Imagine What Would Happen if China Decided to Impose Economic Sanctions on the USA?

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Imagine What Would Happen if China Decided to Impose Economic Sanctions on the USA?

Written by Prof Michel Chossudovsky; Originally appeared at GlobalResearch

In June, Washington threatened Beijing with a sanctions regime, in response to China’s increased bilateral commodity trade with North Korea. Initially, the US sanctions were not intended to be against the Chinese government: selected Chinese banks and trading companies involved in the financing of China-DPRK commodity trade would be potential targets of US reprisals.

Having lost patience with China, the Trump administration is studying new steps to starve North Korea of cash for its nuclear program, including an option that would infuriate Beijing: sanctions on Chinese companies that help keep the North’s economy afloat.

According to Chinese sources, China’s trade with the DPRK increased by 37.4 percent in the first quarter of 2017, in relation to the same period in 2016. China’s exports increased by 54.5 percent, with imports from the DPRK experiencing an 18.4 percent increase.

The insinuation was crystal clear: curtail your trade with North Korea, or else…

Coupled with the aggressive legislative sanctions “package” recently adopted by the US Congress directed against Russia, Iran and North Korea, Washington now threatens China in no uncertain terms.

Imagine What Would Happen if China Decided to Impose Economic Sanctions on the USA?

Trump is demanding that Beijing relinquish its relationship with the DPRK, by unconditionally siding with Washington against Pyongyang. Washington has granted China six months “to prove that it is committed to preventing a nuclear-armed North Korea”, despite the fact that Beijing has expressed its firm opposition to the DPRK’s nuclear weapons program.

The political deadline is coupled with veiled threats that “if you do not comply”, punitive trade measures will be adopted which could result in the disruption of China’s exports to the United States.

Moreover, the White House is intent upon conducting “an investigation into China’s trade practices” focussing on alleged  violations of U.S. intellectual property rights. A “Section 301” investigation, named after a portion of the 1974 Trade Act is slated to be launched.

Following the completion of the investigation, Washington threatens to “impose steep tariffs on Chinese imports [into the US], rescind licenses for Chinese companies to do business in the United States, or take other measures, which could, “pave the way for the U.S. to impose sanctions on Chinese exporters or to further restrict the transfer of advanced technology to Chinese firms or to U.S.-China joint ventures.”

In formulating these veiled threats, the Trump administration should think twice. These measures would inevitably backlash on the U.S. economy.

China is not dependent on US  imports. Quite the opposite. America is an import led economy with a weak industrial and manufacturing base, heavily dependent on imports from the PRC.

Imagine what would happen if China following Washington’s threats decided from one day to the next to significantly curtail its “Made in China” commodity exports to the USA.

It would be absolutely devastating, disrupting the consumer economy, an economic and financial chaos.

“Made in China” is the backbone of retail trade which indelibly sustains household consumption in virtually all major commodity categories from clothing, footwear, hardware, electronics, toys, jewellery, household fixtures, food, TV sets, mobile phones, etc.  Ask the American consumer: The list is long. “China makes 7 out of every 10 cellphones sold Worldwide, as well as 12 and a half billion pairs of shoes’ (more than 60 percent of total World production). Moreover, China produces over 90% of the World’s computers and 45 percent of shipbuilding capacity (The Atlantic, August 2013)

A large share of goods displayed in America’s shopping malls, including major brands is “Made in China”.

“Made in China” also dominates the production of a wide range of industrial inputs, machinery, building materials, automotive, parts and accessories, etc. not to mention the extensive sub-contracting of Chinese companies on behalf of US conglomerates.

Imagine What Would Happen if China Decided to Impose Economic Sanctions on the USA?

www.Made-In-China.com

China is America’s largest trading partner. According to US sources, trade in goods and services with China totalled an estimated $648.2 billion in 2016.

China’s commodity exports to the US totalled $462.8 billion dollars.

Import Led Growth

Importing from China is a lucrative multi-trillion dollar operation. It is the source of tremendous profit and wealth in the US, because consumer  commodities imported from China’s low wage economy are often sold at the retail level more than ten times their factory price.

