These days, the headlines are reporting an already escalating trade war between the East and the West. On one side-the US and their import tariffs, represented by US president Donald Trump's global policies. The other-China and its fast-rising global influence, powered by an economy still on the rise with Chinese president Xi Jinping at the helm.
At first glance, with so many US companies operating in China, it might also hurt if China decides to take the war to another level; however, China will also suffer in the long term from the loss of revenues from assembly plants located here. A study from CBS News says that, on the contrary, the US stands to lose more in this war than China will.
Let's take a look back during the 2008 global financial crisis.
While most US cities suffered at the time and the economy also reeled from the losses, China weathered the storm, thanks to a wealth of surplus reserves that shielded the Chinese people from the backlash of the financial storm. They also managed to jumpstart the economy once the worst had passed, something that the US had failed to do.
On a political landscape, Trump has more to lose than Xi Jinping. The US midterm elections are coming and Trump's presidency will be defined by the consequences of the trade policies of his administration. On the contrary, Xi Jinping has managed to gain the total trust of both his party as well as the Chinese people, granting him powers akin to a 'president for life,' The Washington Post reveals.'
While the US may win the battle, it appears that it could ultimately lose the war.
Perhaps, the best way to study how things could be bad for the US in this escalating feud would be to take a look at the iPhone. Currently, the iPhone is made by salaried workers being paid at a cost that's nothing for Apple. However, this also works in deeper ways that allow Apple to offer their phones at a globally competent price-enough to match that of their next biggest competitor, Samsung.
The 'war' could make their phones expensive, something that takes away that competency. In this case, it would take Apple a lot to keep up with its competitors.
While the US' concern is genuine, their actions might be a little too hasty. Carefully thought out strategies must still take priority at the end of the day rather than simplistic, reactionary policies that do worse than good.
