Everyone is worried about a “trade war” and last week’s US presidential election has further fueled those fears. Donald TrumpThe big winner of this contest has threatened to impose steep tariffs on all goods coming into the United States, and many fear a global downturn as a result. “If you have very serious decoupling and large-scale use of tariffs, you could end up with a loss of close to 7 percent of world GDP,” said Gita Gopinath, the IMF’s first deputy managing director. He told the BBC last month. “These are huge numbers; 7 percent is basically losing the French and German economies,” he added.

The concerns are real, but observers and analysts identify the wrong criminal, confusing the victim and the perpetrator. Don’t blame Trump or America. Blame Xi Jinping and China.

Yes, Trump loves tariffs, and tariff increases could cause a global crisis. The former and future president talked about them throughout his career and during his campaign. He calls himself “Mr. Tariff” and “Tariff Man”. “In my opinion, the most beautiful word in the dictionary is ‘tariff'” he said At the Economic Club of Chicago in the middle of last month. “That’s my favorite word. It needs a PR firm.”

Yes, this word could help a little. Economists hate these measures, and global leaders don’t like them either. Take its president, Christine Lagarde. European Central Bank and former IMF managing director. He sees parallels between today and the “economic nationalism” that led to the collapse in global trade and ultimately the Great Depression.

At a conference in Washington, D.C. in September, he said pointed out He said global trade as a percentage of world gross domestic product fell from 21 percent in 1913 to 14 percent in 1929 and 9 percent in 1938. Lagarde blamed customs duties, among other things.

Last year, In fact, global goods trade fell by 1.2% percentage. Although trade volumes will return to growth this year, there are concerns that global trade has peaked, particularly as countries again prioritize resilience and self-sufficiency and therefore experiment with onshore industry.

What is the culprit causing the trade slump? The IMF has been complaining about “protectionism” for a long time.

But the problem is not protectionism; this is just a symptom. Countries are protecting their economies by reacting specifically to China’s predatory and criminal trade practices. These practices of China have created large imbalances, such as large trade surpluses. Imbalances, aspect Wall Street Magazine reminds usIt brought on the Great Depression. They are also responsible for the global crisis in 2008.

This time, China is suppressing consumer demand at home – the Chinese economy is structured to do this – and subsidizing production as Xi seeks to build an even more frightening export hub. China currently accounts for 30 percent of global production.

As US National Security Advisor Jake Sullivan he said last month According to the Brookings Institution, Beijing’s system “produces far more than domestic demand, dumps the surplus onto global markets at artificially low prices, puts manufacturers around the world out of business and puts a strain on supply chains.”

Sullivan is right. The China Producer Price Index, which measures factory entry prices, was announced in October. It fell for the 25th month in a rowThis shows that China’s production capacity is insufficient due to domestic demand. But Beijing is pouring even more money into the manufacturing sector, negatively impacting consumers’ ability to buy goods.

As a result, domestic demand in China is falling. Last month, imports fell a more-than-expected 2.3 percent; At the same time, exports increased by 12.7 percent, much faster than expected.

China’s export-led system creates “collateral damage.” Wall Street Magazine He labeled the impacts felt by China’s trading partners. The Biden administration calls this “China Shock 2.0.”

So far, the IMF doesn’t want to deal with China’s trade practices, meaning countries will take matters into their own hands. In response to Beijing’s export promotion policies, the United States European Unionand even countries in the so-called Global South are raising their tariff walls. Trump is in good company right now.

“Foreign countries, and especially China, have been waging extremely successful trade wars against uninformed pre-Trump presidents for years,” trade expert Alan Tonelson told me. “High tariffs, non-tariff barriers based on Mickey Mouse regulations, subsidies, local content regulations, currency manipulation, and intellectual property theft have been Standard Operating Procedure for years.”

A showdown is coming soon because the world’s largest market is losing its patience and will take action. It’s true that tariffs would create “a world of unintended consequences,” as Andrew Collier, a senior fellow at the Harvard Kennedy School, told me this month.

Is one of these consequences a worldwide recession as Lagarde implies? Maybe, but like Tonelson, who writes about the intersection of trade and geopolitics. Reality Checkstates: “Foreign economies are so dependent on the American market for growth that any retaliation for new U.S. taxes would be symbolic at best.”

Even if it was more than a symbolic retaliation, the Great Depression shows that it was countries with trade surpluses that suffered the most. America must understand: A century ago, it was the king of the world’s trade surplus and the country most affected by the decline in trade. Now it will be China that will strike the blow.

Therefore, countries with trade surpluses are not in a position to wage a trade war with countries with trade deficits, such as the United States.

The Chinese regime certainly knows this. In 2018, Beijing fumed over Trump’s decision to impose tariffs under Section 301 of the 1974 Trade Act. some 75 percent to 81 percent of the cost is absorbed of these measures.

History is already repeating itself. In recent days, China has been trying to devalue the Renminbi, partly in anticipation of Trump imposing new tariffs. Even before taking the oath of office, the Chinese regime is paying the price for new tariffs.

Gordon G. Chang is the author of Plan Red: China’s Project to Destroy America and China’s Impending Collapse. Follow him on X @GordonGChang.

The views expressed in this article belong to the author.