China Walks Into Trade Trap

I don't have insight into the Trump administration's plans (and Trump critics will argue neither does Trump), but if the trade war is part of a larger plan to cripple the Chinese economy, things are proceeding ahead of schedule.

Global Times: Trade counterstrikes give US painful lessons to learn
It is worth noting that China strikes the US side by targeting its most valuable imports, such as soybeans, automobiles and chemical products. These aspects were targeted because they represent key pillars in the US imports and can create a massive weak spot for the US economy if their profitability is at risk.

Although China will sustain financial losses thanks to the US' Section 301 investigation tariffs, they will pale in comparison to the damage done to the US economy via China's retaliations.

China's counter tariffs are a spectacular way of standing up to America's bullying tactics, not only for itself, but for other countries threatened by the US's new trade policies.
Whether this is a trade war or a larger national security action, China has fired its largest trade bullets. If this is the latter, China has escalated and cannot escalate again without risking a disproportionate response from the United States. For instance, if they hike tariffs on most U.S. imports, the U.S. might respond by jumping from tariffs on $60 to $100 billion of goods, to $300 billion.

China appeals to a global alliance against the United States on trade. But if this is part of a larger strategy, then trade isn't what's going on. It's actually a China containment strategy.
Hawkish politicians in Washington have obviously overestimated the capability and endurance of the US economy in a trade war, since they believe they can do whatever they like. China has shown a great deal of restraint for now, but if the US persists in this trade war, China is ready to fight to the end.

Washington will eventually see what they have lost, thanks to their actions, and it will only serve to embarrass the US. This trade war will serve as a good example to the US that it cannot use intimidating trade tariffs as a form of diplomacy.
China thinks the end is trade war, that the U.S. will bail out if the stock market and economy slump. If the goal is to push China into a depression, these are accepted costs.
Many believe that the Trump administration's $50 billion tariff on Chinese products is meant to pressure China to submit to the US demands. If that is the case, the US will undoubtedly lose. This is because the Chinese government has rallied its citizens and is prepared to go toe-to-toe in its fight with Washington. In fact, more and more Chinese citizens think that an "epic trade war' is inevitable, and could knock some common sense into the US government, so that it will change its way of dealing with China.
As social mood declines, Americans will also encourage and support Washington's escalation of a trade war.
If the trade war happens, China will show that it has just as many reserve plans as the US, if not more. Chinese experts suggest that China could even take actions to weaken the strength of its currency. Since China is the world's largest trading economy and the largest buyer of commodities like oil products, China could use its influence to push its own currency, RMB, in global markets to reduce the dominance of the US dollar. That would be a heavy blow to Washington.

If this trade war comes to pass, it will be an evenly matched total war between China and the US economies, and not some small scuffle. It would be delusional for the US to think it will be victorious at the end of this trade war. China comes up with the conclusion in confidence, and will not shy away from letting Washington know in this situation.
Trump is not Washington. China thinks it is dealing with a NY-DC globalist instead of a Main Street nationalist. If the U.S. dollar tumbles 30 percent, the U.S. wins the global trade war without firing a shot. It becomes the first economy to competitively devalue and exit the depression.

The U.S. has changed the terms of victory. It has different end goals now. It exports oil and could become a major exporter of natural gas. Raising wages is a major goal. The U.S. won't turn isolationist, but on the interventionist-isolationist axis, the U.S. is moving away from interventionism. If the the National Security establishment and Pentagon are whispering into President Trump's ear, especially if they have some understanding of social mood and how the public will grow in anger in coming years, then it's very possible we are only seeing a small part of a much larger plan. Or if no such plan exists, one could form as nature takes its course and the institutional support for confronting China shifts along with changing conditions. One of the chief criticisms of Trump is that he hasn't built an anti-China alliance. But the logic of confrontation creates a natural alliance. Trump doesn't have to convince Vietnam, Japan or France the value of containing China. Once he does it, other nations will act in their own self-interest.

ZH: Trump Is Building An Army Of Nations In Trade War Against China
“The damage of our economy comes from China’s restrictive practices. Blame China. They’ve been doing this for decades. Don’t blame Trump,” Larry Kudlow, head of the White House’s National Economic Council, told reporters in Washington.

In threatening to punish China for its abuse of intellectual property, Trump is “doing what everyone in the world has said we should do,” said Kudlow, adding that the administration will have more to say about its efforts to recruit other major economies to support the U.S. position.

"I call it a trade coalition of the willing. I think everybody in the world knows that China has not played by the rules for many years," he said.

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