President Trump started a trade war with the Chinese. The controversial conflict has had some positive effects on the economy, even as the negative effects continue to proliferate. The former-reality television star may have won the first round of the trade war, according to a recent article in The Hill.
The Hill article remains silent about which particular victory won. The author decided to keep it shrouded in secrecy, noting only the secrecy is needed. Perhaps like many other claims of the Donald and his supporters, this claim must be put into the false category. The article also speculates that their may be good reason for the secrecy as well.
Both China and the United States worried about North Korea’s recent missile tests. Neither nation wants to see a nuclear war. President Xi cannot afford to lose face and neither can the president of the United States. Despite this, the current trade war threatens the economic relationship between the two countries.
Trum first expressed his concerns about China and its economic policies in his 2000 book Crippled America. He expressed his concern in writing again in 2015. The Hill report suggest the White House’s economic team demanded sweeping concessions from the country that threatened the foundation of the country’s communist party’s constitution.
At home soybean farmer worry that the American farmer will no longer be able to sell soybeans in the Chinese market. China is one of the largest market for soybeans even before ethanol demand is considered.
Major financial officials in Asia are nervously watching recent trade tension between China and the United States brought on by President Donald Trumps proposal to levy stiff tariffs on Chinese exports.
If the Chinese economy ends up being negatively affected by a trade war with the U.S., China’s trading partners in developing Asian countries may also suffer. That’s why global economic analysts will be closely watching a meeting between U.S. and China negotiators in Beijing this week.
The major players in the meeting will be U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He. They will discuss an array of trade issues including what to do about tariffs. President Trump has made a significant issue about the U.S. trade imbalance with China.
Another factor that has China and many Asian countries on edge is the possibility of interest rate hikes in the U.S. by the Federal Reserve. Indonesian Finance Minister Sri Mulyani Indrawati said that higher interest rates in America ripple across the world with a “domino effect.”
U.S. Commerce Secretary Wilbur Ross will also play a major role at the Beijing meeting. He has made a point to lower expectations for any kind of major deal. Chinese officials have already been drawing some definite lines in the sand. For example, one Chinese minister said that his country “will not negotiate away its core interests” and will not accept “preconditions on issues.”
If the new U.S. tariffs get a green light from the White House, they will take effect in June after a 60-day consultation period.
Eleven Asia-Pacific countries have just signed a new trade agreement designed to cut tariffs between the member nations. This deal replaces the former Trans-Pacific Partnership and has been named the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Last year the United States pulled out of the agreement after President Donald Trump asserted that the deal would be a hindrance to American business and workers.
Despite the absence of the blessing of the U.S., eleven countries went forward with the pact. The participating nations are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. In addition to slashing tariffs between participating members, the partnership also reduces non-tariff measures in order to make trade more transparent and equal. As part of the deal, the agreeing members have committed to a series of minimum labor and environmental standards.
Even in light of the U.S. pullout, the deal still covers a market of over 500 million citizens. The countries of Brunei, Singapore, Vietnam, and Malaysia are expected to be the big winners of the deal with an increase of approximately 2% to their respective economies by the year 2030. The countries of New Zealand, Japan, Canada, Mexico, Chile, and Australia will benefit to a lesser extent, seeing an increase of about 1% to their economic bottom line. Some experts believe that the U.S. will lose approximately 0.5% of Gross Domestic Product as a result of its absence in the agreement.