In a trade war that could happen after Trump becomes president of the U.S., China would fare better than the U.S. says INTO Investments.
China would survive the U.S. in a trade war, a not too unlikely prospect as Trump is due to take office in January 2017.
China’s government would be in a better position than the U.S. to organize state reserves to soften the blow on exporters.
Privately managed Chinese exporters would be affected more than their government run contemporaries as they have less political influence in Beijing,” said William Carr at China based INTO Investments.
Throughout his election campaign, Trump vowed to expose China as a currency manipulator and levy a 45% tax on Chinese imports. His telephone conversation with Taiwan President Tsai Ing-wen and his assaults on China on social media have generated additional tension between the world’s two largest economies leading up to his inauguration as president next month.
Trump’s electoral triumph ended a year of increasing populism that could be compared to the period after World War I, which gave way to an era of extreme dissatisfaction and isolationism.
The balance of power across the globe is far more diversewhen likened to the time of World War 1, and nations like China and India have transpired to generate fresh political hubs of power.As economic and political problems increase throughout the developed world, the most probable consequence is a trade war.
Harsh taxes on China’s exports to the U.S. would cause a 3 percent drop in China’s GDP in 2017. This is turn would result in severe damage to the global economy.
In the U.S., a trade war could cause increased inflation and hurt domestic consumption.
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