How’s this for a strained simile? Trade wars are a bit like baseball games. Each side gets a chance to whack the other with a tariff bat as well as play defense against duty hits. The number of innings will be determined by how bloody-minded and self-destructive each team decides to be. Unlike our national pastime, however, there are no winners after the final out.
Keeping with that theme, the Chinese government has taken the plate in the bottom of the first and issued its counter-retaliation in response to the steel and aluminum tariffs imposed by the United States last month. The list, English-language version here, is eclectic in its coverage. It includes various nuts, fruits, wines and juices and steel pipe and tube (oh! the irony) along with pork products and scrap aluminum. The latter two groups have additional 25 percent duties imposed, while all the others are at 15 percent.
U.S. exports subject to the tariffs reportedly are valued at $3 billion annually. Although affecting a relatively small slice of trade, they’re sure to be devastating to the companies affected. Let’s call the Chinese response a sharp lead-off double down the middle: damaging, yes, but nothing like a grand slam.
The next inning will bring the Section 301 tariffs to the plate. We’ll soon see whether the United States tries to run up the score, and how China responds.
On second thought, maybe trade wars are more like a Monty Python skit than baseball. Whatever the case, there will be more hits on the way. Stay tuned.