In recent days, Donald Trump has signaled eagerness to reach a trade agreement with China. The president said Tuesday that his 145 percent tariffs on Chinese imports will “come down substantially” in the near future.

On Thursday, Trump said that his administration is already negotiating with China over trade, saying, “They had a meeting this morning.” Asked who precisely had a meeting, Trump told reporters, “it doesn’t matter who ‘they’ is.”

Yet that same day, China denied the existence of such negotiations, saying that “any reports on development in talks are groundless.”

By most accounts, China feels little need to come to the table. Chinese leaders reportedly believe that they can wait Trump out. They’re not enticed by his floated offers of partial tariff relief, but instead favor a total pause on the tariffs, as a condition for commencing negotiations over the two nations’ trade disputes.

China’s intransigence may take some US observers (particularly those in the White House) by surprise. The Chinese economy has been suffering from deflation, due to a collapse in its property sector. Manufacturing has been one of the nation’s few economic bright spots. Now, as many as 20 million Chinese workers are at risk of losing their jobs because of a collapse in exports to the US, according to an estimate from Goldman Sachs.

Nevertheless, the Chinese government believes that it has the upper hand in this trade fight. And they’re probably right. That could have dire implications for America’s economy, if Trump cannot reconcile himself to a near total capitulation.

China has the advantage in its trade war with the US for at least three reasons:

1. China’s stuff is more precious than America’s money

Donald Trump’s trade policies are all rooted in one fundamental — and fundamentally wrong — premise: If America runs a trade deficit with another country, then we are effectively “subsidizing” that nation. After all, in that scenario, our trade partner is receiving more money from us than we are collecting from it.

Given this reality, the president long assumed that America could easily win a trade war with China, which runs a large trade surplus with the US. Trump spelled out the logic of his

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