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China's Firing Back: China Unveils New Tariffs On U.S. Planes, Cars And Soybenasin

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Trump thinks we can easily win a trade war with China because they sell far more goods to us than we sell to them.  Of course, this ignores the fact that our consumers like buying their goods at lower prices, and will see tariffs as just another form of taxation. Also, the money from the trade deficit comes back to the US for services and for US bonds to finance our deficit and the new tax cuts. What China understands and what Trump doesn’t is that a trade war would not be between the US and China.  It would be between Trump and China, and we are a democracy with frequent elections and China is not.  Since China did not start the trade war, all they would need to do is respond with targeted tarriffs to make things worse for workers in certain key states.  Then, in 7 months, Trump’s supporters in Congress would be defeated, and then 2 years later Trump would be out.  China would reasonably expect the new administration to remove the tariffs to reignite both economies.  In the meantime China can subsidize its more affected industries by selling off some of their bond holdings while we won’t be able to do that. That in turn will raise our interest rates and further damage our economy.

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