Are US-China Talks Going to Resolve the Trade War?
The US-China Trade War has lasted for almost 10 months now which has seen $250 Billion in tariffs against Chinese products and an additional $110 Billion in tariffs against US goods. Many industries have been affected and while talks have been held, little progress has been made. However, US Treasury Secretary Steve Mnuchin has stated that the US and China have recently made progress and are heading towards the "final stages of discussion." Therefore, Mnuchin and Trade Representative Robert Lighthizer will be in Beijing on April 30th to begin talks.
Mnuchin has stated that if the talks fail, Trump will most likely impose another round of tariffs. Personally, I'm not quite sure what Trump is trying to do by imposing more tariffs if the talks fail but then again no one really knows what he is thinking. What I'm more curious about is if the talks will actually result in any change in the trade war for the better and if there will be any sort of agreement between the US and China. What are your thoughts on this matter? Will the US and China make any progress or will the talks stall and continue to drag out this trade war?
Hi BDW, just trying to help:
Fingers crossed that one of those helps you.
In my opinion, they are not even close to it, but experts predict that the Trade War might be over this summer( but not earlier). For now there are no positive signs: on May 6th Donald Trump via Twitter announced a sharp increase in import duties on Chinese goods, as a result of it all the export from China to the United States might become affected by tariffs.
first off, can we all please stop calling this a trade war? until I see blockades and ship seizures, "war" is far too strong of a word for this. while it's important, it's not life or death. here's the short version: China should've been put under WTO rules YEARS ago but skated by because Trump's the only president with the gall to call them out. now, they're playing hardball because they don't want to give up their nice things. because China is so integral to the global supply chain and manufacturing isn't as fungible as asset lite businesses (yes, some stuff has been moved to Vietnam et al, but not everything is mobile), it's not as simple as just putting sanctions/tariffs on them and they agree to play by the rules.
I think we'll look back on this in 5 years and either say this was the start of something big (decline of US/China on the world stage, cause for a Sino-American war, toppling of communist party in China, etc.), or it was a non-event. I personally think it's a non-event long term, and I'm investing as such. yes, it hurts business and consumer confidence, but good businesses have found a way to get things done under all sorts of fucked up regimes. I mean for God's sake, India has some of the highest tariffs in the world and you hardly see anyone talking about the end of the world as a result of that. we've traded with Venezuela under Chavez & Maduro, we've traded with Saudi Arabia for God knows how long and they fund terrorism, we've traded with Russia since HW Bush's term in a big way, and just about everywhere east coasters vacation has some of the highest tariffs in the world, yet no one says Bermuda is being unfair. as much things as I hate about Trump, he's right to call China on their bullshit. the way he's going about it? probably sub optimal, but this will be no more than a footnote in American economic history.
why this is such a big deal is as follows:
I personally believe a trade deal will happen sometime between tomorrow and October. It would bode well for Trump's re-election campaign and he knows that.
The issue is it has to be a "good" trade deal. The best, some might say. You can't play hardball and deal with nation states the way Trump has been and then ask for a "kind of good deal" that makes him look good for the next election. China will catch on and walk all over that deal. His only bet is to eviscerate them and hold them accountable to all the WTO agreements they've breached over the years. I frankly don't think we have the negotiating power / ability to foster a deal like this WITHOUT any major war, which would then be a net-negative to his 2020 selling points.
I don't believe it even has to be a great deal. The average person won't know the difference. They'll just hear about the deal and consider it a positive. Any deal would be a boost for his re-election odds IMO.
I agree with the "average person doesn't know shit" sentiment but you don't think leftist media would look into and run with the "this deal is shit" rhetoric via someone like AOC / Warren / Bernie?
I'm becoming increasingly convinced that the trade overhang won't ever actually end. It will, however, be a constant, looming presence in the market until 2020. The issue will continue, give and take, but won't ever actually turn into a full blown war. In this sentiment I agree with Brofessor. Where I think we part ways is that this won't ever turn into a "Thank god Trump stood up to China and whipped them into shape" situation.
This will hang over us for another 18 months and the WH will continue to play both sides, promoting economic growth / nurturing the market as much as possible without actually abandoning the politically driven issues on trade. When one seems threatened the rhetoric on the other will be deemphasized and vice versa. Honestly this is nothing more than "fake news" designed to sow tension and create the illusion of any actual action.
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