A Trade War With China May Be Inevitable
Despite the heated rhetoric of the past few days, a trade war between the U.S. and China does not seem imminent. But it may be inevitable.
Almost immediately after the Trump administration announced its plans to impose tariffs on a broad array of Chinese imports, with an eye towards compelling the Chinese government to address intellectual-property theft and other alleged trade abuses, Chinese officials responded by threatening tariffs of their own, shrewdly training their fire on U.S. imports from constituencies crucial to Republican political fortunes. Many observers have thus concluded that we’re on the cusp of a devastating economic confrontation, which will badly damage U.S. interests.
Of course, nothing is set in stone. Just as President Trump dialed back his steel and aluminum tariffs, to unruffle the feathers of various allies, it is likely that something similar will happen this time around, particularly if the Chinese make concessions, as I expect they will. Beijing recognizes that they are more vulnerable to a disruption in trade flows than their U.S.
