China Preparing for a Possible Trade War with the U.S.

The unannounced trade war between China and the U.S. with the second coming of President-elect Donald Trump has almost kicked off with China launching a probe into U.S. chip giant Nvidia. China suspects that the U.S. company has violated business trust. China also has placed a ban on the U.S.-bound exports of some rare materials.

According to reports of news organisations, this is a preparation of China to welcome Trump to the Oval office in January next year, so that the U.S. could be brought to the negotiation table.

Trump has announced a 60% tariff on all China imports upon his take over as the President of the economically most powerful nation of the world. Thus, a trade war between the first largest economy nation of the world and the second largest economy nation of the world looks imminent. Before the full-blown trade war, China has already started making the preparations to meet Trump when he heads the largest economy of the world second time.

China now globally dominates sectors such as electric vehicles and green energy. Chinese exports to the U.S. include telephone sets, computers and computers parts, devices to transmit audio and video, lithium batteries among other things. its imports from the U.S. include aircraft, integrated circuits, luxury four-wheelers, turbofan engines etc.

China back home is now going through tough time in its domestic economy. It cannot afford to lose the trade war with the United States. However, according to analysts, China is concerned about the possible impact that the imminent trade war with the U.S. may have upon its own fragile domestic economy.