In retaliation for $50 billion in U.S. trade tariffs against Chinese imports, China laughably hits back with $3 their own billion tariffs against the U.S. According to most reporting Beijing has selected U.S. pork and scrap aluminum as targets for a 25% tariff, along with wine and fruit tariffs around 15%.
It should be emphasized the approach by China is rather ridiculous considering the Chinese government purchased the largest U.S. pork manufacturer Smithfield in 2013 for $5 billion; at the time the purchase price was 30% more than the company was worth. Smithfield, now a Chinese company, represents 25% of all U.S. pork products.
Do you really think China is going to not import it’s own pork products… or subject them to a domestic tax? Think about it. It’s ridiculous. China knows they have ZERO leverage in a trade-dispute with the U.S., they cannot afford to lose access to the U.S. market.
The example of Smithfield foods is exactly what we have outlined in how China cannot sustain itself and needs to control the assets of foreign countries. Hence, their one-road/one-belt program for securing products and raw materials. China is a dependent economy, they need to exploit global trade to survive. China cannot feed itself. This is the inherent flaw within their short-sighted authoritarian government-controlled economic model.
Again, for emphasis, the Chinese government underwrote the purchase of Smithfield foods in 2013. They paid 30% more than the company was worth because they were securing access to food just like they would any other raw material (uranium, minerals, etc). China also purchases U.S. politicians to retain their ability in this regard.
Now look at the cartoon from the unofficial Chinese state-run media today:
