Epoch Times - China analyst says Xi Jinping will have no choice but to surrender to Trump’s tariffs
Aired: 2025-04-17
Duration: 03:06


=== Cost of Tariffs? (03:06) ===

[00:00:00]  Xi Jinping is perfectly capable of taking China off the cliff.
[00:00:04]  And so, yeah, you know, he says he won't be bullied.
[00:00:07]  He says he's not going to talk to us until we come begging.
[00:00:11]  So, I don't know.
[00:00:13]  But this is not going to be a good story for China.
[00:00:16]  Because remember, our economy is much bigger than theirs.
[00:00:20]  Even with their inflated gross domestic product reports, their economy is less than two-thirds the size of ours.
[00:00:27]  Last year, China ran an enormous merchandise trade surplus against us, $295.4 billion, which was 5.8% bigger than the merchandise trade surplus in 2023.
[00:00:41]  I mean, they've got everything to lose.
[00:00:43]  Now, they can retaliate, as they've done with the rare-earth export ban.
[00:00:48]  But, you know, they tried that against Japan in 2010.
[00:00:51]  It didn't work.
[00:00:52]  China collapsed in a couple months.
[00:00:54]  You know, they can tell Boeing we're not accepting deliveries of planes.
[00:00:58]  But if President Trump says if he prohibits Boeing from selling planes and replacement parts, there are going to be a lot of planes in China not flying.
[00:01:06]  So, you know, we have the power.
[00:01:08]  The only way China wins this trade war is if it gets Trump to preemptively surrender.
[00:01:15]  Now, Trump knows he holds the high cards.
[00:01:17]  But the question is, and a lot of people say, well, you know, we're a democracy.
[00:01:20]  We've got to give up.
[00:01:22]  I don't think so, because Trump actually believes in these tariffs.
[00:01:25]  He knows how important it is.
[00:01:27]  But that's China's only route out of this.
[00:01:30]  So one of the biggest, I guess, criticisms that I hear often is that these tariffs, the cost of the increased goods, good cost, is going to be transferred to the consumer.
[00:01:44]  And how do you view that?
[00:01:46]  Well, we actually have an experiment, and that was 2018 when Trump imposed 25% tariffs on China.
[00:01:54]  We know that China absorbed at least 75% to 81% of the cost of those tariffs.
[00:02:00]  The American consumer didn't feel it.
[00:02:02]  And by the way, we tend to think of tariffs as a bilateral matter.
[00:02:06]  When we impose tariffs on China, we think in binary terms, U.S. and China.
[00:02:10]  But we've got to remember that when we impose tariffs on China...
[00:02:14]  Companies move supply chains and production out of China to areas which are lower tariffed.
[00:02:21]  So, yeah, we didn't feel it in 2018.
[00:02:24]  Now's a different situation.
[00:02:26]  But I think that if Trump is able to do what I think he can do, which is stitch up these trade deals with other countries, we're going to see a redirection of trade and the American consumers just not going to feel it.
[00:02:39]  But there's a more important point.
[00:02:42]  For decades, American presidents have pursued deeply injurious trade policies with China.
[00:02:49]  And we're going to have to pay some cost.
[00:02:52]  I think that's inevitable.
[00:02:54]  I don't think the cost is going to be as great as all the smart people in New York and Washington think.
[00:02:59]  But even if it is, this is a cost we have to pay.
[00:03:03]  Because if we don't pay this cost, we become a vassal state of China.