【Abstract】The colossal trade deficits of the United States are a direct consequence of its long-standing domestic structural and policy imbalances supported by the US dollar’s exorbitant privilege as the dominant international reserve currency. China, on the contrary, has focused on transforming its domestic economy to achieve external rebalancing through internal restructuring, which provides an exemplary case for solving the problem of trade imbalance. It requires both sides, especially the US, to face up to the domestic structural issues of the US to resolve their trade disputes; a trade war will only exacerbate the US economic imbalance. China should adhere to its righteous position, focus on its long-term interests, and accelerate its domestic reforms.

【Keywords】 trade war; economic policy; rebalancing; Sino-US trade;

【DOI】