Donald Trump's protectionist economic policies led to the introduction of tariffs on $250 billion of imports from China. President Xi Jinping responded with tariffs of his own, affecting some $110 billion worth of US-made products. As the two global economic behemoths enter a trade war, what are the implications for both economies and the rest of the world?
The trade war is good for the USShow moreShow less
The US has the upper hand; this is a war it is likely to win
The US is likely to win the trade war. This means it can protect jobs and force China to stop abusing it via trade policy.
The US has a significant trade deficit with China. The US buys more items from China than China does from the US. This means that there are more imports that the US is able place tariffs on, and that China’s economy is more vulnerable than the US’s. If the US tariffed all Chinese imports the effect on China’s economy would be far more damaging than if China tariffed all the US products it imports. If they continue in a tit for tat exchange, eventually china will experience a huge economic shock and damage. This means the US has more leverage in forcing concessions from China and can ultimately get what it wants, as China would never follow the war through to this conclusion.