Today is the deadline for Canada's negotiations to join the recently renegotiated version of NAFTA agreed to by the United States and Mexico. If the Canadians can't find a way to come to terms with the new deal, the U.S. and Mexico will enact their own deal bilaterally. Canada's Foreign Minister Chrystia Freeland is leading negotiations for the country, and is upbeat about the process. Paul Vieira and Jacob Schlesinger report in The Wall Street Journal: Canadian Foreign Minister Chrystia Freeland spoke briefly to reporters Thursday afternoon during a break on the third day of the talks in … [Read more...]
Is Today the Day for a NAFTA Breakthrough?
Josh Zumbrun and Robbie Whelan report for The Wall Street Journal that an agreement on NAFTA between the United States and Mexico could be reached as early as today. They write: The U.S. and Mexico could reach a bilateral agreement as early as Monday on the key issues holding back a renegotiation of the North American Free Trade Agreement, according to Mexico’s chief trade negotiator Ildefonso Guajardo. Mr. Guajardo and the rest of Mexico’s trade delegation arrived at the office of the U.S. Trade Representative around midday Sunday—after negotiating in Washington, D.C. for weeks—and said … [Read more...]
Winning: Trade Edition
There is increasing concern about the Trump administration's trade policies. The Google trends chart for the search term trade war has more than doubled in recent weeks (though Kim Kardashian is still about 7X more popular). President Trump says trade wars are easy to win. Maybe he has a point. U.S. stocks have held up much better than Chinese shares in recent months. In all seriousness, investors should keep a close eye on future trade developments. Don’t forget though, view Trump's actions through the lens of somebody who believes what he is doing is part of an ongoing … [Read more...]
Higher Costs and Trade Risks Scare American Manufacturers Away from China
In a change of course, American businesses like Amazon and Microsoft are expanding in Taiwan, rather than mainland China. The move is a reaction to rising costs of labor and increased trade risk due to heightened tensions between China's communist government and the Trump administration. Kotaro Hosokawa and Kensaku Ihara report at Nikkei Asian Review: The interest in Taiwan owes partly to a cheaper pool of talent than in China, where labor costs are climbing steadily. In Taiwan, entry-level engineers with master's degrees employed in electronics or telecommunications earn an average of about … [Read more...]
Has the UK Found a Way to Fix the Irish Border Problem?
One of the hardest problems to solve during Brexit negotiations has been the status of the UK controlled portion of the island of Ireland. Jason Douglas reports in the Wall Street Journal that negotiators may have found an answer. He writes: Under the proposals unveiled on Thursday, the U.K. wouldn’t leave the customs union until permanent arrangements can be put in place, possibly involving new technologies, that avoid the emergence of a visible border between Northern Ireland and the Republic of Ireland. Northern Ireland is part of the U.K. while Ireland will remain in the EU. The … [Read more...]
Did China Just Outmaneuver Trump on Trade?
The Trump administration has decided not to impose $150 billion in tariffs on China. According to the FT, the Trump administration caved on its demands for China to stop subsidizing favored industries and engaging in other troublesome behavior so long as China buys more American goods. This is a rather disappointing end to the tough-on-China trade policy. The U.S. says it will consider putting tariffs back on the table if China doesn’t live up to its commitments. But who is kidding who here? It would seem China has outmaneuvered Trump. Trump’s presidency ends in two years, or six years if … [Read more...]
America Takes a Hard Line with China at Summit
A U.S. delegation to China, led by Treasury Secretary Steve Mnuchin has demanded China take steps to narrow the trade deficit with America to $200 billion by 2020. Also targeted by the team were China's state subsidies for strategic industries. Gabriel Wildau reports: The target represents a doubling of a previous White House demand that China cut the bilateral deficit by $100bn. The negotiators also asked that Beijing cut import tariffs to levels at or below those imposed by the US on the same goods from China. The proposal further calls on Beijing to eliminate all subsidies linked to … [Read more...]
Can Mnuchin Hammer Out a China Trade Deal?
Murmurs of a possible meeting between Treasury Secretary Steve Mnuchin and his Chinese counterpart are reported this morning in The Wall Street Journal by Lingling Wei and Bob Davis. They write: Treasury Secretary Steven Mnuchin says he may be heading to Beijing for trade negotiations, suggesting an easing of U.S.-China tensions that have widened to include big-name companies in both countries. Mr. Mnuchin said Saturday he is considering the China trip, and on Sunday, China’s Commerce Ministry said in a terse statement that “the Chinese side welcomes this.” The display of good will, … [Read more...]
Can EU Use Free Trade Deal to Avoid Steel Tariffs?
In an attempt to avoid the steel and aluminum tariffs being implemented by the Trump administration, the EU is coming back to the table on a stalled free trade agreement known as the Transatlantic Trade and Investment Partnership. To sweeten the deal, the EU is offering to join with the U.S. to combat Chinese trade abuses. Valentina Pop and Bojan Pancevski report: The European Union is drawing up a peace offer it hopes will end trade hostilities with the White House and avoid steel and aluminum tariffs being imposed on the bloc in two weeks’ time, according to European officials. Its … [Read more...]
Expect Some Pain
Yesterday, President Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese imports on top of the $50 billion already implemented. The extra $100 billion is punishment for the $50 billion in tariffs China announced in response to the initial $50 billion the U.S. put on Chinese goods. While many globalists, including some in Congress are wringing their hands over Trump’s tariffs, strong action against China is long overdue. China hasn’t played fair for decades. This is a single party system we are talking about, an economy that is far from the type of … [Read more...]