US China trade war latest news: America Is likely to win Trade War

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us china trade war latest news

US China trade war latest news

 

US China trade war latest news: America Has The Advantage

The reality is a bit more complicated. In a trade war with China, the U.S., if it’s smart about it, could “win,” or least make sure that China loses more. In fact, as Michael Pettis, a professor of finance at the elite Peking University in Beijing, explains, “the dirty little secret of trade is that for diversified economies with large deficits (such as the U.S.), a trade war can actually be positive for growth, at least in the short run, as long as the intervention is done correctly.” (He and others argue that the U.S. should focus on reducing the amount of money from abroad that flows into the country to rectify trade imbalances.)

When it comes to trade wars, many reflexively invoke the infamous Smoot-Hawley tariff of 1930. That measure helped bring on the Great Depression by accelerating a contraction in global trade. The reason this tariff was so monumentally stupid: The United States ran massive trade surpluses—much like China does today. Its domestic economy could not absorb everything it produced. So it exported the difference. At the time, Pettis notes, “the U.S. had the highest absolute trade surplus in history.” Full Story

US China trade war latest news: Experts Favour US

If one were to borrow a military analogy, the first round of the U.S.-China trade war is either a skirmish or a probing attack, as the amount of the two-way merchandise trade affected by the tariffs is about only 10% of the total U.S.-China trade. But everyone knows that the main battle will be joined soon. Besides the additional $32 billion merchandise trade targeted for punitive tariffs ($16 billion of exports for each country), U.S. President Donald Trump has threatened to retaliate by levying tariffs on all Chinese exports to the U.S. ($505 billion in 2017).

But the costs of the concessions needed to stabilize Sino-American relations go beyond the number of extra goods China pledges to import from the U.S. or even the perceived loss of face for Xi. Ultimately, China will not only have to give up its state-capitalist model, the root cause of Sino-American trade tensions but also curtail its geopolitical ambitions and put on hold its challenge to American preeminence. Full Story

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