In A Trade War, Would China Or The United States Prevail?

2017 hasn't even officially began, and it is shaping up to be a year of worsening relationship between the United States and China and could very well result in a trade war. If that proves to be the case, then China could outlast the United States, at least according to a Hong Kong-based professor. Wang further argued that China's government also has punitive options at its disposal, including withholding aircraft orders from Boeing Co BA or limiting automobile and agriculture imports from American companies. Image Credit: By U.S. Department of State [Public domain], via Wikimedia Commons

James Wang, a City University of Hong Kong professor who writes a monthly commentary letter for the billion-dollar Pine River China Fund, wrote in his recent letter that a trade war between the two superpowers is a "distinct possibility" next year.

Wang argued that companies in a democratic society, such as America, will face difficulties in drawing up a relief effort from a trade war with China and the country as a whole may face a political backlash from the companies who are most impacted. On the other hand, state-controlled Chinese companies will have the full backing and support of the central government.

"On this basis, the Chinese may have more runway to play the long game in a trade war," Wang's letter added.

On the other hand, Bloomberg cited Kinger Lau, a China equity strategist with Goldman Sachs, who suggested that the any tariffs on China's exports to the United States would erase 3 percent from its GDP.