Business group: China preparing to retaliate on trade

JOE McDONALD

Associated PressJanuary 18, 2017

ricky l

16 seconds ago

It said the "big question" for them is "what steps both governments will take to ensure a positive business environment."
--

Both Government must have the wisdom to ensure a positive and win-win outcome in the business environment and not let it deteriorate.

Else it will impact and lead to further Global Economic slowdown - that will affect everyone.

Tom

8 hours ago

TRADE WAR with China, Trade war with Mexico. Trade war with Japan. Trade war with Europe...
No problem... Russia's got our back
Hail Trump. Hail Putin.
America is saved.

• 

  ricky l

  4 seconds ago

  If Trump start a trade war with China, Mexico, Japan, EU ----- then US will be flopped dead.
  
  US = $18 trillion Economy
  versus
  China = $18 trillion Economy
  Mexico = $ 1 trillion Economy
  Japan = $ 5 trillion Economy
  EU = $ 18 trillion Economy
  
  Probably Russia - $ 1.2 trillion Economy can help US.
  
  US will be left bruised, defeated and concuss ---- when Trump start to fight all the big Economies - and end all trade deals with its trading partners.
  
  China RCEP and FTAPP led trade deals with member Countries with potential $ 100 trillion trade revenue will have squash US.
• • 

    ricky l

    13 seconds ago

    So even before Trump inaugurate with the new Administration - and has start firing on his hip - labeling China as currency manipulator, threaten to impose tariff on China's trade, threaten US, Japan, Germany motor car with heavy tariff that are investing in Mexico, threatening to cancel TPP with 12 trading partners, threatening to cancel TTIP with EU etc --- is setting all the wrong footing for US trade partners to all retaliate US business at one go.
    
    Trump is in fact turning all US trade partners, allies and friends against US - even before Trump inaugurate into the office with his twitter.
    
    Just like Trump is spoiling for a fight :- US vs the World.
  • 

    ricky l

    13 seconds ago
    
    
    Who will lose in the looming US-China trade war?
    Trump policy called a "nasty version" of Reagan's protectionism
    JENNIFER LO, Nikkei staff writer
    
    HONG KONG -- With Donald Trump set to take office on Jan. 20, all eyes are on whether the new U.S. president will "walk his talk" by triggering a trade war with China that could result in a no-win situation, according to trade experts.
    During his election campaign, Trump pledged to label China as a currency manipulator on his first day in office and slap a punitive tariff of up to 45% on Chinese goods to unwind trade imbalances, although his team members had played down both commitments.
    But the real threat to U.S.-China relation may not be in the first 100 days of Trump's presidency. "It's really a year or two from now as fiscal stimulus kicks in and the trade deficit begins to widen," said Marcus Noland, executive vice-president of the Peterson Institute for International Economics, a Washington-based think tank.
    Trump's proposed tax cuts and rising spending on infrastructure and defense could generate a substantial fiscal stimulus, resulting in a short-term growth spurt, budget deficits, rising interest rates and a strong dollar.
    
    Marcus Noland, executive vice-president at the Washington-based Peterson Institute for International Economics, speaks at a seminar in Hong Kong on Jan. 9. (Photo by Jennifer Lo)
    "What could transpire is a very nasty version of the first [Ronald] Reagan administration" as rising trade deficits led the former president to step up trade protection, said Noland, speaking in a seminar in Hong Kong on Monday.
    Peter Navarro, Trump's economic adviser, likens his boss's proposal to the tariffs Reagan imposed on Japanese automobiles and steel imports to protect the U.S. economy in the 1980s. Describing Trump as a "free trader" like Reagan, Navarro said the incoming president would "defend America against cheaters" and make China play by the rules.
    Observers are skeptical about Trump's agenda, nonetheless. "He goes without saying that the U.S. is making those demands on Japan in the context of the Cold War," said Noland. Back then, Japan had to comply with the trade restrictions because the U.S. was its "ultimate political and military guarantor."
    Different now
    The situation between the U.S. and China now is very different. Beijing has made clear that it is ready to fight back if Trump imposes new tariffs on Chinese products. Boeing aircraft, iPhones, soybeans and even Chinese students studying in the U.S. have been identified as possible targets for retaliation, according to a commentary published in China's state-run Global Times.
    A recent study by the Peterson Institute estimates that a U.S.-led trade war would cost more than 4 million American jobs in the private sector, sending the country into a downturn. Export-dependent industries that manufacture for sectors including information technology, aerospace and engineering will be heavily affected. It will also have a spillover effect on sectors not directly related to international trade, such as retail distribution and restaurants.
    
    The Bank of Singapore, a private banking arm of Oversea-Chinese Banking Corp., has also warned of adverse consequences from Trumponomics. "The risk of recession has become realistic under Trump's boom-bust policy mix," said the bank's chief economist, Richard Jerram. While fiscal stimulus would add inflationary pressure to a U.S. economy that was near full capacity, higher tariffs could dampen global trade.
    So who would lose a U.S.-China trade war?
    "Both sides will be losers, because that's the whole point of trade," said Noland, adding that it would be a trade war with a regressive economic impact. The same study showed that the casualties would be disproportionately the most vulnerable people, with lower-skilled and lower-wage jobs -- who voted heavily for Trump in the November election.
    Trump has also threatened to impose a 35% tariff on Mexican imports and build a wall on the southern border to curb immigration so as to allow unemployed Americans to "to fill good-paying jobs." But critics like Noland say that if Trump were to send his neighbor into a recession, it would do just the opposite -- the U.S. could end up with a bigger influx of undocumented immigrants.
    Still, the first year of the Trump's administration looks like it could be chaotic. "His tweets will set a tone, but the actual policies will emerge from bureaucratic and personal infighting in the system Trump seems to be setting out," said Noland, with the president intervening periodically to micromanage the economy.