Trump's Trade War with China -- Who would Really Win ?
Who Would Win a US-China Trade War? | China Uncensored
President Trump's economic protectionism could lead the US and China into a trade war. So who would come out on top?
Transcript : On this episode of China Uncensored, 0:01 everybody's a winner! 0:03 Wait, what's that, Shelley? 0:10 Welcome to China Uncensored, 0:12 I'm your host, Chris Chappell. 0:13 Trade Wars. 0:14 That's more than just George Lucas's unproduced spin-off 0:17 of the Star Wars prequels. 0:19 According to the leaked script, 0:21 it follows Jar Jar Binks as he infiltrates the Trade Federation. 0:25 Strange that it never got made. 0:27 0:28 Anyway, trade wars. 0:29 That's what some experts are afraid might happen 0:31 if President Trump carries out his promise to impose a tariff, 0:35 or tax, on goods made in China. 0:38 He blames China’s unfair trade practices 0:41 for the loss of American manufacturing jobs. 0:44 Here today to talk about this issue 0:45 is the only person at China Uncensored 0:48 with an economics degree from Trump's own alma mater, 0:51 University of Pennsylvania, Shelley Zhang. 0:54 Thanks, Chris. 0:55 How likely is it that Trump is going to impose tariffs on China? 1:00 Oh, he's definitely going to do it. 1:02 Really? 1:03 100 percent. 1:04 How can you be so sure? 1:05 I'm not sure about anything anymore. 1:07 Ok, yes President Trump can be a smidge unpredictable. 1:12 But railing against unfair trade practices 1:14 is kind of his jam. 1:16 In 1987, 1:17 he took out this full-page ad in the New York Times. 1:21 In it, 1:22 he criticized Japan for taking advantage of the US 1:24 with its weak yen and trade surpluses, 1:27 and suggested that we "tax" Japan and other countries 1:30 for the services the US provides, 1:32 like keeping the world safe. 1:33 Sound familiar? 1:34 I guess China is the new Japan? 1:37 Yes. 1:38 Just a quick find and replace, 1:39 and he can still use the same speech 1:41 30 years later. 1:42 Ok, 1:43 so when President Trump imposes tariffs on China, 1:46 what effect will that have? 1:47 Will that start a trade war? 1:49 That I don't know. 1:51 It really depends on how high the tariff is, 1:53 and how broadly it's applied. 1:55 Trump has talked about wanting to impose a 45% tariff 1:59 on all Chinese-made goods. 2:01 Something that big would probably trigger China 2:03 to impose its own tariffs on American goods in retaliation. 2:07 That could lead to a trade war. 2:09 Of course, you could argue that China 2:11 already started the trade war years ago. 2:14 You know, when it did things like 2:15 artificially lowering the price of their products 2:17 through export subsidies, 2:19 stealing intellectual property, 2:21 and setting up ways to keep US companies 2:23 from competing in China. 2:25 That's definitely how the Trump administration 2:27 sees it. 2:28 Well, more important than who starts it, is who finishes it. 2:32 Who wins the US-China trade war? 2:35 Experts are divided, Chris. 2:36 Some say it will hurt America. 2:39 Others say China will lose. 2:40 Meanwhile, Chinese state-run media 2:43 say that China would totally not get hurt by a trade war. 2:47 And, like, it's not going to happen. 2:49 Plus why would the US want a stupid trade war anyway? 2:53 Which means state-run media also think China will lose. 2:57 So what you're saying is, America wins. 3:00 Well, it's complicated. 3:02 Americans will lose in that tariffs mean 3:04 companies will raise prices on Made in China stuff. 3:07 So we'll have to pay higher prices on most stuff at Wal-Mart, 3:10 as well as things like appliances and consumer electronics. 3:14 But will tariffs bring American jobs back? 3:17 They might bring some jobs back. 3:19 But not necessarily the same ones that left. 3:22 Jobs might require higher technical skills, for example. 3:25 Low-skill manufacturing jobs 3:27 probably aren't going to come back. 3:29 Lots of those jobs have been replaced by technology. 3:33 And US companies can just move to other Third World countries 3:36 with cheap labor. 