A Trade War with China Is Brewing?

The trade and business battles between China and the United States were ratcheted up again as the American government set tariffs on China made solar panels that will be as high as 30%. The action comes just days after congressional leaders said the activities of China telecom equipment makers Huawei and ZTE could be a security risk. The People’s Republic responded that the charges were no more than China bashing.

But the two events — the tariffs and accusations — coupled with campaign rhetoric by both Obama and Romney, will only make tensions with China worse. That leaves China with a tough balancing act. It needs U.S. trade to keep its sputtering gross domestic product above 7%. But it knows it cannot appear weak without emboldening American interests that want to push harder and harder on China’s trade and currency practices.

Douglas A. McIntyre