Trump’s Trade War With China May Backfire If China Decides To Go “All-In”

China has the second largest economy in the world. For years, China’s Gross Domestic Product growth was in the double-digit category. When the country’s manufacturing sector slowed down, the GDP growth figure dropped. But China’s economic growth is still better than the United States GDP output.

China’s more than six percent GDP growth puts U.S. GDP figures to shame. Trump thinks the 3.2 percent third-quarter U.S. growth figure is a reason to celebrate. But he might want to reconsider that option. Even though Mr. Trump’s tariffs slowed China’s growth recently, Trump won’t hear the Chinese cry “uncle.” The Chinese don’t make a move unless they weigh all their options. And China has plenty of options that can hurt the U.S. economy.

Trump wants China to import more American products, and he wants the Chinese to stop regulating their currency on the world’s currency exchange. But China’s President Deng Xiaoping won’t let Trump disrupt his economy without giving the United States a lesson in trade warfare. The United States depends on Chinese business people and Chinese tourist to the tune of $32 billion a year. That’s what the Chinese spend on trips to the United States for business and pleasure. A Chinese consumer embargo could put some American businesses in the red since the average Chinese tourist spends more than $6,900 each time they visit the United States.

The Chinese put a travel embargo in place when South Korea and China had a diplomatic dispute last year. The Chinese embargo cost South Korea businesses more than $7 billion in just a few months. If the Chinese president tells his people they can’t visit the U.S., Trump’s love affair with big American corporations may end on a sour Chinese fortune cookie type note.

The Chinese can easily visit Italy instead of Napa Valley, according to one Chinese official. More than 350,000 Chinese students visited the U.S. last year. That number could drop like a stone if President Deng Xiaoping decides to go “All-In.” Mr. Trump may not care how important China’s tourism and travel industry is for American businesses. But he’ll care in a hurry if China puts a travel embargo in place. The Chinese want to end the trade issue without hurting American businesses. But President Trump wants to keep the pressure on his frienemies in order to show how powerful his econiomic policy is, according to several media reports.

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