How Trump can challenge China

There is another possibility, however, which is that at least some Chinese citizens are cheering on Trump’s hard-line approach, as the pro-democracy activist Chen Guangcheng recently suggested in The Washington Post: “It might seem counterintuitive to many Americans that people in China would call for more tariffs, as though welcoming economic damage at home. But most ordinary Chinese people don’t see it that way. They commonly believe tariffs will hurt the Communist Party far more than regular people, since it’s the party that manipulates trade to line its pockets and prop up the economy.”

Yet it is striking that Trump has done virtually nothing to encourage this line of thinking, despite the fact that doing so would surely redound to his, and more importantly, the world’s, benefit. To Trump, all that seems to matter is narrowing the bilateral trade deficit between the U.S. and China. In this regard, he is sure to be disappointed. Even if the bilateral trade deficit between the two countries were to shrink, overall trade balances are driven by how people in different countries choose to save and spend.