BEIJING ¨C As U.S. President Donald Trump prepares a wide-ranging package of tariffs and investment restrictions targeted at China, a trade war between the world¡¯s two most important economies looks unavoidable. On the face of it, the United States might seem to have the leverage it needs to win. Since it runs a huge trade deficit with China, the Chinese have a lot more to lose.
But there¡¯s a flaw in Trump¡¯s logic. He appears to have an outdated and exaggerated view of how big a role the U.S. plays in the global economy. By overestimating American economic power, he¡¯s also greatly overestimating his chances of compelling China to change its trade practices.
True, the U.S. remains by far the world¡¯s biggest economy. The next largest, China, was only 60 percent as large in 2016. And the U.S. plays a massive role in international trade. It was the world¡¯s biggest importer and second-largest exporter in 2016. As China¡¯s top customer, the U.S. retains a great deal of influence over Chinese trade and employment.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.