In a trade war with China, the US loses

IF President Donald Trump were to impose 35 per cent to 45 per cent tariffs in order to force China into renegotiating its trade balance with the United States, the immediate result would be a fierce trade war that the US would almost certainly lose.

For the moment, no one expects that to happen, but Mr Trump's rhetoric is so erratic that it is difficult to know what to expect. What is clear is that he is entering uncharted waters.

When Mr Trump publicly accepted the phone call from Taiwan's President Tsai Ing-wen, Beijing assumed that Taiwan had taken advantage of the US president-elect's ignorance. In order to allow him to save face, China dismissed the incident as a crafty Taiwanese trick to garner publicity.