Why the US-China trade war won’t last

16-May-2019 Intellasia | CNN | 6:00 AM Print This Post

The United States and China don’t just coexist. Their massive economies are deeply intertwined in ways that make the intensifying trade war unsustainable.

China’s booming middle class is a critical growth engine for Boeing (BA), Apple, Nike (NKE) and other American brands. China is expected to keep growing in importance as a buyer. And America’s insatiable appetite for cheap goods has created a Chinese factory juggernaut that employs millions of workers.

The world’s two largest economies are each other’s biggest trading partners. Nearly $700 billion in goods were sent between China and the United States in 2018 alone. And with $1.1 trillion of Treasuries, China is America’s largest foreign creditor.

The United States has legitimate complaints about China’s trading practices, and persuading China to open its market to American sellers is an important goal now and for the future.

But China and America need one another. The tit-for-tat tariff battle is threatening one of the world’s vital economic relationships and because of their size, the global economy. At a time when the two nations should be forging rules for the next 20 years, they are pointing a gun at one another.

Trade wars are simply bad economics.”


“We have to learn how to live with each other,” said Keith Lerner, chief market strategist at SunTrust.



Category: China

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