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Finance & Economy

Trump will win the US-China trade war easily


US exports to China: goods 2006-16 and services 2006-15 (chart from US-China Business Council’s State Export Report June 2017)

Beijing will accept a new US-China trade deal which is dictated by Trump.

The American oilseeds for producing cooking oil, navigational instruments for building cargo vessels (dry bulk or container ships), intermediate producer goods for manufacturing … (see the picture shown above) are at this moment irreplaceable items that China needs to import from the United States.

In economic terms, the Chinese demands are “inelastic”. This inelasticity restricts China’s capability of fighting a real trade war against the U.S. by, say, imposing tariffs on the imports of these semi-finished products. In other words, Trump can do whatever he wants and his trade war is a sure win.

If it is so easy to win, why did the previous presidents not do it? Among the various reasons ranging from the free trade ideology to vested interests in the commercial world, a major reason is about election.

To start a trade war, the White House has to impose tariffs on Chinese products which would somehow hurt the consumers. And most of these consumers are those living in the western and eastern coastal states which normally vote for the Democrats (so-called ‘blue states’).

Therefore, Bill Clinton and Barack Obama would not do it. George W. Bush made use of the wars in Afghanistan and Iraq to get re-elected, and therefore chose to skip it.

Trump is very different. The working class in the South as well as the ‘swing states‘, not the mass consumers in states like California or New York, is his source of presidential victory. Take a look at the number of “jobs supported by the exports to China” state-by-state in 2015:

6,600 in Alaska
15,500 in Arizona
6,100 in Arkansas
121,000 in California
12,600 in Colorado
9,600 in Connecticut
3,200 in Delaware
34,900 in Florida (swing state won by Trump 2016)
26,100 in Georgia
3,900 in Hawaii
5,500 in Idaho
48,100 in Illinois
20,300 in Indiana
18,100 in Iowa (blue state won by Trump 2016)
13,700 in Kansas
15,100 in Kentucky
16,400 in Louisiana
2,400 in Maine
10,700 in Maryland
30,500 in Massachusetts
29,700 in Michigan (blue state won by Trump 2016)
21,500 in Minnesota
7,600 in Mississippi
17,200 in Missouri
3,000 in Montana
11,000 in Nebraska
11,100 in Nevada
3,400 in New Hampshire
18,200 in New Jersey
2,300 in New Mexico
57,900 in New York
21,700 in North Carolina (swing state won by Trump 2016)
6,300 in North Dakota
28,700 in Ohio (swing state won by Trump 2016)
4,700 in Oklahoma
25,800 in Oregon
29,000 in Pennsylvania (blue state won by Trump 2016)
2,400 in Rhode Island
25,200 in South Carolina
6,000 in South Dakota
18,800 in Tennessee
75,800 in Texas
7,100 in Utah
2,000 in Vermont
17,300 in Virginia
83,800 in Washington
3,700 in West Virginia
14,000 in Wisconsin (blue state won by Trump 2016)
800 in Wyoming

If Trump could force China to buy more American goods by using the tariffs as bargaining chips, he would add more jobs for the working class in the ‘swing states’ and the unstable ‘blue states’ where a sizable quantity of jobs has been there for exports to China. This is the core of his calculation. As Beijing has no better alternative, why not appear to be co-operative?

The opinions expressed are those of the author, and not necessarily those of China Daily Mail.

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About keith K C Hui

Keith K C Hui is a Chinese University of Hong Kong graduate major in Government and Public Administration and the author of "Helmsman Ruler: China's Pragmatic Version of Plato's Ideal Political Succession System In The Republic" (2013).

Discussion

3 thoughts on “Trump will win the US-China trade war easily

  1. We live in interesting times to put it mildly, or dangerous times to be more blunt.
    Politicians sure have changed over the years of my lifetime, but so have Generals, and modern weapons.
    I wish we would be attacked by little green man from Mars, the entire Human race would stand shoulder to shoulder
    like brothers and sisters to fight of this Foreign enemy.
    But as that is not going to happen soon, I am afraid we have to relie on hating each other so some at the top may succeed at the useless bloodshed of other more innocent sitizens.
    Trade war, cold war, hot war it seems to always include that one word “WAR!”
    My word for humanity is “WHY!”
    This planet is going for a shit! And no one cares, not realy, or it would stop.
    Trump, Xi, Kim, May, Merkel, Putin etc,etc,etc what is the difference?
    The are proffesional liers after all,……….arent they?

    Dont get your shirt in a knot! Proove me wrong first!

    Like

    Posted by Arend Hendrik van Vierzen | March 28, 2018, 1:29 pm

Trackbacks/Pingbacks

  1. Pingback: World politics after the US ban on selling chips to ZTE | China Daily Mail - April 25, 2018

  2. Pingback: Trump to win more trophies from China in the 2018 trade war | China Daily Mail - May 2, 2018

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