Tariff barriers will lead nowhere

The threat of a full-fledged trade war between China and the US might have receded thanks to the recent Sino-US trade talks. But many still fear China would suffer a bigger blow if a trade war indeed breaks out because it relies heavily on the US to keep its enormous export operation going.

The facts are different. Despite China exporting more products to the US than the US exports to China, there is no reason why Washington would emerge winner in a trade war. Since many US companies could lose access to the Chinese market and products in the event of a trade war, US citizens in general would have to not only pay more for consumer products, but also face pay cuts or lose their jobs.

Worse, since farmers in the United States would be caught in the middle of a trade war, as their agricultural produce exported to China could be one of the main retaliation targets for Beijing. And regardless of Trump's claim that trade wars are "good, and easy to win" - which was immediately criticized by many Americans - the US would suffer huge losses in a trade war. In fact, the tit-for-tat retaliation would be beneficial to neither the US nor China.