A leading American economist compared Donald Trump’s pricing battle with China in the Vietnam War, arguing that the two parties will be taken in a quagmire and unable to find a saving outing.
Adam Posen, the head of the Peterson Institute of Washington and a former decision -maker of the Bank of England, spoke to The Guardian after writing an article for the foreign affairs of the American magazine. He said that Trump’s tactics “echoes by presidents Johnson and Nixon during the Vietnam War, unable to believe that they would not win if they only raised the attacks and did not want to negotiate real peace”.
Posen said Trump and US Treasury Secretary Scott Bessent, who defended the high prices on China on Wednesday, “deeply wrong”, accusing them of boasting of the United States’s self-use level was willing to inflict on himself and how it would win China.
Many economists have accused the White House advisers to misunderstand the mechanisms of international trade and the way in which industries manufacture through borders, to sometimes benefit from cheaper workforce, but also access to unavailable skills and technologies in their country of origin.
The financial markets of the roller coasters, which struggled to put a price on the tariff war, were frightened Friday after China increased its prices on American goods by 84% to 125% and that the United States returned fire, saying that it would bring the total to 145%.
China has become the main battlefield after Trump agreed with a 90 -day moratorium on the punitive rates it has targeted to most other countries, leaving an import burden of 10% in place.
Writing in Foreign Affairs, Posen said that Bessent, a billionaire and former hedge fund manager, wrongly compared the dispute with Beijing to a poker game in which the United States has held all the best cards.
Bessent said: “I think it was a big mistake, this Chinese escalation, because they play with a pair of two. What do we lose by the Chinese uprising prices on us? We export a fifth towards them of what they export us, so it’s a losing hand for them.”
Posen said: “The analogy of Bessent’s poker is misleading because poker is a zero -sum game: I only win if you lose, you only win if I lose. Posen.
More fundamentally, he said, the Trump administration believes that “the more you import, the less you have at stake, and it is because the United States has a trade deficit with China, important more Chinese goods and services that China does not make American goods and services; It is less vulnerable.
“It’s a bad opinion, not a question of opinion. Trade blocking reduces the real income of a country and purchasing power; Countries are exporting to earn money to buy things they don’t have or are too expensive to do at home.
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“In addition, even if you focus only on the bilateral trade balance, as the Trump administration does, it augurs badly for the United States in a trade war with China. In 2024, American exports of goods and services to China were 199.2 billion dollars and imports from China were $ 462.5 billion, which allowed a 263.3 billion trade deficit.
“Depriving American households and companies that are impossible to replace imports no longer hurts the United States that China is suffering from lost sales,” he added.
Logic is based on game theory. Trump thinks he has a “climbing domination” over China, which means that the United States has the capacity to degenerate a conflict without China inflicting pain in return.
“But this logic is wrong: it is China which has the domination of climbing in this trade war. The United States obtains vital goods from China which cannot be replaced anytime soon or at home unless prohibitive costs.
“Reducing such dependence on China can be a reason for the action, but fighting the current war before doing so is a recipe for an almost certain defeat, at a huge cost. Or to put it in terms of bessent: Washington, not Beijing, betting on a losing hand.”
