Is America winning the trade dispute with China?

Juan Casas, Courier Staff

The current administration has taken a protectionist stance on trade against China and its own allies across Europe and even Canada.

Tariffs have been issued on all sides, from aluminum and steel tariffs to America against China and Europe; whiskey and cheese tariffs from Russia and Europe against America, not to mention a tariff against American farm goods like soybeans imposed by China as retaliation for the tariffs on billions of dollars of Chinese goods placed by America. The mainstream media has almost daily declared these events as a trade war, yet the truth is that at this moment, its much closer to a trade dispute than an actual trade war. This is because not all tariffs that can be applied on all sides have actually been applied. So, the question arises of how the trade dispute is going and how is it benefiting Americans.

Taking a closer look, it appears that as of right now, America does seem to be benefiting from the trade dispute with China. For example, there has always been a trade deficit in favor on China; from the beginning of the trade dispute that trade deficit has dropped by 17 percent in favor of America. So, if things continue at this rate and if things don’t escalade into a full out trade war, America does appear to be winning. The reason is that the trade tariffs placed on Chinese goods are aimed at specific products that America can attain from other countries if need be. This forces China to lower their prices in order to avoid further losses; this has benefited America and has forced Chinese companies to take the overwhelming blunt of the tariffs. For example, from the 25 percent tariffs on aluminum and steel, China has absorbed an estimate of 20.6 percent of tariffs versus the United States only absorbing 4.4 percent. So, as of right now, China is losing the trade dispute.

Yet, there is growing concern for the global market on the prospects of the trade dispute escalating into an all-out trade war which will disrupt the global economy and send the majority; if not the entirety, of it into disarray and into the recession/depression levels seen during the 2008 housing market crash. This is bad for obvious reasons, for it is true that the current trade dispute has benefitted America, a trade war will not only hinder Chinese markets but will harm American ones as well. For the benefits to be seen in America; the current administration must show restraint and not allow it to be pushed into escalating the trade dispute with China. China has shown restraint up until this point, mostly because their prime minister has been in power for over a decade and intents by all means to remain in power and an economic collapse will put his personal ambition in the crosshairs.

Overall, it is unlikely (albeit possible) that the current trade dispute will escalate.