Chinese retaliatory tariffs aim to hit Trump in his electoral base

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Washington’s penchant for brandishing “big sticks” will come back to haunt it, China Daily, official organ of the Chinese government, warned on Friday as trade tensions between the two countries continued to fray. And China, and the EU, have identified just where that haunting will begin: in America’s heartland.

For Donald Trump, the threat of a trade war with China, as well as potentially with Mexico and Canada, is a vital component of an overdue effort to correct longstanding injustices that have seen the US taken advantage of by trading partners for “far too long”.

But the US looks likely to be hit hard if the war of words escalates into action ahead of any deal. The Chinese state media outlet cited research by the Rhodium Group pointing to a 92% drop in Chinese investment in the US, to $1.8bn, in the first five months of the year, its lowest level in seven years.

And the effects of the multi-front trade dispute are already being felt. US lumber prices are up 32% since the president announced a 21% tariff on Canadian lumber imports. The National Association of Home Builders estimates that the tariffs will result in about 9,400 construction jobs lost, raising the price of the average single-family home by $9,000.

Trade wars are “easy” to win – Donald Trump declared last March – shortly before plunging the US into its worst trade dispute in decades. That remark may well come back to bite him as the EU and China turn the heat up on Trump by targeting the states that elected him.

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