Production does not take place in the USA. The producers have given up production. The US trade deficit with China is instrumental in fuelling the profit driven consumer economy which relies on Made in China consumer goods.

A dozen designer shirts produced in China will sell at a factory price FOB at $36 a dozen ($3 dollars a shirt). Once they reach the shopping malls, each shirt will be sold at $30 or more, approximately ten times its factory price. Vast revenues accrue to wholesale and retail distributors. The US based “non-producers” reap the benefits of China’s low cost commodity production. (Michel Chossudovsky, The Globalization of Poverty and the New World Order, Global Research, 2003).

Imagine What Would Happen if China Decided to Impose Economic Sanctions on the USA?

The import of commodities from China (in excess of 462 billion dollars) is conducive through the interplay of wholesale and retail markups (which contribute to value added) to a substantive increase in America’s GDP, without the need for commodity production. Without Chinese imports, the GDP rate of growth would be substantially lower.

What we are referring to is Import Led Growth. US businesses no longer need to produce, they subcontract with a Chinese partner.

And why is this occurring? Because America’s manufacturing industries (in many sectors of

production) has in course of the last forty years been closed down and relocated offshore (through subcontracting), to cheap labor locations in developing countries.

China’s economy is not only linked to industrial assembly, China increasingly constitutes a competitor and major exporter in a variety of  high technology sectors.

Imagine What Would Happen if China Decided to Impose Economic Sanctions on the USA?

Image: Make America Great Again: Made in China

In Your Face Donald Trump!

In summary, this kind of economic blackmail on the part of the Trump administration against China does not work. It falls flat.

In turn, America is threatening both Russia and China militarily including the pre-emptive use of nuclear weapons. How will Russia and China respond to US threats?

While US sanctions against Russia have largely backlashed on the European Union, it is not excluded (although unlikely) that China could at some future date respond to US threats by impose economic sanctions against the USA.

In the short run, the US cannot relinquish its imports of Chinese manufactured goods. It would be economic suicide.

Laughing in Beijing

Chinese policy makers are fully aware that the US economy is heavily dependent on “Made in China”.

And with an internal market of more than 1.3 billion people, coupled with a global export market, these veiled US threats will not be taken seriously by Beijing.

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  • Artimus Gray

    Thanks for the read. :)

  • Quenten Bruce

    Who is taking America seriously anymore..? Only the poor and intimidated, incarcerated and oppressed within America. The rest of us are laughing too.

    • Nightcrawler136

      In truth most of the world hates America!

      • Fabrizio Brader

        And you can blame the Neocon Washington’s regime for that.

        • BL

          America’s problem didn’t begin with the Neo-cons, America started off as a terrorist, genocidal, globalist, exploitative nation from the get go.

  • Nuno Cardoso da Silva

    Seeing that a confrontation between China and the US is inevitable, China should decide to go full steam ahead against the US, politically, economically and strategically, and not try to satisfy any of the US aggressive demands. The sooner the US is confronted with a firm response to its imperialistic follies, the better.

  • Weldon Cheek

    Is this really trumps doing?i know it was his rhetoric in his election campaign but we all know that what they say and what they do is two different things,could this be the “dark side” using his stated policies against him?i find it rediculous that they could seriously come out with this kind of economic suicide and mean it?itd be like them really building the mexican wall and all the Americans looking at the instructions to see how all the machinery works!

    • Vtran

      You could TRY and say that none of this is to do with Trmpz, Except

      Every time the Those Out of Work Figure Drops in U$ america (Manipulated figures)…. Trmpz Takes the Credit

      Dow has rizen to 22,000 …. Trmpz is taking the Credit

      Trmpz signed the New Sanction Bill on Russian Federation … so Trmpz / Trmpz Administration OWN that Bill … not congress

      Trmpz Launch Cruize Missiles at Syrian Individuals even tho Informed before hand that there was NO CHEMICAL ATTACK … Trmpz is a War Criminal

      So anything “Good” whether False / Manipulated .. Trmpz is Claiming … and so when it all Collapses … only One Person to point the Figure at … Trmpz !

