The president told CNBC that he is ready to place a tariff on every single Chinese good entering the U.S. in the latest salvo in what could quickly turn into an unprecedented trade war. Trump told CNBC, “I’m ready to go to 500,” referring to the $505.5 billion in goods the U.S. imports from China each year. Currently, Trump has slapped tariffs on $34 billion in Chinese goods, which China has retaliated on.
However, China would be incapable of retaliating fully if Trump does carry through with his “500” threat. That’s because China only imports $129.9 billion in U.S. goods each year. So how else would China be able to retaliate? Their only options would seem to be through diplomatic or military efforts. If the last one sounds far-fetched, it’s important to remember the truism “free trade stops wars”–that is, you’re less likely to attack another country if that country is also your customer. If Trump does slap tariffs on every Chinese good entering the country, China could very well see it as an attack on its economy that is so grave it threatens its national security, and that it must respond against that attack in any way it can.