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China is fully prepared to win any kind of tariff war that Donald Trump can throw at it with some quite simple stratagems that might all be grouped under a single rubric: Autocratic Capitalism. After U.S. markets closed on Monday, Trump announced he would impose a 10 percent tariff on $200 billion worth of Chinese exports to the United States – half the level previously contemplated, but still designed to move Beijing toward bilateral talks. As an added incentive to come to the table, he announced that figure would surge to 25 percent at the end of the year, after the U.S. holiday selling season. Yet, this autocratic capitalism that China has effectively embraced will make it harder for Trump to cause the kind of economic pain that might produce any kind of victory for the White House.

There are several key elements of this plan that have received little or no attention in Washington, but that should lead to head-slapping, “ah-ha” moments. One came to me as I was examining som...

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