Despite the dire state of Sino-US relations, US President Donald Trump and Chinese President Xi Jinping can strike a deal which will benefit their countries. Such a deal would benefit the global economy, since the US and China produce around 40 per cent of the world’s goods and services.
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For Chinese leaders to reach an agreement with Trump, who styles himself as a deal-maker, they must understand the factors that led to him being elected twice.
As my book Is China a Menacing Empire? points out, Trump rode a wave of discontent among less-educated Americans. Trump won votes by blaming the influx of cheap Chinese goods into the US on the loss of American jobs. To be fair, the growth of Chinese exports to the US has also benefited the lives of some in Trump’s support base.
US imports from China jumped to US$427.2 billion in 2023 from around US$100 billion in 2001, according to data from the US Bureau of Economic Analysis. The US trade deficit grew during the same period, reaching US$279.4 billion in 2023.
Yet, for most years between 2004 and 2024, US unemployment did not exceed 6 per cent, according to the World Bank. The exceptions happened during the global financial crisis, the recession’s aftermath and the Covid-19 pandemic. The main blame for these exceptional events cannot be placed on trade with China.
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Imports of cheap Chinese goods have expanded the purchasing power of Americans of all classes. Hence, Americans overall have prospered from the influx of cheap Chinese goods into the US. However, university-educated Americans are much better off than their non-university-educated counterparts.