Trade War

Newsletter 11 - February 17, 2020

Welcome to the 11th edition of Trade War. It’s one week after China officially reopened for business and while there are some signs of life, there are also numerous flashing warning lights for the Chinese economy its ability to trade as before with the world.  

“The Chinese economy is the real concern”

Hao Hong, head of research at Bank of Communications International points out that \while people may be overly worried about the coronavirus (not sure I agree), they should be very concerned about the Chinese economy (100% agree).

“People are too pessimistic about the coronavirus. But the Chinese economy is the real concern,” he writes on twitter, posting a chart showing how China’s domestic airline capacity utilization has collapsed.

I’m staying home

Meanwhile, it’s not just travel by air in China. Travel by sea, road and rail also has been devastated by the virus, as this tweet by a Peking University professor shows.

Where are the workers?

You can’t do business without workers—that in part appears to be the dilemma facing China’s companies as they struggle to resume operations. That’s particularly true of those who rely on migrants, most of which are not yet returning to the cities to work, writes Stephanie Studer in the Economist.

“On the verge of death”

Migrants may in part be staying away as they fear no jobs will be awaiting them. China’s small businesses appear to be in serious trouble, with 30 percent planning job cuts and one-tenth, “on the verge of death,” reports the South China Morning Post.

“Eviction measures includes water & power stoppage”

Making matters worse, those migrants who might consider returning, are finding they are not welcome and indeed are being forced out of neighborhoods in many cities, even when that’s where they had previously been living.

“An inherent tension”

Simon Rabinovitch who is consistently very good on calling China’s economy, makes a key point in the Economist: there is a tradeoff between continuing to aggressively curb the virus spread and getting China’s economy back on an even keel.

In short, there is no way for the economy to grow as long as cities are quarantined, roads blocked, and very importantly, people stay home, effectively withdrawing from most economic life.

Lockdowns

Beyond Hubei's Wuhan, center of the coronavirus, other cities continue to clamp down on their populations. That’s happening in Huanggang, some 30 miles east of the provincial capital.

And quarantines

Even as the central government in Beijing pushes for companies to reopen and business to restart, the city has just announced that there will be a 14 day-quarantine for returnees to the capital—hardly a move designed to facilitate easy operation.

There go the barrels

Goldman Sachs predicts that China’s oil demand will fall by around four million barrels a day, because of the coronavirus.

Meanwhile, back in the U.S.A.

Last year was tough on state economies due to the trade war—now they have the coronavirus affecting business. “Exporters from most U.S. states experienced dismal sales to China last year as tariffs slammed products ranging from wheat and whiskey to ginseng and gas,” reports Bloomberg News. With the virus, expect the pain to continue, “phase one” deal or not.

Anybody home?

The USTR announces a hotline for resolving disputes related to the “phase one” deal—and no one answers the phone….

Tariffs? Who said tariffs?

U.S. VP Mike Pence avoids the word tariffs in a 45-minute long speech to the manufacturing association on February 14.

“Cascading protection”

Economists call a second set of tariffs on top of previous tariffs, for products earlier hurt by duties, “cascading tariffs.” That’s what steel and aluminum products are now experiencing, according to the Peterson Institute. “Trump [admitted] these new tariffs are to help an industry suffering because of his previous tariffs,” writes the Peterson Institute.

Tariffs and U.S. jobs

And perhaps not coming as a surprise: it turns out tariffs don’t always protect jobs, at least in the steel and metals industry, points out this Bloomberg Opinion piece.

Notable/In Depth

Look what happens if you say you can make masks. Your stock goes WAY up.

Good thread of video clips showing how a popular Beijing shopping mall is still deserted, even as officially China reopens for business.

China-dependent Southeast Asian economies are suffering, as Trinh Nguyen of the Carnegie Endowment explains in this piece.

Nice informative story from Bloomberg New’s Peter Martin about the former Shanghai mayor now being sent to Hubei to do crisis control. He’s a Xi guy, surprise, surprise…

Trade War

Newsletter 10 - February 10, 2020

Welcome to the 10th edition of Trade War. Monday February 10 was the day that business was supposed to resume to normal across China, with people returning to work and companies reopening, including its many export factories. That clearly did not happen.

Overzealous local officials

Even as the central government in Beijing announced the official national reopening, local governments across China ignored the order. In Guangdong province in particular, China’s biggest export manufacturing base, cities from Zhongshan to Foshan instructed factories to wait, usually until March 1 to reopen, as this tweet thread shows.

