The dangers of Trump and Xi’s ‘who blinks first’ trade standoff
Each believes the other is more vulnerable, raising the odds of a conflict even though both sides have good reason to compromise
In Davos and during his recent state of the union address to Congress, US President Donald Trump made clear he means to get tough with China. This US president has an "outdated Cold War mentality", responded China’s foreign ministry. Trade and investment relations between the world’s two largest economies are headed for trouble. Trump doesn’t want a full-scale trade war. Neither does Beijing. But even short of that, there is much damage that can be done. Since announcing his presidential candidacy in 2015, Trump has presented himself to US voters as the consummate maker of deals; tougher, shrewder and a better defender of the American people than any past president, Democrat or Republican. He knows his popularity, odds of re-election, and presidential legacy depend on his ability to promote the interests of voters who believe trade competition has undermined their lives and livelihoods. In that arena, fast-rising China and its state-dominated economy have emerged as the ultimate adv...
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