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if China were a capitalist economy the bluff might have worked, but China is a controlled economy. so Trump played his high stakes game and he is about to lose, the US may be a trading partner but China has many other trading partners so loss of US business hurts but it doesn't kill the economy. China has yet to play the next card, which is sell off the US junk bonds it has invested in and kill the US bond market. This is what happens when you allow a man with no economic credentials to call the shots. The Trump crash of 2019
The falacy here is the assumption that China and US are trading partners and not competitors . I don't mind what he is doing with China. But he should be up front to the US people what is at stake . He's asking us to do the equivalent of going into economic war footing . China will not sell off it's US debt holding because they have no better place to put their capital . That was one of the reasons I cited for the benefits of having a trade deficit with a nation. We bought their goods and paid for it with fiat currency . They are holding on to that and have no place to reinvest it except right back in the US.
Trump is trying to get them back to the table . But it is their economy in peril ,not ours . Yes this can cause pain and if his base doesn't understand it he is taking political risks .
But China is financing continued cheap exports on the backs of it’s citizens now, who are about to get smashed with hyperinflation due to the devaluation .So let's see who blinks first .