China’s conflicts with the US have not provided the most exciting news reportage in the last year or so, but as elections loom for both countries, it’s not surprising that the tensions and threats of sanctions mount. President Obama
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has been filing complaints against the Chinese government for quite some time, and there is a legitimacy to his grievances: from currency manipulation, to unfair import tariffs – the US has had its cases upheld, but the question remains, what do you do?
Much of this is political posturing from the Obama team, and the desire to look tough in Middle America, but the fact remains that the World Trade Organization has agreed that “China’s tariffs on imports of certain US steel products were illegal” according to a recent BBC piece. But, the list continues. The US is upset with currency manipulation on the Chinese side, its illegal subsidy of car exports and China’s tight control of rare earth materials that constitute much of our society’s gadgets. What these complaints will mean for the Chinese is hard to tell. Organizations like the WTO help maintain the balance between nations and keep a level playing field for imports and exports, and it’s foolish to think these court decisions don’t mean anything for the Chinese. Nonetheless, as is happening now with Japan, the real power to strike back against any country is implemented by consumers refusing to buy their products, as is the case with China boycotting many Japanese brands; they feel the ouch of that, for sure.
This evolving conflict is destined to continue between the US and China, and there will be further allegations on both sides in the near future. But, at the end of the day, China holds a much better hand than the US – after all, who is America’s no.1 creditor?