China is planning to punish an automaker from the U.S. accused of alleged price-fixing is a signal of how the government might retaliate if U.S. President-elect Donald Trump stops decades of relations between both nations.
Trump’s claim that the U.S. does not have to be bound by that policy of one China when it relates to Taiwan would end a years of ties between the two countries that has become the foundation of cooperation between the two largest economies in the world.
Few involved believe the disagreement is going to lead to a military confrontation nor the economic war that many worried could start by the threat from Trump during the presidential campaign to place tariffs of as high as 45% on imports from China.
However, a China that has risen over the years has a number of ways to push back very hard if Trump were to press over Taiwan, which the majority of analysts see as the biggest part of the relationship between the two.
The official newspaper of China quoted an official in China as saying China would penalize an U.S. automaker that was unnamed due to monopolistic behavior.
While the Chinese officials said there should be nothing read into that as being improper, it caused shares of Ford Motor and General Motors to fall.
Sources in the auto industry have said that specific investigations had already been underway prior to the recent comments by Trump.
However, the way it was announced that saying only that it was an automaker from the U.S. prior to the fines being formally announced, has increased questions over whether or not officials might seize on the opportunity to hit back on the Trump administration upon its start.
A Trump spokesperson said this week that he had heard of the report by it was too premature to make any comment.
A congressional aide, who is a Democrat, said that the threat by China to fine an automaker from the U.S. was a strong reminder that China also has its own cards to play and if Trump thinks he can enter negotiations for Taiwan, North Korea or trade, as if the U.S. was the only superpower in the world.
A spokesperson for the government in China said that the country welcomes foreign businesses, including those from the U.S. to operate and invest in China. However, those companies must respect the laws and regulations in China as well.