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The Right Way to Rebalance Trade

The Trump administration’s introduction of sweeping protectionist measures was one of the defining economic-policy developments of 2018. By embracing a bilateral perspective on national current accounts, the US government has made it clear that it will risk the long-term costs of tariffs for the sake of short-term political goals.

BEIJING – The US-China trade dispute reshaped the world’s economic and financial landscape in 2018, and it might continue to do so for years to come. That’s not how it looked as recently as May, when a bilateral trade deal was almost within reach. But the United States backed out at the eleventh hour, and tensions have since flared, with President Donald Trump’s administration imposing tariffs on a wide range of Chinese exports, and China responding in kind.