Tag Archives: China Trade War

US might retreat from its tough policies towards China

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According to Asia Times, US President Donald Trump’s recent switch from engaging to confronting China has put the world on edge. China’s quick response in vowing a “tit-for-tat” on US tariffs imposed on its goods prompted a free fall in the US stock market, with a combined loss totaling nearly 6 percent in the week ending March 23, the worst in more than two years, though it has rebounded since.

This market volatility coupled with outcries from US businesses against Trump’s “tough” policy stances seem to have an impact on the US president or his senior officials. Treasury Secretary Steven Mnuchin called his Chinese counterpart, Vice-Premier Liu He, on Saturday to discuss the issue. In that telephone call, Liu was reported to have told Mnuchin that China would retaliate against the US if Trump followed through with his tariff proposal, where to buy liquor.

The fact that Mnuchin is opening the door for negotiations to address issues with China’s “economic czar” is a good sign of a pragmatic approach to addressing differences between the world’s two largest economies. That will avert a trade war, at least for now.

What’s more, Mnuchin’s gesture seems to indicate the recognition that the kind of trade threats leveled against Japan, the UK, France, and Germany in the 1980s will not work against 21st-century China.

The United States’ huge trade deficit with Japan in the 1980s led to the signing of the Plaza Accord in 1985 among the so-called Group of Five: the US, the UK, Japan, Germany, and France. The main purpose of the accord was to weaken the US dollar against the other four countries’ currencies.

Between 1980 and 1985, the greenback appreciated as much as 50 percent against the yen, pound, franc, and mark, prompting US companies such as General Motors, Caterpillar, Motorola, and others to ask for protection against foreign imports (notably from Japan). What’s more, the US had incurred a merchandise trade deficit of almost 3.5 percent of gross domestic product with the four powers and had just emerged from a recession.

China, no to trade war! says East West Bank CEO

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According to Xinhuanet’s report, Chairman and CEO of East West Bank Dominic Ng said, “It looks like President Donald Trump has started to do something in order to live up to another aggressive campaign promising to address trade imbalances after the tax reform has been done last year.”

Ng emphasized the fact that domestic political purpose was behind the decision of higher aluminum and steel import tariffs imposed by Washington on March 8. However, the trade deficit issue may be overstated by the politicians and may lead to the trade war with other countries like China.

“It is a strange phenomenon that the steel and aluminum tariff issue actually has the very small impact on Chinese exporters since only a measly two percent of total U.S. imports of steel products, by value, came from China in 2017. But most people interviewed by local media in street showed they believed China will feel pain,” he said during a recent interview with Xinhua at the bank’s headquarters in Pasadena City of California.

Statistics revealed Canada as the biggest supplier of steel to the United States. South Korea accounts for over 10 percent of all the US steel imports in 2017 while Japan accounts for almost six percent. Moreover, the Europeans are worried steel might have gone to the US and may now find its way to EU. This would pressure local steelmakers even further, find liquor store.

Ng cites in an interview how public opinion in the United States is turning against the free trade. However, they the public does not desire for a trade war, not speaking of a ‘ridiculous’ trade war base on wrong calculations.

“A trade war must have an internecine result,” the banker said.  East West Bank has 36 billion U.S. dollars of assets and was listed by the Forbes in January as one of the top five on the annual list of America’s Best Banks 2018.