Some of Donald Trump’s case appointments and pronouncements have grave implications for China, and they have been dominating the news media. The Chinese have noticed.
In response to Trump’s attempts to force China out of the US business, they are signaling some of the way they did act. You may also suggest they’re reacting pre-emptively.
Trump has chosen China hawks for his ambassador to China ( David Perdue ), national security adviser ( Mike Walz ), and secretary of state ( Marco Rubio ). He has repeatedly made the pledge to impose levies of 60 % on Chinese goods. The other day, he threatened the nine people of the BRICS union, which include China, with 100 % taxes if they attempt to replace the US dollar as the world’s supply money.
The BRICS states aren’t really threatening to do that – any time soon, at least. China would have to release its controls on the flow of capital for the Foreign yuan, which is the obvious prospect, to enjoy the reserve-currency part. It doesn’t want to accomplish that.
However, BRICS is a significant component of China’s response to the possibility of serious restrictions on its ability to enter the US marketplace. The concept is growth, meaning that both imports and exports are dependent on various trading partners. As US producers may readily imagine, Brazil– the B in BRICS – is near the top of China’s party cards.
The additional response China is signaling is retribution. It took China less than 24 hours to respond when the Biden administration placed fresh restrictions on exports of crucial nutrients to China that China generally supplies in early December.
Growth, though, may show a particularly significant part of the strategy. China is already the world’s largest trading partner of more than 100 countries. More business with nations with somewhat large economies is what it needs to make up for the decline in the US market. Several of the BRICS countries fall under that umbrella.
The union people are Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan, and Malaysia are all submitting applications for membership, and potential others will pursue.
China may win large with India. It has the nation’s largest people and, by one estimate, the second largest gross domestic product. But India and China are competitors.
Many of the international buyers who are leaving China are being drawn to India. The two places have a long-running borders debate. Although they’ve made progress just in de-escalating conflicts, their political connection has been described as “frosty”.
Brazil has a population over 200 million and the world’s eighth largest business, bigger perhaps than Russia’s. Since 2009, China has been its biggest trading partner. Brazil is one of the few nations, according to the Economist, with a business deficit with China.
During Trump’s first phrase, the Economist calculates, Brazil’s imports to China almost doubled. As China responded to Trump’s taxes by shifting more of its ag-product buys from the US to Brazil, company exports played a key position.
In Trump’s subsequent expression, that switch might become even more perceptive. According to a study from the American Soybean Association and the National Corn Growers Association, extreme fresh US tariffs on Chinese goods would cost American soybean farmers$ 8 billion in lost value and$ 5 billion in corn farmers.
China hopes to increase its exports to Brazil. Electric vehicles manufacturers there are already selling electric cars, and two of them, BYD and Great Wall, intend to start energy car companies in Brazil in the following month. Without a doubt, those factories did buy a lot of components from China. SpaceSail, a Taiwanese opponent to Elon Musk’s Starlink in satellite communications, recently signed an agreement to do business in Brazil.
China and Brazil are drawing closer socially, also. China just raised the position of its ties to Brazil. Brazil’s left-wing leader, Luiz Inacio Lula de Silva, joins Chinese President Xi Jinping in supporting the BRICS ‘ dreams for what one expert perfectly calls” a planet buy independent of US hegemony”.
China and Brazil tried investing in their own currencies last year instead of cash. Although the transaction’s price was small, others may follow. If they do, they’ll determine whether Trump is serious about imposing 100 % tariffs on nations that reject the money.
Brazil isn’t the whole truth for China, to be sure. However, it may help some in making up for US business opportunities that were lost.
British farmers and ranchers must expect that in the US, a marketplace of comparable size will make up for what they might drop in China in the years to come.
Urban Lehner, a former long-time Asia editor and writer for the Wall Street Journal, is now editor professor of DTN/The Progressive Farmer.  , This , content,  , initially published on December 12 by the latter news business and then republished by Asia Times with authority, is © Copyright 2024 DTN, LLC. All rights reserved.  ,  , Follow , Urban Lehner , on X @urbanize.