Hi SchnitzelTo my understanding the US doesn't have quite the...

Hi Schnitzel

To my understanding the US doesn't have quite the power over China that you seem to suggest. For one thing the imbalance of trade over many years now sees China holding vast US $ reserves - it would be a very big problem for the US to see China lose confidence in their currency which is currently upheld by their desire to do business in USA. Of course this is already happening gradually worldwide but the US certainly wouldn't want to accelerate it.

The second factor is China's pegged currency, the US are desperate to see the value of the yuan increased - for the very same balance of trade problems. Imagine if tariffs had the opposite effect of causing China to lower the peg in order to maintain their competitive advantage???