Though the U.S. faces real economic and diplomatic risks, China is more vulnerable, with a fragile financial foundation and heavy reliance on its trade surplus.
Great article Stan, and I agree with you. I still believe the strategy of the Trump administration is to break apart the existing world economic order by using the cudgel of punitive tariffs to reshape trade policy with individual countries - eg Vietnam, Canada, and soon Italy, to negotiate bilateral trade deals that finally benefit the US - which is tariffed extensively and highly even by my former home country of Canada - 150-200% tariffs on dairy products, 60% on lumber - and this under NAFTA!
China is indeed vulnerable and it's clear the Trump administration's policy is to threaten China with such high tariffs they have no choice BUT to come to the table. Whether it works or not remains to be seen, but I have to believe there is some serious backroom negotiations currently underway to pave the way for a face saving way allowing China to do precisely that. They obviously do not want a trade war with the US and vs va Fingers crossed this is the case.
Great article Stan, and I agree with you. I still believe the strategy of the Trump administration is to break apart the existing world economic order by using the cudgel of punitive tariffs to reshape trade policy with individual countries - eg Vietnam, Canada, and soon Italy, to negotiate bilateral trade deals that finally benefit the US - which is tariffed extensively and highly even by my former home country of Canada - 150-200% tariffs on dairy products, 60% on lumber - and this under NAFTA!
China is indeed vulnerable and it's clear the Trump administration's policy is to threaten China with such high tariffs they have no choice BUT to come to the table. Whether it works or not remains to be seen, but I have to believe there is some serious backroom negotiations currently underway to pave the way for a face saving way allowing China to do precisely that. They obviously do not want a trade war with the US and vs va Fingers crossed this is the case.