Turning One's Loss Into a Win? The US Trade War With China in Perspective

This chapter aims to shed light on the hidden benefits and losses of US-China trade within the framework of unequal exchange theory. After presenting the evolutions of the trade balance between China and the United States, we propose two methods for measuring the unequal exchange between them: one considers the labor content directly incorporated into the exchange; the other focuses on the international values with input-output tables. This allows to present a synthesis of sectoral analyses. Our results show a significant unequal exchange in US-China trade over 1995–2014, the United States being actually the main beneficiary of this trade. Both methods exhibit the inequality in exchange tending to decrease over time; China's disadvantage has been gradually reducing from the 2000s. We finally suggest that the relative decline in the hegemonic status of the United States in this bilateral unequal relationship could help explain its decision to launch its trade war with China.