"The US and China are locked in a dangerous trade stand-off, with the world’s two largest economies trading tit-for-tat blows as Donald Trump demands Beijing seek a deal from his administration.
China relies on the US as an almost irreplaceable market for its manufactured goods, but experts warn that Washington should not underestimate Beijing’s capacity to resist Trump’s coercive tactics.
The combination of centralised political control, increasingly diversified export markets and its virtual stranglehold on some strategically vital materials, including rare earth metals, gives Beijing plenty of negotiating power. The question is how far it can use its leverage without suffering even more damage itself.
China had a trade surplus of almost $300bn with the US last year, with about 15 per cent of its total exports heading into the US. Trump’s tariffs of 145 per cent would inflict significant pain on Beijing.
But international economists said this overlooks one crucial fact: China can replace its imports from the US more easily than the other way around.
US goods exports to China are heavily focused on agriculture — such as soyabeans, cotton, beef and poultry — and so are low value-added. Many US imports from China — electronics, machinery and some processed minerals — are the opposite.
Marta Bengoa, professor of international economics at City University of New York, said that while the US and China remained heavily interdependent in trade, this meant the ultimate balance of risk was on the US side."
https://www.ft.com/content/7c0d1b6d-41bd-4bc4-9450-4c0f08484956