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Trump Gets His Trade Deal, China Gets the Win


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Peace rather than more conflict is finally in the cards, at least temporarily, for the United States-China economic relationship. After many twists and turns, the United States and China are expected to sign a trade deal on Wednesday and have agreed to resume a regular dialogue about their differences. The phase-one agreement leaves many issues unresolved, so tensions between the two countries may continue. But a cease-fire and dialogue are certainly preferable to the alternative — a further escalation of trade and economic hostilities between the world’s two largest economies.

 

What has the deal accomplished? It will bring some significant changes but comes with a big price tag for the American economy. The long-term effects will most likely end up favoring China.

 

As part of the deal, China has agreed to increase its purchases of products from the United States. This is largely a symbolic issue meant to mollify President Trump, since this will not, by itself, affect the United States trade deficit with China in a durable way. Such deficits are more of a reflection of other policies that influence a country’s consumption and output.

 
 

More important, China has agreed to beef up its protection of intellectual property rights, to refrain from forcing foreign companies operating in China to transfer their technology to domestic firms, and to open up more of its economy to foreign investment. These measures could help American and other foreign businesses that are interested in selling in China’s markets, investing there or using the country as part of their global supply chains. In return, the United States has reduced some tariffs on Chinese imports and canceled additional tariffs.

 

Why did China make these concessions? Therein lies a deep irony. Many elements of the deal will make the Chinese economy stronger. China wants to be a more dynamic, innovation-led economy, so better protection of intellectual property rights will help. Opening up parts of its economy, such as banking and insurance, will spur competition and innovation in, for example, the Chinese financial sector. Many of the ostensible concessions are in areas where Chinese reformers have long sought to create change for their country’s own good.

 

China’s economy will also get a short-term boost from the trade deal. Stimulus measures, such as more spending by local governments, lower taxes and more bank credit, have kept growth from stalling, but the economy remains fragile. Private investment has been weak, partly reflecting the uncertainty caused by the trade tensions. Even a cease-fire, and the prospects that further tariffs can be avoided, might help mitigate the slump in business sentiment and investment in China.

China has also agreed not to artificially devalue its currency, the renminbi, to boost its exports. This concession is ironic in a different way. For years, the United States has asked China to let its currency’s value be determined by market forces. Now both countries seem to have agreed on letting this happen — unless markets want to push down the value of the renminbi. In that case, all bets are off and Washington wants Beijing to override the market.

 

The United States has deferred its more substantive demands to the next phase of trade talks. These include China’s corporate subsidies, which give its companies a leg up on foreign competition, the dominance of state-owned enterprises in its economy, as well as a mechanism to review China’s progress on meeting its commitments on these issues. This was one of the more contentious part of the negotiations, since China did not want to be seen as ceding sovereignty over any of its domestic policies. The new dialogue could provide a more balanced mechanism for regular reviews of China’s commitments. Nothing will change overnight, but at least some fundamental issues are being confronted squarely.

 

Unfortunately, all this progress comes at a heavy price for the American economy. Most of the costs of tariffs on Chinese imports have been borne by Americans, in the form of higher prices for households or lower profits for companies. Farmers will get some temporary relief as China resumes its purchases of agricultural products, but producers from countries such as Brazil, who filled the gap left by American exporters, are likely to increase their share of China’s growing markets.

Moreover, the uncertainty resulting from trade tensions with China and other trading partners has probably contributed to falling business investment in the United States. The deal with China and the recently ratified United States-Mexico-Canada Agreement ought to help resolve that uncertainty.

 

But given the Trump administration’s record of mercurial policymaking, trade hostilities could again flare up at the president’s whim, undermining the certainty businesses need before making decisions about their investments and supply chains. This, in turn, would have a negative impact on labor productivity, employment and wages.

 

While Mr. Trump and his team celebrate their “victory” over China, don’t expect much fanfare among anyone else. The trade deal limits some short-term damage to the economy, but China might end up being the winner when the dust settles.

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3 minutes ago, benson13 said:

Peace rather than more conflict is finally in the cards, at least temporarily, for the United States-China economic relationship. After many twists and turns, the United States and China are expected to sign a trade deal on Wednesday and have agreed to resume a regular dialogue about their differences. The phase-one agreement leaves many issues unresolved, so tensions between the two countries may continue. But a cease-fire and dialogue are certainly preferable to the alternative — a further escalation of trade and economic hostilities between the world’s two largest economies.

 

What has the deal accomplished? It will bring some significant changes but comes with a big price tag for the American economy. The long-term effects will most likely end up favoring China.

 

As part of the deal, China has agreed to increase its purchases of products from the United States. This is largely a symbolic issue meant to mollify President Trump, since this will not, by itself, affect the United States trade deficit with China in a durable way. Such deficits are more of a reflection of other policies that influence a country’s consumption and output.

