Yale economist Stephen Roach warns that America has much to lose from the current trade war with China for a few reasons.

Joseph Corr

2018-07-13 09:41:00 Fri ET

Yale economist Stephen Roach warns that America has much to lose from the current trade war with China for a few reasons. First, America is highly dependent on China as a key source of low-cost products and services. As America increases its trade bets and tariffs on $200 billion imports from China, most U.S. households and firms would face higher costs due to inflationary concerns.

Second, the Chinese government holds huge dollar amounts of U.S. Treasury bills and notes. These investments help finance the perennial U.S. budget deficit. Third, erecting tariffs, quotas, and even embargoes may isolate America from the OECD free trade bloc. In turn, U.S. economic output expansion and employment growth may slow down as a result. For these reasons, America has much to lose from its current trade conflict with China.

In contrast, Mohamed El-Erian, chief economic advisor of Allianz, suggests that America is in a much stronger position to win the trade war against China. Further, it is crucial for America to protect its IT-driven intellectual property rights with better patent, trademark, and copyright enforcement. Chinese regulatory agencies have been notorious in requiring U.S. corporations to set up data centers and IT science parks in some major cities in China. In effect, this regulation transfers many patents and IT solutions from America to China.

The U.S. Trade Act Section 301 investigation hence concludes that it is opportune for the Trump administration to impose punitive tariffs on Chinese imports. Global stock market investors may suffer some short-term losses due to this relentless Sino-American trade conflict.

 


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

Reuters polls show that most Americans blame President Trump for the recent U.S. government shutdown.

Olivia London

2019-01-05 11:39:00 Saturday ET

Reuters polls show that most Americans blame President Trump for the recent U.S. government shutdown.

Reuters polls show that most Americans blame President Trump for the recent U.S. government shutdown. President Trump remains adamant about having to shut d

+See More

Donald Trump defies the odds to become the new U.S. president.

John Fourier

2016-11-08 00:00:00 Tuesday ET

Donald Trump defies the odds to become the new U.S. president.

Donald Trump defies the odds to become the new U.S. president. He wants to make America great again. He seeks to repeal Obamacare. He has zero tole

+See More

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence and smart data analysis.

Peter Prince

2017-12-01 06:30:00 Friday ET

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence and smart data analysis.

Dr Kai-Fu Lee praises China as the next epicenter of artificial intelligence, smart data analysis, and robotic automation. With prior IT careers at Apple, M

+See More

Partisanship matters more than the socioeconomic influence of the rich and elite interest groups.

John Fourier

2019-08-26 11:30:00 Monday ET

Partisanship matters more than the socioeconomic influence of the rich and elite interest groups.

Partisanship matters more than the socioeconomic influence of the rich and elite interest groups. This new trend emerges from the recent empirical analysis

+See More

Apple is now the world's biggest dividend payer with its $13 billion dividend payout.

Dan Rochefort

2017-04-19 17:37:00 Wednesday ET

Apple is now the world's biggest dividend payer with its $13 billion dividend payout.

Apple is now the world's biggest dividend payer with its $13 billion dividend payout and surpasses ExxonMobil's dividend payout record. Despite the

+See More

CNBC All-America Economic Survey indicates 54% majority approval of the Trump team's supply-side economic reform.

Jonah Whanau

2018-07-11 09:39:00 Wednesday ET

CNBC All-America Economic Survey indicates 54% majority approval of the Trump team's supply-side economic reform.

In recent times, the Trump administration sees the sweet state of U.S. economic expansion as of early-July 2018. The latest CNBC All-America Economic Survey

+See More