China and the United States both have the "ability and wisdom" to reach a trade deal that is good for both, the Chinese government's top diplomat said, as U.S. President Donald Trump said he thought recent talks in Beijing would be successful. "We've helped them before, and we'll do it again if we have to and if the numbers show that out".
Heightened trade tensions between the US and China over the last few days, that seemed to catch many media outlets and pundits off-guard, were actually always lurking just beneath the surface.
Mr. Trump, unbowed, said the USA could up the ante by imposing import taxes on another $325 billion worth of Chinese goods. He emphasized the talks' ongoing nature and discouraged the term "trade war", saying the tariffs were simply part of the negotiations.
"Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically". While some economists argue that Chinese exporters may lower their prices in an attempt to be more competitive in the US market, Goldman Sachs' latest analysis shows that "no decline in the prices (exclusive of tariffs) of imported goods from China that faced tariffs". But as the Chinese delegation was arriving in Washington, the talks broke down.
"I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the United States of America for $500 Billion a year", he tweeted.
China's retaliatory tariffs a year ago have hit specific industries very hard, like soybean farmers. But markets there are still higher than analysts had predicted. Hong Kong, Singapore, South Korea, and Taiwan are seen as particularly exposed, along with economies such as Australia that have a large trade weighting toward China. "They are not victims of China's 'unfair competition.'", it said. Now, it's used mostly as a move to protect American industry. "I don't disagree with that", he said to Fox News' Chris Wallace. "Our results imply that the tariff revenue the U.S.is now collecting is insufficient to compensate the losses being born by the consumers of imports", the study found. "Both sides" are not, in fact, paying.
The United States is pressing China to change its policies on protections for intellectual property, as well as massive subsidies for state-owned firms, and to reduce the yawning trade deficit.
"They've increased consumer costs by $1.4 billion a month, according to experts from the Federal Reserve Bank of NY and Princeton and Columbia University".
On the supply side of the oil markets equation, Saudi Arabia, Russia and other major producers, with memories still fresh from the cataclysmic drop in oil prices from more than $100 per barrel in mid-2014 to dropping below the $30 price point in January 2016, can be expected to withhold as much production as possible to keep prices from plunging too low. And that could grow.
Also, U.S. exports to China only accounted for 1 percent of U.S. GDP before the dispute began, meaning that a complete cessation "would have only a modest impact on U.S. GDP growth". 'Once the tariffs go onto cellphones, I mean then you're going to see people scream, ' " she says.