Report: China Is Picking Up The Tab For Trump’s Trade War

Virginia Kruta | Associate Editor

China appears to be taking the brunt of the economic impact of President Donald Trump’s trade war, at least according to a paper published by EconPol Europe.

The paper, authored by Benedikt Zoller-Rydzek and Gabriel Felbermayr, asserts that American consumers and U.S.-based companies will only absorb 4.5 percent of the 25 percent tariff increase imposed on China — the remaining 20.5 percent will be picked up by China — and this applies to $250 billion in Chinese goods.

Critics argue that the real impact has only begun to take its toll on Amerian farmers, in particular with regard to soybeans.

And others — including Chinese President Xi Jinping — have argued that trade wars simply have no winners. (RELATED: US Tariffs Leave China Little Options That Aren’t ‘Playing Into Trump’s Hands)

Still others have argued that the trade war has pushed business away from China without actually delivering a direct benefit to Americans.

But an indirect benefit to America may still be coming — via Malaysia, for example. Malaysia has reportedly replaced the United States as China’s biggest supplier of ethanol, but Malaysia is compensating for the increased demand by importing some of that ethanol from the United States.

China’s former chief trade negotiator may agree with EconPol’s report, however. He attacked Beijing’s strategy on Sunday, calling it unwise.

In addition, President Trump is claiming that his strategy is working. He said on Friday that “China sent a large list of things they are willing to do, and wants to make a deal.”

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