Archive for Trade and Trade Policy

Opinion | America the Cowardly Bully – By Paul Krugman – The New York Times

Paul Krugman

By Paul Krugman

Opinion Columnist

Image.  President Trump’s trade belligerence has done lasting damage to America’s reputation.CreditCreditPete Marovich for The New York Times

“This is the way the trade war ends. Not with a bang but with empty bombast.

According to multiple news organizations, the U.S. and China are close to a deal that would effectively end trade hostilities. Under the reported deal, America would remove most of the tariffs it imposed last year. China, for its part, would end its retaliatory tariffs, make some changes to its investment and competition policies and direct state enterprises to buy specified amounts of U.S. agricultural and energy products.

The Trump administration will, of course, trumpet the deal as a triumph. In reality, however, it’s much ado about nothing much.

As described, the deal would do little to address real complaints about Chinese policy, which mainly involve China’s systematic expropriation of intellectual property. Nor would it do much to address Donald Trump’s pet although misguided peeve, the imbalance in U.S.-China trade. Basically, Trump will have backed down.

If this is the story, it will repeat what we saw on the North American Free Trade Agreement, which Trump denounced as the “worst trade deal ever made.” In the end, what Trump negotiated — the U.S. Mexico Canada Agreement, or U.S.M.C.A. — was very similar to the previous status quo. Trade experts I know, when not referring to it as the Village People agreement, call it “Nafta 0.8”: fundamentally the same as Nafta, but a bit worse.”

Source: Opinion | America the Cowardly Bully – The New York Times

Posted in: Trade and Trade Policy, Trade and Trade Policy

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Trump Undermines Top Trade Adviser as He Pushes for China Deal – By Ana Swanson – The New York Times

WASHINGTON — President Trump has signaled that he is moving toward peace with China in a trade standoff that has rattled markets and businesses globally. But as he backs off his threat to impose higher tariffs, the president’s relationship with his own trade negotiator is now showing signs of strain.

The situation has left Mr. Trump’s trade representative, Robert Lighthizer, who is both an ardent supporter of the president and a longtime China critic, in an uncomfortable bind. While broad tariffs on Chinese imports brought Beijing to the negotiating table, Mr. Trump has grown impatient with the talks, and a consensus is growing in Washington that Mr. Trump will ultimately accept a weak deal.

And despite the lack of a transformative arrangement he once promised, the president has begun dangling the idea of a “signing summit” with President Xi Jinping of China at Mar-a-Lago, Mr. Trump’s Florida resort. As a result, the president is undermining Mr. Lighthizer as he tries to pressure China to make big concessions.

“Trump is certainly doing his negotiating team no favors by undercutting them in public,” said Eswar Prasad, a trade expert and the former head of the China division of the International Monetary Fund. The president’s actions, he said, “weakens rather than fortifies Lighthizer’s leverage.””

Source: Trump Undermines Top Trade Adviser as He Pushes for China Deal – The New York Times

David Lindsay Jr.
Hamden, CT | Pending Approval

Posted in: China, David Lindsay, Trade and Trade Policy, Trade and Trade Policy

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Opinion | China’s Online Censorship Stifles Trade- Too – By Tim Wu – The New York Times

Tim Wu

By Tim Wu

Mr. Wu is a law professor who specializes in technology.

“As China and the United States engage in high-level negotiations over a possible trade deal, it’s puzzling to see what’s been left off the table: the Chinese internet market. China blocks or hinders nearly every important foreign competitor online, including Google, Facebook, Wikipedia in Chinese, Pinterest, Line (the major Japanese messaging company), Reddit and The New York Times. Even Peppa Pig, a British cartoon character and internet video sensation, has been censored on and off; an editorial in the Communist Party’s official People’s Daily newspaper once warned that she could “destroy children’s youth.”

China has long defended its censorship as a political matter, a legitimate attempt to protect citizens from what the government regards as “harmful information,” including material that “spreads unhealthy lifestyles and pop culture.” But you don’t need to be a trade theorist to realize that the censorship is also an extremely effective barrier to international trade. The global internet economy is worth at least $8 trillion and growing, yet the Trump administration has focused chiefly on manufacturing, technology transfers and agriculture, and does not seem to have pressed for concessions on this issue.

Sheltered from American, Japanese and European competition, Chinese internet businesses have grown enormously over the past decade. Nine of the world’s 20 largest internet firms, by market value, are now Chinese. Some of this growth reflects the skill and innovation of Chinese engineers, a vibrant start-up culture and the success of Chinese business in catering to local tastes. But it’s hard to believe that this has been unaided by censorship.

And the barriers to foreign competition have more than just economic effects. Without any better options, Chinese users are forced to put up with companies like Tencent, which owns the private messaging app WeChat, and the online payment company Ant Financial, whose privacy violations are, amazingly, even more troubling than those of Facebook and Cambridge Analytica. By tolerating Chinese censorship, the United States encourages other countries to do the same.”

