China seems to be ready for a trade war with the U.S., an expert on U.S.-China relations said on Thursday, adding that the United States should consider the costs of one as it could hurt Americans.
Robert Ross, a professor of political science at Boston College, told CNBC that the Chinese have indicated clearly they are prepared for a trade war “because of course they have a very large market and a very robust economy.”
An op-ed published on Wednesday on nationalistic state media outlet Global Times said that China should be ready for a “looming trade war.”
“Beijing needs to give Washington head-on blows in a similar manner and must not be soft,” the op-ed said.
Ross further noted that the U.S. should consider the possible fallout for Americans and companies operating in China in case of a trade war.
“We should remember two things. One, Chinese exports to the United States improve the American standard of living by selling less expensive goods to United States that we benefit from — and we don’t make those goods anymore. Second, there are an awful lot of American companies that are making large sums of profits inside China, whether it’s Apple, whether it’s Buick, whether it’s other American companies,” he stated.
Ross also pointed out that the $276 billion trade deficit with China is a result primarily of economic factors instead of policy issues.
“The Chinese have a very high savings rate, the Americans have a very low savings rate. We consume more than they do, we’re going to have a trade deficit. Now, do you fix that through policy? Do you fix that through trade wars? Highly highly debatable.”
Regarding a “coalition of large trading partners and allies against China,” which President Donald Trump’s new economic advisor proposed, is highly unlikely according to Ross because, as he said, “the Europeans are constantly tripping over each other to get advantages in China and would not risk imposing sanctions that could harm their economic growth.”
Ross concluded by saying that a trade war would also make it impossible for the United States to ask China for a cooperation on the issue of North Korea’s denuclearization.
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