The U.S. and China are not in a trade war yet – but they are in a rapidly escalating war of words that poses a danger to them both.
President Trump’s new threat Thursday to consider imposing tariffs on an additional $100 billion worth of Chinese products gives him leverage to negotiate a peace settlement that will avert economic warfare and benefit the U.S. But achieving this will not be easy.
You might call this challenge – if I may borrow a phrase from the president – the art of the deal.
President Trump’s new threat comes on top of a threat he made Tuesday to slap tariffs on $50 billion of goods imported from China, in addition to tariffs he imposed last month on Chinese steel and aluminum exports coming to the U.S. That brings the total amount of Chinese products imported into the U.S. each year that President Trump has threatened with tariffs to $153 billion.
What’s needed now are tough and serious negotiations between China and the U.S. to reach a reasonable and fair compromise that gives each nation some of what it wants.
Unsurprisingly, China matched the earlier tariffs President Trump floated with threats to impose its own tariffs on $53 billion worth of U.S. crops and products it imports annually.
However, China would have a hard time matching the new round of tariffs proposed by President Trump because it purchased only $130.4 billion worth of goods from the U.S. in 2017. In contrast, America imported $505.6 billion in Chinese goods last year.