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Trump has China on the defensive

7 0 0
14.05.2019

Donald Trump was much ridiculed for his famous remark that "trade wars are good and easy to win". It's not over yet, but on developments so far you'd have to say that he is winning his trade war with China.

After Trump fired the first shot in the trade war eight months ago, the world's two biggest economies slapped punitive trade taxes on each other's goods while they negotiated a new deal.
Last week they seemed to be on the brink of an agreement. The two sides were even discussing the details of when and where Trump and Chinese President Xi Jinping would hold the signing ceremony for the new pact.

US President Donald Trump is so far having a good trade war.Credit:Bloomberg

Then, abruptly, Trump accused the Chinese government of backtracking. Instead of ending hostilities last week, Trump dramatically escalated them. Over the weekend he increased from 10 per cent to 25 per cent the level of US tariffs on some $US200 billion worth of American imports of Chinese products.

He threatened to go much further. The US Trade Representative, Robert Lighthizer, said that Trump had "ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $US300 billion".

How is this winning? First, the US President is winning inside his own administration. Some of his topmost officials had been keen for an easier settlement where China merely agreed to buy a set sum's worth of extra American imports. But these trade "doves" have yielded to the hardline "hawks". And just now the leading hawk is Trump himself.

Illustration: Andrew DysonCredit:

Second, Trump is winning the broad........

© The Age