If you looked at this trade war realistically, there would be no doubt in your mind the severity of the situation. President Trump has very little options available to make this look like a situation that is not only winnable but that the risk is contained. To get a good look at the mood of the Chinese, just follow their media. Today, one of the more concerning messages was published in their media.
“We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you!”
The name of the article is “United States, don’t underestimate China’s ability to strike back.”
This was published in the People’s Daily. That is the main media outlet in China.
According to CNBC, the phrase “Don’t say we didn’t warn you” was only used two other times by the People’s Daily in history — in 1963 ahead of China’s border war with India and in 1987 right before China went to war with Vietnam. This seems a little more than political posturing. They see the consequences of giving into US demands and are willing to do whatever it takes to avoid that scenario.
President Trump is between a rock and a hard place right now. This has the potential to hurt the US economy and the global economy. Most importantly, it is almost given that it will rock the stock market. Most importantly to President Trump, this could give the democrats the advantage in the polls. Think about it - why not use the Presidential Elections and the pain of the American people as weapons in this trade war. Could China have the absolute upper hand?
Know your risk and be comfortable with it. Washington might be underestimating China. In fact, President Trump referred to this war as "easy to win" back in the beginning stages. For the sake of your retirement, I would not underestimate the risk here.