A Lose-Lose Trade War for North Dakota

PHOTO COURTESY | THE RUSSIAN PRESIDENT
President of China Xi Jinping and President Donald Trump have mixed words over a trade war between the two countries.

U.S. President Donald Trump and Chinese President Xi Jinping are coming head to head in an aggressive economic battle over trade between the two global powerhouses. However, it is likely that both countries will be able to survive the onslaught of tariffs.

The relationship between the two countries has always been tense, with the current administration focusing on three problems: the trade deficit, Chinese intellectual property theft and China’s industrial policy.

However, the issue at hand here is the politics, not the economics. President Trump is looking to take an aggressive stance against our Pacific neighbor in an effort to follow through on his campaign promises and rhetoric on trade.

China is more vulnerable to tariffs and trade restrictions. With an export-dependent economy and 20 percent of those exports going to the United States, China is more susceptible to economic woe in a trade war than the United States.

However, the United States has much more to lose. President Xi has substantial control over industries in China, the media and $3 trillion in surplus, enabling him to aid Chinese companies and subsidize prices for Chinese consumers.

Trump, however, is facing backlash from Wall Street, the Republican Party and farmers in the Midwest, many of who voted for Trump. With the 2018 midterms approaching, many Republicans are worried that Trump’s actions and attitude toward China in a trade war, with potentially significant casualties to the agricultural sector, could cause the party to lose seats, both locally and nationally.

Farmers and businesses in North Dakota are starting to worry as threats of tariffs on U.S. goods — including soybeans, wheat, corn, beef, automobiles, chemicals and aircraft — begin to circulate within China. To put it into perspective, two-thirds of North Dakota’s soybean crop is exported to China.

Steel businesses have already seen the effects that worry have caused, with prices in steel beginning to rise, and consumers, many local, having to pay the price.

In a trade war, everyone loses. North Dakota loses. The United States loses. China loses. In the end, whatever the result, each says to the other, “It’s not you; it’s me. It’s not economics; it’s politics.”

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