Zheng Gao of Shanghi, China, photographs the front pages of newspapers on display outside the Newseum in Washington the day after Donald Trump won the presidency on Nov. 9. (AP Photo/Susan Walsh)

Zheng Gao of Shanghi, China, photographs the front pages of newspapers on display outside the Newseum in Washington the day after Donald Trump won the presidency on Nov. 9. (AP Photo/Susan Walsh)

China can hit back quickly on trade; Boeing sales at risk

Bloomberg

China’s stance on U.S. trade can be illustrated by one of Sir Isaac Newton’s laws of motion: For every action, there’s an equal and opposite reaction.

From aircraft to steel to solar, Beijing has responded in kind to what it deemed as trade slights from Washington. It also has sought World Trade Organization protections, and with some success.

That’s something for President-elect Donald Trump to weigh as he decides whether to honor his proposal for tariffs on the world’s largest trading nation, which had $627 billion in U.S. trade in 2015.

A Communist Party newspaper this week gave a flavor of what could come, suggesting “tit for tat” retaliation should a trade tiff erupt. “Boeing orders will be replaced by Airbus,” the Global Times said in an editorial. “U.S. auto and iPhone sales in China will suffer a setback, and U.S. soybean and maize imports will be halted.”

Here’s how history could be a guide:

Aircraft

Boeing, the largest U.S. exporter, has long been a key bellwether for trade relations. China Southern Airlines threatened in 1995 to pull the plug on $2 billion of orders based on progress in talks over copyright law, then didn’t. The next year, Boeing said strained trade ties would hurt sales after China gave Airbus Group SE its biggest-ever order for $1.5 billion.

While China doesn’t sell its own commercial aircraft, yet, trade tension could still arise. President Xi Jinping gave Boeing a $38 billion order last year on a plant visit in Seattle.

Solar

In July, the U.S. raised anti-dumping duties on photovoltaic products from China. Two months later, China imposed anti-dumping and anti-subsidy duties on distiller’s dried grain, a byproduct of ethanol and animal feed, from the U.S.

In 2014, China hiked tariffs to 57 percent for U.S. exports of polysilicon used in solar cells. That rippled through to small manufacturers like REC Silicon ASA in Moses Lake and Hemlock Semiconductor Corp. in Hemlock, Michigan. The dispute with China, the biggest market for materials used in solar panels, pressured U.S. producers to cut output and prices.

Technology

China stepped up efforts to shift to domestic technology companies after 2014 revelations of widespread spying by U.S. intelligence agencies using American electronics to snoop. It complicated life for U.S. firms like Cisco Systems Inc., Intel Corp. and Hewlett-Packard Co.

Meanwhile, Chinese regulators pursued antitrust probes against Microsoft Corp. and Qualcomm Inc. Microsoft’s China offices were raided, Windows software banned from government PCs, procurement of Apple Inc. iPads was blocked. Now, foreign tech firms must give Beijing unprecedented access to their systems under a new law. Trump’s tariff plans could hurt U.S. buyers too. Cellphone imports are now duty free, but such tariffs would raise the average price by $90.08 per phone, according to a Bloomberg Intelligence analysis.

Steel

The latest U.S. anti-dumping action against Chinese steel was a preliminary ruling in September on imported stainless steel sheets and strips from China, after American tariffs of 266 percent on Chinese cold-rolled steel imports were announced in May.

In October, China extended anti-dumping tariffs on U.S. exports of caprolactam, a material used in textiles. Beijing also scored a victory over the U.S. at the WTO in a dispute over U.S. duties imposed on 13 imported Chinese products—three years after Beijing first filed the case.

Tires, Chicken

Chronology sometimes says more than causality. In 2009, the U.S. imposed tariffs on Chinese tires. In 2010, China announced charges on U.S. poultry. The U.S. filed a WTO complaint in 2011. Beijing’s broiler chicken duties of as much as 105.4 percent hurt about 300,000 workers and farmers, the U.S. said at the time. In 2013, after the WTO upheld the U.S. on tire tariffs, China renewed its investigation into American poultry.

In 2015, the U.S. announced duties on Chinese tires in June after a year-long investigation. China said later in August the same year that it would keep current countervailing duties on U.S. broiler chickens and relaunch a subsidy investigation. In August, the U.S. again imposed duties on truck tires. In September, China extended anti-dumping duties on U.S. chicken for five years, raising them as much as 73.8 percent.

