Who will hold his nerve?

"Economists have been quick off the block to criticize President Donald Trump for his seemingly disparate and uncoordinated actions on trade and intellectual property disputes with China," wrote VA Nageswaran. "But they had not offered better answers." "President Xi Jinping promised Obama that China wouldn't turn a series of man-made islands in the South China Sea into military installations. He did just that." China promised Bill Clinton that it would "sign the government procurement agreement, which requires government purchases to be made on a non-discriminatory and transparent basis, when it entered the World Trade Organization in 2001. Sixteen years later this had still not happened." Trump could force more concessions from China by threatening a trade war, wrote Prof N Smith. Even Paul Krugman "was worried about Chinese imports reducing aggregate demand" and did not think that China could do much to retaliate. Curiously, Smith concludes, "In other words, the safe bet is that this trade war will not end well for Trump, or for the US." Last month Trump announced plans to increase tariffs on $60 billion worth of Chinese imports. In retaliation China announced plans to impose tariffs on $50 billion of US imports, including soybeans, planes, whiskey and pork among other items. Angered by China's audacity, when it had a trade surplus of $375 billion with the US in 2017, Trump announced that he has asked US Trade Representative's office to find another $100 billion of imports to tax. In a speech yesterday, Xi Jinping said that China was going to reduce tariffs on certain imports and enforce stricter controls on theft of foreign intellectual properties. "China does not seek trade surplus," he said. "We must refrain from seeking dominance and reject the zero-sum game, we must refrain from 'beggar thy neighbor' and reject power politics or hegemony while the strong bully the weak." Ask Taiwan, India, or Vietnam. Previous president of Philippines, Benigno Aquino compared China to Nazi Germany on more than one occasion. "Trump has lost the confidence of investors," wrote R Burgess. The stock market is falling, bond yields are rising and "The Bloomberg Dollar Spot Index, which measures the currency against its major market peers, fell 8.52% last year." China is contemplating devaluing its currency, the yuan, to increase its exports. Reducing tariffs is of no use if a weaker yuan makes imports more expensive. Will Trump label China a currency manipulator, we shall see. The US could force other countries to increase tariffs on Chinese goods, said M Every in an interview. When the US imports over $2 trillion worth of goods who is going to argue. Hope Trump can hold his nerve against concerted attacks by vested interests. Most Indians support him.