This Wednesday, November 8th President Donald Trump will be visiting Beijing, China to meet with one of China's most powerful leaders in decades, Xi Jinping. During the meeting, Trump will likely address the trade imbalance that the United States and China have. Many analysts are expecting the POTUS to announce a series of high value deals between the countries that will help narrow the trade imbalance. These deals will likely include the Chinese buying American energy, farm products, aircrafts and likely other heavy machinery items. In addition to these moves, it has been noted that reforms to Chinese financial sector could be seen as a result of delegations from Goldman Sachs CEO Lloyd Blankfein.
Although the deficit is a major issue for the U.S. economy, many leading businesses are hoping that Trump's fixation with the deficit doesn't distract him from dealing with other larger issues. An example of an issue that Trump may be overlooking is the US-Sino relations such as market access and competition in industries of the future.
Overall, the best case scenario from Trump's visit is described as , "proactive, reciprocal treatment" by William Zarit, the chairman of the American Chamber of Commerce in China. He describes his worst case scenario as reactive motion from the United States which would include limiting investment and limiting Chinese exports.
https://www.cnbc.com/2017/11/06/trump-visits-china-heres-what-to-expect.html
It seems like Trump has putting forth a lot of his attention to the United States' trade imbalance with China. Hopefully, all of the effort he has put in will pay off. It would make sense to try to talk to the Chinese about buying American energy, farm, products, aircrafts, etc. If President Trump is able to accomplish his goal of reducing the deficit between us and China, it will not only benefit our economy, but it will allow him to focus his attention on other issues going on.
ReplyDeleteHopefully this won't deteriorate into a trade war where Trump threatens retaliation in trade with China--by threatening to put high tariffs on Chinese exports to the US.
ReplyDeleteHopefully this does not limit foreign direct investment from China if this goes wrong as that would overall hurt the U.S. economy. Another possible repercussion would be China not letting the U.S. borrow as much, because they are our main financial lenders.
ReplyDeleteTrump proposing this further emphasizes his commitment to re-establish American manufacturing across the world. Personally, I believe this will increase confidence in the economy even more if he is able to get China to agree, which will be a difficult task.
ReplyDeleteThis meeting sounds as though it has the potential to be very successful for the United States. A reduction in the ever increasing trade deficit could be a huge victory for the United States and could prove to be beneficial for economic activity domestically as well. A reduction in the deficit could change consumer and business expectations, which could lead to increases in consumption and investment. Both would be very positive for the health of the United States economy.
ReplyDeleteI am really nervous about this visit given the Democratic victories - what if Trump needs an ego boost after the victories and lashes out at China or North Korea?
ReplyDeleteI hope and don't expect the result of the visit to end up in a limitation of trade to and from China as that would have a significant impact on our economy. This is no easy task he is embarking on however if he is successful the lessening of the deficit with China will only benefit the US.
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