TRADE IN ACTION September 21, 2018
Trade War: On September 17, President Trump announced a 10 percent tariff on an additional $200 billion of Chinese goods, effective September 24th. He also announced that the duty would rise to 25% January 1st, and warned of targeting an additional $267 billion of goods if China retaliates. Shortly after, China announced retaliation on $60 billion of US imports.
GLOBAL: The G20 Global Forum on Steel Excess Capacity met on September 20 at the Organization for Economic Cooperation and Development (OECD) headquarters in Paris to discuss how to reduce global steel excess capacity. The US administration released a rather critical statement following the talks.
NAFTA: Canadian Foreign Minister Chrystia Freeland returned to the US on September 18 to continue NAFTA negotiations. Negotiations have stalled over divergent views concerning an independent dispute-settlement mechanism and access to Canada’s protected dairy market.
US-EU: USTR Robert Lighthizer and EU Trade Commissioner Cecilia Malmstrom are hoping to “finalize outcomes” of a (mini) transatlantic trade deal between the US and the EU by November.
Brexit: The UK is due to leave the EU on March 29, yet details of the exit still remain unclear, as such London Mayor Sadiq Khan calls for a second EU referendum. On September 17, IMF Managing Director, Christine Lagarde warns that a “disorderly” exit from the EU will lead to reduced growth and an increased deficit and depreciation of sterling, thus leading to a shrinking of the UK economy. Moreover, at the Salzburg Summit on September 19, European Council President Donald Tusk stated that UK Brexit proposals need to be “reworked and further negotiated”.
Trilateral US-EU-Japan Meeting: On Tuesday, USTR Lighthizer will meet with EU Trade Commissioner Cecilia Malmström and Japanese Trade Minister Hiroshige Seko in New York to discuss how to counter Chinese trade practices.
NAFTA: With the Trump administration expected to turn over agreement text to Congress by Sept. 30, it remains unclear if they will be able to deliver a trilateral deal. If there is no agreement with Canada by Sept. 30, it will be unclear if the US and Mexico will conclude a bilateral deal, if negotiations are postponed- or if President Trump pulls out of NAFTA altogether.
UNGA: Next week, the General Assembly of the United Nations will meet in New York. In this context, the Atlantic Council hosts the Global Citizens Awards gala- watch the webcast here.
Why President Trump Will Keep Escalating the Trade War with China Until After the Midterm Elections
By Marie Kasperek
Atlantic Council’s Marie Kasperek discusses her take on the escalating trade war waged by President Trump against China. She goes on to posit that de-escalation and productive trade talks between the two nations are not likely to happen soon, or at least not before the US Midterm Elections. Despite mounting political pressure to end the trade war, favorable economic conditions still put the United States in a strong position. Yet President Trump will be gearing up to campaign for the 2020 presidential elections soon after the midterms. De-escalating the situation with China before current economic tailwinds are reversed would not only make economic sense but also put Trump in a strong position for re-election. Read more here.
For more insight on the subject, please find a list of analysis and quotes from our Atlantic Council Experts below.
