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For decades, Chinese leaders have staked their legitimacy primarily on the continual delivery of prosperity. Trump not only threatens the Chinese economy but also the Communist Party’s political system. That gives China’s leaders great incentive to hold back retaliatory moves.
Analysts love to point out that China can retaliate by not buying US products. “American firms may not profit from a trade war with China, but both Airbus and Brazilian farmers have to be salivating at the prospect,” writes Colin Grabow of the Cato Institute in “Americans Will Pay the Price for Trump’s Toughened Approach with China,” posted Friday on the website of The National Interest.
Boeing executives and American soybean producers are right to be nervous, but they surely know how global markets work. If China does not buy soybeans from the American heartland and purchases them from Brazil instead, American producers will sell soy to Brazil’s customers.
There are only so many soybeans in the world at the moment, and the same principle generally holds for commercial aircraft. Airlines and leasing companies are unlikely to wait years longer because Airbus’ production has been diverted to China to fill orders that would have gone to Boeing. In most cases, Airbus customers will opt for Boeing craft to fill needs.
In short, Trump holds the high cards when it comes to China, and, unlike his predecessors, he knows it.
So, yes, Ambassador Cui, we will see who lasts longer if you choose to go toe-to-toe with president No. 45.