Michael Snyder – March 20, 2017
The United States and China are the two largest economies in the world by far, and the upcoming trade war that is about to erupt will be cataclysmic for both sides. The Trump administration and the Chinese government are both gearing up for a prolonged trade war, and this is going to have very severe implications for the entire global economy. During the campaign, Donald Trump repeatedly stated that we “can’t continue to allow China to rape our country”, and he was quite correct about that. Over the past ten years, the U.S. has run a trade deficit of over $2 trillion with China, and as a result of imbalanced trade we have lost tens of thousands of manufacturing businesses, millions of good paying jobs, and hundreds of billions of dollars of tax revenue.
So clearly something needs to be done to balance our trade with China and other countries. But the situation must also be handled delicately, because trade disruptions could bring substantial short-term economic pain.
Prior to winning the election, Trump threatened to unilaterally impose a 45 percent tariff on Chinese exports. Unfortunately, China is not just going to sit there and take whatever Trump throws at them. Every single time the U.S. has imposed tariffs on Chinese goods in the past, China has responded by slapping tariffs on U.S. goods.
And this time around, the Chinese are already preparing a very harsh response even though Trump has not officially made his move yet…