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

Warren Buffett warns that the current cap ratio of U.S. stock market capitalization to real GDP seems to be much higher than the long-run average benchmark.

James Campbell

2019-08-24 14:38:00 Saturday ET

Warren Buffett warns that the current cap ratio of U.S. stock market capitalization to real GDP seems to be much higher than the long-run average benchmark.

Warren Buffett warns that the current cap ratio of U.S. stock market capitalization to real GDP seems to be much higher than the long-run average benchmark.

+See More

The Federal Reserve System conducts monetary policy decisions, interest rate adjustments, and inter-bank payment operations.

Dan Rochefort

2023-03-28 11:30:00 Tuesday ET

The Federal Reserve System conducts monetary policy decisions, interest rate adjustments, and inter-bank payment operations.

The Federal Reserve System conducts monetary policy decisions, interest rate adjustments, and inter-bank payment operations. Peter Conti-Brown (2017)

+See More

Warren Buffett shares his key insights into life, success, money, and interpersonal communication.

Rose Prince

2018-09-09 13:42:00 Sunday ET

Warren Buffett shares his key insights into life, success, money, and interpersonal communication.

Warren Buffett shares his key insights into life, success, money, and interpersonal communication. Institutional money managers and retail investors ca

+See More

European economic integration seems to have gone backwards primarily due to the recent Brexit movement.

Daisy Harvey

2019-10-19 16:35:00 Saturday ET

European economic integration seems to have gone backwards primarily due to the recent Brexit movement.

European economic integration seems to have gone backwards primarily due to the recent Brexit movement. Brexit, key European sovereign debt, and French and

+See More

Smart firms and customers connect the continuous flow of lean production to the lean consumption of cost-effective minimum viable products.

Olivia London

2020-07-26 15:29:00 Sunday ET

Smart firms and customers connect the continuous flow of lean production to the lean consumption of cost-effective minimum viable products.

Firms and customers create value and wealth together by joining the continual flow of small batches of lean production to the lean consumption of cost-effec

+See More

Steven Shavell presents his economic analysis of law in terms of the economic outcomes of both legal doctrines and institutions.

Jacob Miramar

2023-08-21 12:25:00 Monday ET

Steven Shavell presents his economic analysis of law in terms of the economic outcomes of both legal doctrines and institutions.

Steven Shavell presents his economic analysis of law in terms of the economic outcomes of both legal doctrines and institutions. Steven Shavell (2004)

+See More