2018 China America trade war started

  • It can take 6 years until Trump leaves office
  • It is Trump who desperately wants a deal, then a good deal, so to win the re-election. Without a deal, and with bad economy, Trump might lose the re-election.
  • There will be no real trade deal
  • In case 25% tariff on all $500 Billion Chinese goods, China will lose some (100 billion/year) * 5 years /2 = $250 billion, because Chinese companies will pay only a small part of the lose, it is mainly the American importers and consumers paying the Trump Tariff.
  • $250 billion lose for China in 6 years is serious nothing, see China has so much forex, and still making big profit from CN-US trade.
  • Even if each year China loses some 30 billion USD to Trump’s tariff, China still makes like 300 billion surplus from US, so still the big winner of the trade.
  • China will then stimulate the domestic market, which is the KEY for long term eco development of China. China will also keep its state-owned companies system, and put huge funds into Made in China 2025 strategy, and maintain complete control of Chinese internal political and economic systems. China will also put huge money into R&D in high tech like chip industry, see what happens with Huawei.
  • USA will lose trust from Chinese people, this is too bad for USA in long term, because anyway China will be #1 in the world, and this will is be reality very soon, even Trump can delay this process like 5 years.
  • All in all, in the end, China will come out as big winner, Trump will be out of office after no more than 5 years, Xi wins.

https://money.cnn.com/data/dow30/