Tuesday , February 18 2020
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The US-China Nothing Burger Trade Deal

Summary:
There has been much hype about the signing of Phase One (and probably only) US-China trade deal.  However based on a front page story in today's Washington Post, there is not much there.  The US did not raise tariffs as planned, but tariff still remain on two thirds of the sectors that had them, although some were halved.  But numerous US sectors see no change at all and are now viewing the  situation as not likely to improve, with them suffering losses of business likely to return.  Among those are chemicals, apparel retailers, and auto parts. In these and other sectors there is not much reduction of uncertainty regarding US-China trade, so not likely much increase in investment.The main items in it besides no worsening of tariffs, China has made promises not to pressure US firms to turn

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There has been much hype about the signing of Phase One (and probably only) US-China trade deal.  However based on a front page story in today's Washington Post, there is not much there.  The US did not raise tariffs as planned, but tariff still remain on two thirds of the sectors that had them, although some were halved.  But numerous US sectors see no change at all and are now viewing the  situation as not likely to improve, with them suffering losses of business likely to return.  Among those are chemicals, apparel retailers, and auto parts. In these and other sectors there is not much reduction of uncertainty regarding US-China trade, so not likely much increase in investment.

The main items in it besides no worsening of tariffs, China has made promises not to pressure US firms to turn over technology and also to increase imports from the US by $200 billion over the next two years, especially in energy and agriculture. So maybe US soybean farmers will no longer need the bailouts of billions of $ Trump has been providing to them.  However, such promises have been made in the past.

As it is, I am watching commentators on Bloomberg, and about the most any of them are willing to say is that this "puts a floor" on the "deterioration" of US-China trade relations.  That is far from some dramatic breakthrough, and most of the tariffs put on as part of the US-China trade war remain in place.

Barkley Rosser

rosserjb@jmu.edu
I remember how loud it was. I was a young Economics undergraduate, and most professors didn’t really slam points home the way Dr. Rosser did. He would bang on the table and throw things around the classroom. Not for the faint of heart, but he definitely kept my attention and made me smile. It is hard to not smile around J. Barkley Rosser, especially when he gets going on economic theory. The passion comes through and encourages you to come along with it in a truly contagious way. After meeting him, it is as if you can just tell that anybody who knows that much and has that much to say deserves your attention.

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