Is a Trade War Between the U.S. and China Imminent?
Concerns over a U.S.-China trade war arise from ongoing tariffs by President Trump, but experts believe a deal is likely before escalation occurs. Economist Hank Lewis emphasizes China’s reliance on the U.S. economy, which may lead to successful negotiations. He also highlights the importance of U.S. production capabilities and inflation in determining the outcome if a trade war occurs.
The ongoing situation regarding tariffs imposed by President Trump has raised concerns of a potential trade war with China. However, experts suggest that an agreement is likely to be reached before such a conflict escalates.
Lone Star College Economist Hank Lewis asserts that China’s economy is significantly dependent on the United States. This mutual reliance is expected to encourage negotiations, as he stated, “There’s a real need to keep the trade flowing. The last thing China needs is having one of its largest customers trying to find workarounds, because that’s going to cost them money.”
Lewis further indicated that if a trade war were to occur, the United States’ production capabilities would significantly influence its course. He noted, “Can we produce the volume needed? Can we get the infrastructure set up to do that, so that we hopefully would not face a lot of inflation in the short term?”
Although the U.S. currently possesses a short-term advantage, inflation could become a critical issue in the long run. Lewis believes that such a trade conflict would likely not persist beyond a few months due to the financial repercussions for both nations, emphasizing that both sides will be motivated to negotiate consequent losses.
In conclusion, while concerns about a trade war with China persist due to tariffs, expert opinions suggest that economic interdependence will likely lead to a negotiated settlement. The U.S. has a temporary advantage; however, the potential for inflation and significant financial losses could motivate both countries to reach an agreement swiftly. A full-scale trade war is not anticipated to last long if it were to occur at all.
Original Source: woai.iheart.com
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