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The Sino-US Trade War Has Officially Started. How Should Chinese LED Display Companies Respond?
Jan 04, 2019

After hard-testing on both sides, the Sino-US trade war officially started the first shot on July 6:

1) On June 15, the White House issued a statement on Sino-US trade, imposing a 25% tariff on 1,102 products with a total value of $50 billion. The White House statement mentioned the Chinese made 2025. The US Trade Representative Office said that the Chinese tariff list contains two sequences. The first group of Chinese tariffs covered $34 billion in imports and was officially levied at 12 o'clock on July 6.

2) On June 15, the State Council Tariff Commission decided to impose a 25% tariff on 659 items of approximately US$50 billion worth of imported goods originating in the United States, including 545 items of agricultural products, automobiles and aquatic products of approximately US$34 billion. Customs duties will be imposed on July 6, 2018.

3) On June 18th Trump instructed the US trade representative to determine $200 billion worth of Chinese goods. If China takes retaliatory measures and refuses to change the trade "unfair" practices, an additional 10% tariff will be imposed. Trump then announced a further upgrade to $500 billion, which basically achieved full coverage of Chinese exports to the United States. On June 27th, Trump said that he would impose restrictions on China's investment in key US technology.

4) In July, a spokesman for the Ministry of Commerce said that the United States violated the WTO rules and launched the largest trade war in economic history. The Chinese side promised not to fight the first shot, but in order to defend the core interests of the country and the interests of the people, they had to be forced to make the necessary counterattacks.

For China and the United States to be so fast, so tough, and so large-scale trade wars, domestic and foreign media and markets began to have collective misjudgments. It can be said that this collective misjudgment from Trump counterattacks the president to China and the United States. The trade war has been staged again and again, and it is worth pondering. Until recently, the market began to face up to and accept the reality, and the rational views such as protracted warfare and abandoning illusions began to be gradually recognized, and the positive voice calling for accelerating the reform response gradually began.

At the beginning of the Sino-US trade war, we put forward some judgments that differ from the market's popular views: "The Sino-US trade war has long-term and increasingly severe nature." "This is under the banner of trade protectionism." In the trade war, our best response is to push for a new round of reform and opening up with greater determination and greater courage. We must remain calm and strategically determined."

China's economic rise challenges the US economic hegemony, China's entry into high-tech challenges the US high-tech monopoly position (international division of labor from complementarity to competition), China's mercantilism challenges the US free trade, China's "Belt and Road" challenges the US geopolitics, China's development model challenges American ideology and Western civilization.

The new Cold War mentality has triggered a hegemonic power to curb the rise of emerging powers. This is under the banner of trade protectionism, and the future does not rule out the expansion from trade warfare to exchange rate financial warfare.

China recently issued a license: to fight the war, to promote peace, and to expand reform and opening up. On the one hand, tariff reduction, investment facilitation, expansion of openness, financial de-leverage, supply-side reform, unwavering implementation of reform and opening up, and the use of quantitative and qualitative types to respond to the US, prompting them to return to the negotiating table. Strive to reach a consensus, hold the bottom line, seek a win-win situation, avoid the worst case and friction escalation.

China occupies 80% of the world's display foreign trade share. Compared with the consumption of US display screens, the display screens provided by Chinese display companies to American consumers meet the demand for high quality and low prices. The United States unilaterally increases taxes. For the display consumers in the United States, it also increases the cost of consumption, and at the same time makes the display industry export more and more severe. Is China’s LED screen enterprise ready for war in this millennial moment?

The "337 investigation" conducted by the United States on 13 display companies in China and the strict control of Chinese screen enterprises have caused Chinese screen enterprises to fall into a bottleneck. The US market has become increasingly difficult for many companies to develop. The US market has not allowed us to be too optimistic. However, "all roads lead to Rome", we must be treated with positive and optimistic emotions in the Sino-US trade war.

Domestic demand is one of the three troikas that drive the national economy. In 2016, the domestic market for display companies was 33.5 billion yuan. Compared with exports, exports were less than 10 billion yuan. This shows that the demand for LED application market is still in China. Pulling domestic demand will be a fundamental way out for our foreign trade to be blocked.

The “Belt and Road” is the region that currently drives the world economy and is the most promising region in the future. The “Belt and Road” is an important strategy implemented by the state. LED screen display companies should also match this strategy, and continue to go out according to the country's strategy to become bigger and stronger.

China's LED display screens are sold all over the world. Currently, more than 160 countries around the world source LED displays from China, which was the main export market in the United States. After the Sino-US trade war broke out, LED display companies should pay more attention to this strategy. With the “One Belt, One Road” process and advancement, China can open up new markets in the countries along the “Belt and Road” and penetrate the display screens along the line. each country.

The “Belt and Road” covers more than 70 countries and more than 70 international organizations, of which 68 countries have already entered into strategic partnerships with China. The “One Belt, One Road” market will gradually form and mature.

Chinese LED display companies can integrate with national strategies and develop and cultivate new markets in the countries and regions along the Belt and Road.

Blessing in disguise. I know the blessings. The Sino-US trade war is a severe test for LED display companies. In the face of complex domestic and international environment, whether it can respond in a timely manner, and how to minimize the risk in the face of risk, only to fully achieve these can seek long-term development of the enterprise. The East is not bright and the West is bright. LED screen enterprises have experienced this trade war. It is a process of experience and a test process.

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