Fears that factories — and construction sites -- could become a vector for disease transmission are well-founded, given that many workers sit near each other on production lines or work in close proximity on building sites, Wang Kan, professor at the China Institute of Industrial Relations, tells Trade War in a phone interview.

“Back to work”

What would normally be packed subway stations across the country, not surprisingly, did not show a large pickup in use. While many white collar workers tried to do their jobs from home, many other people still had no work to return to. Not just factories but also company offices across the country—also often responding to orders to stay shut from the local governments where they are based—did not reopen either.

“They are afraid”

Most small shops, those that sell fruit, vegetables or daily use goods, and that traditionally have been the lifeblood of China’s cities, have not restarted business; their owners and employees, the bulk of which are migrants and had returned to their homes in the countryside for the Lunar New Year, have now delayed their return to the cities. “They have no desire to come back right now as they are afraid,” Wang Kan told Trade War.

Meanwhile, some businesses that are open are finding novel ways to deliver goods while minimizing close human contact.

Underestimating the damage

As the spread of the coronavirus continues, serious questions are starting to be asked about the longterm viability of centering so much of the world’s key supply chains in China. Already, the trade war tariffs, plus demographic changes that have raised the costs of labor, had multinationals beginning to pick up some of their operations and set up shop elsewhere, often in other parts of Asia including Vietnam, Indonesia, and India.

Author and journalist Michael Schuman warns in a tweet that U.S. investors are “underestimating the damage” the virus will cause, including by hurting corporate profits and cutting off global growth.

A broken supply chain?

China’s still widespread travel bans and transportation restrictions in particular will inflict serious damage on the overall industrial economy, and its lifeblood, China’s until now unparalleled supply chains, says this interesting tweet thread. And damage to supply chains means damage to global trade of course.

Apple as a bellwether for decoupling

And while some production looks set to restart at one key Foxconn facility producing iPhones in Zhengzhou, Apple perhaps more than any company, is being watched to see how it will respond to the virus and deal with its shuttered supplier factories. If it decides to move more rapidly to diversify production to places outside China, it would be seen as a bellwether of decoupling.

“The coronavirus outbreak has given new meaning to something Apple executives have been saying for years: Apple needs another China,” says a report by the Wall Street Journal on February 5.

Disrupts both internal and external trade

Former Pimco CEO Mohamed A. El-Erian sees the coronavirus injecting deep uncertainty into China’s overall economic outlook and for the global economy. That’s because the virus "involves critical interruptions to both demand and supply; it impacts both manufacturing and services; and it disrupts both internal and external trade," he writes in Bloomberg Opinion.

Face mask shortage

It’s also got companies distracted from their main business: As a worldwide shortage of face masks looms, firms in China including electric vehicle and battery maker BYD, SAIC-GM-Wuling, the joint venture for General Motors, and yes, Apple assembler Foxconn, have all started making their own protective gear.

“Foxconn began making masks on Feb. 5 for its 1 million employees, saying daily production is expected to reach 2 million pieces by the end of the month,” Bloomberg News reports on February 9. “While China made more than 5 billion face masks on the mainland last year -- about half the world’s output -- there’s still a shortage as the number of infections soars.”

And drug shortages?

Drug shortages in China and the U.S. are a worry too, warns Scott Gottlieb, MD, a resident fellow at AEI. The two countries dominate global production, making up 41% of drug manufacturing.

German factory orders

Factory orders are falling in Germany, a sign of the deepening global malaise. They fell 8.7% YoY, the most since the beginning of the global financial crisis in September 2009.

Phase One delight?

So what’s going on with the “phase one” trade deal, everybody celebrating that? Not so, apparently. "I'm one of those farmers who is supposed to be delighted with the US-China "Phase One" trade deal. ... Although I'm hopeful that it will give farmers a boost, I'm more than a little worried that it won't," writes Mark Wagoner, who grows alfalfa seed and wheat on his family farm in Washington, in CNN.com.

Meanwhile, the Trump administration is touting its trade successes, with Commerce Secretary Wilbur Ross tweeting that “trade wins for America” are “shrinking the trade deficit and leveling the playing field for U.S. exporters.”

Pain per family

Whether or not that’s true, it isn’t carrying over to the American consumer. Peterson Institute economist Gary Hufbauer predicts that the average U.S. household still will face a net loss from tariffs next year, and a report from the Congressional Budget Office puts the pain per family at $1,277.

Notable/In Depth

Lots of interesting charts on the coronavirus impact on markets and economies in this Reuters report.

