Re:Trump Readies Sweeping Tariffs and Investment Restriction...
by crdoconnor on Friday March 16, 2018 @06:08AM
(#16599657)
>The US has a trade deficit towards Chine, so China has more to lose in a trade war than the US.
The US stands to lose all of the manufactured (especially electronics) goods China makes. The supply chains for a lot of its companies (especially tech) will be severed. China stands to lose soybeans, civilian aircraft, corn and... chicken feet, I suppose?
Of those, the only one that isn't easily substitutable with imports from elsewhere is civilian aircraft, and China is already pretty far ahead on making its own.
I think, on balance, given the relative substitutability of US vs Chinese imports, China has the upper hand in a peaceful scenario. The US can't really replace the Chinese industrial ecosystem whereas China can get corn and soybeans from elsewhere - assuming that shipping is not blocked.
...which is why I'm worried that the US might try to escalate a trade war to blockades and from blockades to, well, you know...
That said, if the US continues with a policy of unfettered trade while China continues with managed trade, China's hand grows stronger while the US's gets weaker. The US doesn't actually have a lot of good options now - it's about 15 years too late for it to safely reverse this process.
The US stands to lose all of the manufactured (especially electronics) goods China makes. The supply chains for a lot of its companies (especially tech) will be severed. China stands to lose soybeans, civilian aircraft, corn and... chicken feet, I suppose?
Of those, the only one that isn't easily substitutable with imports from elsewhere is civilian aircraft, and China is already pretty far ahead on making its own.
I think, on balance, given the relative substitutability of US vs Chinese imports, China has the upper hand in a peaceful scenario. The US can't really replace the Chinese industrial ecosystem whereas China can get corn and soybeans from elsewhere - assuming that shipping is not blocked.
...which is why I'm worried that the US might try to escalate a trade war to blockades and from blockades to, well, you know...
That said, if the US continues with a policy of unfettered trade while China continues with managed trade, China's hand grows stronger while the US's gets weaker. The US doesn't actually have a lot of good options now - it's about 15 years too late for it to safely reverse this process.