DEBATE: Is it possible for Donald Trump to ‘win’ the trade war with China?

Is it possible for Donald Trump to ‘win’ the trade war with China?

Dr John Hemmings, director of the Asia Studies Centre at the Henry Jackson Society, says YES.

While many people blame Donald Trump’s “America First” policy for the trade war, it’s likely that Hillary Clinton would have done the same, since Beijing’s leadership has cheated on many of the rules agreed to in the WTO.

We note the expansion of Chinese state-owned enterprises in the Belt and Road initiative. We marvel at how Huawei went from 2.5 per cent of the European ICT market to 25 per cent between 2006 and 2014, buoyed by billions from Chinese state banks. We note how Made in China: 2025 aims to substitute Chinese products for western ones in China’s vast home market.

While these subsidised Chinese firms find welcoming doors in the west, their western competitors struggle in China with IP-theft, forced joint ventures, and non-tariff barriers.

Trump’s tariff war does inflict some pain on US consumers, but let’s not forget US workers and manufacturers. He is trying to get Beijing to respect the rules that the US itself follows. Can he win? The world’s largest economy, a source of high tech IP, and the dollar say he can but China has to want to change.

Read more: Economists pour cold water on Trump's tariff arguments

Dr Brian Klaas, assistant professor of global politics at University College London, says NO.

Donald Trump drastically ratcheted up his Quixotic trade war with China, slapping sky-high tariffs on a much larger number of goods. China, predictably, responded in kind.

The President has infamously claimed “trade wars are good and easy to win”. If you can find an economist who agrees, don’t take investment advice from them, because they would fail Economics 101.

Even if Trump’s reckless gambit eventually leads to a deal, it comes with a major cost. Americans – particularly American farmers – are already shouldering a devastating burden from his trade war. Beyond the US, Trump’s protectionism risks geopolitical destabilisation. It ratchets up tensions between the world’s biggest superpowers. And as both seek to unload products, they will dump them, depressing prices and undercutting producers in other countries.

Protectionism drastically worsened the Great Depression; we learned the hard way the lesson that nobody wins a trade war. Everybody loses, it’s just a question of how much.