 

More important, China has agreed to beef up its protection of intellectual property rights, to refrain from forcing foreign companies operating in China to transfer their technology to domestic firms, and to open up more of its economy to foreign investment. These measures could help American and other foreign businesses that are interested in selling in China’s markets, investing there or using the country as part of their global supply chains. In return, the United States has reduced some tariffs on Chinese imports and canceled additional tariffs.

 

Why did China make these concessions? Therein lies a deep irony. Many elements of the deal will make the Chinese economy stronger. China wants to be a more dynamic, innovation-led economy, so better protection of intellectual property rights will help. Opening up parts of its economy, such as banking and insurance, will spur competition and innovation in, for example, the Chinese financial sector. Many of the ostensible concessions are in areas where Chinese reformers have long sought to create change for their country’s own good.

 

China’s economy will also get a short-term boost from the trade deal. Stimulus measures, such as more spending by local governments, lower taxes and more bank credit, have kept growth from stalling, but the economy remains fragile. Private investment has been weak, partly reflecting the uncertainty caused by the trade tensions. Even a cease-fire, and the prospects that further tariffs can be avoided, might help mitigate the slump in business sentiment and investment in China.

China has also agreed not to artificially devalue its currency, the renminbi, to boost its exports. This concession is ironic in a different way. For years, the United States has asked China to let its currency’s value be determined by market forces. Now both countries seem to have agreed on letting this happen — unless markets want to push down the value of the renminbi. In that case, all bets are off and Washington wants Beijing to override the market.

 

The United States has deferred its more substantive demands to the next phase of trade talks. These include China’s corporate subsidies, which give its companies a leg up on foreign competition, the dominance of state-owned enterprises in its economy, as well as a mechanism to review China’s progress on meeting its commitments on these issues. This was one of the more contentious part of the negotiations, since China did not want to be seen as ceding sovereignty over any of its domestic policies. The new dialogue could provide a more balanced mechanism for regular reviews of China’s commitments. Nothing will change overnight, but at least some fundamental issues are being confronted squarely.

 

Unfortunately, all this progress comes at a heavy price for the American economy. Most of the costs of tariffs on Chinese imports have been borne by Americans, in the form of higher prices for households or lower profits for companies. Farmers will get some temporary relief as China resumes its purchases of agricultural products, but producers from countries such as Brazil, who filled the gap left by American exporters, are likely to increase their share of China’s growing markets.

Moreover, the uncertainty resulting from trade tensions with China and other trading partners has probably contributed to falling business investment in the United States. The deal with China and the recently ratified United States-Mexico-Canada Agreement ought to help resolve that uncertainty.

 

But given the Trump administration’s record of mercurial policymaking, trade hostilities could again flare up at the president’s whim, undermining the certainty businesses need before making decisions about their investments and supply chains. This, in turn, would have a negative impact on labor productivity, employment and wages.

 

While Mr. Trump and his team celebrate their “victory” over China, don’t expect much fanfare among anyone else. The trade deal limits some short-term damage to the economy, but China might end up being the winner when the dust settles.

Why are you hiding the link beanie?   :)

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Trump himself has begun to lower expectations, saying he’s in no rush, and his top allies are warning the next phase might not conclude until after November’s presidential election. The result is increasing frustration among some American businesses and technology companies who feel Trump is trading away hard-earned leverage in exchange for an agreement that does little to resolve the systemic issues that led the White House to begin imposing tariffs against China two years ago.

 

**** “We’re no closer today to resolving any of those fundamental frictions than we were before the trade war started,” Bown said.

 

Still, Trump himself was quick to tout the benefits of an agreement he hailed as a "really incredible breakthrough" at Wednesday’s signing ceremony, which dozens of Republican lawmakers and business and industry representatives attended.

 

“Today we take a momentous step — one that has never been taken before with China — toward a future of fair and reciprocal trade," Trump said in the White House East Room.

 

Yet, billions in tariffs will remain in place, hurting the economy. The added duties imposed over the past two years — which were meant to bolster domestic manufacturing and punish China — were “approximately 100 percent” borne by American consumers and importers, a paper by three economists recently found.

 

Administration officials say the path forward will depend in part on how closely China adheres to the commitments it has agreed to in phase one, including whether it meets the required purchasing figures. The administration has said Beijing agreed to boost overall purchases by $200 billion above 2017 levels; POLITICO reported this week that will break down to around $75 billion in manufactured goods, $50 billion in energy, $40 billion in agriculture and $35 billion to $40 billion in services.

 
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53 minutes ago, benson13 said:

This is Trumps MO, cause a problem, stir up a problem, and then back off, give in or just wait until things settle down and then claim to have solved the problem.

Trump caused China to abuse our intellectual properties and manipulate their currency? Damn he's stronger than I thought. 

