Opinion | Why Trump’s threats to ‘punish’ China over Covid-19 ring hollow

Trade tariffs, tech bans or cancelling US debt obligations to China are all unlikely, given their enormous cost to the US economy

As for backing Taiwan independence? Not if it meant outright war with China

Reading Time:4 minutes

Published: 3:00am, 14 May 2020Updated: 10:01am, 14 May 2020

For President Donald Trump, aggressively attacking China could prove an effective way to deflect criticism in the United States over his handling of the Covid-19 outbreak. To match the toughening rhetoric, the Trump administration is reportedly weighing various options aimed at punishing Beijing’s alleged cover-up of the coronavirus outbreak in Wuhan.

However, “punishing” China will not only prove easier said than done, but could also put the world at risk of financial chaos or even war.

There are a few options that the Trump administration can use to go after China: trade, finance and technology. However, each will also involve enormous cost to the US. Trump has threatened to reimpose tariffs on Chinese goods, but as the US-China trade feud has shown, higher tariff rates are not a bonanza for the US economy.

The US-China trade spat last year quickly unsettled global financial markets, undermined US business investment and injected a huge amount of uncertainty into the business environment.

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Last week, top officials from China and the US resumed talks, with China having reiterated its commitment to buying US$76.7 billion more goods from the US this year, despite the Covid-19 outbreak. This suggests that Trump’s earlier threat of restarting the trade war has no teeth.

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