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#TradeWars (1/) Is Trump's trade war hurting China? The short answer is no. Listen to this great @Trade__Talks podcast with the amazing @SoumayaKeynes and @ChadBown interviewing China connoisseur Nicholas Lardy. tradetalkspodcast.com/podcast/102-is…
(2/) China's growth slowed after the Great Recession mostly because global trade slowed. The tariffs did not add anything to the existing trend. China's exports to the US did fall, but China's exports to the rest of the world picked up the slack.
How come? China has roughly a $12T economy. Exports to the US are about $550B, but in value added terms it's about half, say $250B which is the right number to compare to GDP. That's 2%. So even if it shrinks, it won't hurt China that much.
What about Jobs? As China develops and manufacturing productivity increases it needs fewer manufacturing jobs. That structural change has been under way for a while and tariffs have changed essentially nothing.
China seems to understand that tariffs are a tax that hurts consumers and growth, so it has not increased its own tariffs too much. The US seems intent on shooting itself in the foot with tariffs, however.
What does affect China then? Restrictions on US exports to China, not imports from China, especially in the tech sector. The fact that Huawei's new phone does not come with Google's Android apps is certainly more relevant than all the tariffs the US has imposed so far.
The thing is: the issue of technology transfer is one where the EU was potentially on the same line as the US. It is a real issue. The non-sensical trade wars have only diverted energy from the relevant issue.