A good podcast on the coronavirus, trade, and decoupling from China business maven James McGregor.

And here’s an interesting piece from the Wall Street Journal that argues that Vietnam and Mexico have been the true winners of the U.S.-China trade war.

Trade War

Newsletter 9 - February 3, 2020

Over the course of the last week it has become abundantly clear that the fast-growing coronavirus crisis has the potential to significantly slow China’s economy at least in the short term, intensify the decoupling of the long-entwined U.S. and Chinese economies, and have a large negative impact on global trade.

“It’s the punch that you don’t see coming”

Here is a chart from Bloomberg that shows dramatically how the world’s attention has shifted from the trade war to focusing instead on the coronavirus. “Biggest risk to markets? It’s the punch that you don’t see coming that knocks you out,” tweets Bloomberg TV’s David Ingles on January 30.

One reason people are so worried about the impact of the coronavirus on the global economy and expect it to be much worse than that experienced during 2002-2003 SARS outbreak: the fact that the Chinese economy is so much more important to the world then it was 17 years ago.

“In 2002 China was still in the early stages of its great economic surge; it accounted for only around 8 percent of global manufacturing value added, far less than the shares of the U.S., Japan and Europe. Today, however, China is the workshop of the world, accounting for more than a quarter of global manufacturing,” writes Paul Krugman in the New York Times on January 30.

As for overall GDP—not just manufacturing—China’s influence too has become much larger; while in 2003 China only generated 4% of the total, last year it made up 16% of global GDP.

Busily revising down their forecasts

Fear of the impact of the virus has got economists scrambling to cut their China growth forecasts, according to The Economist’s Shanghai bureau chief Simon Rabinovitch. “One analyst (Chen Long of Plenum) thinks growth in the first quarter could slow to as little as 2% y/y, which would be China's lowest recorded rate since the death of Mao,” writes Rabinovitch in a tweet.

Goodby phase-one?

The coronavirus too is likely to make it even more difficult for China to meet the already overly ambitious purchasing targets its government offered the U.S., as part of the “phase-one” deal. “With the outbreak driving down commodity prices and placing huge swathes of Chinese territory on lockdown, analysts are warning that import targets that already seemed aspirational have become even tougher to reach. The longer the crisis lasts, the worse the damage to China’s ability to meet the purchase target,” writes Finbarr Bermingham in the South China Morning Post.

Escape clause for an “unforeseeable event”?

Meanwhile the significance of a clause in the agreement that allows the two sides to engage in further consultation, if there are delays in deal implementation because of “a natural disaster or other unforeseeable event” has a sudden relevance.

“[The coronavirus] obviously is going to have some ramifications economy-wide, which we hope will not inhibit the purchase goal that we have for this year,” U.S. Agriculture Secretary Sonny Perdue said on January 29. “We’ll have to look ahead and see. But the honest answer is we just don’t know yet.”

At least one category of imported goods—products from the U.S. that are key for epidemic control—will no longer face retaliatory tariffs, China’s Custom Tariffs Commission said on February 1, notes a tweet by CNBC’s Beijing bureau chief Eunice Yoon.

“So disgraceful and cold-blooded”…

When U.S. commerce secretary Wilbur Ross commented that the corona virus “will help to accelerate the return of jobs to North America," China’s state media, perhaps not surprisingly, reacted with anger and name-calling, saying Ross is “so disgraceful and cold-blooded.”

Not to mention, a “low blow at a difficult time”…

And it wasn’t just China reacting with strong words. In an interview with the Wall Street Journal’s Bob Davis, China expert Eswar Prasad called the Commerce Secretary’s comments a "low blow at a difficult time for China."

80% of national GDP and 90% of exports

Meanwhile scores of provinces and cities have extended the date when business resumes after the Lunar New Year holiday, a move sure to have a major impact on economic growth. “The 24 provinces, municipalities and regions in China that have told businesses not to resume work before Feb. 10 at the earliest last year accounted for more than 80% of national GDP and 90% of exports,” tweets CSIS scholar Scott Kennedy citing a CNBC report.

Who’s hurting? Everybody’s hurting.

Both the Wall Street Journal (on February 3) and the New York Times (on January 29) have good, lengthy articles which lay out how the coronavirus is wreaking havoc in the operations of multinational companies and the global economy.

Apple shuts its stores in China

And Apple, which relies on China for about a fifth of total sales, is shutting down all of its more than 40 stores in China, notes the Wall Street Journal in a separate piece on February 1.

