The burgeoning trade war between the U.S. and China has economists, investors, and much of the media in a tizzy. They're worried about a drawn-out standoff that will raise prices, cut off supply chains, and do long-term damage to the U.S. economy. But this battle is not as equal as it is being portrayed. Breitbart News points out that President Trump is engaging China with eyes wide open about where they really stand. That is, he knows China is much weaker and more vulnerable than they are letting on publicly.
"China's economy has deep structural problems, they've known about those problems for a long period of time, and that makes them a bit brittle," says Stephen Miran, Chair of the White House Council of Economic Advisers, on Fox Business. "That means that they need a deal. President Trump is correct that the United States holds all the cards, we have the leverage...and you have to hand it to the President and his team for creating the leverage to bring other countries to the negotiating table."
So far, China has talked tough against U.S. tariffs and engaged in a series of retaliatory moves, like trying to cutoff the U.S. from microchips and rare Earth minerals. But those moves are likely to do more damage to their own economy than ours in the long run. "We forget one thing: Yes, we need to buy, but the Chinese need to sell," says Gordon Chang, author and China expert.
Of all the cards the U.S. is holding, the biggest might be Trump himself. After all, he is the author of the "Art of the Deal." As Miran points out, this isn't Trump's first high-stakes standoff, and not even his first with China. "Nobody thought the phase one deal with China was possible, and yet the president delivered it (during his first term)," says Miran. "And it delivered a stream of concessions from China, on intellectual property, market access, currency, on purchase of agricultural commodities."
"It was a great deal the president negotiated, and it's too bad that the Biden administration walked away from it."
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