Are Foreign Companies Really Leaving China in Droves? (PIIE)

President Donald Trump, in defending his trade war with China, has yet again let his Twitter fingers get ahead of reality. He tweeted in late August that “China wants to make a deal so badly. Thousands of companies are leaving because of the Tariffs. They must stem the flow.” This supposed exodus of foreign firms is another element informing his view that China is under increasing economic pressure and thus anxious to accept US terms for a trade agreement. As is the case with Trump’s claim that the US tariffs are slowing China’s economy and increasing its unemployment, the facts fail to support his view.

Nicholas R. Lardy (PIIE)

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