CNN – CNN Today New Tariffs — Trade War Robert Lawrence Kuhn, September 18, 2018 HOST: Robert Lawrence Kuhn joining us via skype from Beijing. He's the author of How China's Leaders Think and a longtime advisor to Chinese leaders and corporations. Robert, we appreciate you joining us. First off, you know it seems like Trump's strategy here is to force China into concessions with these tariffs. What's China's view on that? RLK: China's view is that the economic ties between China and the rest of the world, the United States in particular, is very important for the peace and prosperity of the world. RLK: And indeed for the entire economic relationships and standards of living of all people. There are real issues and I think we need to discuss them. But right now, China is sending signals by what it's doing, that it wants to ratchet down the trade war. It recognizes that it cannot be unresponsive. RLK: In China, the legitimacy of the government and indeed of the Communist Party is based upon two cardinal factors. One is the economy. This is the 40th year of China's reform and opening up — truly an economic miracle, an astonishing increase in standards of living. RLK: The GDP per capita has gone up more than 50 times in these 40 years. And so that's number one. But number two is national rejuvenation, national pride. This is what the government and the Party has brought to China in terms of its position in the world. So it cannot back down and look weak in terms of these tariff attacks. But given that, given that environment, the Chinese response is very carefully calibrated. RLK: China levying tariffs on $60 billion is not dollar for dollar, the way the first $50 billion was. But what it is, in fact, is in proportion — because $60 billion is roughly 40 percent of the roughly $150 billion of the total US exports to China, just as $200 billion is roughly 40 percent of the little over $500 billion of the total China exports to the US. RLK: So it's a proportional response