TRADING BLOWS

PROTECTIONISM. BRINKMANSHIP. IDIOCY. Whatever you call it, the trade war between China and the United States isn’t an isolated event. Rather, it’s a symptom of the issues between ‒ and within ‒ the two superpowers, all tangled up in a Gordian knot. Domestically, Trump’s party faces a tough fight in the mid-term elections, even as his own approval ratings plummet. Framing this as a fight to address trade imbalances, along with allegations of IP theft and domestic bias by China? Why not? China has retaliated with tariffs of its own, but revealed its limits after a few rounds of back-and-forth escalations, as its exports to the US dwarf its imports. Tit-for-tat has its limits, although other options are available. Expect international trade flows to readjust in the months and years ahead; a rock placed in a stream merely diverts its flow, instead of stopping it. AM