America's trade war with China creates significant economic losses for few tangible gains, infers Joseph E. Stiglitz of The Globe And Mail. Compared to the US, China’s government has far more control over its economy, which will allow it to weather this storm better. The best possible outcome for America is that it would only sustain slight damage to its economy. This trade war pushes US companies to re-route their trade away from China, raising the cost of exporting as well as importing. China’s currency will lose value, which will boost exports as their price goes down. America won’t fare quite as well.
So far, the trade war is going in America’s favor, believes Adam Shell of USA Today. The US stock market is up by 6.1% while the Chinese one is down by almost 13%. This trade war is happening during a period of economic optimism in America, while the rest of the world is seeing less growth. China is also more exposed, as its exports versus import ratio with the US is around 3 to 1. It is much more reliant on this trade than the other way around. America’s economy is driven by local spending, making it much more self-sufficient. Up until now, America is looking like the strong favorite in this trade war.