When will the trade war with China end? No one knows the answer to that question, but the Chinese are likely betting that they can outlast the Trump administration and in the process make the President settle for a non agreement with little impact on China. The Chinese are well aware that President Trump is anxious for a deal, especially since he promised that winning the trade war would be quick and easy and that something approaching a deal needs to be put in place before November, 2020.
What the Chinese know best is that when it comes to wars, military or trade, the United States can be bogged down for years without a clear victory and the loss of national treasure- witness Vietnam and Afghanistan and now tariffs. Trump has little patience for delay and an ego the size of Greenland, but the Chinese have a history of using delaying tactics and half-hearted negotiation schemes with the hope that their adversaries will simply give up and walk away. All Trump has is boasting, false promises and outright lies to bolster his phony claim that a deal is around the corner.
Trump was right that a new trade relationship with China was necessary and that past administrations, Democrat and Republican, had done little to level the playing field and carve out changes in the export-import regime. My guess is that a trade deal that included changes in intellectual property, access to markets, and industrial espionage could have been achieved without creating a climate of uncertainty and instability that now threatens growth in the global economy. But Trump was all about showing his base that he is a tough guy who was going to “fire” the Chinese as if trade and a global economy were a reality television show. While his supporters cheer on his trade posturing, they depend on cheap Chinese clothes, toys, sneakers, electronics and holiday trinkets.
Trump fashions himself as the ultimate deal maker, a tough guy and the father of America First; the Chinese fashion themselves as restrained, resilient in the face of threats, and confident that they are the future of the global economy or to take a phrase out of the Trumpian playbook- China First. Right now I would give the edge to the Chinese.
There are clear signs that US business executives are tiring of the Trump trade war and want a return to the days of market stability and consistent policy. These executives have too much invested in China and its cheap labor to just pack up and leave, no matter what commands come from the White House. So be prepared for a long war with stock market hills and valleys, corporate angst, and an inevitable downturn in the world economy, all of which could have been avoided with less bluster and false promises.