The US and China signed a trade deal recently that made the news.

Shortly afterwards, Nobel-prize winning economist Paul Krugman claimed that the US lost the trade war. His argument is that US importers have to pay the tariffs to import Chinese goods. China's exporters could drop prices to remain competitive, but they haven't, so it's the US importers and consumers who wind up paying the price. Meanwhile, China's importers have had more success finding replacements for US exports, and because of the tariffs, US farmers suffered hard (which is why the government was forced to bail them out).

Meanwhile, Axios published an article saying that although the US suffered, China suffered more. China's total exports fell for the 12th straight month, the US-China trade deficit narrowed to its lowest point in over two years, and China's trade surplus fell by $8 billion more than expected. Accordingly, S&P analysts wrote that the economic pressure is "working", and there's little reason for the US to back away from the tariffs.

I don't get how to reconcile these two seemingly at-odds positions. Paul Krugman's argument seems logical, but then Axios' statistics also seems impeccable. I imagine one could think "both sides lost", but if China lost harder than the US then Paul Krugman's arguments seem bombastic if not outright misleading. Besides, his statistics seem to claim that the US lost harder than China.

How do I make sense of this? I know little about economics and this is an example of how I can't understand economic arguments when they show up in the media, so I'd appreciate an elementary explanation.

  • 3
    $\begingroup$ Could it be that everyone lost? $\endgroup$
    – Giskard
    Commented Dec 16, 2019 at 7:57
  • $\begingroup$ @Giskard it could, but as I mention in the question - even if we assume that both the US and China lost, the two sources seem to be at odds, with Paul Krugman claiming that the US lost harder while the Axios article claims the opposite. $\endgroup$
    – Allure
    Commented Dec 16, 2019 at 8:00
  • 2
    $\begingroup$ @Allure the title is actually quite provocative because it’s clear that in trade wars everyone looses but it’s a good question to ask who suffered more, but perhaps then question should be phrased in that way as well. Also, I think that your question can’t be presently fully settled as there was no time to really rigorously analyze the most recent trade war $\endgroup$
    – 1muflon1
    Commented Dec 16, 2019 at 8:45
  • $\begingroup$ Still early to tell, IMO. Nothing is currently written in stone. $\endgroup$
    – heh
    Commented Dec 16, 2019 at 20:09
  • $\begingroup$ "Who suffered more", probably depends on the metric used. There's also the issue that it's hard to put an end date to that trade war. And losses by any measures have to be judged against an unrealized alternative, which would also entail some debate as to what it could have been, exactly. $\endgroup$ Commented May 4, 2023 at 18:42

1 Answer 1


It looks like China suffered more, at least according to Chinese economists.


The economic cost to Beijing of Trump’s tariffs, retained by Biden, is real. Chinese companies slapped with tariffs exported less to the U.S., reduced hiring, spent less on research and development and were less likely to start new ventures, according to research from economists at Peking University, Fudan University and other leading Chinese universities. Overall, the damage to China’s gross domestic product from the trade war was three times as high as the hit to the U.S., according to some Chinese economists.

No details are given, however. Presumably one would have to search the economics literature for the relevant papers, and I almost surely will lack the expertise to evaluate them.


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