3:37 Like the Donald J Trump Signature Collection 3:39 has already started moving from China to other countries. 3:43 Yes. 3:44 Although in a recent speech, 3:45 Trump said he will incentivize US companies with tax breaks 3:48 and other things to come back to the US. 3:51 Tariffs could also create different jobs. 3:53 For example, in industries where China has a virtual monopoly, 3:57 like on rare earth minerals, 3:59 which are needed to make electronics. 4:01 Tariffs could cause a huge shortage in the short term, 4:04 but in the long term, 4:05 it could encourage American companies 4:06 to start mining rare earth minerals. 4:09 What about China? 4:10 China has more to lose 4:11 because they sell us more stuff 4:13 than we sell them. 4:14 And in a trade war, 4:16 generally the country with the trade surplus 4:18 gets hit the hardest. 4:19 China could lose millions of export and manufacturing jobs. 4:23 And at a time when economic growth is slowing, 4:25 that could cause not only huge problems with their economy, 4:29 but it could lead to political instability as well. 4:32 After all, 4:33 one of the big reasons 4:34 people put up with the Communist Party 4:35 is economic growth. 4:36 Very true. 4:37 And if China loses more, 4:39 does that mean America wins? 4:41 It's not so cut and dried. 4:43 There are other things that would probably happen. 4:45 Like the cheap manufacturing that's currently in China 4:47 would move even faster to places like Southeast Asia. 4:50 And it might create a gray market 4:52 where goods are manufactured in China 4:54 but shipped to another country, 4:56 where they are officially exported to the US 4:58 to avoid the tariffs. 4:59 Are you really saying that people will find loopholes 5:02 to avoid taxes? 5:04 Anyway, I guess we'll have to wait and see what happens. 5:07 Well, we actually have kind of a test case. 5:11 What I like to call the Rubber Chicken Skirmish of 2009. 5:14 That's when President Obama set a tariff 5:18 of 35% on Chinese tires. 5:21 It did manage to save 1,200 US tire jobs 5:24 and increased US tire production. 5:27 However, tires also got way more expensive 5:29 for US consumers. 5:31 And China raised retaliatory tariffs on chicken parts 5:34 from the US, 5:35 which cost chicken producers about 1 billion dollars. 5:38 I'm glad that wasn't actually about rubber chickens. 5:41 I was starting to worry about you. 5:43 Would it help if I told you I didn't sleep last night? 5:47 No? 5:48 Ok, one thing to note here Chris 5:50 is that I have been talking about this tariff in generalities, 5:53 since Trump hasn't talked yet about the specifics 5:56 of his plan. 5:57 However, economist Peter Navarro, 5:59 who’s the new director of Trump's National Trade Council, 6:02 has defended the tariff. 6:03 He says that it would be applied not on everything, 6:06 but with a "flexible case-by-case approach.” 6:09 And that tariffs would be used strategically 6:11 to negotiate with China. 6:13 Remember, 6:14 the Chinese regime is scared to lose manufacturing jobs— 6:17 because it could affect China's political stability. 6:20 That means the threat of a trade war 6:22 could be a powerful bargaining chip for the US. 6:25 So, if these tariffs are targeted to give the US 6:28 greater political leverage over China 6:30 and expose the ways the Communist Party 6:32 has gamed the system, 6:34 they could maybe get the Party 6:35 to change some of their trade practices. 6:37 And that would make the tariffs successful, 6:39 even if they don't bring back millions of manufacturing jobs. 6:43 So what you're saying is, America wins. 6:46 Trade isn't exactly a zero sum game, Chris, and... 6:49 Ok, you know what, yes, America wins. 6:53 Thanks, Shelley. 6:54 That's what I like to hear. 6:56 Go get some sleep. 6:58 And thank you for watching this episode of China Uncensored. 7:01 What do you think of the possible US-China trade war? 7:04 Leave your comments below. 7:05 Once again, I'm your host, Chris Chappell. 7:07 See you next time.
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