Chinese foreign ministry spokesman Lu Kang has responded to Trump's claim that business is flooding out of China by saying investors are “still bullish” on the Chinese economy.
I don't know if that's true, but Trump's boast that this trade war is prompting American importers to turn to other sources that makes no sense at all in context of his trade war.
BEIJING (Reuters) - Foreign investors remained enthusiastic about China, the foreign ministry said on Tuesday, following U.S. President Donald Trump’s claim that his tariffs are causing companies to move production away from the world’s second largest economy.
Trump said in an interview aired on Sunday that his tariffs on Chinese goods are causing companies to move manufacturing out of China to Vietnam and other Asian countries, and added that any agreement to end a trade war with China cannot be a “50-50” deal.
Our trade deficit with China is still at or near a record high level and we have no evidence as of yet that importers are turning away from China in droves, but if even if that were the case it would mean our trade deficit with Vietnam and other Asian countries would increase by a similar amount.
Shifting the flow of trade from China to other Asian countries may or may not reduce our trade deficit with China, but it would have virtually no impact on economic conditions here at home because we're still buying goods from overseas. The average American wouldn't even notice.
At the end of the day, we have to buy our goods from someone whether its China or Vietnam. Trump cannot boast that his trade war is prompting American businesses to move production back to America because that's not going to happen.
Reading between the lines, I think we can see that this trade war is more about geopolitical power, not economics, and China is likely aware of that as well because Trump keeps telegraphing it. This is a pissing match for Trump.