The U.S.-China trade war is in full swing, and it’s not going away anytime soon. The U.S. is beginning to see it more as a strategic opportunity to contain Chinese assertiveness than as a play to invigorate U.S. manufacturing. What the White House is demanding in negotiations, Beijing cannot concede without abandoning the state-led economic model that the Communist Party of China thinks it needs to address a staggering range of political and economic problems at home – ones that it’s been grappling with even before the trade war began. Thus, the trade war is only going to get bigger from here.
This Deep Dive looks at the potential fallout in China. Ultimately, it concludes that for Beijing, the economic cost of the trade war will be real but likely manageable if considered in isolation. China has ample tools at its disposal to ease the pain, and it’s been gradually reducing its dependence on the U.S. market anyway. The problem for Beijing is that it’s contending with much