Trumponomics How China Can Weather Trump’s Trade War with Nouriel Roubini
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Apr 16, 2025 
Nouriel Roubini, a senior advisor at Hudson Bay Capital and NYU economics professor, dives deep into the U.S.-China trade war. He discusses how China might not only weather the tariffs but even find opportunities to emerge stronger. Roubini highlights China's resilience, its shifting strategies in global markets, and the potential risks of selling U.S. treasuries. He emphasizes the need for heightened domestic consumption and how cultural factors influence China's negotiation tactics, revealing the complexity of international relations.
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Trade War Hits China Harder
- The trade war impacts China’s growth more severely than the U.S., due to China's larger trade surplus with the U.S.
- A complete halt in trade could shrink China's GDP by 2%, compared to 1% for the U.S.
China’s Mitigation Tools
- China can offset trade war shocks with fiscal stimulus and monetary easing, unlike the U.S.
- They can retaliate with export restrictions and pressure on foreign firms operating in China.
Limits of Export Diversification
- China diversified exports with a "China plus one" strategy, spreading production beyond China into Asia.
- The U.S. will enforce strict local content criteria, making simple rerouting of Chinese exports difficult.