Trump’s Doomsday Gamble in China Trade War
President Trump dramatically resumed a trade war footing this week with Beijing, threatening to impose tariffs on virtually all imported Chinese goods to the US.
After earlier negotiations this month appeared to avert a clash, the Trump administration is back to full trade war mode. With fiery language, the US president and his trade advisors said they have run out of patience with what they claim to be “predatory practices” by Beijing.
For its part, China quickly hit back, condemning “unacceptable blackmail” by Washington. Beijing said it will not hesitate to respond in kind with counter-tariffs on American exports.
Markets in Asia, Europe and America tumbled, with companies and investors panicked by the prospect of a full-blown trade war between the world’s two largest economies, and the uncertain repercussions from such a titanic clash.
Trump is gambling big time. He is betting that China will be the “first to blink”, as the New York Times reported. That’s because the Trump administration reckons that with China’s huge trade surplus, Beijing has much more to suffer financially if it goes toe-to-toe with the US in a trade showdown.
“China has a lot more to lose than we do,” said Trump’s trade advisor Peter Navarro, who is a hawk when it comes to dealing with Beijing. Navarro, like Trump, has continually accused China of ripping off the American economy and workers through alleged unfair trade practices and theft of intellectual property from US tech companies.
During his election campaign, Trump fired up voters with tirades slamming China for “raping America”. Recently, the president railed against “China taking $500 billion out of our economy every year”.
But typical of Trump, the emotive charges and figures are not what they appear to be.
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