Why the US isn’t winning the trade war with China | FT


Donald Trump tweeted this week
that the US-China trade war is a beautiful thing to watch. His view is that
Washington is combating China’s sharp
practises, while helping attract massive amounts
of money into the US through investments. But key data from the trade
war is telling an almost opposite story. If you look at
the numbers alone, it is very difficult
to make the argument that the US is winning. In the year to the end of
June, US exports to China slumped $33bn or 21 per cent. Chinese exports to
the US, by contrast, actually grew a little,
rising one per cent or $4bn. In July, according to
numbers just announced, China’s surplus with the
US grew still further, and over the first seven
months of the year, China’s total surplus
was worth a hefty $168bn. This is exactly the
outcome that Mr Trump was determined to
avoid when Washington imposed a flurry of tariffs
against China last year. And the relative lack of
pain being felt by China could also go some
way to explaining why Beijing seems fairly
nonchalant when it comes to negotiations with the US. It’s clear that
Washington wants to talk. Larry Kudlow, the top White
House economic advisor, said this week that
the US side was preparing the
Chinese negotiating team to come over in September. He also held out the
possibility that there could be some softening
in Mr Trump’s threat this month to impose new tariffs
on Chinese goods worth $300bn. For now though, Beijing
is not sounding too keen to concede to
Washington’s demands.

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