Is Trump wise to take on China over trade?


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Presidents Xi and Trump meet in Florida on Thursday

US President Donald Trump has said that trade negotiations with China will be “very difficult” when he meets President Xi Jinping in Mar-a-Lago, Florida, on Thursday.

Trade will be one of two key issues on the agenda, along with North Korea. But what’s the problem – and what can Trump do about it?

Buying Chinese

The problem with the US-China trade relationship is that it is highly unequal and has been for a long time.

In 2016 alone, the US imported $480bn (£385bn) of goods and services from China – mostly consumer items like clothing, shoes, televisions, smartphones, laptops and tablets.

Those imports keep prices low for American consumers.

In return, the US sold just $170bn (£137bn) worth of exports to China – including sophisticated machinery like aircraft and agricultural products like soybeans.

It also makes money from services, like the education of an estimated 350,000 Chinese students in the US.

Overall, China is the largest source of the US trade deficit – the amount by which the value of its imports exceeds the value of its exports. In 2016 it accounted for about 60% of its overall deficit of $500bn (402bn).

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