Balancing Trade with China
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Eswar Prasad, Cornell University Senior Professor of International Trade Policy, discusses the current balance of trade between the US and China. He explains that the Trump tariffs on China have continued under President Biden, leading to a decrease in imports from China. The trade deficit with China is likely to show the smallest goods trade deficit relative to US GDP in the last 20 years. However, it is unclear whether imports from China have fallen or if they have been diverted through other countries. Prasad also addresses the differences between Trump and Biden's trade policies and the potential effects of a 60% tariff on goods from China. He mentions that the uncertainty surrounding trade policy creates challenges for investors and businesses, both foreign and domestic. Prasad notes that while there may be opportunities in China's economy, there is a significant amount of uncertainty in every dimension. He also discusses the potential winners in the context of deteriorating trade relations between the US and China, highlighting countries such as India, Vietnam, and Mexico that have more open trade relationships with the US. Prasad concludes by emphasizing the need for policies that restore confidence in China's economy and direction.

#Trade #Us #China #Tariffs #Imports #TradeDeficit #Investment #Uncertainty

https://www.bloomberg.com/news/videos/2024-02-05/balancing-trade-with-china