Mon 5 Dec 2016 / Asia Pacific,North America
Heading for trade war with China
America’s habitual excess of spending over saving is financed through credits from the rest of the world. Donald Trump is promising policies that will increase the trade deficit still further. When that happens, Trump will blame China, which accounts for 48% of the US trade deficit. A trade war with the world’s second biggest economy appears increasingly likely. The spat over Trump’s Friday phone call with Taiwan President Tsai Ing-wen, breaking decades of diplomatic protocol, offers an uncomfortable foretaste of more squalls ahead.