The Chinese administration delivers a written response to U.S. demands for trade reforms.

Olivia London

2018-11-25 12:37:00 Sun ET

The Chinese administration delivers a written response to U.S. demands for trade reforms. This strategic move helps trigger more formal negotiations between both sides to resolve the current Sino-American trade war. Thus far $360 billion Chinese imports have been subject to 10%-25% U.S. tariffs, and the Trump administration floats additional duties and concessions in recent times. In light of the U.S. midterm elections, President Trump expects to strike a positive trade deal with China. The Trump administration is thus unlikely to impose new tariffs on Chinese imports. As both Chinese and American delegates and diplomats resume their trade talks, the Trump team now sidelines most diehard protectionists.

President Trump and Chinese President Xi can next meet to agree on a new trade framework at the G20 summit in late-November 2018. China can purchase more American goods to help lower bilateral U.S. trade deficits. Nevertheless, the Trump administration may find it difficult to prevent the perennial Sino-U.S. technology transfer and other intellectual property theft in the mainland. This trade dilemma reflects the reality of unfair trade practices in several high-tech industries such as semiconductors, microchips, smart phones, visual animations, speech recognition devices, and artificial intelligence apps etc.

In fact, Sino-American bilateral trade deficits have ballooned about 10% from $275 billion to $305 billion in the interim period from September 2017 to November 2018. Part of this deficit increase reflects an 8.1% surge in U.S. imports from China while U.S. exports to China remain flat. U.S, real output growth, employment, and capital investment fire on all cylinders, thus the American economy attracts more Chinese imports in the current phase of robust economic growth. Greenback appreciation also contributes to this bilateral trade deficit increase, whereas, a weaker Chinese currency helps offset some costs of American tariffs on Chinese imports. The U.S. cannot readily replace Chinese imports with close substitutes because only China can produce these goods in a cost-effective way.

On balance, the Trump administration should seek to deter unfair trade practices such as Sino-American technology transfer and patent and trademark infringement. Whether the Trump team can reduce bilateral trade deficits with China becomes a secondary issue. Insofar as the Trump administration can attain 3%-4% real GDP economic growth, the additional tax revenue intake can self-finance fiscal budget and trade deficits.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More
Fed Chair Janet Yellen says the current high stock market valuation does not mean overvaluation.
Jonah Whanau

2017-12-11 08:42:00 Monday ET

 Fed Chair Janet Yellen says the current high stock market valuation does not mean overvaluation.

Fed Chair Janet Yellen says the current high stock market valuation does not mean overvaluation. A stock market quick fire sale would pose minimal risk to t

+See More
The Trump team receives a 3.2% first-quarter GDP boost as Federal Reserve halts the next interest rate hike in May 2019.
Olivia London

2019-05-07 09:30:00 Tuesday ET

The Trump team receives a 3.2% first-quarter GDP boost as Federal Reserve halts the next interest rate hike in May 2019.

The Trump team receives a 3.2% first-quarter GDP boost as Fed Chair Jay Powell halts the next interest rate hike in early-May 2019. This smooth upward econo

+See More
AYA Analytica podcast provides fresh insights into the latest stock market news, economic trends, and investment portfolio strategies.
Andy Yeh Alpha

2019-02-28 20:44:00 Thursday ET

AYA Analytica podcast provides fresh insights into the latest stock market news, economic trends, and investment portfolio strategies.

AYA Analytica finbuzz podcast channel on YouTube February 2019 In this podcast, we discuss several topical issues as of February 2019: (1) our proprieta

+See More
Higher public debt levels, interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy.
Daphne Basel

2019-01-23 11:32:00 Wednesday ET

Higher public debt levels, interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy.

Higher public debt levels, global interest rate hikes, and subpar Chinese economic growth rates are the major risks to the world economy from 2019 to 2020.

+See More
Uber seeks an IPO in close competition with its rideshare rival Lyft and other tech firms such as Slack, Pinterest, and Palantir.
Amy Hamilton

2019-03-13 12:35:00 Wednesday ET

Uber seeks an IPO in close competition with its rideshare rival Lyft and other tech firms such as Slack, Pinterest, and Palantir.

Uber seeks an IPO in close competition with its rideshare rival Lyft and other tech firms such as Slack, Pinterest, and Palantir. Uber expects to complete o

+See More
Google CEO Sundar Pichai makes his debut testimony before Congress.
John Fourier

2018-12-15 14:38:00 Saturday ET

Google CEO Sundar Pichai makes his debut testimony before Congress.

Google CEO Sundar Pichai makes his debut testimony before Congress. The post-mid-term-election House Judiciary Committee bombards Pichai with key questions

+See More