The trade war that China will win

No one has an idea of ​​this American horror movie. It is not possible to predict the behavior of the crazy king who is currently misleading America, because it generates an instinct and prophecy, and such things, by nature, unexpected.

Written by Jose Fiorido *

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In addition to the famous instability of the Supreme Commander (we have announced that their prices in the morning have been suspended in the afternoon of the same day) We also have something like an authoritarian government. For example, we know that the 90 -day suspension of “mutual” prices was identified without consulting with the Secretary of Treasury in Scott Payet or the head of the economists for the economy, Stephen Miran. Trump rules with a very restricted circle of uncomfortable believers capable of supporting the barriers of the explosion.

However, the past is not a month after the “liberation day”, the day when the “mutual” definitions were announced, and there are some things that we can already say with some security.

It seems clear that Dundel Trump overwhelmed his strength in a virtual commercial war.

Trump’s logic of the main locker sheet. If China sells me $ 450 billion annually and only 150 buy me, the potential blockade of trade means that China is losing more than me. For this reason, the creature emphasized that commercial wars are good and easy to win.

In fact, China has a lot to lose in a declared trade war with the United States. American imports that originated in China are about 15 % of the total export by the Central Empire. On the other hand, China relies heavily on exports, as its global trade balance is about three dollars per year, and all of this is more important when the internal demand is fragile after the residential real estate bubble.

Despite China, Trump’s punitive definitions have responded to increasing his definitions on American imports whenever Donald Trump expanded the war of tariffs a little more. It ended with ridiculous levels with a 145 % American tariff and the corresponding Chinese by 125 %. By the way, when matters reached this point, the Chinese government informed the US administration that it could expand the scope of the customs tariff that would become China to react. In fact, 125 % of customs rights, in practice, constitute a real ban on imports, which should climb to what is beyond these levels is pure demagicy.

When Donald Trump realized that there was nothing for domestic consumption that China would warn to conclude a deal and that the phone would soon be released with Xi Jinping on the other side asking potatoes. The call did not arrive!

In despair, Donald Trump lied to the number of teeth he mentioned that the commercial issue with China would be negotiated and that an agreement could be soon.

The Chinese government responded through official channels, saying that no trade agreement is negotiated with the United States and that any official talks on this issue can only happen when the United States retracts one -sided tariff.

It may seem strange that calm on the side that seems to have more to lose.

However, the fact is that China has prepared for this possibility because at least the first presidency of Trump, with the first provision of a trade war, although it is limited at the time. The strong hand is not with Trump, it is with the Chinese.

Of course, it is not positive for the Chinese economy without a market worth $ 450 billion. Despite China, it has many ways to compensate, at least partially, a possible loss.

From the beginning, it can turn some missing exports into other markets in the diversification process that started a few years ago and has been having birth. In 2018, China provided 21.8 % of American imports, currently less than 14 %.

Then we should not overwhelm us if Yuan is, the Chinese currency tends to decrease the value of the market forces or under the political motivation, which helps in exports.

However, the strong weapon of China and Donald Trump does not have the ability to compensate for any losses while stimulating internal demand. In China, there is an abundant margin of stimuli, whether cash and taxes, which Donald Trump cannot appeal.

In the monetary part, Donald Trump’s federal reserve was already informed that so that the path of bee inflation is not clear, there is no opportunity to reduce interest rates. Moreover, if these prices persist, it is more likely that pure hypertrophy cannot be excluded that the movement rates will increase instead of a descendant.

On the budget front, with a deficit that was walking 6 or 7 % of GDP annually, you don’t see where there is a margin of any large incentive, although tax reduction promises.

So we are not surprising, that Trump’s despair, who had even the hypothesis of the Federal Reserve Chairman, even before the term of the state that will happen in 2026. As expected, the immediate silence of the markets was so much that the creature came to clarify that there was no intention to replace Jerome Powell before the end of the field.

Donald Trump measured his strength strongly. The weight of the American economy in the global economy is decreasing, and although it is still strong, it is no longer an indispensable market.

Even countries that have been highly exposed to the United States market, such as neighboring Canada, decided to fight, although others were exposed as Mexico decided a more absorbing position.

For those who only know how to consult the closet sheets, values ​​such as respect, patriotism or dignity are absent things. But there!

Although Donald Trump and China’s sites were equivalent (they are not!) The Chinese will always win. The Chinese are more suitable for the pain and the necessary suffering from the charming Vandanga band that supports Trumpland ideas. Once the prices start climbing the supermarkets and unemployment begins to grow balloon.

By this time, Chinese patients will frankly monitor.

* Economic expert. The material was originally published in the solidarity newspaper.

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