Here’s why America cannot stop the trade with China

In the battle of showing-off, countries claiming them as the superpower or the most powerful often kneel down in front of this very factor—Money. Money, in whichever form, is always the decisive factor in diplomacy. And this is why, even after a lot of allegations on China, the United States cannot stop trade with China.

President Trump very well knows it that in the current scenario, if a trade war is to happen, America will most certainly lose and he somehow managed to save the sinking ship, for now, after White House trade advisor, Peter Navarro, claimed that the phase one trade deal between the US and China is ‘over’. Trump then took to twitter to clear things out and said that the deal is fully intact and hoped that China will live up to the agreements.

According to a report in CNBC, Navarro said “My comments have been taken wildly out of context. They had nothing at all to do with the Phase I trade deal, which continues in place. I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world.”

For anyone who knows Navarro will definitely not believe the ‘out of context’ part as the trade advisor is known for his stance against China and his comments on Fox News were anything but ‘out of context’. The superpower recognises the upper hand targets asian countries have over it especially when it comes to trade.

Donald Trump may seem to be a ‘get it all’ man but the way he quickly came to rescue this situation shows that somewhere he knows that the US needs China more than China needs America. America is heavily dependent on the low-cost goods that enable income-constrained American consumers to make ends meet. China is only second to European Union in trading with America and though for Xi Jinping, the US might be the top trader but the increase in the domestic consumption of their products will leave it in a way better condition than America can ever be in.

To lead on, the basic model of functioning of America is the reason why a traderalways has an upper hand and that too if it is as big as China. America has an earn, spend and grow model whereas China has earn, save and become rich model. The US must import surplus foreign savings from abroad – and run a massive balance of payments and trade deficits to import this capital. This is a great burden on the US. This is why, no matter how much Trump wants it, he cannot single out China. So even if he blames coronavirus on China and holds them responsible for this global crisis, he most certainly cannot end the trade.