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What China Can Gain from Trump’s Trade War

An unintended outcome of US President Donald Trump's trade war is that China will reduce its reliance on foreign trade and imported technologies. The end result could be a China that is stronger, more resilient, and possibly less willing to acquiesce to US-designed rules.

BEIJING – The world’s two largest economies – China and the United States – are engaged in a full-blown trade war, and what US President Donald Trump hoped would be a blitzkrieg has turned out more like trench combat. Many fear that this is only the beginning of a long conflict that could include weapons – and casualties – far outside the realm of trade.

Since China joined the World Trade Organization in 2001, the US has taken issue with China’s large current-account surplus and the undervalued renminbi. But over the last ten years, that surplus has pretty much disappeared, and the renminbi has largely been appreciating. Now, the US has shifted its attention to China’s inadequate protection of intellectual-property rights and its policy of appropriating foreign technology in exchange for market access.

Yet, in China’s view, what the US is really reacting to is not only the specifics of its trade policy, but also its overall development model and its aspirations to become a major global power – aspirations that are not out of reach. In fact, the Chinese believe, Trump’s trade war effectively proves that China has become a real and present threat to American hegemony.

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