May 15, 2019

China is ready to fight this trade war

Illustration: Rebecca Zisser/Axios

When President Trump began threatening China with tariffs, the Chinese initially played the role of obsequious couriers in an effort to avoid a head-on conflict. But since raising tariffs to 25% on their goods, China has reversed course and is making clear its intent to take the conflict with the U.S. to the proverbial mattresses.

The state of play: In a commentary published last week on its WeChat account, China's state-owned People's Daily warned the U.S. to "not even think about" concessions.

  • "China does not want a trade war but is not afraid of it," Geng Shuang, a spokesman for the Chinese Foreign Ministry, told a press briefing on Monday. "We will not succumb to any external pressure and have the determination and ability to safeguard our legitimate rights and interests."

Background: Heading into 2018, China's long-held philosophy had been to speak softly and carry a big stick. Its military was working to dominate Southeast Asia by land and sea, it was growing its Belt and Road Initiative globally and making loans to low-income countries to win friends and strategic allies.

  • As Trump began his confrontation, China agreed to many concessions, including buys of more U.S. goods, pulling back cyber-espionage, amending the law to ban forced technology transfers and cracking down on IP infringement in order to get "a bit of elbow room," Keyu Jin, associate professor of economics at the London School of Economics, wrote in January.

But the time for reconciliation looks to have passed and a new, emboldened China is emerging, one that is not afraid to take the fight directly to the U.S.

  • There are differing factions inside China, Jin tells Axios. "Some want to cave in ... some want to stay strong and resist." President Xi Jinping and the country's policymakers appear to now be siding with the latter faction.

What's next?

  • "[W]e will have another type of Cold War," Da Wei, professor at the University of International Relations in Beijing, said on PBS' "Frontline."
  • "I think it is a comprehensive confrontation. ... If that happens it will last for quite a long time. That's a tragedy for everyone."

Why it matters: Market analysts at both Morgan Stanley and Bank of America-Merrill Lynch have predicted a prolonged trade war could lead to an outright global recession.

The bottom line: Tuesday's stock market rebound shows investors haven't quite gotten that message.

Go deeper: Trump's long trade war

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America's future looks a lot like Nevada

Illustration: Sarah Grillo/Axios

Today's Nevada caucus will foreshadow the future of American politics well beyond 2020.

Why it matters: The U.S. is in the midst of a demographic transformation, and the country's future looks a lot like Nevada's present. Today's results, in addition to shaping the 2020 race, will help tell us where politics is headed in a rapidly changing country.

Coronavirus spreads to more countries, and U.S. ups its case count

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

The novel coronavirus continues to spread to more nations, and the U.S. reports a doubling of its confirmed cases to 34 — while noting those are mostly due to repatriated citizens, emphasizing there's no "community spread" yet in the U.S. Meanwhile, Italy reported its first virus-related death on Friday.

The big picture: COVID-19 has now killed at least 2,359 people and infected more than 77,000 others, mostly in mainland China. New countries to announce infections recently include Israel, Lebanon and Iran.

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