It won't work in Trump's favor.
First, China's economical output is already about one third larger than the US currently, and will grow to 2X, 3X, may be even 4X of the US economic output in the future. It is always awfully difficult when you try to beat a guy whose body weight is one third heavier than yours, and never try to think to beat a guy whose body weight is twice heavier as yours.
Second, the Chinese economy is the most diversified in the world. It has every industry specialty monitored by the UN, covering the full spectrum of all economic activities in the world. There is no other country in the world that has so completed industry specialties. Even the US economy can't cover so broad economic activities, not to mention the Iranian economy which is heavily dependent on oil and gas industry.
Third, China's economy is a growing economy, while the US economy is a saturated economy. About half of population in China are still living in rural area and they are future consumers, thus are the drive of future growth of internal consumption. In the US, almost all population are living in urban area, and there is no inflow of new consumers, thus there is little room for internal consumption to expand, unless Trump agrees to accept huge numbers of immigrants. If the both countries cut exports to zero, and cut governmental spending to zero, then, the two economies must survive on internal consumption only. In this extreme scenario, the Chinese economy can still move forward by attracting rural population to cities, while the US economy will standstill unless it has a huge immigrant inflow.
To examine the validity of the above scenario, one must remember the basic economics teaching, that is, exports, investment, governmental spending and internal consumption are the most important factors that can fuel a country's economic growth. None of the these factors works in Trump's favor. Therefore, no matter how hard he tries and no matter trickery he may apply, Trump has zero chance to win his trade war against China.
But, Trump may try two novelty weapons in order to win the trade war. Weapon number one, import about 1 billion immigrants, popping up US population base to 1.4 billion. Or, weapon number two, cut American worker wage to about one fourth of Chinese worker wage. Of course, he can use any combination of the two weapons.
Because Trump hates immigrants, so we know what weapon he is going to use: lower American worker wage by de-valuating the dollar.
To get an American worker paid as little as one fourth of a Chinese worker wage, Trump will have to make Americans as poor as Haitians. Ten years from now, the greenbacks may be de-valuated to the level that are no better than toilet papers.
Buy gold, boys. Sell your house sell your car, sell your wife sell your cat, Just buy gold.
Last edited:
