Larry Summers Sounds Alarm On US Becoming 'Object Of China's Frustration' Amid Trade Tensions

Former Treasury Secretary Larry Summers expressed concerns about the U.S. becoming a target for China’s mounting frustrations, emphasizing the need for the U.S. to tread cautiously.

What Happened: Summers retweeted a statement he made during Bloomberg‘s show “Wall Street Week” where he voiced his apprehension about the U.S. potentially becoming the focal point of China’s vexation. This, he believes, might provoke China into taking aggressive actions. The former Treasury Secretary’s comments come from recent trade tensions and the U.S.’s strategic moves to counter China’s influence in various sectors.

“I am concerned that we will become the object of China’s frustration and that will tempt them to lash out. I think we need to be very careful in our approach to China at a moment of this kind of difficulty and we need to be more attentive. I think some of the policy advocates in Washington are too avoiding a situation where we terrify China with potential economic damage that we are going to do to them,” Summers said.

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Why It Matters: The U.S. and China have been embroiled in trade disputes for years. Recently, the World Trade Organization ruled in favor of the U.S., stating that China’s retaliatory tariffs on U.S. goods breached international trade agreements. This decision traces back to the Trump administration’s tariffs on steel and aluminum, which were introduced to counteract the influx of cheap metals from China. In response, China imposed tariffs on various U.S. imports.

Furthermore, the U.S. has been actively trying to weaken China’s semiconductor industry, posing potential threats to major chipmakers like Nvidia Corporation NVDA. China, in turn, has been boosting its domestic semiconductor industry, offering significant subsidies to local companies.

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