Trade war: China should tax US companies within its borders if Washington won’t be reasonable

PUBLISHED : Saturday, 29 September, 2018, 2:17pm
UPDATED : Friday, 05 October, 2018, 5:35pm

It is clear that the United States is using tariffs and sanctions, as well as subsidies, in ways the World Trade Organisation, Europe and others could consider unlawful, or at the very least detrimental to international trade and harmony. It is also clear that it is discriminating against China and specifically attempting to “hurt” China.

China should therefore have no hesitation in levying heavy taxes on US-owned companies and brand names operating in China. A 25 per cent tax on all of these would very quickly hurt many businesses that are increasingly dependant on China for large percentages of their growth and profits. On the other hand, very few Chinese companies or brands directly operate in the US.

The US companies targeted would be desperately unhappy about such a development, because, once they have lost market share to local, European and Japanese companies and brands, it would be extremely difficult for them to regain the lost position in the future.

Such moves might have once been resisted because China would not wish to damage its reputation for impartiality in opening its markets, but the whole world now recognises the US as an unreliable rogue that respects no international agreements or regulations and which habitually reneges on its own treaties.

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China has attempted to maintain the moral high ground but it is time to play to its own real strengths to make the US understand that it cannot bully the world forever.

The time for action is at hand. China may not have much clout with the US, but maybe McDonald’s, KFC, General Motors, Pizza Hut, Budweiser, Walmart, Dell, Apple and dozens of other US corporations with a huge presence in China will find an ear in Congress, especially when their profits are hit and their share values tank.

Erich Beck, Pok Fu Lam