China Warns of a Trade War with U.S. Under Donald Trump

China warnsLast night, Chinese President Xi Jinping rang up President-elect Donald Trump to congratulate him on his recent election win.

During the phone call, Xi stressed the need for cooperation between China and the United States in terms of trade, reported Beijing's state-run TV channel China Central Television (CCTV) this morning.

U.S.-Sino trade relations were a key political point for Trump's presidential campaign, which kicked off on June 16, 2015. Since that day, the billionaire thrived on promises of hitting China with a 45% tariff on imported goods while taking on Beijing for currency manipulations. This, Trump vowed, would bring jobs back to the United States.

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But during last night's "congratulatory" phone discussion, Xi slipped in what many media sites have called a veiled threat to Trump: He stated that cooperation between the two countries "was [Trump's] only choice," CCTV reported.

Starting this morning, the "threat" theme took off in headlines:

  • "China Warns Donald Trump on Slapping Tariffs on Their Goods," International Business Times
  • "China Warns Trump About Starting Trade Wars," The Daily Beast
  • "China Warns Trump Over Possible Trade War," tech-centric media site AppAdvice

And influential Beijing media site The Global Times backed up Xi's warning. It went into detail about exactly what negative consequences will occur should Trump keep up with his anti-China rhetoric...

China Warns These U.S. Business Powerhouses Will Suffer If Trump Starts a Trade War

Here is what The Global Times stated will happen:

  • An unspecified cache of Boeing Co. (NYSE: BA) orders would soon be replaced by Airbus Group SE (EPA: AIR) orders - a U.S. airline competitor based in Blagnac, France.
  • U.S. auto and Apple Inc. (Nasdaq: AAPL) iPhone sales in China would "suffer a setback" - though the site did not specify what this "setback" would look like.
  • U.S. soybean and corn imports will be completely halted.
  • Beijing will also limit the number of Chinese students studying in the United States.

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As an example of earlier tariff tit-for-tats, The Global Times pointed toward the 35% tariffs imposed in 2009 on Chinese tires by President Barack Obama.

China retaliated then with its own 31.4% tariffs on U.S. car parts and chicken.

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"Both China and the U.S. suffered losses as a result [of this trade war]," The Global Times reported. "From then on, the Obama administration waged no trade war against China. If Trump imposes a 45% tariff on Chinese imports, China-U.S. trade will be paralyzed."

In the end, however, the Chinese media site acknowledged that last night's phone call between Xi and Trump actually ended on a positive note.

In fact, the U.S. president-elect even stated that he believes the two leaders will have one of the strongest relationships for both countries ever moving forward.

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Money Morning Executive Editor William Patalon, III, began anticipating Wall Street's reaction to a Trump presidency right when the billionaire announced his bid over a year ago.

While some mainstream analysts claimed Trump's trade protectionism would cause a cataclysm in the market, Patalon never agreed.

Especially when airlines were involved in the panic chatter.

Here's why Bill says the "Trump factor" won't hurt Boeing one bit...

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