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Trump's $200bn cut from China’s trade surplus seen 'economically impossible'

Trump's $200bn cut from China’s trade surplus seen 'economically impossible'

Mubasher: US President Donald Trump’s demand that China deducts $200 billion from its trade surplus with the US by 2020 is not just politically difficult, but also impossible in economic terms, according to a CNBC reporter.

As the US president made his demand, threatening high tariffs on imported Chinese goods, while citing erroneously a “$500 billion” trade deficit, it seems that the country's economy did not suffer at all, CNBC economics reporter John W Schoen wrote late Tuesday.

The only way to shrink China's trade surplus with the US by $200 billion in just two years would be either through deducting US imports from China or increasing exports to Beijing.

US tariffs on Chinese products will only result in increasing their prices, while it is not certain that American consumers would buy fewer amounts, he said, adding that China has little control over market demand in the US.

Moreover, boosting US exports to China by an annual total of $200 billion will not prove helpful.

"Even if we sell them every last soybean we own or produce, it’s only going to make up a small portion of that $200 billion," Bridgepark Advisors investment banker Stefan Selig told CNBC.

In the same vein, if China decides to buy $200 billion worth of goods from the US, “it would be all but impossible to find enough skilled workers to fill those orders,” Schoen assumed.

Moreover, President Trump failed to consider a widening trade advantage with China, ranging from travelling and studying to banking, which would eventually add to the US trade surplus, Schoen noted, adding that the trade deficit with China was offset by the products received by US consumers and businesses which were collectively higher than those received by their Chinese counterparts.