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Which Country Has More to Lose in a Us-China Trade War?

Updated on December 16, 2018

It’s quite surprising how most people are so persistent to imply that our government’s economy is stable enough to keep the initiators at bay. In fact, those people are also more concerned with the American consequences than the Chinese.

One side is the resource-abundant global police/powerhouse who has the money to provide military services, and with countless billionaires+private companies… and she’s the leading economy. The other is a developing powerhouse whose entire loot storage belongs to the top tier officials (and government-sponsored billionaires)… and she’s the co-leading economy.

Who’s going to fall quicker if they’re taxing one another at high rates?

Earlier this year (first 3–4 months) the dollar/yuan currency is ¥6.3 CNY per $1 USD.

As of now it’s ¥6.9 CNY per $1 USD.

Who’s at a disadvantage? While we know that this trade war is far from over, it’s only praying that can delude the inevitable greater decline of the one side.

Yes, China sells products at low prices. But, nations are now aware of their sanitary and quality risks, hence the growing mistrust that shall weaken their biblical relationships in the future. But that’s besides the point, unlike the U.S. and EU, China can’t make profit off herself due to pollution (from the self-sold products and other cheap junks), plus our (Chinese citizens) conservative mindset to keep using the same product for an extended period of time; hence the lack of need to keep buying new products. They depend on rapid foreign involvement to sell the cheap labor off.

So if you’re going to deny the global superpower and refuse to cooperate with her, who are you going to turn to when they no longer cooperate with you?

Sure the U.S. agriculture guys will suffer from seizures, but that doesn’t stop other nations from purchasing farmed goods from them. In return, again, who’s China going to turn to? Brazil?

What’s wrong with befriending Brazil? Because they’re known for mass production of grains too. But sure, CPC, why not? At the end of the day they’ll charge you even more since you refused the Trump administration.

While the situation’s getting more complicated and hotter than a barbecue feast, the simple break down is this: If the toughest person in the room throws a punch on a tough-but-not-toughest guy and he returns the favor, who’s going to end up in the hospital after a series of exchanging blows?

Both, but one will walk out with a cast and heavy duty bandages while the other will live the rest of his life rib-less

Assuming that the trade war continues, the true results will only become obvious about 5 years hence. Rebalancing the world economy takes time.

So I can only project an answer, a risky task:

The major winners will be countries that stay out of the trade wars, for instance Brazil can replace soybeans no longer imported by China from the US; Argentina can supply beef to China. European countries will provide milk products as cheese, and of course wine. India may supply services that require IP but also involve labor and language competencies - as software maintenance, although it will have to overcome cultural differences ,

Malaysia will replace China for electric components, as LEDs, needed by US industry. Thailand will grow their electronic manufacturing. India may be able to supply some specialty steel to the US, where US steel producers see insufficiently large markets. Mexico will assemble more European cars and their components. African countries may replace China as a source or rare earth elements needed for electronic parts.

There are opportunities for Japan and Taiwan to supply components for US and Chinese manufacturers.

China will be driven to reduce dependence on US products, and grow their capabilities in electronic component manufacture.

The US will become more self-sufficient as well. Automation will replace manual labor where-ever possible, but manufacturing costs will rise, and so will consumer prices. Americans may have to learn to do with less stuff. With higher prices for goods, the effect on the economy measured in dollars may be modest.

Countries that depend on trade and building trade infrastructure may suffer, as Singapore and Korean ship builders

All these prognostications will depend on the adaptability of producers and consumers, item by item. That means there will be many individual winners and losers, in each of the countries.


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