trump xi jinping beijing NICOLAS ASFOURI/AFP/Getty Images

How Trump Is Helping China

China's leaders have long known that the economy has outgrown the world market, and is desperately in need of rebalancing. But, thanks to Donald Trump’s trade war, they are now pursuing that goal with a new sense of urgency, suggesting that US pressure may well end up being a blessing in disguise for China.

FRANKFURT – The Sino-American trade war, initiated early this year by US President Donald Trump’s administration, is escalating rapidly. Already, the Trump administration has imposed an additional 25% tariff on $50 billion worth of Chinese goods, and an additional 10% tariff on goods worth another $200 billion. Unless the leaders of the two countries can strike a deal at next month’s G20 meeting in Buenos Aires, the situation is likely to worsen. That’s better news for China than it is for the US.

So far, China has refused to bow to US pressure. While it has retaliated, it has kept its actions proportionate, to avoid excessive escalation. But there is no reason to think that the Trump administration – which has threatened tariffs on all Chinese products – will reverse course. After all, Trump believes that a country with a bilateral trade deficit is necessarily being taken advantage of by its partner.

The reality, of course, is that whatever costs the US incurs from trade with China are vastly outweighed by the benefits. For starters, thanks to low-cost imports from China, US consumers pay less for a wide range of goods, from shoes to electronics.

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