China Trade War Update: A Trickle Of Soybean, Oil Exports
Forbes (19/02/2019) - Days before President Trump is expected to back off from his threat to bump the tariff on some $200 billion in Chinese imports, it's apparent in just-released trade data that China is still trying to punish key industries President Xi Jinping believes will hamper Trump's re-election efforts.
It's also pretty clear the strategy is not working.
This is important stuff, here, that risks plunging the United States economy into recession or tossing China into an accelerated slowdown in growth. Neither is particularly appetizing.
The United States and China are the world's two largest economies. The world's economy has long been dependent on the performance of the United States for signals as to the ease of trecherousness of the path forward. It is increasingly mindful of the ups and downs of China's.
Underscoring that, the two all but certainly just set the record for most trade ever between two countries in one year, surpassing the 2014 mark set by the United States and Canada. (Annual trade data, supposed to have been released Feb. 5, was delayed a month by the government shutdown and will not be released until early March, so I am projecting the total trade between the two based on 11 months if trade data.)
As the deadline looms, we seem stuck in a transpacific contest to see who will blink. The two sides will be meeting in Washington this week, having met in China last week.
If Trump backs off, the United States will be hard-pressed to ever go after an ascendant China again. If Xi backs off, it is not just that he would feel weakened. The real issue is whether China could adapt to playing by WTO rules as a developed economy -- without slowing its growth to a more moderate range than has been the case for the last two decades.