  • FlorianGeyer

    The time has come to put the US out of her debt laden misery and boycott US goods wherever possible. Including trading in the Petro Dollar.
    The spectacle of US politics is very entertaining I know and never fails to cheer my day :)

    The sooner the mountains of US debt bring reality to the US the better.

  • JPH

    Sanction Apple. Company has enough cash outside the US (on which it refused to pay taxes anyway) to survive and sanctioning Apple will ensure US gets the message.

    • Ronald

      BDS , they are about to attempt to pass a law against it , so that is where it really hurts .

  • Serious

    Economy, economy, economy.

    USA is the largest economy in the world and USA has 20 000 billion of debt that is going up every month. So what is the orupose of having the largest economy if your debt are going up exponentially ??

    And USA are threatening arabs to get their oil and gas. USA is corrupting most of the countries to give markets to US companies. Without that, it will be worst and USA will collapse.

    • dutchnational

      The one advantage of the US is that their debt is in $. In theory, they could say to the FED just print 20.000 billion in $ and their debt is wiped out. It would wipe out the value of their $ but who cares.

      As for oil and gas, they are now the largest producer and do not need imports anymore. They can even export a bit.

      Markets are obtainable for the US. They just can say to any country that they can export to the US but only to a max of say 110% of what they buy from the US. Wise? Maybe not. Doable, likely yes.

      • Serious

        Even if it’s in dollar, the collpasing of their economy will affect hardly USA and even more their partners. Of course, they say others countries to destroy their national central bank. But USA keep his central bank in the USA. “Do what I say, not what I do”. The ones that are listening to USA are the dumbest people on Earth. Once you listen to USA, your debt start rising up. Anf if you bankrupt, USA doesn’t care but if USA bankrupt, you are affected hardly.

        USA is the largest producter but I think their production can only provide 70% of their needs. And also, they need to provide their puppets countries like Europe. Ortherwise they can’t maintain their domination on them.That’s exactly why the GCC don’t need USA but the support of GCC state is vital for USA.

      • Terra Cotta Woolpuller

        They are not the largest oil and gas producer they have never left their position as number 3 , the US buys oil cheap to support their economy and sells theirs on the open market. They force Canada and Venezuela to sell oil to them for cheap along with Mexico to ensure they have no markets to challenge the US , by interfering in their politics and using NGO’s to sell the idea of Green Energy and actively supports these groups endeavors through political pressure.

  • dutchnational

    The US and China are co dependent. If China will stop exporting to the US, it would have some effect on the availability of some consumer goods for the US, which they can buy from other countries, maybe at a higher price. Production capacity in countries like Taiwan, Japan, Malaysia, Singapore can be expanded quite rapidly.

    China will have many goods it cannot sell elsewhere, they will get hurt too.

    In the end, the US is less vulnarable then China as China has a very large surplus in trade with the US.

    They would be stupid to let things escalate, but whomever said that politicians are wise?

  • grumpy_carpenter

    DPRK is currently at war with the USA and SK. The current situation is a 64 year old ceasefire but the actual war is still unresolved.

    This is just ludicrous. The USA which has overwhelming air superiority over the DPRK, has threatened the DPRK with nuclear war and inflicted the most brutal bombing campaign in history on the DPRK in the active stage of the war is demanding the DPRK unilaterally disarm.

    Who in their right mind would ever think that a sane leadership would give up a weapons system just because the enemy they’ve been at war with for 70 years demands it? I guess it’s worth a try but really?

    Then the USA gets upset because DPRK ally in the war, China doesn’t stab their ally in the back by supporting US efforts to disarm them.

    Perhaps if the USA had bargained in good faith and really tried to negotiate peace over the last 64 years instead of threatening and betting that the DPRK starves or self destructs to end the war they wouldn’t be dealing with a nuclear armed DPRK right now.

    • Serious

      Once apon a time, there was one country called Korea. USA came and cut the country in two parts. The more you are away from USA, the better it is for you.

  • Serious

    And also, USA managed to occupy Europe after WW2. My theory is that USA and GB planned WW1 and WW2 to occupy Europe. Because without Europe, USA dream of controlling the world is dead.

