Regarding the question of WHO will have the advantage in the long run when a trade war occurs.... Here's how I see it...
We should not just be looking at this as a business/economic/trade war.
The reality is, whether we like it or not, POLITICS is heavily involved here.
Let’s look at the business side of this first.
Business-wise, China has more to lose economically in an all-out trade war. The Chinese economy is dependent on exports, and nearly 20 percent of its exports go to the U.S. It sold $506 billion in stuff and services to the U.S. last year. In contrast, the U.S. only sold $130 billion to the Chinese.
Now let’s look at the POLITICS of this...
This is NOT just an economic fight, it’s also political, and there’s a strong case that Trump would be less able to sustain a protracted conflict than the Chinese — especially with the 2018 midterm elections coming soon.
Xi Jinping runs a communist country that has just granted him the ability to rule for life. He controls the media in his country and is also sitting on top of about $3 trillion in surplus cash.
All of this means Xi can react quickly to Trump. He can even aid Chinese companies that get hurt in the coming months and subsidize soybean prices so Chinese consumers don’t face massive sticker shock at the store. The Chinese used similar tactics during the global financial crisis of 2008 and 2009, spending heavily from their surplus reserves to stimulate their economy and insulate their people from pain. The Chinese cash reserves are not as large now, but they still have more than the U.S. does.
Trump doesn’t have it so easy. He’s already getting phone calls from Republican lawmakers who are angry at what he’s doing with the tariffs. He faces backlash from Wall Street, from executives of companies such as Boeing and from soybean farmers in the Midwest, many of whom voted for Trump and feel betrayed. Some GOP leaders fear Trump’s actions could cost the party seats in the 2018 midterm elections.
I don’t even have to mention the Democrats who are just itching to hurt Trump.
And here's the other thing --- the Chinese aren’t constrained by the rule of law or a representative democracy.
In terms of hurt, the Chinese government is NOT as compassionate to its citizens as the USA is and their pain tolerance I would surmise, is MUCH HIGHER than Americans when it comes to economic deprivation as a huge section of their citizenry are used to it compared to ours.
Let's not even talk about China stopping cooperating on North Korea as they seem to be doing before this tariff brouhaha was brought up.
This is one campaign promise I was hoping Trump would not fulfill.
