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Trade Wars Are Easy To Lose

September 1st, 2019 · Comments Off on Trade Wars Are Easy To Lose

We are now entering the seriously ‘lose-lose’ part of the trade war, where economic rationality has gone out of the window and parties dig in. While the damage accumulates and is nearing a tipping point, which party is going to blink first is determined by politics. China has the advantage in that department, and it […]

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Tags: Trade

Trade War: The Free Lunch Is Over

August 8th, 2019 · Comments Off on Trade War: The Free Lunch Is Over

So far, the trade war with China, which has been fought on a host of misconceptions, has not produced serious economic consequences for the US economy and markets. But after the latest escalation, that benign outcome can no longer be guaranteed. Any further escalation risks doing serious damage to the US markets and economy. The […]

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Tags: Trade

Tariff Man Strikes Again

June 1st, 2019 · Comments Off on Tariff Man Strikes Again

There are compelling reasons to assume that the U.S. goals in the trade dispute with China go way beyond just trade. The real goal is likely to slow the economic and technological rise of its main economic rival. With this becoming clearer and with recent escalations, there is no easy way out and the Trump […]

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Tags: China · Trade

The Real Risk Of The Trade War

May 19th, 2019 · Comments Off on The Real Risk Of The Trade War

It is difficult to see the Chinese caving to the demands of the Trump government, which seem to involve a wholesale change of China’s economic model. Either some middle ground is found or we risk a serious escalation with multiple risks to the state of the world economy, with many known and unknown facilities. The […]

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Tags: Trade

What Trade War Are We Having Will Determine What Happens To The Markets

January 2nd, 2019 · Comments Off on What Trade War Are We Having Will Determine What Happens To The Markets

Either President Trump wants to be able to announce a victory, or we are witnessing the first innings of a hegemonic clash between the existing and rising superpower. If the first scenario is correct, we could have a deal pretty soon, which might still arrive in time to revive the markets before the rot sets […]

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Tags: China · Trade

Better Globalization

October 8th, 2018 · Comments Off on Better Globalization

The US economy has created as much wealth as any advanced economy, if not more so, but many have been left out of this wealth creation altogether. Trade has been blamed for this, but the experience of some other, more open economies show that this doesn’t have to be the case. While trade and technology […]

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Tags: Economy · Trade

The U.S. Is Ignoring The Progress China Has Made

September 25th, 2018 · Comments Off on The U.S. Is Ignoring The Progress China Has Made

China has a reputation for being a currency manipulator, having mercantilist trade practices, glaring disrespect for IP and depending on exports for growth. While these things were all true in the recent past, today much of this doesn’t hold much water anymore and in other fields there have been real improvements. Denying this progress and […]

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Tags: China · Trade

Investors Keep Ignoring The Trade War

September 25th, 2018 · Comments Off on Investors Keep Ignoring The Trade War

For now, it has paid off buying the dips induced by increasing trade tensions. But as the economic damage of every new round of escalation increases, one can’t count on that to continue. The next escalation will present a binary option, and we think it’s wise to raise a little cash in advance. Source: Investors […]

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Tags: The Markets · Trade

A Lose-Lose Trade War

September 20th, 2018 · Comments Off on A Lose-Lose Trade War

Assuming rational actors, a further escalation in the US trade war with China doesn’t make sense, as the upside is limited and the potential downside rather large. It is rational only if one assumes the US believes the damage to China is much bigger and so it will be the first to cave. It could […]

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Tags: Trade

What Does The U.S. Want From China?

September 14th, 2018 · Comments Off on What Does The U.S. Want From China?

The US government wants the Chinese to respect US intellectual property and a lower bilateral trade deficit. Unleashing a trade war isn’t likely to bring these goals closer, in fact it could very well result in the opposite. It risks doing great damage to the US and world economy and denies the considerable progress China […]

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Tags: China · Trade