Why China could kick Trump’s ass in a trade war

The China that Donald Trump campaigned against in 2016 is not the China he is up against now. Chinese President Xi Jinping has prepared well for a showdown between the two largest economies on the planet.

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When Trump was still a candidate in the presidential race, the People’s Republic was experiencing slowed growth, ballooning debt, and severe capital flight. We may never know the real numbers about China’s GDP growth, but today the channels of financial exodus have been choked off to a level deemed acceptable by the Chinese Communist Party, and the debt is being reined in. As Xi tightens the Party’s monetary policy, he has also put his political house in order, with loyal supporters installed in key positions after a series of high-profile purges and power shuffles. The Chinese president has all the elements in place to make the big moves required for international financial confrontation.

And these facts may be dawning on Trump, whose economic policies are in confusion, and whose leadership is in vast, self-inflicted disarray. Trump tweeted last month that “trade wars are good, and easy to win.” But after Beijing’s announced retaliation slapping America with sanctions on $50 billion worth of goods—in response to Trump’s proposal to do exactly the same—Trump’s immediate response on Twitter was to backpedal: “We are not in a trade war with China,” he wrote, before pivoting to a rant about the previous occupants of the White House.

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