As U.S. President Donald Trump prepares a wide-ranging package of tariffs and investment restrictions targeted at China, a trade war between the world's two most important economies looks unavoidable. On the face of it, the United States might seem to have the leverage it needs to win. Since it runs a huge trade deficit with China, the Chinese have a lot more to lose.
But there's a flaw in Trump's logic. He appears to have an outdated and exaggerated view of how big a role the U.S. plays in the global economy. By overestimating American economic power, he's also greatly overestimating his chances of compelling China to change its trade practices.
True, the U.S. remains by far the world's biggest economy. The next largest, China, was only 60 percent as large in 2016. And the U.S. plays a massive role in international trade. It was the world's biggest importer and second-largest exporter in 2016. As China's top customer, the U.S. retains a great deal of influence over Chinese trade and employment.