The restriction imposed by the United States on imports of Chinese products has led to fiscal bustle. At the beginning of the hurricane, Donald Trump announced that he would raise tariffs on imports of aluminum and steel from China. China's response was to charge imports of 128 goods in the United States of America. After that, Washington decided to increase tariffs for many of the goods imported from China. Competition has opened up dangerously.

In any case, China is acting rigorously in two respects. For the first time, it continues to make progress on reform and openness policies so that its economic development can move forward. These measures have been effective for many years for the economic growth of China and for the benefit of society, such as the decline in the poverty rate. The eastern country therefore has no reason to change its openness strategy.

Secondly, the conflict between the two countries is inevitable, as the American economy has been in a long-standing trade deficit, particularly in the deficit with China. China knows that it is impossible for a long time to maintain an unbalanced trade position with the United States. Although it makes an effort to increase imports from North America, they do not accept to increase exports of goods from the Chinese technological era. As part of innovation, the United States wants to prevent China from developing high-value-added industries.

What is more, the culprit for this trade deficit is not China, but the position of the dollar. In fact, without major economic merits, the dollar remains hegemonic in the international monetary system. The devaluation of the dollar needed to reduce the United States trade deficit would call into question its hegemonic position.

This trade conflict is the conflict between currencies. In particular, China has published in the Shanghai International Energy Exchange trade in crude oil, called yuan (Chinese currency). This small step shows that China is pushing for the liberalization and internationalization of its currency so that it may once become an international currency for the Yuan Reserve.

On the other hand, two adverse effects that do not meet the objectives of the new protectionism in the United States can be anticipated. On the one hand, the fiscal reform announced by Trump, which aims to reduce taxes, would increase the public deficit and, therefore, the trade deficit. And secondly, as protection measures will lead to an increase in domestic prices, the Fed – the Central Bank of EE.UU – will speed up interest rates in order to limit inflation. In this way, the backward shift in the expansive economic cycle of the United States, which is already intubated, would be accelerated.

In the hypothetical trade conflict between China and EE.UU, and in currencies, the latter would lose more. Beyond the economic policy reasons mentioned above, other structural elements that come in advance are decisive for Beijing to show its position of strength. The dependency ratios of the US economy on China have long come, especially from the huge trade deficit and the huge US debt of the Chinese lenders. All previous Governments in Washington have failed in their efforts to address the grave danger posed by the change in economic power. The logical result is that this transition will be accelerated if Trump’s unilateral initiative is carried out in a crude manner. n