Fishing

China’s counter-punches haven’t been restricted to responding just to commercial actions. Norwegian salmon exports to China plunged after the country’s parliament awarded the 2010 Nobel Peace Prize to imprisoned Chinese dissident Liu Xiaobo.

In 2010, when a Chinese fishing boat and a Japanese Coast Guard vessel collided in contested waters, China stopped giving Japan export licenses for rare earth metals, needed for cars and electronics. Licensing resumed days later after Japan released the boat captain.

Talk to us

More in Herald Business Journal

Think Tank Cowork in Everett, Washington on July 19, 2022. (Kevin Clark / The Herald)
The first co-working space opens in downtown Everett

Think Tank Cowork’s owner hopes the facility will inspire other business owners to call Everett home.

New LGI Homes on Thursday, May 12, 2022 in Sultan, Washington. (Olivia Vanni / The Herald)
The real estate market took an abrupt turn this spring

Mortgage rates are up, but home inspections, seller concessions are back on the table for buyers.

The Lab@Arlington is a new one-stop shop for entrepreneurs and inventors located at 404 N. Olympic Ave. (Photo credit: TheLab@Arlington)
New Arlington business incubator opens

TheLab@Arlington is a new one-stop shop for entrepreneurs, inventors and business owners.

Patrons view the 787 exhibition Thursday morning at the Boeing Future of Flight Musuem at Paine Field on October 8, 2020. (Kevin Clark / The Herald)
Paine Field was county’s No. 1 tourist attraction. Not now

Snohomish County officials hope festivals and outdoor activities will fill Paine Field tourist gap.

Logo for news use featuring the municipality of Stanwood in Snohomish County, Washington. 220118
Stanwood Chamber of Commerce ‘can’t keep the doors open’

The chamber is set to shut down at the end of the month due to financial challenges.

OnTrac Logistics has leased a building now under construction at Bay Wood Business Park on Everett's waterfront. The shipping company will open a facility there later this year that will employ 400 people. (Artist Rendering/Broderick Group.)
New Everett shipping facility to generate 400 jobs

OnTrac Logistics has leased a new building on the 12½-acre Baywood Business Park on Everett’s waterfront.

Maria Rios, a ferry worker of 13 years, helps Frank and Fran Butler, both of Washington, D.C., check out as the couple purchases food on Thursday, July 21, 2022, aboard the MV Suquamish ferry between Mukilteo and Clinton, Washington. Rios said food service returned to the Suquamish about three weeks prior. (Ryan Berry / The Herald)
Drink up! Happy hour on the Mukilteo-Clinton ferry is back

More galleys are reopening as pandemic restrictions scale back. Get out of your car for concessions just like at the ballpark.

The Flying Heritage & Combat Armor Museum at Paine Field in Everett. (Janice Podsada / The Herald) 20220419
Flying Heritage Museum to reopen with new owner at Paine Field

Walmart heir Steuart Walton bought the historic aircraft and artifacts. The museum is set to reopen within the year.

Renee's Contemporary Clothing store at 2820 Colby Ave. on July 11, 2022. The iconic downtown Everett store is closing in August after 29 years in business. (Janice Podsada/The Herald)
Renee’s, another iconic downtown Everett store, is closing

After 29 years in business, the longstanding clothing shop will shutter. In-person sales slowed when stores reopened.

FILE - The logo for Boeing appears on a screen above a trading post on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Boeing is reporting a money-losing quarter as both its civilian-airplane division and the defense business are struggling. Boeing said Wednesday, April 27, 2022,  that it lost $1.24 billion in the first quarter and took large write-downs for several programs.  (AP Photo/Richard Drew, file)
Boeing sees best month for aircraft deliveries since 2019

The company delivered 51 passenger and cargo planes in June, its best month for deliveries in recent years.

The Alderwood Towne Center, a 105,000 square-foot strip mall, is located at 3105-3225 Alderwood Mall Blvd. The mall, which has been sold, is home to 20 businesses, including anchor tenants Marshalls and Michaels. Photo Credit: CBRE Group.
Lynnwood strip mall near Link Light Rail Station sold

Alderwood Towne Center, home to 20 businesses, could eventually be redeveloped to take advantage of light rail.

James Berntson shows how his farm uses a trellis system to control tomato plants on Tuesday, June 21, 2022, at Radicle Roots Farm in Snohomish, Washington. (Ryan Berry / The Herald)
Backyard business: Snohomish farm thrives on less than one acre.

James Berntson grew Radicle Roots Farm using smart crop planning and organic practices.