Why China could withstand the trade war far longer than Trump thinks
Quote:President Trump insisted Thursday that he was “under no pressure to make a deal with China,” signaling a readiness to escalate his trade war with Beijing.
“They are under pressure to make a deal with us,” Trump tweeted in reference to China. “Our markets are surging, theirs are collapsing.”
The president’s statement sought to downplay any hope that the United States would extend a hand toward reconciling the trade conflict, amid word that Treasury Secretary Steven Mnuchin had invited Chinese officials to return to talks.
Trump’s view that the Chinese are suffering while the U.S. thrives helps explain his confidence that Beijing ultimately will buckle. But the president’s expectation that financial hardship will prompt Chinese President Xi Jinping to cave in a fresh round of diplomatic talks is misplaced, analysts said.
“There’s a lot of overly wishful thinking on the American side,” said Jeff Moon, a former U.S. trade negotiator. “Every economy has problems. We have trillion-dollar deficits. That doesn’t mean either economy is in fundamental danger. It’s a massive miscalculation.”
Quote:“To the extent that Trump is looking at that and thinking he has China by the neck, he’s wrong,” said economist Andrew Polk, a partner at Trivium, a Beijing-based advisory firm. “China’s economy has its own issues. It’s slowing down, but it’s not about to blow up. Trump has less leverage than he thinks.”