Will Trump trigger a trade war between U.S. and China?

If U.S. President-elect Donald Trump returns to protective plans for the security of the U.S. trade sector after his inauguration on Friday, he would probably identify China as a currency manipulator and slap a 45 percent tariff on Chinese imports.

China has been adopting a wait-and-see approach to Trump’s pledge to attack China as Trump continuously comes up with hostile and assertive remarks in almost all of the spheres including diplomacy, national security and trade. However, China is beginning to take it more seriously, thinking “Trump may be different from other politicians.” Amid these changes in political circles, Chinese politicians have vowed to undertake retaliatory measures if Trump turns his words into actions. The world is holding its breath for a possible trade war between the world’s two largest economies.

Trump has been complaining America’s bilateral trade deficit with China, which is contributing to a half of U.S. trade deficit. Trump blamed China’s unfair trade policies such as deval‎uation of yuan.

According to the U.S. Department of Commerce, America’s bilateral trade deficit with China recorded 371.4 billion dollars, accounting for 50.1 percent of total deficit of 737.1 billion dollars. Moreover, the share of deficit from a trade with China has been on the rise. Trade deficit with China amounted to 187.3 billion dollars in the first half of 2016, which was 53.8 percent of a total deficit of 348.3 billion dollars.

Ja-Ryong Koo bonhong@donga.com