Parallel to US-China trade war, Japan & Korea fall out

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August 8, 2019 — I responded to 9 questions in an interview today with Chosun Ilbo.  They concern the US-China trade war and the new simultaneous dispute between Korea and Japan.

  1.  The trade war between the world’s two largest economies continues and it appears the war is spilling over to currency now. What do you think are the fundamental reasons for this conflict?

JF         It was legitimate for the outside world to ask China to make some changes.  But we did not sit down in a responsible manner with China’s leaders to negotiate. The reason for the trade war is that an ignorant and reckless man by chance became president of the United States. He has aggressively raised tariffs against China as well as other trading partners.  He has departed from past international commitments, from good economic policy and even from basic deal-making tactics. read more

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Trump escalates China trade war

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August 5, 2019 — The China’s People’s Daily in an interview had three questions about the US threat of August 1 to apply tariffs on the remainder of Chinese goods.

  1. As the tariff list of Trump now covers all the goods from China, economists are warning that consumers will pay more for the tariff. Do you share this concern?

JF Answer:
Yes, the additional tariffs — 10% on the remaining $ 300 billion of imports from China — will clearly raise the price that American consumers have to pay for many items.  This is one reason I am concerned.

2. It seems the trade war between the two countries will not end soon. Do you see any evidence that it’s having more impact on global economy? read more

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Let’s Forget about 2% Inflation

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July 28, 2019 — The Fed has some reasons for cutting interest rates at its meeting July 31, or subsequently if the US economy weakens. (And there are some good arguments on the other side as well, if growth remains as strong as it has been over the last year.)  But I find less persuasive one argument for easing: a perceived imperative to get inflation up to 2.0% or higher.

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