[everlastinge]

So which is it...tires or tyres? Kidding

Both of you make good points...however if this situation manifests itself further there is a real possibility that a mutually recriminatory trade war ensues between the two major economies that will attract opportunistic trade realignments among the traditional allies of the US. US multinational corporations, unable to steer US domestic politics, will increasingly trade with China through their foreign subsidiaries, leaving the US economy with even less jobs, and a condition that will further exacerbate anti-China popular sentiments that translate into more anti-free-trade policies generally and anti-China policies specifically.

A global economic depression from a trade war between the world’s two largest economies is not out of the realm of possibility either and could heighten further mutual recriminations.

For instance curbs on Chinese export trade will accelerate a redirection of Chinese growth momentum inwards as it is already trying to do so. It could also increase Chinese power, including military power, while further encouraging anti-US sentiment in Chinese policy circles. This in turn will validate US apprehension of a China threat, increasing the prospect for an eventual hot conflict as the tit for tat snowballs. It's easy to start something...much harder to contain or end it.

A war between the US and China can have no winners, particularly on the political front. Let's hope this situation doesn't snowball...I don't think it is prudent given the weaker position we are in to instigate China. It seems we're going to have a duel between two of the biggest state capitalist economies going forward.