China has blinked in the latest showdown, as part of the ongoing trade standoff between the nations. One day after China devalued its key currency to the lowest level in a decade, prompting the U.S. to label them a currency manipulator and tanking the U.S. stock market, the Chinese reversed course on Tuesday and restored their currency value. The result was a bounce-back in the markets, but the broader showdown continues with both sides appearing to dig in. Last week, after face-to-face trade negotiations broke down, President Trump announced a new 10 percent tariff on $300 billion of Chinese imports to begin September 1st.
The president has used tariffs and the threat of tariffs to put pressure on the Chinese economy and ultimately secure a new trade agreement with more favorable terms toward the U.S. While the tactic has prompted criticism from some who claim it will harm the U.S. economy and hurt American consumers, author and China expert Gordon Chang believes the Trump Administration is taking action that is long overdue. "China is attacking our economy across the board...they've done that since the early 1990s, but recently it's become obvious, and we've got to do something," he tells KTRH. "Previous presidents have either ignored the problem altogether or imposed solutions which were obviously ineffective."
In particular, Chang notes that China has been manipulating its currency and stealing U.S. intellectual property for years, with little to no pushback until now. "What China is doing is vicious, it is a violation of their obligations to us, and it is criminal," he says. "So we have no choice but to respond, unless of course we want to end up being a third-world economy."
As for any negative impact of Trump's tariffs on the U.S. economy and consumers, Chang believes it will be minimal and temporary. "As factories move out of China, these tariffs will no longer apply," he says. "So nine months to a year from now, for most U.S. consumers, this will not be an issue."