US-China Tariff War / Why is Trump having to take a U-turn? Is the US scared by China's warning?

In the US-China tariff war, Trump reduced tariffs on electronics, which is being considered a U-turn. But the real reason is the import of rare minerals from China, which has become a necessity for America. China's counterattack is clearly visible from the attack on poultry and America's new move in Panama.

US-China Tariff War: The tariff war between the US and China is no longer limited to imports and exports, but has become the new face of strategic confrontation between the two superpowers. President Donald Trump's exemption of tariffs imposed on 20 major electronics materials, while on the one hand looks like a U-turn, on the other hand it is also a sign of a deep strategic compulsion. In this report, we will try to understand whether the exemption of tariffs is actually a sign of retreat or preparation for the big fight to come.

Strategy or pressure?

The statements made by Xi Jinping during his Vietnam visit tried to put psychological pressure on the Trump administration. He said in clear words that there will be no solution from protectionism and double standards. This indication from China was a warning to the US that there is no winner in a tariff war - there will be losses on both sides.

However, the exemption given by Trump is limited to only a limited category - computers, laptops, disk drives, data processing equipment, semiconductors, memory chips and flat panel displays. These are the products for which America is heavily dependent on China. The biggest reason for this is China's ban on the export of rare earth minerals, which are the backbone of semiconductor production.

America's compulsion and China's growth

Big industries like auto and aerospace in America are dependent on these technical products. Stopping production means economic loss of billions of dollars and a surge in unemployment. In such a situation, giving exemption in tariff is not a political defeat for Trump, but an attempt to avoid economic collapse.

The latest statement of China's Commerce Ministry points in this direction - America should cancel all its tariffs. It is clear that Beijing is now in the mood to increase pressure on America even further.

Preparation for counterattack: Poultry products and Panama

After America's weakness came to the fore on the tariff front, China has made a new attack through poultry products. By saying that salmonella bacteria was found in poultry meat imported from America, China has not only attacked America's image, but has also given an economic blow to those companies which were sending these products. Due to this, America will not only have to face trade deficit but will also have to face global disrepute.

On the other hand, the Trump administration is now preparing to surround China on the geopolitical front instead of tariff. The first example of this is Panama - where China's economic and diplomatic influence is continuously increasing. America has now taken steps there to end this influence.

Signs of battle for sea routes

Beijing fears that this tariff war can now turn towards maritime strategy. The possibility of US-China conflict on important sea routes like South China Sea and Panama is increasing. China is engaged in strengthening its navy and logistics network more than before. This is an indication that the next phase of the tariff war can turn from an economic war to a strategic conflict.