Economist Mike Walden: Who Will Blink?

One of the most important conflicts occurring today is not on a military battlefield, but instead is on the trade battlefield.  The United States and China are locked in a battle over trade, tariffs, and market access.   Both countries recently announced the next set of products that will be subject to tariffs if a negotiated agreement does not occur.  Which country has the upper hand?

  1. We’ve already heard about farmers and various manufacturers suffering reduced sales in the US as a result of tariffs already in place
  2. Next round – if they occur – will impact consumer prices bought from China
  3. But trade is relatively more important in China than in the US as a part of the economy
  4. Also, China has suffered a big drop in the value of their currency, whereas US dollar’s value has increased
  5. US economic growth rate has been increasing, whereas opposite is the case for China
  6. So seems like cards right now favor the US – big question – when will a deal occur

The Economic Perspective is an NC State Extension program from the Department of Agricultural and Resource Economics.