United States will not win a trade conflict

China exports more to the United States than the US exports to China. This fact infuriated US President Donald Trump so much that during his campaign trail he threatened to take tough protectionist measures against China. As Trump attempts to consolidate his presidency, he is unlikely to back away from that threat. And with the 19th National Congress of the Communist Party of China later this year, Chinese leaders are unlikely to yield to US pressure.

If the hardened positions of the US and China were to lead to a trade war, it would undoubtedly hurt both sides. But there is reason to believe that the US has more to lose, because China seems to know precisely which weapons to use in such circumstances.

China could stop purchasing US aircraft, impose an embargo on US soybean products, and dump US Treasuries' other financial assets. Chinese enterprises could reduce their demand for US business services, and the government could persuade companies not to buy "Made in America" products. The bulk of numerous Fortune 500 companies' annual sales come from China.