Tariff Trade War De-escalation

USA - China lowered tariffs. 

China is winning the Trade War

The best way to check who is winning the U.S.-China trade war is to just look at the balance of trade between U.S. and China. Since the start of the trade war in 2018, the balance of trade is essentially unchanged ($32 billion monthly trade deficit).

Also, China doesn't purchase a lot of agriculture from the U.S. anymore.

Instead, it is buying from Brazil.

China imposes tariffs on $75 billion of U.S. imports

Looks like the U.S. China trade war is still intensifying. The effect is, higher inflation, lower GDP growth, lower bond yields, lower oil prices, higher gold prices.

And it's getting better.

The effect of trade war on goods trade U.S. - EU - China

Who is the real loser since the start of the U.S. - China trade war in 2018?

=> The U.S.

But ultimately both China and the U.S. lose as their GDP will shrink as imports and exports both crater.

Also very important to know is that due to China not selling as much goods to the U.S., it will have no reason to buy U.S. treasuries anymore from the U.S., because it won't have excess dollars to buy treasuries. Since the trade war started, China has been selling U.S. treasuries.

 

The effect on Chinese growth is acceptable. China will still grow at an annual rate of 6% as we don't see a big decline in power consumption since the start of the tariffs in 2018.