Wednesday, November 13, 2019
https://www.cnbc.com/2019/11/05/china-presses-trump-to-remove-more-tariffs-in-phase-one-trade-deal.html
As the trade war presses on, there are uncertainties in the relationship between the two largest economies in the world. It continues to intensify and there have been significant repercussions. Negotiations are approaching a "phase 1" in which China is pressing President Trump to remove roughly 15% of tariffs imposed on $125 billion worth of Chinese goods. They also seek to relief from 25% tariffs placed on $250 billion of imports from machinery and semiconductors to furniture. Chinas economy has taken quite an impact from these tariffs and are attempting to have much of them removed to provide them with some economic relief since they rely so heavily on global trade. With additional tariffs on about $156 billion worth of Chinese imports scheduled to be put in place mid-December, China may want to find ways to incentivize the President Trump not to do so. Major reasons the U.S. jumped into this trade war were to get China to curb massive subsidies of state-owned firms and to end the forced transfer of American technology to Chinese firms simply as a price of doing business with them. China has not done so over the period of the trade war, so it does not seem that the U.S. will have much reason to back off on the tariff stronghold. Though it would be beneficial for both countries if a trade deal was arranged, neither country seems to be budging.
Which economy do you think has taken more of a hit, China or the U.S.?
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The affects of the hit on the US have not yet been made clear, but I do think we are going to be hurt much more from this as it appears China is already recovering from the short term pains.
ReplyDeleteI definitely think that it would be mutually beneficial for the US and Chine to both get out of the trade war. While that is the case, I don't see it happening any time soon. I think the impact will be about equal for both countries but I see it being worse for the US because of how heavily we rely on them.
ReplyDeleteI find it very interesting that the most recent agreements don't touch on Chinese state subsidies, the very thing that began the trade war. I think that until that issue is addressed it will be difficult to ease the tensions between the economies.
ReplyDeleteAt the moment, the consequences of the trade war have most likely been mutual, with each economy being affected in adverse ways. At the moment, though, there is no clear evidence on who has been more adversely affected by the detrimental trade policies.
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