He asked Chinese airlines to suspend aircraft from the US company amid a shock with them, Bloomberg reported today.
The US president imposed on imported Chinese products. Reacting China responded with 125% duties to US imported products.
In addition, Beijing has asked Chinese airlines “to suspend any purchase of aircraft equipment and components from US companies,” Bloomberg said, citing persons who know the case.
This order was issued after Beijing imposed additional duties on US imported products, the same source added.
More than doubles costs
US additional duties more than double the cost of aircraft and components manufactured in the US and imported into China and would significantly burden Chinese airlines that would find it difficult to cope with the new costs.
According to Bloomberg, the Chinese government is also considering helping airlines renting Boeing aircraft that will be faced with higher costs.
The Chinese Foreign Ministry and Boeing refused to respond immediately to AFP’s request to comment on this information.
In a dangerous commercial impasse
The US and China are in a dangerous commercial deadlock, with the world’s two largest economies exchanging blows in a confrontation where Donald Trump requires Beijing to negotiate with his own government.
China is largely dependent on the US market for its industrial products – a market almost irreplaceable.
But experts warn that Washington should not underestimate Beijing’s ability to resist Trump’s coercion. The combination of centralized political control, the differentiation of its export markets and the control it exerts on strategically critical raw materials – such as rare land – offers Beijing with significant bargaining weapons. The question is: how far it can use them without suffering even greater losses itself.
Commercial power
China had a surplus of almost $ 300 billion in trade with the US last year, with about 15% of its total exports being directed to the US market. The 145% duties imposed by Trump could cause a serious blow to Beijing. However, international economists point out that this is unaware of a critical parameter: China can replace its imports from the US more easily than the US in Chinese.
US exports to China mainly focus on agriculture – such as soybeans, cotton, beef and poultry – and therefore have low added value. On the contrary, many of the Chinese products imported by the US – electronic, machinery, processed minerals – are of higher value.
Financial power
China has another negotiating weapon: the large amount of US government debt it has in its hands. Theoretically, it could sell it to reduce its exposure. But this could hurt the attractiveness of US securities and lead to further decline the value of the dollar. Zerlina Zeng from Creditsights notes that such a sale will also hit China itself because of the size of its stocks. However, he estimates that Beijing will continue to differentiate its reserves in the long run, transferring them to other coins.
Critical minerals
The US also depends on China for many of the so -called “rare metals” necessary for modern industry – such as electric vehicles. China controls more than two -thirds of world production and more than 90% of the processing of these minerals. Trump had excluded strategic metals from the first rounds of duties, recognizing the vulnerability of the US. But such exceptions may not be enough if China decides to further escalate the trade war.
