Gordon Chang
"There are no winners in a trade war or a tariff war," wrote Xi Jinping this week. If he’s talking about China, he’s absolutely right. Across the board, the Chinese will suffer.
In America, the story will be different. When the dust settles on President Donald Trump’s tariffs, there will be 340.1 million people much better off.
For more than four decades, China’s regime has been implementing predatory and criminal trade practices. For various reasons, the U.S. and other countries have let matters slide.
Trump in his first term, in 2018, fired a warning shot with his 25% tariffs. Unfortunately, the Chinese regime did not take the hint. This month he raised the general tariff rate on China’s goods to 145%.
Trump’s trade actions could not have come at a worse time for Xi.
As an initial matter, his economy is stumbling. It cannot be growing at the 5.4% pace reported Wednesday for the first quarter of this year. Price data for March – the Consumer Price Index was negative for the second-straight month and the Producer Price Index was negative for the 30th-straight month – indicates the country has entered a deflationary spiral. That phenomena suggests the economy is now contracting and will do so for some time.
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