    Germany is the most powerful country in the world. USA wanted to control Germany because USA knew that Germans were the top in the world and were the biggest threat for USA hegemony. Everthing that Americans can do, Germans can do it better. Isn’t an ex-Nazi that build Saturn V ???

    Now, USA is flooding Germany with aliens to make sure that this country will never ever recover.

  • Serious

    I don’ think USA is particularly strong. Europe is way more stronger than USA. But, USA decided to destroy Europe to keep their world domination.

    And I don’t think China will ever be such a threat for USA. China will be a problem but not a challenger.

    For me, the biggest challenger was Germany. And if Germany stop the aliens entering Germany by millions and managed (I don’t by what mirace to get rid if USA), Germany will recover and become the most powerful power.
    The second challenger is France. But also controlled by USA.
    The third challenger is Russsia. It doesn’t need that much for Russia to become a real superpower. If Russia manages to get that little, it will be the big challenger and maybe the world savior. Man, Russia is the only country that bring people on space on ISS but Russia can’t make cars ???

    • Vtran

      Looks like you have been reading too many U$ american National Interest articles … least it gives you a warm feeling

  • John Brown

    China is being smart as is Russia both are doing all they can to strengthen their economies and militaries for when the inevitable collapse of the global racist supremacist Jewish slave empire occurs which is now very, soon less the 5 years tops. Just as with the racist supremacist Jewish owned EU being the bigger loser with Russia sanctions so will racist supremacist Jewish owned America be the biggest loser in Chinese sanctions but it is best to pretend to be afraid of the global racist supremacist Jewish slave empire, as every day the racist supremacist Jewish power gets weaker and is in rapid decline, while Russia and China are rapidly growing in economic and military power. Together with their more Russian military and more Chinese economic strength they are more than a match for racist Supremacist Jews who had hoped to play Russia and China off against each other. https://uploads.disquscdn.com/images/65272ba33698043a57e8677e4dfb9b290550d79a0d39a7be6eeff14a12a9f86e.jpg

    • Serious

      This rabbi is exactly right. Goyim are me,nat to serve jews and the Americans are the typical goyim.

      Americans even give billions of dollars a year to israel. They give 38 billions dollars of the most sophisticated weapons. They even give their country.

  • Solomon Krupacek

    “Imagine what would happen if China following Washington’s threats
    decided from one day to the next to significantly curtail its “Made in
    China” commodity exports to the USA.”

    nothing, bro. they shift the production in other countries. mostly india, but also south-east asia. reality is that, china is not giant. china needs the american market. if americans would close for china their market, china will not survie. hude debts are present in chinese economy.

    until now china is buying and steeling western technology. and some decades will this continue.

    btw., when obce china will be enough strong economically, that day will be the Dawn of Russia. so guys, do not be happy from chinese ;)

    • Serious

      Neighbour countries are not as effective and cheap as Chinese. And China doesn’t need particularly USA. They can export to the world.

      USA alone is weak. that’s why USA wants puppet countries.

    • I am Jaziel

      In a way you are right. but together with Russia, India, Brasil, Iran. India and Pakistan they are gigantic. I don’t know where you are from but I suppose that you have heard of Brix.
      And right know you have the Europeens to that does not want to bye this expansiv LNG gas from US, to a least the double of the prize from Russia or Iran or whatever.
      This new sanctions are just old sanction reapeated again.
      My dream is that Europe together with Russia will explore and devellop everything from minerals, steel and gold from Russia, together with Oil and gas from the same area together with Norway. and of coarse also the fertelisers to the farmers and so on.
      Then Europe and Russia together will be the new economic “superpower”

      • Solomon Krupacek

        together with Russia, India, Brasil, Iran. India and Pakistan they are gigantic.

        unfortunately, not. very vulnerable economies.

        the next problem is:
        brasil – crisis, before collapse, the new president cia-agent. brasil is not anymor memeber of brics

        iran – destroyed by sanctions. needs 2 decades to stabilize the economy. till today is not able to cover the economy with gasoline.

        india – more pro western country then pro brics. on the india-chinese border is armored conflict. in 30 years in south asia hal of the population will starve. if 1 milliard people move, this will be large push on china, russia. catastrophy!

        pakistan – everything unpredictable

        china – they will not share anything with other ccountries. the chinese politics for thousands of years was isolation. only trade, nothing else. this is also the new politics of peking. the population is rising, the climate changes worsening. inevitabely will attack russia, if will be enough strong.

