U.S. vs. China Trade War: Can U.S., Donald Trump Win the Trade War with China?

President Donald Trump and China are now in a full-fledged, tit-for-tat trade war that is quickly eroding into a deep battle with long-term implications.

"The downward spiral that we have previously warned about now seems certain to materialize," said William Zarit, chairman of the American Chamber of Commerce in China.

For Trump, it’s an escalation of a campaign promise made to rebalance the global trade scale with the aim of protecting American workers. He’s also bothered by America’s trading gap with China, estimated at $336 billion in 2017. But now that he’s engaged China in a trade war, there’s one big question looming: Can the U.S. and Donald Trump win?

China, it's well documented, has declared its intentions to push beyond the United States in technology enterprise, developing plans including a “Made in China 2025” blueprint that calls for “creating powerful Chinese entities to compete in robotics and other fields."

"The U.S. says the plans are based on stolen technology, violate China's market-opening commitments and might erode American industrial leadership,” the Associated Press reported.

But even though many in the U.S. have concerns about China’s plans, there is also concerns about Trump’s launched trade war, which escalated this week with his imposition of tariffs on $200 billion worth of Chinese goods on Monday. Within 24 hours, China retaliated Tuesday with increased taxes on $60 billion worth of U.S. imports including coffee, honey, and industrial chemicals.

China is also taking its battle farther than just tariffs. Consider that at first glance, it appears Trump should eventually get an easy win in the trade war because of America’s trading deficit of $336 billion. If the war only consists of a tit-for-tat battle, the U.S. wins ultimately because China is the first to run out of imports to tax.

That’s perhaps why China is already digger deeper in its weaponry, disrupting shipments so that U.S. enterprise is hurt.

“American companies say regulators are already starting to disrupt their operations,” the AP reported. “Last week, the American Chambers of Commerce in China and in Shanghai reported 52 percent of more than 430 companies that responded to a survey said they have faced slower customs clearance and increased inspections and bureaucratic procedures.”

With its imposed tariffs, China is also hitting America, and Trump, where it hurts most.

“The U.S. taxes are targeting Chinese goods that Washington says have benefited from improper industrial policies,” the AP reported. “Beijing's tariffs have hit soybeans and other farm goods from states that voted for Trump in 2016.”

“Contrary to views in Washington, China can, and will, dig its heels in, and we are not optimistic about the prospect for a resolution in the short term,” said Zarit. “No one will emerge victorious from this counterproductive cycle.”

Trump seems to understand that, while he attacks China with tariffs, China is attacking the U.S. with a myriad of weapons. But he’s not planning to give in.

“China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me,” Trump tweeted Tuesday after China’s $60 billion tariff retaliation. “What China does not understand is that these people are great patriots and fully understand that...China has been taking advantage of the United States on Trade for many years.

“They also know that I am the one that knows how to stop it. There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”

Trump has already made clear that he plans more tariffs against China as long as it retaliates in a tit-for-tat style. Already, he has threatened an additional $267 billion worth of Chinese goods. It’s enough to make one top global business leader proclaim that the Trump vs. China trade war will long outlive Trump’s presidency and likely last for two decades.

“Short term, business communities in China, U.S., Europe will all be in trouble. This thing will last long. If you want a short-term solution, there is no solution,” said Jack Ma, the founder and executive chairman of Alibaba Group, during a speech at Alibaba's investor day conference in Hangzhou, Bloomberg reported.

China has been invited to trade talks by the U.S., but it isn’t clear yet if Trump’s Monday move has muddied those political waters. But a Chinese Commerce Ministry statement did say the U.S. tariffs increase "brings new uncertainty to the consultations."

As for winning the war, Trump’s biggest disadvantage may be that he has a limited time in office, while China can dig in deep for the duration. Already more than one-third through his first term, Trump potentially faces a short timeline, though he could win a second term. That means he has from two years to a maximum of six to win what many experts say will be a prolonged economic tug-of-war. It's not about if he can win but whether he can he outlast China.

"China is in a fairly good position to weather this storm. Its economy is less dependent on exports in general, and exports to the U.S. in particular, than just a decade earlier," wrote David Dollar, a senior fellow of foreign policy at the Brookings Institution's John L. Thornton China Center. "The value added in its exports to the U.S. is less than 3 percent of its economy."

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