China has all the reasons to be cautious about every trade that it makes. Trump's China tariffs have been set in place, and there's a lot of products that belong to this category. What makes it painful for US companies is that a lot of these products are needed in the manufacturing of their products. That, perhaps, is China's greatest asset, so far.
In the trade war, the US is sitting pat with the idea that China relies heavily on them more than they do in China. However, they are about to find what's wrong soon enough; Economic Times points out that the risks in the trade war are the US' business itself. It's through a combination of luck and careful investments that China managed to make itself the US' top trading partner, in terms of manufacturing.
China holds within its country, various manufacturers. Automobile makers, in general, are vulnerable; GM and Ford alone are particularly at risk. GM managed to sneak in 150 Camaros from the US into China, while Ford relies on parts assembled in Chinese factories. There are other automobile companies at risk, not just these two.
That, however, is not the only weapon that Beijing has in this game of taxes. China revealed recently that it was preparing a 700 billion yuan ($101.91 billion) stimulus package for affected businesses. It was already common knowledge among the markets that Beijing had this plan, and that it had taken effect when the tariffs from both countries became active.
The US will hold pat, as President Trump knows the elections are coming. The US midterm elections is a time when the leader of the Republican party must show that he is strong and unbending, no matter how this affects policies beneficial to the people. This can be seen in the actions that Trump made on Chinese companies, where he imposed restricted access based on accusations that these Chinese companies are bent on 'stealing secrets.'
Motorcycle company Harley-Davidson is one company that's a perfect example of being trapped in the middle of the dispute. According to CBC Canada, Harley had adjusted by moving jobs out of the US. Trump responded with stricter restrictions and condemnation of the manufacturer.
In the end, the fallout-even as risky as it is in China, as it looks like they are warning businesses from taking the US' side-will effectively be felt in the US, where more and more jobs are outsourcing into other countries rather than falling in line, just as Trump wants.