Analysis:More Shots Fired in US-China Trade War, Ashish Kumar Sen, Atlantic Council
Opinion: Trump’s Trade War Unlikely to End Soon, David A. Wemer, Atlantic Council
Opinion:No Country Gains in US’ Reckless Trade War, Robert A. Manning, Global Times
Quotes: The Christian Science Monitor, Think Progress, The Washington Post
Official Statement: Statement from the President on China, The White House
Official Remarks: Remarks by President Trump at the Inaugural Meeting of the President’s National Council for the American Worker, The White House
Official Numbers: Tariff List - September 17 2018, Office of the United States Trade Representative
News: Trump Is Denying Product Exclusions From New China Tariffs, Jenny Leonard and Mark Niquette, Bloomberg
Official Statement: Comprehensive Approach for the Modernisation of the World Trade Organisation, European Commission
Analysis: A New Approach to EU-US Trade: Less is More, Hans van der Burchard, Megan Cassella, Ginger Hervey, Politico
Opinion: Making the Atlantic Great (Again)? Prospects for New U.S.-EU Trade Negotiations, Peter S. Rashish, AICGS
Analysis: Milking it for Politics? US, Canada Dig in on Dairy in NAFTA Talks, Catherine Boudreau, Politico
News: US Business Groups Urge Trump to Keep Canada in NAFTA, William Mauldin and Paul Vieira, The Wall Street Journal
Infographic: How the World Has Reacted to Trump's Tariffs, Politico Pro
Opinion: Trump Has Put the US and China on the Cusp of a New Cold War, Mark Landler, The New York Times
Analysis: As Trump’s Trade War Mounts, China’s Wall Street Allies Lose Clout, Alexandra Stevenson, Kate Kelly and Keith Bradsher, The New York Times
Analysis: Why the US-China Trade Deficit is So Huge: Here’s All the Stuff the US Imports, Jeffry Bartash, MarketWatch
Opinion: Trump’s China Strategy is the Most Radical in Decades and It’s Failing, Alex Ward, Vox
Analysis: China Once Looked Tough on Trade, Now its Options are Dwindling, Keith Bradsher, The New York Times
Analysis: UK Keen for TPP Entry and Japan Trade Deal After Brexit, Shinya Oshino, Nikkei Asian Review
Report: France and the US- Trade: A State by State Analysis, Embassy of France in the United States
TWEET/FACTOID OF THE WEEK:
Did you know… that September 15th marked the tenth anniversary of the collapse of Lehman Brothers Bank? The Lehman Brothers bankruptcy, the largest in US history, is often cited as the first domino to fall in the US subprime mortgage crisis in 2008.
Opinion: How the Next Downturn Will Surprise Us, Ruchir Sharma, The New York Times
Opinion:The Financial Crisis is Still Empowering Far Right Populists, Manuel Funke, Moritz Schularick and Christoph Trebesch, Foreign Affairs
Analysis: On the Cusp: Poised to Become Digital-First Economies, ASEAN Countries Still Face Core Challenges, Jia Feng, International Monetary Fund
Report: Outperformers: High Growth Emerging Economies and the Companies that Propel Them, Jonathan Woetzel, Anu Madgavkar, Jeongmin Seong, James Manyika, Kevin Sneader, Oliver Tonby, Andres Cadena, Rajat Gupta, Acha Leke, Hayoung Kim, and Shishir Gupta, Mckinsey Global Institute
Opinion: In Cyberwar, There Are No Rules, Tarah Wheeler, Foreign Policy
Analysis: Where Will Online Orders Get Fulfilled? The Changing Local Geography of E-Commerce, Adie Tomer and Joseph Kane, The Brookings Institute
Opinion: How Close Are We to Another Financial Crisis? Eight Experts Weigh In, Emily Stewart,Vox
WHAT WE ARE READING:
Transcript: A Conversation with Six Former USTRs, Center for Strategic and International Studies
News: US, EU and China Vie for Influence in Eastern Europe, Alison Mutler, The Washington Post
Big Read: Deal or No Deal? May’s Moment of Truth on Brexit, Alex Barker, The Financial Times
News:In Big Win for Trump, US Sanctions Cripple Iranian Oil Exports, Javier Blas, Bloomberg
News: Turkey Faces Prospect of Syrian Refugee Wave Amidst Currency Crisis, Mariya Petkova, Al Jazeera
Opinion: White and Male: Trump’s Ambassadors Don’t Look Like the Rest of America, Robbie Gramer and Jefcoate O’Donnell, Foreign Policy
September 25: Debate: Should the US Copy EU’s New Privacy Law? Information Technology and Innovation Foundation
September 25: In Conversation with Pierre Moscovici, ECCNY, New York
September 26: The US, Hong Kong, and China: Innovation Economies in the 21st Century, Atlantic Council
September 27:From Inside the Pentagon: The Work of Women in National Security, Atlantic Council
October 5: The Next Battle of the Atlantic? A conversation with Admiral James G. Foggo, Atlantic Council
November 5-8: DC Fintech Week, Georgetown University's Institute of International Economic Law
Your Newsletter Team:
Marie Kasperek, Associate Director, Global Business & Economics, Atlantic Council
Christina Gay, Intern, Global Business & Economics, Atlantic Council
Raina Hasan, Intern, Global Business & Economics, Atlantic Council
The views expressed in this newsletter and linked external articles and content do not necessarily reflect the opinions of the Atlantic Council, its staff, or its sponsors.
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