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US and China – Why A Trade War Now ? Who is To Blame?

US and China - Why A Trade War Now ? Who is To Blame?

To understand the trade issues with China, good back 70 years in the post-WWII Bretton-Woods era, this will help us understand everything. The US and China are both looking out for their people, so they talk and it does get heated. If Hillary Clinton were elected, she would be in a trade war …… with less noise than Trump. 

We sometimes give strong views and commentary that provokes a response from the readers and we love rigorous discussion and healthy discourse. While we hope there is a solution tabled regarding the US-China trade talks the fact remains that this massive problem is the unwinding of post-WWII Bretton Woods System policy and as a result the US is pulling out of the global management business.

So even if we put Trump aside, put aside his nasty rhetoric and tariffs, we must understand that any president in office would have this same problems that we all face – the US does not dominate the world and will not dominate ever again. The American based world view is over and the next 20 years will be the unwinding of the old system, while China fills some of the gaps. Right now the US and China are struggling to find some common ground but the risk of recession is rising for both countries. 

China could see 1.5% cut from its GDP as a result of a trade war and the US might see 0.4% – according to research. The New York Fed produced a piece saying the the probability of recession over the next 12 months just spiked to 27.5%. For his part, President Trump called the trade talks “a little squabble” and said that his relationship with President Xi is “extraordinary.” 

Team Classiarius 

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