The US-China trade war has unfolded exactly as economic fundamentals suggested it would.
What began as an aggressive policy initiative has evolved into a strategic miscalculation with far-reaching consequences for America’s global position and economic stability.
As I predicted, the US is losing the trade war. It’s sad to lose a war. It’s even sadder to lose a war that was started for no good reason.
Table of Contents
The Fundamental Imbalance
As I said at the time, the US needs China a lot more than China needs the US. The US buys a lot of stuff made in China, including 50% of our Christmas presents.
China does not need much made in the US.
The Current Impasse
The current situation is hilarious, with the administration trying to walk back the tariffs while China refuses to play along.
All of this is destroying America’s global standing and is contributing to capital flight (lower dollar, lower stocks, higher bond yields).
The Deeper Problem
But it gets worse. What the trade war fiasco illustrates is that the administration has no ability to craft grand strategy or implement policy.
This lacuna will show up again and again in issue after issue. Adversaries will take advantage of the administration again and again.
That’s why things will get worse and worse and worse.
Conclusion
This trade war represents more than just failed economic policy—it reveals a fundamental weakness in strategic thinking and policy execution.
As other global challenges emerge, this pattern of poor planning and implementation threatens to compound America’s difficulties on the world stage.
The question now is whether lessons will be learned before further damage is done to US interests and credibility.