What do us economists think of a trade war between China and the us?

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The escalating trade war between China and the United States has drawn wide attention at home and abroad. Who will win the “smokeless” war? In addition to the already

Aside from the cliche “everyone loses” assertion, mainstream us coverage seems to have little to do with trade between China and the us

Rub has a more sober cognition. This issue takes a brief look at three American economists, including two Nobel Prize winners

Paul Krugman and Joseph e. Stiglitz and the United States

Robert a. Blecker, A professor of economics at the university of California, has launched A trade war against trump from A national perspective

The view of war.

The escalating trade war between China and the United States has drawn wide attention at home and abroad. Who will win the “smokeless” war? Aside from the cliche “everyone loses” claim, mainstream us reporting seems to have a more sober view of the trade friction between China and the us. This issue takes A look at what three us economists, including two Nobel laureates, Paul Krugman and Joseph e. Stiglitz, and Robert a. Blecker, an economics professor at American university, think about Mr Trump starting A trade war from A national perspective.

Joseph E stiglitz

The us risks losing a trade war with China

America has a problem, but not China. It’s that America has too little savings. If us domestic investment continues to exceed its savings, it must import capital and run a large trade deficit. Worse, thanks to the tax cuts enacted at the end of last year, the us is heading for a record fiscal deficit — more than $1,000bn by 2020, according to the latest projections — which means that the trade deficit is almost certain to increase regardless of the outcome of the trade war. The only way to stop it is if Mr Trump leads the us into a recession in which incomes fall so much that investment and imports fall sharply.

The “best” outcome of Mr Trump’s narrow focus on China’s trade deficit would be an improvement in the bilateral trade balance, but an equivalent deficit would be passed on to other countries. In short, the best outcome means that America will be worse off than it is.

In fact, it is very difficult to reduce the bilateral trade deficit in a meaningful way. With less demand for Chinese goods, the renminbi would weaken even without any government intervention. This would partially offset the impact of us tariffs; At the same time, it will make China more competitive with the rest of the world — even if it does not use its other tools, such as wage and price controls, or push hard for higher productivity. Like the us, China’s overall trade balance depends on its macroeconomic situation.

If China intervened more aggressively and retaliated more tit-for-tat, the change in the u.s.-china trade balance might be smaller. The degree of pain inflicted on each other is also difficult to measure. China has more control over its economy and has been hoping to shift to a growth model based on domestic demand rather than investment and exports, and the U.S. is just helping China do what it’s trying to do. On the other hand, it comes at a time when China is trying to deal with excess leverage and overcapacity; In at least some areas America’s actions make these tasks harder.

One thing is clear: if Mr Trump’s goal is to prevent China from implementing the “made in China 2025” policy it adopted in 2015 to further its 40-year goal of closing the income gap with developed countries, he is almost certain to fail. Instead, Mr. Trump’s actions will only strengthen the resolve of China’s leaders to promote innovation and technological transcendence, as they realize they can no longer rely on others and face a hostile America.

As americans realize that they have lost a dual interest in this war, public support will weaken further: jobs will disappear, not only because of Chinese retaliation, but because American tariffs make American exports more expensive and less competitive. At the same time, the price of goods purchased by consumers will rise. That could force the dollar down and cause us inflation to rise further — leading to more opposition. Then the fed is likely to raise interest rates, leading to weak investment and growth and rising unemployment.
In this scenario, trump will “solve” the problem he created imperfectly. But the world of his foolish trade wars is no longer what it was: more uncertainty, less confidence in the international rule of law, and tighter border controls. Trump has changed the world forever, but for the worse. Even in the best of circumstances, the only winner would be Mr Trump — with a little more of his super-inflated ego.

Paul krugman

A trade war between China and the us could spark global disruption

President Donald trump’s protectionist policies risk a “” damaging trade war” “. When it comes to the economy, President trump’s instinct is “protectionism” and his view of the us is “50 years out of date”. He wants the United States to become a nation of heavy industry, as it was when he was young. He is also trying to make it happen, which would be very damaging for the United States and the world at large.

Trump’s protectionist policies will not succeed. Because American companies are investing in a global economy. All the investments that companies make are based on the assumption that open trading systems will continue to exist. A lot of jobs depend on these value chains. The immediate problem is not with China, but with Europe, because “steel tariffs” will hit Europe. A “damaging global trade war” could be at risk.

The Chinese economy “is going to face a financial crisis. China is an unbalanced economy… The country is sustaining a credit bubble that is about to burst… The risk of a bubble bursting in China is very high.

Robert a. black

Trump is a protectionist: who is he protecting?

Indeed, the progressive critique of globalization and trade agreements has been widely confirmed in recent research by some of the top economists. Massachusetts institute of technology (MIT) David Autor, (David Autor) and environmental protection, asimo gru (Daron Acemoglu), and a series of co-authors found strong statistical evidence, confirmed that imports from China increased unemployment leads to a lot of American workers “shock” (2.4 million), and significantly reduce the wages of American workers, especially those workers by education degree is low.

They found that Chinese imports affect workers not only in manufacturing industries that compete directly with imports, but also in local service industries that serve communities affected by imports, as well as in “upstream” industries that provide inputs to import-competing companies.

Robert e. Scott of the Economic Policy Institute estimates that the loss of jobs has been even greater as the us trade deficit with China has widened. Believe it or not, free trade advocates who ignore or deny these enormous social costs have clearly created their own current wave of anti-trade backlash.

If the goal is to reduce America’s trade deficit, the best course of action would be to fight the dollar’s overvaluation rather than impose tariffs that benefit some industries at the expense of others.

Another outcome, far from certain, is the prospect of a “trade war”. Free traders are crying out hysterically that us steel and aluminium tariffs will lead to massive retaliation from other countries. But to do so legally, they must first ask the world trade organisation to declare the us tariffs illegal, or face protective tariff investigations, both of which take time. Us exporters could eventually suffer, especially if other countries impose tariffs on key exports such as corn and jet aircraft.

Another outcome, far from certain, is the prospect of a “trade war”. Free traders are crying out hysterically that us steel and aluminium tariffs will lead to massive retaliation from other countries. But to do so legally, they must first ask the world trade organisation to declare the us tariffs illegal, or face protective tariff investigations, both of which take time. Us exporters could eventually suffer, especially if other countries impose tariffs on key exports such as corn and jet aircraft.

A true American industrial Renaissance would require the complete opposite of the trump administration’s domestic policies. The government will have to devote considerable resources to technology research, science education and worker training in order to develop the industry of the future. A number of progressive economists and commentators, including Dani Rodrik, the Harvard economist, Joseph Stiglitz, the Nobel laureate, the economic journalist and Robert Kuttner, professor brandeis, have advocated a similar programme. But in the absence of such a policy agenda, progressives should not support tariffs on false national security grounds in favor of a reactionary policy agenda that completely undermines the interests of working people.

Mr Trump has offered the false hope that trade barriers to specific industries, coupled with tax cuts, deregulation and increased fossil fuel production, will revive us industry and restore the rich, well-paid manufacturing jobs of the past. It’s just a trap and an illusion. The American people do need to rewrite trade agreements, and they do need to adopt monetary policies that prevent the dollar from being overvalued and thus exacerbating the trade deficit.

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