Why China should avoid a large-scale trade war with the United States

As in any war, there will be victims on both sides.

In a large-scale trade war between China and the United States, the Asian giant could be badly hurt, not in vain, exports to the North American power are a key element in its growth model.

The trade surplus in favor of China (estimated at around US $ 347,000 million annually) would be directly hit by a protectionist escalation between the two largest economies in the world.

That is why some experts warn that Beijing would have much more to lose than Washington.

"Potentially, China is much more exposed, which is why it will want to negotiate a way out of this escalating tariff confrontation," says Stephen McDonell, BBC correspondent in Hong Kong.

So far, China and the US They seem to be playing the previous cards of a conflict that, if it escalates, can even trigger a global economic recession, according to the director general of the World Trade Organization (WTO), Roberto Azevedo.

China on Monday announced tariffs of between 15% to 25% for 128 US products (including scrap aluminum, pork, nuts, fruits and wine) for a total of US $ 3,000 million, against which the White House said that It was "distorting global markets."

Wall Street reacted amid fears about an eventual trade war, with the Dow Jones Index down 2.7%.

China imposes tariffs on 128 US products for US $ 3,000 million and responds to the "commercial war" of Donald Trump
The Chinese announcement against American products was the answer given by the government of Xi Jinping to Donald Trump after the US president decided to impose controversial tariffs on the import of steel and aluminum, and the subsequent announcement about trade restrictions on Chinese products by some US $ 60,000 million.

"China has more to lose"
According to William Alan Reinsch, an adviser to the Center for Strategic and International Studies, based in Washington and former president of the National Council of Foreign Trade of the United States, China prefers to negotiate because it has "potentially more to lose" in a commercial war, given that "it sells more to the United States than what he buys from him. "

"Trade negotiations with the United States in the past have generally generated agreements that have not required major concessions, they would be happy to repeat them," Reinsch said in conversation with BBC Mundo.

"China is an economy more dependent on exports and, therefore, fears for the stability of the global trading system," says BBC World Barry Eichengreen, professor of economics and political science at the University of California.

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"China has more to lose than the United States in an eye-to-eye trade war, in which bilateral trade between the two countries stops," he adds.

This explains the expert the apparent efforts that Beijing is making to convince the other actors to preserve that system.

In a more political terrain, Eichengreen says that it is in China's interest that the situation does not escalate "as a way to demonstrate global leadership and improve its reputation in the eyes of other countries as a reliable partner."

The key factor in which several experts agree is the Chinese dependence on the US market.

"At least until China can find alternative markets for its exports," says Raj Bhala, of the law school at the University of Kansas and an advisor to the Dentons law firm.

"Negative economic consequences for China mean negative political consequences for the Chinese Communist Party," he adds.

"The theft of intellectual property"
This week, the White House will make public the list of Chinese products that will be affected by the new tariffs, with which the government aims to punish Beijing for its "tremendous theft of intellectual property," according to Trump.

This list would target "mainly high-tech" products.

In this context, China warned the United States to "not open the Pandora's box" and generate a wave of protectionist practices around the world.

And it is likely that the government of Xi Jinping will do everything in its power to cool tensions before responding with more far-reaching measures.

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Another diplomatic channel that runs in parallel, experts say, is that China is playing its cards by joining forces with other countries to stop the protectionist explosion in which Trump apparently is engaged.

The point is that any false move can have repercussions in different parts of the planet, considering that today's economic and financial architecture is increasingly interdependent and synchronized.