One of Donald Trump’s closest advisers has told the BBC that the US would win a trade war with China.
Anthony Scaramucci warned that if China chose to retaliate when the Trump administration imposed tariffs on imports, it would cost them “way more” than it would cost the US.
He added the current trade relationship was “more favourable to China than us”.
The comments came just as China’s President Xi warned that no-one would “emerge as a winner in a trade war”.
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In the first address to the World Economic Forum by a Chinese president, Mr Xi gave a staunch defence of globalisation and attacked protectionism.
“Pursuing protectionism is just like locking oneself in a dark room. While wind and rain may be kept outside, so are light and air. No-one will emerge as a winner in a trade war,” he told the audience.
“China will keep its door wide open and not close it,” he added.
During his election campaign, Mr Trump floated the idea of a 45% tariff on goods from China.
Mr Scaramucci, who will enter the White House on Friday as a senior adviser to the president, called the relationship with China “asymmetrical”, and downplayed the nation’s ability to exact revenge on the US.
“What are they going to do, [are] they going to move against our move for fairness?
“That’s going to cost them more, way more than it is ever going to cost us, and I think they know that.”
Mr Scaramucci, a Goldman Sachs alumnus who spent three decades on Wall Street, insisted Donald Trump is a fan of free trade, and that his policies, including the renegotiation of longstanding trade agreements, do not amount to protectionism.
“If you are running eight or nine hundred billion dollar trade deficits, some of that is based on demand, but some of that is systemic related to the trade deals.
“There’s an unfairness in the system,” he added. “That has borne a deleterious outcome for working-class families and middle-class people that Mr Trump identified.”
One of the trade deals the new US president has repeatedly condemned is Nafta, which connects Canada, Mexico, and the United States.
The agreement, which Mr Trump called “the single worst trade deal ever approved [in the US]”, fundamentally reshaped North American economic relations, most notably by many car manufacturers moving their plants to Mexico.
This, Mr Scaramucci argued, has led to a “lopsided” relationship.
“We signed Nafta in 1993, and in the 24 years from then you have lost 70,000 factories, and you had every 24 months a reviewal process for Nafta that the US never did, we never went through the reviewal process, never made any changes to potentially create more of an equilibrium in the deal, then we would have an issue, and I think we do.”