- As the trade war heats up, China has limited options to use against the U.S. without negatively impacting its own bottom-line.
- According to sources familiar with the matter, “Chinese leaders are pressing ahead to seal a deal and avoid a drawn-out trade war that risks stalling China’s long-term economic development.”
- However, China understands there will be consequences if they bend too much to the U.S.’s will.
- Sources said: “Agreeing to U.S. demands to end subsidies and tax breaks for state-owned firms and strategic sectors would also overturn China’s state-led economic model and weaken the Communist Party’s grip on the economy.”
- The U.S. has continued to put pressure on China to fix unfair trade practices by levying increased tariffs on $200 billion of Chinese goods and has plans to impose additional tariffs.
- In retaliation, China announced higher tariffs on $60 billion worth of American products.
- America has also ramped up pressure on China by targeting some of its huge tech companies and deploying warships to the Taiwan Strait.