In just a matter of days at least some of what’s going to happen with trade under Trump’s rule will become clear, but if the incoming U.S. president does incite a trade war with China, some seem to think he’ll win.
Donald Trump’s proposed 45 percent tariff on imports from China has stirred talks of a soured relationship with the Asian leader, and China said if the punitive tax does take effect, it may respond in kind.
Chinese leadership reportedly told U.S. commerce secretary Penny Pritzker that it would impose a similar import duty on the U.S. if Trump’s tax goes through.
One of Trump’s closest advisors, Anthony Scaramucci—who will assume the role as a senior advisor to the new president as of Friday—says however, that if a trade war does start up, the U.S. will win it.
Speaking to the BBC, Scaramucci said a retaliation from China wouldn’t fare well for the country.
“What are they going to do, [are] they going to move against our move for fairness?” Scaramucci posed to the BBC. “That’s going to cost them way more than it is ever going to cost us, and I think they know that.”
What China’s president Xi Jinping does know, is that a trade war will be a lose lose for both sides.
“Pursuing protectionism is just like locking oneself in a dark room. While wind and rain may be kept out, so are light and air,” Jinping said speaking through a translator at the World Economic Forum in Davos, Switzerland this week. “No one will emerge as a winner in a trade war.”
In other trade-related news coming out of the World Economic Forum Wednesday, former U.S. treasury secretary Lawrence Summers said Trump’s threats to companies manufacturing in Mexico won’t work either.
The move could be counterproductive, leading to the loss of “hundreds of thousands” of American jobs, AP reported Summers as saying at the forum. Trump’s talk about Mexico has sent the country’s currency reeling, and that in itself could make it more attractive for companies to move to Mexico.
“Classic populism is invariably counterproductive for those in whose name it is offered as a policy regime,” Summers said, according to AP.