US-China Trade War Data: Truth and Post-Truth

Anirban Sengupta & Siddhartha K. Rastogi

Published: December 2018

Data on the importance of US–China trade and fundamental trade theory suggest that the USA is in a relatively weak position in its trade war. Not only will the protectionist measures of the Trump administration reduce the welfare of American citizens (theory of competitive advantage) but they also pose a threat of triggering an inflationary cycle. The imposition of tariffs on soybeans by China has strategically hit core Republican voters in states like Iowa, risking the political prospects of Republicans in future elections. Thus, the current administration should reconsider the feasibility of continuing the trade war against China given the economic and political risks.

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