Former Trade Official Issues Stark Warning As US-China Tariff War Escalates: 'The Tsunami is Coming For Everyone'

A former trade representative is warning of the impact President Donald Trump's tariffs, even after the pause announced for most countries on Wednesday.

Concretely, Katherine Tai, who worked during the Joe Biden administration, said China is preparing for "prolonged economic warfare" and that factories in the U.S. and around the world will close as a result.

She went on to say that Chinese companies had previously offered discounts to longtime U.S. clients, but now are willing to give up the market entirely and find new buyers elsewhere. In fact, China has been expanding its trading blacklist and also those facing export controls.

The Daily Mail detailed that Beijing will likely impose more controls on products needed by U.S. companies to make their own, especially through regulatory investigations and penalties. It might also seek for them to give up intellectual property or be banned from doing business in the country.

Beijing has vowed to "fight to the end" against Trump's tariffs, with top official Li Qiang saying authorities were "fully confident" in the resilience of the Chinese economy.

In this context, The Washington Post quoted Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai, who said "some people here believe that we should not seek negotiations right away."

"By then Trump will be under a ton of pressure and is maybe willing to negotiate with China, and by then China will be in a better position to bargain," he added, claiming that negotiating now "plays into Trump's hands."

However, AFP noted that even though the country is trying to tariff-proof its economy by boosting consumption and investing in key industries, it remains highly vulnerable to Trump's measures.

"The Chinese economy has been significantly weakened since Trump's first term and can't really withstand the impact of sustained high tariffs," Henry Gao, expert on Chinese economy and international trade law, told the outlet.

Moreover, Ryan Hass, a senior fellow at Brookings, a Washington-based think tank, told The Washington Post that Beijing's leaders "recognize they are asymmetrically vulnerable to an escalating trade war," but they also "do not believe they have an exit ramp [and] will not tolerate being publicly pressured into submitting to Trump's will."

Originally published on Latin Times