Donald Trump is winning the trade war with China. That’s what they are saying. Who? Who is saying that? What crazy “right-wing mouthpiece” is peddling that blather? Munich-based EocnPol Europe, that’s who.
In a paper titled ‘Who is Paying for the Trade War with China,’ they report that it’s not Americans. It is Chinese Exporters who are paying.
Related: A View of Trump From China
Chinese firms pay approximately 75% of the tariff burden and the tariffs decrease Chinese exports of affected goods to the United States by around 37%. This implies that the bilateral trade deficit between the US and China drops by 17%.
The additional tariffs generate revenues of around USD 22.5 billion, which could subsequently be redistributed in the US. Although the tariffs introduce a distortion to US consumption decisions, the economic costs are shifted to Chinese exporting firms and the US government is able to extract a net welfare gain of USD 18.4 billion.
The left, the media, the Never-Trumpers, have all been full-throttle on the incompetence of a trade war with China. Only to discover that it has been waged with precision and that America is winning. As if somehow, Donald Trump knew this all along.
China May Be Ready To Surrender
Legal Insurrection reports that the Chinese have already presented a deal to end the tariffs.
“China wants to make a deal, they sent a list of things they are willing to do, which is a large list, and it is just not acceptable to me yet. But at some point I think that we are doing extremely well with respect to China,”
It’s not good enough. Not yet. So, the Chinese have dispatched a Trade Delegation to Buenos Aries in advance of the upcoming G20 summit. President Trump and Chinese leader Xi Jinping will meet face-to-face there. Given that the tariffs are hurting the Chinese most, and failing to negotiate a new deal will result in more of the same it behooves the Chinese to come up with an arrangement that comes closer to Mr. Trump’s expectations.
We said it months ago. China needs the US market more than it needs China. Mr. Trump has put paid to a reality that the Chinese government can no longer ignore.
And it looks like America wins either way.
Related: In Other News: Trump Secures New Trade Deal With Mexico and Canada