China’s best-case scenario for a U.S. trade deal looks worse by the minute. Negotiators on Wednesday evening wrapped up yet another round of negotiations, but made little progress. A tariff ceasefire brokered in June has dragged on, and President Donald Trump no longer seems enthused about a quick deal that could expose him to criticism ahead of a 2020 presidential election. With supply chains already migrating out of the mainland and economic growth slowing, time is not on Beijing’s side.
The tariffs aren't just effective because they were put in place and threatened by Trump.
They are effective because American economic strength at the moment means we can better endure economic consequences of a trade dispute.
In addition, our tariffs apply pressure on existing trends in China that pre-date Trump. China has already experienced declining Chinese economic growth and loss of low-cost manufacturing as China's economy has advanced, raising wages in China beyond the level that allows China to compete in the low-cost manufacturing sector.
China is hurting. But they have a plan:
China is apparently hoping to be patient and take advantage of the current political turmoil in the United States. This has made most of the American media and many American politicians reluctant to criticize China mainly because American mass media is obsessed with overthrowing the current U.S. government.
Can China endure a few more years of this pain on the hope of getting a Democrat in the White House who will cave to Chinese demands to go back to business as usual?
The American edge in this dispute is kind of funny considering the odd belief here that China is naturally gifted at long-range planning.