Source: Opinion | China’s Online Censorship Stifles Trade, Too – The New York Times

Posted in: China, Trade and Trade Policy, Trade and Trade Policy

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Opinion | China and Trump- Listen Up! – by Thomas Friedman – The New York Times

“HONG KONG — I’ve been in Tokyo and Hong Kong this week, and if I were to distill what echoed in all my conversations, it would sound something like this:

From Chinese business and government types, some real anxiety — “Can you please tell me what is President Trump’s bottom line in this trade war? Is this about rebalancing trade or containing China’s rise?” — combined with some real bravado — “You realize that you Americans are too late? We’re too big to be pushed around anymore. You should have done this a decade ago.”

From the Japanese it was gratitude — “Thank God for Donald Trump. Finally we have a U.S. president who understands what a threat China is!” — combined with real anxiety — “Please, please be careful. Don’t go too far with Beijing and break the global trading system.”

And from a smart European consultant it was bewilderment — “Boy did the Chinese have a failure of intelligence. They had no clue just how much both Democrats and Republicans, and Europeans, all want to see Trump hammer China in these trade talks. But please, please don’t start a cold war with China that will force us to choose sides.”

And from me to both my Chinese and Japanese interlocutors: I’m glad Trump is confronting China on its market access barriers. Those are the real issue — not the bilateral trade imbalance. This is long overdue. But trade is not a zero-sum game. China can thrive and rise, and we can, too, at the same time. That’s what’s been happening for the past 40 years. But we’d be even better off if China offered the kind of easy access to its market for U.S. manufacturers that it enjoys in America. It’s time to recalibrate U.S.-China economic ties before it really is too late.”

 

Thank you Thomas Friedman. Here is a comment I support.

Edward
Philadelphia
Times Pick

In this situation it seems time to cut off access rather than beg for it over and over. If the US and the EU both installed a policy that all policies regarding access are a mirror of the country in question, then the ball is moved into China’s court. Open up and keep access to those markets or stay closed and stay home. Back that up with huge trade and military agreement with the rest of Asia.

Source: Opinion | China and Trump, Listen Up! – The New York Times

Posted in: Thomas Friedman, Trade and Trade Policy

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China’s Taste for Soybeans Is a Weak Spot in the Trade War With Trump – By Raymond Zhong – NYT

XIAOWUSILI, China — For all its economic might, China hasn’t been able to solve a crucial problem.

Soybeans. It just can’t grow enough of them.

 

That could blunt the impact of one of the biggest weapons the country wields in a trade fight with the United States.

Beijing placed a 25 percent tariff on American soybeans last week in retaliation for the Trump administration’s levies on Chinese-made goods. Last year, soy growers in the United States sold nearly one-third of their harvest to China. In dollar terms, only airplanes are a more significant American export to China, the world’s second-largest economy.

Source: China’s Taste for Soybeans Is a Weak Spot in the Trade War With Trump – The New York TimesMay

 

David Lindsay:  Maybe. Here are the three most recommended comments, that doubt some of what this article says:

Kathy Chenault
Rockville, Maryland

Although you say U.S. soybean producers “could take a hit,” you fail to realize they already have been hurt deeply and they suffer more each day this ruinous trade manipulation continues. Farmers need to be selling significant percentages of expected production throughout the growing season on futures contracts. This usually begins even before they have planted their crops in the spring. I grew up on a family farm in Nebraska and still am involved in its operations. (Each year, about half of our acres are planted in soybeans.) Commodity prices already were trapped in a low cycle before Trump’s disastrous trade moves. Farmers know how to deal with the usual ebb and flow that comes with such a long-range economic pursuit like farming. But then came the trade war that Trump says he wanted. Farmers now face these perilous conditions: Rising interest rates, decreasing land values because of falling commodity prices, and higher equipment costs and operating expenses because of other non-farm tariff threats by Trump. Our foreign grain markets, including but not limited to China, have taken decades to develop. All that work is being undone daily by Trump. The short-sighted focus of your story fails to take that into account — just as it appears the Trump administration has failed to truly understand the very nature of our farm economy or how rural America is affected by his actions. Shame.

donald.richards commented July 9

donald.richards
Terre Haute

Monsanto grows plenty of soybeans in Brazil, Argentina and Paraguay. I’m sure they won’t have any problem wiping out more of the rain forest to meet Chinese demand.

And when they do more American farmers can apply for food stamps. They might want to reconsider that work requirement for eligibility though.

Ruralist commented July 9

Ruralist
Upstate

The article seems to assume that the rest of the world produces no soybeans, but that is far from true. The biggest of the other exporters in Brazil. In fact, Brazilian farmers saw this coming and started expanding their plantings earlier this year.
They are also buying US soybeans at the great discount the trade war creates ($7.80), and selling them to other customers at the Brazil price ($10).

The competition is smart and well-informed.

 

 

 

Posted in: Agriculture, China, Trade and Trade Policy

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