        My dream is that Europe together with Russia will explore and devellop
        everything from minerals, steel and gold from Russia, together with Oil
        and gas from the same area together with Norway. and of coarse also the
        fertelisers to the farmers and so on.
        Then Europe and Russia together will be the new economic “superpower”

        that is also my dream. from lissabbon to ladivostok. but also the russian politicy makes not enough in favour of this way.

  • Jan Tjarks

    Imagine if BRICS and SCO would agree on a new international ‘lead’ currency system to create new and emerging markets, while sanctioning the USA diminishing this market.

    No one would go through this period easily, but it would work, no matter the cartels in the background trying to crush the currencies of the countries to punish them. It would be a very different world, but the USA seem to promote this kind of change in their madness.

    • Serious

      USA is bluffing. They will do nothing. USA is not that powerful. USA is just trying to bring more puppet countries to her in order to make a global ban to their ennemies.

      • Jan Tjarks

        They are losing ground pretty much everywhere, the only reason why they are still going is the lead currency and the military & industrial complex, which are making the required profits from this imperial business model.

        However, everything else has to step aside for this, which won’t last forever, as the USA are already in a so called “cold civil war” internally. Trumps made in China “Make America great again” campaign is not really helping it.

        That even Europe is openly against these sanctions is a huge sign of losing control. Only Vasall Merkel is keeping her cards hidden so far.

    • Terra Cotta Woolpuller

      The Shanghai Cooperative includes India and Pakistan and many observing members as ones and future members. They may very well end the US hegemony in economy and do much better than which you have surmised. This to me seems a bluff and a testing of the waters in whether they can get away with things much longer , the EU needs to stand up and impose it’s own restrictions on the reach of these US only sanctions which are illegal under international law as which they all have been.

      • Jan Tjarks

        With the speed and ferocity these sanctions were pushed out, it seems to be more than just a test balloon. In the end, Berlin neither wasn’t taken over by reason.

        • Terra Cotta Woolpuller

          The US is a state full of bobbleheads and like them they also think like the tiny heads do they never approach anything with any clarity of understanding, but what I meant by test is if the EU is just talk or more tiny heads talking.

  • Serious

    And I think that China is just in transition. China goal is to be isolated and create an interior market. When you have more than 1 billion people market, you don’t really need others. China is just trying to make up lost time. China wants to build aircrafts, micrprocessor, … but they can’t do it right now. They don’t have the technology.

  • Gesellman

    The us would immediatelly send mccain to congress to say that Chinese sanctiins against the us economy is an act of war. Guaranteed to happen this way. Its what they do and its how they get out of repaying their foreign debt which China is the main beneficiary with 75% of us debt.. if China decided to cash in on it the us would be devastated and call for war.

  • MeMadMax

    The BEST thing china could ever do for us is to stop trade with the united states….

    I’m serious.

    This would right our jobs issue, solve the unemployed and homeless issue, solve the trade imbalance issue, increase tax income for our government, reduce debt, etc etc etc etc…

    PLEASE china, PLEASE do a sanction on the US… Just completely STOP all economic activity with us…

  • globalism = communism = jew world order

    this is the consequence of allies fighting for the wrong side in WW2.

    reap what you sow. Now fix the mistake before you are erased forever.

  • “Chinese policy makers are fully aware that the US economy is heavily dependent on “Made in China”.”
    ——————-
    Then cut them off.
    Get rid of this pestilence once for all.

  • Jens Holm

    Münchausen was here. If China dont sell for 500 bio doallr to USA, who will buy it. And if not. If the dollar will go right down, which it will, who will suffer -all incl. oilproducers.