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More lies from the   left.

 

If this was a China  win, Trump would have  flown to  China and  signed it with  Xi

 

 

Instead   this is what  happened

 

 

They flew here and a  subordinate  signed it.

 

 

MAGA  you  lying POS  Benson

 

 

US-CHINA-DEAL.jpg

 

 

 

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1 hour ago, benson13 said:

Peace rather than more conflict is finally in the cards, at least temporarily, for the United States-China economic relationship. After many twists and turns, the United States and China are expected to sign a trade deal on Wednesday and have agreed to resume a regular dialogue about their differences. The phase-one agreement leaves many issues unresolved, so tensions between the two countries may continue. But a cease-fire and dialogue are certainly preferable to the alternative — a further escalation of trade and economic hostilities between the world’s two largest economies.

 

What has the deal accomplished? It will bring some significant changes but comes with a big price tag for the American economy. The long-term effects will most likely end up favoring China.

 

As part of the deal, China has agreed to increase its purchases of products from the United States. This is largely a symbolic issue meant to mollify President Trump, since this will not, by itself, affect the United States trade deficit with China in a durable way. Such deficits are more of a reflection of other policies that influence a country’s consumption and output.

 

More important, China has agreed to beef up its protection of intellectual property rights, to refrain from forcing foreign companies operating in China to transfer their technology to domestic firms, and to open up more of its economy to foreign investment. These measures could help American and other foreign businesses that are interested in selling in China’s markets, investing there or using the country as part of their global supply chains. In return, the United States has reduced some tariffs on Chinese imports and canceled additional tariffs.

 

Why did China make these concessions? Therein lies a deep irony. Many elements of the deal will make the Chinese economy stronger. China wants to be a more dynamic, innovation-led economy, so better protection of intellectual property rights will help. Opening up parts of its economy, such as banking and insurance, will spur competition and innovation in, for example, the Chinese financial sector. Many of the ostensible concessions are in areas where Chinese reformers have long sought to create change for their country’s own good.

 

China’s economy will also get a short-term boost from the trade deal. Stimulus measures, such as more spending by local governments, lower taxes and more bank credit, have kept growth from stalling, but the economy remains fragile. Private investment has been weak, partly reflecting the uncertainty caused by the trade tensions. Even a cease-fire, and the prospects that further tariffs can be avoided, might help mitigate the slump in business sentiment and investment in China.

China has also agreed not to artificially devalue its currency, the renminbi, to boost its exports. This concession is ironic in a different way. For years, the United States has asked China to let its currency’s value be determined by market forces. Now both countries seem to have agreed on letting this happen — unless markets want to push down the value of the renminbi. In that case, all bets are off and Washington wants Beijing to override the market.

 

The United States has deferred its more substantive demands to the next phase of trade talks. These include China’s corporate subsidies, which give its companies a leg up on foreign competition, the dominance of state-owned enterprises in its economy, as well as a mechanism to review China’s progress on meeting its commitments on these issues. This was one of the more contentious part of the negotiations, since China did not want to be seen as ceding sovereignty over any of its domestic policies. The new dialogue could provide a more balanced mechanism for regular reviews of China’s commitments. Nothing will change overnight, but at least some fundamental issues are being confronted squarely.

 

Unfortunately, all this progress comes at a heavy price for the American economy. Most of the costs of tariffs on Chinese imports have been borne by Americans, in the form of higher prices for households or lower profits for companies. Farmers will get some temporary relief as China resumes its purchases of agricultural products, but producers from countries such as Brazil, who filled the gap left by American exporters, are likely to increase their share of China’s growing markets.

Moreover, the uncertainty resulting from trade tensions with China and other trading partners has probably contributed to falling business investment in the United States. The deal with China and the recently ratified United States-Mexico-Canada Agreement ought to help resolve that uncertainty.

 

But given the Trump administration’s record of mercurial policymaking, trade hostilities could again flare up at the president’s whim, undermining the certainty businesses need before making decisions about their investments and supply chains. This, in turn, would have a negative impact on labor productivity, employment and wages.

 

While Mr. Trump and his team celebrate their “victory” over China, don’t expect much fanfare among anyone else. The trade deal limits some short-term damage to the economy, but China might end up being the winner when the dust settles.

But Obama's deal with Iran allowed them to build a nuke

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2 minutes ago, benson13 said:

Doesn't matter if it's a bad deal...the ConMans fans believe what he (and Foxaganda) tell them: this is the biggest, greatest, most fabulous deal ever made in the history of the world!!!

It's a better deal than the last five administrations got.

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3 minutes ago, benson13 said:

Doesn't matter if it's a bad deal...the ConMans fans believe what he (and Foxaganda) tell them: this is the biggest, greatest, most fabulous deal ever made in the history of the world!!!

Hey Benson..

Can you show us a link to the above article?

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