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This Asian Country Is The Real Winner In The Us China Trade War

This Asian Country Is The Real Winner In The Us China Trade War
This Asian Country Is The Real Winner In The Us China Trade War

For most of human history there was one superpower in the world and it wasn’t the US it was China.

Now the Chinese are vying for global domination once again, and it’s increasingly starting to look like they’re actually succeeding in overtaking the US economy.

Say what you want about president trump it’s undeniable that he’s trying to push back against this, and yet his trade war is having disastrous effects on many industries around the world especially back home in the US.

In this article we Will learn how the trade war started & who’s really winning.

Let’s go back to where it all started 18 years ago the World Trade Organization allowed China to become a member, after tons of negotiations and some important changes to the Chinese economy.

Ironically it was the US who advocated for China to enter the market, the Chinese economy was one of the fastest growing ones on earth & the U. S. wanted a piece of the pie.

The US invested billions into the blossoming Chinese economy, doubling their dollars invested in just five years by gaining access to international capital in the global markets China flourished factory sprung up.

That rapidly produced goods Destined for export across the world Including the West, Some Americans however were Getting worried.

You see While Chinese companies have the benefit of cheap labor and materials their biggest advantage was China’s loose enforcement of intellectual property rights.

The situation became almost comical, one inventor launched a smartphone case with a built-in selfie stick on Kickstarter.

He patented and trademarked, but just seven days later he found out it was being sold at a fraction of the price on Chinese markets before his own campaign had even been funded.

In total counterfeit Chinese goods were costing the American economy 600 billion dollars every year, and 87% of the fakes were coming from China.

In comes Donald Trump who campaigned on the promise of taking a hard stance on China, in 2017 he launched a formal investigation Into China’s policies.

Which of course sparked anger and outrage in China, Xi Jinping threatened sanctions against the US, which in hindsight was probably not the smartest way one could respond to a president like Trump.

One of trump’s first actions was to pull the US out of the transpacific partnership, the comprehensive trade agreement with Asian nations that was supposed to reduce tariffs and help free trade.

With that aspect of president Obama’s legacy out of the way trump began making increasingly more Hostiles.

First came a US imposed tariffs in March 2018 on three billion dollars worth of Chinese goods, like electric components, Clothing and scientific equipment.

China retaliated very quickly with its own tariffs on American goods Like soybeans, gold, and Cotton this is where the trade war kicked off.

And ever since president trump and president Xi Jinping have each been threatening, and then introducing new tariffs every few months.

Sometimes it seems as if the two sides might come to an agreement, with both supposedly having very productive talks, but so far it’s been all for nothing it looks like the trade war is here to stay.

So Who’s winning?

The only number that president trump cares about is the trade deficit, how much more the US is importing from China then it is exporting back to it.

Unfortunately, the deficit isn’t really getting small it’s no longer growing with the same pace it used to but that’s hardly a major victory.

And yet the cost of sustaining the trade war is already being felt in the US, the thing about tariffs the end of the day it’s the consumers who usually end up paying for them.

Due to The Associated increases in price And that’s exactly what’s happening when you look at the inflation on non tariffed goods, versus the inflation on the products that are getting hit by tariffs you’ll see a pretty stark divergence.

Another big source of damage was falling direct investment

in comparison to Americans who are still pouring as much money into China as always, the Chinese money tap has been thoroughly closed.

With most of that money instead flowing to Europe and the rest of Asia, so we definitely can’t say that American consumers are winning at least not on the short term.

There is however a somewhat surprising winner in all this and it is Vietnam.

Ever since the first wave of tariffs was announced the Vietnamese trade deficit with America has been growing faster and faster.

It seems that a lot of Chinese businesses are realizing that they can just outsource production to Vietnam and call it Business as usual.

Vietnam is benefiting so much that Trump is already considering putting tariffs on them as well, in the end, it seems as if no one is safe from the watchful eyes of the tariffs man.

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Written by Wolfgang Mayer

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