"The Relationship Between The United States And China Is Officially Going Down The Tubes"

endoftheamericandream.com

What happens when the two largest economies on the planet start fighting a trade war with one another?  Well, we are about to find out.  As you will see below, the U.S. has gone “nuclear” on China in a trade dispute over steel, and the Chinese response is likely to be at least as strong.  Meanwhile, events in the South China Sea have brought tensions between the Chinese government and the Obama administration to a boiling point.  The Obama administration strongly insists that China does not have a legal right to those islands, and in China there is now talk that it may ultimately be necessary to confront the United States militarily in order keep control of them.  Most Americans may not realize this, but the relationship between the United States and China is officially going down the tubes, and this is likely to have very significant consequences during the years to come.

Let’s start with the trade war that has erupted.  About a week ago, we learned that the Obama administration had decided to “go nuclear” on China by imposing a 522 percent duty on cold-rolled steel from China that is used in certain kinds of manufacturing…

In some regard, China has reason to be angry: the US unleashed what is nothing short of a nuclear bomb in its rapidly escalating trade war with China, and recently imposed duties of 522% on cold-rolled steel used in automobiles and other manufacturing,  In doing so it has rendered Chinese exports to the US unsustainable and will force even more excess Chinese production to remain landlocked within China’s borders, making the domestic glut, and price collapse, that much worse.

Subsequently, it was announced that a 450 percent duty will be imposed on corrosion-resistant steel from China…

Corrosion-resistant steel from China will face final U.S. anti-dumping and anti-subsidy duties of up to 450 percent under the U.S. Commerce Department’s latest clampdown on a glut of steel imports, the agency said on Wednesday.

Needless to say, the Chinese are less than amused, because these “shock and awe” trade duties were clearly designed to punish China.

And of course the truth is that China has been abusing us for years, so there is definitely a case to be made that they deserve even harsher treatment.  However, we need to keep in mind that the Chinese will retaliate for this.  And when they retaliate, it will likely be quite painful for us.  But for the moment, they are just issuing vague threats…

China’s Commerce Ministry said it was extremely dissatisfied at what it called the “irrational” move by the United States, which it said would harm cooperation between the two countries.

“China will take all necessary steps to strive for fair treatment and to protect the companies’ rights,” it said, without elaborating.