Why the tariffs are not here to stay - Shaun Rein

Shaun Rein

The trade war between the US and China has been heating up, but - says business analyst Shaun Rein and author of The War for China's Wallet: Profiting from the New World Order - they are basically negotiation tools, not here to stay. Where Donald Trump is right, and where he is wrong, tells Rein in an interview at Marketplace.

Marketplace:

So you don't think these U.S. tariffs and Chinese counter tariffs today are here to stay? 

I view these tariffs as a negotiating ploy by President Trump to try to force the Chinese to open up their market better for American companies. Because frankly, Trump is right to criticize China. It's very difficult for American companies in the auto sector or in financial services to sell into the China market, because there's a lot of regulatory barriers. Good luck if you're a technology company. However, I think he's wrong for talking about the trade imbalance. Instead, he should be talking about reciprocity and allowing American companies the same rights in China that America grants Chinese companies when they try to invest and operate in the United States. 

All right so tariffs are a negotiating tactic. That conjures the image of this being a cool, calm, collected game of chess on both sides: Washington and Beijing. But the thing is some say the trade war started this morning, and in a war, it's not always calm or controllable or rational. 

Trump needs to be careful that he doesn't go too far and cross a red line and he's very close to doing that right now. President Xi, the president of China, is taking a much longer view than Trump because China's presidency doesn't have term limits. And President Xi is enjoying, like, 90 percent support from the Chinese population. He feels he can take a very strong line against Trump. And he also wants to indicate to his neighbors and the rest of the world that China is the new superpower that they need to get close to. 

So Trump should push, but he can't go too far, because at the end of the day, it's the American consumer who's going to get hurt the most. Because products that are made in China — from Apple products to Nike ones — are going to get expensive, and be more expensive on the shelves of Walmart for everyday American consumers.

More at Marketplace.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on the trade war between China and the US? Do check out this list.