As China begins to retaliate against the United States, its numerous businesses that produce energy are becoming prime targets. In recent weeks, the Middle Kingdom has been shaking up the markets as its government begins to fight back against American economic sanctions. By going after America’s energy production, China is making sure the economic pains are far-reaching, and being felt all the way across the Pacific Ocean.
1. Chinese Retaliation: An Unfortunate Reality
For years, the US and China have found themselves in a state of political and economic opposition. As the world’s two most significant economies, many recognize the potential of an all-out trade war between the two nations that would consequently damage otherwise prosperous international markets. In recent weeks, US tariffs against Chinese imports have been a concerning reality; in retaliation, China instantly put its own duties against US products.
The retaliatory move triggered a wave of alarm among many of the heavyweights in both countries. The implication of increased tariffs is far-reaching, with the greatest victims being the poorest – middle-classes have the least to gain and the most to lose in a trade war. Furthermore, it may be that these tariffs become customary practice, triggering an unfortunate chain-reaction between the two world powers.
- Increased Tariffs – US tariffs placed against Chinese imports will be met with swift retaliation from China, placing increased tariffs onto US products.
- Unequal Impact – Trade wars have largely different impacts on different classes, with the poorest bearing the brunt of the cost.
- Chain-Reaction – Tariffs may remain commonplace, becoming a permanent factor in US-China relations.
2. Retaliation Against America’s Energy Companies
America’s energy companies have had it good for years, but that is all about to change. In response to the energy industries’ ever-increasing rates and practices, the US government has put together a two-pronged strategy to hold them accountable.
The first prong is reform. The government is pushing for reform that strips energy companies of the monopolies and strict regulations many have taken for granted. This will enable better competition and lower prices for consumers.
The second prong is a series of fines and punitive measures designed to punish those companies who take advantage of consumers. This might include higher taxes, or even partial nationalization of key assets.
Will Customers Benefit?
In the short-term, customers may not benefit directly. Companies may pass the cost of these fines down to the customer, or cut important services. But, in the long run, this retaliation policy is aiming to protect the American public from being overcharged, and give them the competitive prices they deserve.
The government hopes this approach will send a lasting message to all energy corporations, encouraging responsible practices and competitive rates. Whether it succeeds or fails, the time has come to hold the energy sector accountable for their actions.
3. Consequence of a National Power Struggle
When a nation finds itself in a perpetual power struggle, the effects can be far-reaching and devastating. The reverberations can spread like ripples in a pond and shatter a nation’s preexisting infrastructure, leaving behind chaos and destruction.
The impacts can be profound:
- A weakened government which is unable to implement its own laws, protect its citizens and ensure social welfare.
- Tensions among the population which can erupt into civil unrest and acts of violence.
- An economy that craters under the strain of the instability.
- An uncertain future that can take a long time and many resources to repair.
It takes strong leadership and even stronger commitment to break out of the quicksand of a national power struggle. The post-consequences of such a situation can be serious and long-lasting, so nations must take action and unite to protect their citizens and their nation.
4. The Impact of China’s Reciprocal Response
China and its allies have reacted swiftly to what many perceive as economic bullying and protectionist trade policies imposed by the United States. The Chinese have implemented reciprocal tariffs on American goods, goods which are capable of having a far-reaching impact on the American economy. While the United States has claimed victory in the ongoing trade war, it is difficult to estimate the potential damage caused by China’s retaliatory measures.
The impact of China’s response can already be felt in certain industries. American farmers and agricultural producers have been hit hard, with crops such as soybeans, wheat, and peanuts feeling the sting of Chinese tariffs. Furthermore, Chinese tariffs on other goods, such as cars, steel, and aluminum, have had a ripple effect, further impacting other sectors.
The economic implications of China’s retaliation are substantial and could continue to escalate in the face of continued economic tension between the United States and China.
China’s attack on American energy companies is sure to have lasting implications on the relationship between the two countries. It is yet another disturbing chapter in the complicated relationship between the two governments. As both sides embark upon a new era of economic and political interaction, it is clear that both nations must find a way to work together if they are to emerge as global leaders. How these events unfold in the coming months will be something to watch for.