US Lacks Weapon, Ammunition in Trade War with ChinaPosted: January 5, 2017
Reuters’ report “Trump names China critic Lighthizer as U.S. trade representative” gives the impression that with Lighthizer’s track records in stemming the tide of imports from Japan in the 1980s with threats of quotas and punitive tariffs, Trump will win his trade war with China by employing him.
The China now is quite different from the Japan in the 1980s when Japan’s market was much smaller than the US and depended on export to the US for Japan’s economic prosperity.
Chinese market is now much bigger than the US and is expanding fast. China is now switching to relying its own market from its dependence on export.
Reuter says in another report titled “GM’s China vehicle sales rise 7.1 percent year-on-year in 2016” that China has been GM’s top market for five consecutive years. In last December alone, GM sold 434,799 vehicles in China.
Will Trump fight a trade war to cause US companies to lose their major market?
The US is a big market for Chinese goods, but most of Chinese exports are products of low technology that China can easily transfer the production to other Asian countries where labor and land resources are much cheaper.
Does Trump want China to drive away from China popular American soft drinks, fast food, cars, airliners, medicines, mobile phones, etc.? Does he believe that China is unable to produce similar products to fill its domestic market?
Trade war will certainly hurt China but China will enjoy long-term benefit from taking back the parts of its domestic market monopolized by the US.
Without strong weapons and ammunitions, Trump will lose his trade war with China sadly.
I do not think Trump is so stupid as to launch a trade war with China to hurt the US. I believe that Trump will gain from win-win cooperation with China as it is unthinkable that a great nation may have three stupid presidents in a row.
Comment by Chan Kai Yee on Reuters’ report, full text of which can respectively be found at http://www.reuters.com/article/us-usa-trump-trade-idUSKBN14N0YA and http://www.reuters.com/article/us-gm-china-sales-idUSKBN14P145.