Date: 05 Sep 2017, Economics and Finance
Question setter: Mettletest Panellist

China USA relations

Will the USA impose any new sanctions or tariffs on China before the end of October 2017?


Answer: No
Confidence level: 15%
Mean confidence level (all requests): 30.67%

Is the rhetoric likely to become reality? Trump is threatening "stopping all trade with any country doing business with North Korea". His main target is China, North Korea's biggest trade partner and supporter. Cutting off trade with China would be so devastating to the US and world economy that his threat becomes incredible. Nor is it probable that China will show a complete change of embedded mind-set to follow US instructions and totally abandon its communist neighbour. Trump will not follow through immediately and any action will be postponed until after his November meeting with Xi Jinping. Then there may be limited action, say steel tariffs, to show the USA means business and to retain some credibility in the President's statements. Trump has already rejected a negotiated offer to curb Chinese steel imports, which appears odd, but perhaps could be reintroduced as a triumph in response to his more recent threats. Most of the world is alarmed by Trump's threats and the sanctions pending if taken at face value. The hope is that the talk is empty and the answer to the question remains NO.

Outcome: No
Score: 15
Mean score (all respondents): 19.33

Expert opinion:

Answer: No

Selected Expert Answer from Sir Jeremy Greenstock:
In light of DPRK acitivity, some form of targeted action on companies and individuals is possible, but unilateral sanctions on China are unlikely until after the President’s visit to Beijing, scheduled for November. Trade will feature on President Trump’s agenda during his visit (the Trump administration is still packed with trade-hawks), and he will use trade as a lever in conversations with President Xi - so is unlikely to initiaite trade sanctions beforehand and lose the negotiating leverage. Additionally, Ivanka Trump and Jared Kushner, both with commercial interests in China, are going to Beijing in September for a “preparatory” visit – given the Trumps’ propensity to mix politics with business, this would be a particularly unfortunate time to sour bilateral relations further.

(As far as North Korea goes, beyond the tough rhetoric, President Trump is aware Xi’s support will be crucial to handle the North Korean crisis [he recently demonstrated this by pulling planned sanctions to pass a resolution in the Security Council]. As history has repeatedly demonstrated in Iraq before North Korea, sanctions are blunt tools in foreign policy and another round is unlikely to cause a radical behavioural shift in either Beijing or Pyongyang).

Answer: No

Selected Expert Answer from Derek Wyatt:
It is hard to predict what the USA will do from day to day such is the state of play in the White House. A tweet one day is corrected the next. Any statement from the Commander in Chief has to be taken with a pinch of salt as we know he struggles to understand foreign affairs.

The thought that President Trump would do something hasty on China given his in-box is fall of huff and puff is hard to believe. He has his hands full with North Korea (inaction), the Middle East (total inaction), Yemen (turn a blind eye) and ISIS ( no credible policy).

Trump does not know how to handle China. China plays the long game. She does not use foreign policy as a way of spreading her political system. She uses global capitalism to shore up her domestic growth. She holds trillions of dollars and euros.

So, unsurprisingly my answer is No. There will be no new sanctions by the end of next month.

Outcome: No

Comment on outcome from Mettletest Panellist:
Our experts were right and we have as yet seen no new action from Trump on tariffs for China. There remains the possibility for the future. The Trump initiated investigation of Chinese efforts to steal intellectual property of U.S. firms.proceeds. Various groups, including solar manufacturers and producers of hardwood, are lobbying to get the president to match his pre-election rhetoric with action to curtail Chinese imports. Nevertheless, ahead of Trump's Asian visit this November, a trade war has been avoided.