President Donald Trump’s trade war with China is causing more economic pain for his own citizens than it is hurting Chinese consumers and companies, according to analysts at investment bank HSBC.
Studies of trade-war impacts by the International Monetary Fund and the European Central Bank found the "likely impact on the US economy to be significantly more negative than on China," the analysts Janet Henry and James Pomeroy said in a research note. "Whereas China has been benefiting from strong import demand in most of its other trading partners except for the US (and Germany, due to cars)," they said, "the US has not."
After tariffs were placed on hundreds of billions of dollars' worth of products between the US and China, signs of threatened growth have emerged across the global economy. On Thursday, a key gauge of factory activity in the US was fell by its most in more than a decade in December as hiring and new orders slowed sharply.
"One problem for the US is that many of its large export markets are not growing as quickly," the HSBC analysts said. "Another is that, according to US customs data, it is not just the US products that China imposed its retaliatory tariffs on that have seen weakening export growth to China, but US exports to China have seen some softening across the board."
Still, the analysts noted that China is not without negative impact, as it endures an economic slowdown:
To be sure, the US is far from alone in hurting from the tariffs, which Trump asserts are necessary to force China to change business practices the US sees as unfair. Trade barriers come at a particularly difficult time for officials in Beijing, who are grappling with an economy that has been growing at its weakest pace in a decade.
Manufacturing data out Wednesday showed China's private manufacturing activity contracted in December for the first time in 19 months.