Donald Trump on May 5 suddenly revealed that a trade agreement with China was not imminent after all. To the contrary, the Administration on May 10 raised its earlier 10 percent tariff on $200 billion of Chinese goods to 25%, and threatened to extend 25% tariffs to the remainder of imports from China by late June (roughly $300 billion of goods). China, of course, retaliated against US exports [announcing reciprocal 25% tariffs on $60 billion of US goods, to start June 1. Surprised stock markets fell in response, with the S&P 500 down 4 per cent over the first week of the renewed trade war.
Category Archives: trade
Xi & Trump Miss a Chance to Expand Markets
March 24, 2019 — Donald Trump has postponed until April the supposed deadline for a conclusion to China-US trade negotiations. A good outcome for both sides would have China agree to better protect private property rights and to reduce the role of the state in its economy; the US agree to strengthen national saving and public investment; and both sides agree in the short-term to reverse their recent tariff increases and the resulting shrinkage of international markets. Unfortunately this deal is not likely to happen.
New Year questions about the economic outlook
January 1, 2019 – Five questions about the international economic outlook, from Chosun Ilbo (the leading Korean newspaper), and my replies: