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Who is More Vulnerable In The US-China Tariff War?

A trade war would hurt America more

No, its economy is more robust

 Getty: Pool / Pool

With his trade tariffs on China President Trump has chosen an adversary that he cannot beat, holds Philippe Legrain of Foreign Policy. While both countries have much to lose from a potential trade war, China has the means persevere economically and politically. Thirty-seven percent of its exports are essential to American manufacturers. Much of the technology that China sends over is simply assembled there but originates from places like South Korea and Japan. Furthermore, while many US industries rely on imports from China, it can simply buy elsewhere. Soybean farmers and airplane builders are set to suffer from tariffs.

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The US is much better equipped to withstand a trade war than China is, infers Bill Powell of Newsweek. Its economy is more diversified and robust. China has much less leverage than many assume. For example, not buying American debt would result in its own currency getting stronger in ways that would hamper its exports. A potential trade war could benefit the US, because it would reduce its national deficit due to importing more than it exports. Even if China were to block imports on soybean companies or Apple, this would not severely affect America’s GDP. The US holds all the aces because of its economic supremacy.

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