Steady supply of cellphones?

Apple’s production network in China too is heavily affected, with in particular its supplier Foxconn’s Wuhan, Hubei factory—located at the virus epicenter—shuttered. “The work of around 13,500 Foxconn workers will be affected by the virus outbreak from China, which puts to question the steady supply of cellphones, industrial robots, and precision machined products,” writes the Taiwan News.

Semiconductors too..

Virus-struck Wuhan too is an important base for semiconductors and other hardware manufacturing, notes Paul Triolo from Eurasia Group. The continued development of domestically-produced semiconductors, of course, is a crucial plank in realizing China’s high tech ambitions.

And autos

Bloomberg News warns of “a scenario in which the coronavirus spreading rapidly across the country triggers a cascade of plant closings that lasts into mid March and reduces output by more than 1.7 million cars,” a prospect that could "threaten to end the country’s run as the world’s largest auto market."

The Last Straw

So will all this doom and gloom accelerate decoupling? The answer seems pretty obvious. “The virus could be the last straw for companies doing business in China,” says Reuters.

The ‘world’s factory’ could fall off a cliff

If the virus has not abated by March, then “China’s supply chains and status as the ‘world’s factory’ could fall off a cliff” says Liu Kaiming, head of the Institute of Contemporary Observation, in an interview with the South China Morning Post.

Social instability a risk from a wave of unemployment?

One big risk is the possibility of a fast-growing problem with unemployment in China. That could be particularly severe for China’s several hundred million migrant workers who may have no jobs to come back to after the new year holiday, with factories shut and restaurants and other service businesses closed.

The chief economist of the China Evergrande Group has called for the government to provide subsidies for low-income people to “prevent social instability caused by the potential wave of unemployment,” Bloomberg News reported on February 1.

More countries halt air travel to China

Meanwhile, it seems every day or so another country announces new restrictions on flying to and from China. The list of those who have imposed blocks now include the U.S., Australia, Singapore, Israel, Russia, The Philippines, Vietnam, Italy and Qatar, reports Bloomberg News on February 2.

In Depth/Notable

A podcast on the cost to global trade from the South China Morning Post

A commentary on the fallout of Phase 1 from the former head of the World Bank in China

“WTO Must Reform or Die” is the title of a feature story worth reading from the January 27 edition of Bloomberg Markets magazine

Trade War

Newsletter 8 - January 27, 2020

Welcome to the eighth edition of Trade War. Obviously the big—and alarming—news out of China is the rapid spread of the Coronavirus. And while the clear focus is on slowing its transmission and helping those who might already have it, the virus is also likely to have a huge impact on China’s economy and China’s trade with the world.

Shave about 1 percentage point off China’s 2020 growth rate?

The Wall Street Journal appears to be first out of the block to look at the economic impact with this interesting article from January 26. Key point: back during the SARS virus of 2003, China’s economy was hit hard, even though then the economy was even more investment-driven, and most consumption came via purchases by the state and its companies. This time the impact will be worse, with an economy much more dependent on individual’s consumption, where the virus’ spread will surely inhibit buying, even if some purchasing can still happen online. The article lays out where the impact is/will be severe:

-- Tourism: During this busiest season of all for tourism, the Lunar New Year, the virus is keeping most Chinese—sometimes involuntarily—in their homes. Shanghai Disneyland closed on Friday, offering refunds to ticket holders.

--Entertainment: “China’s movie business typically does nearly one-tenth of its $9 billion-plus annual box office during the weeklong holiday. Seven film premieres are canceled, including “Leap,” a biopic starring Gong Li as the coach of the national volleyball team that was expected to fare especially well.”

“The current coronavirus outbreak could cost more than 40 billion yuan ($5.77 billion), which would shave about 1 percentage point off China’s 2020 growth rate,” one economist tells the Wall Street Journal, basing his estimate on a comparison with SARS.

“Your Chinese factory might shut down tomorrow”

For those sourcing goods from China, now is the time to start coming up with some serious contingency plans, writes China investment lawyer Dan Harris:

"If your company has its widgets made in China, you need to realize that your Chinese factory might shut down tomorrow or next week or next month. If your Chinese factory is within or near ground zero for the virus, it has probably already shut down."

Harris predicts that the coronavirus is sure to accelerate the ongoing decoupling already happening with the trade war, with global factories moving production out of China to Southeast Asia and elsewhere.

Dan Harris@danharris
China’s Coronavirus Impacts Everything: What Your Business Should Do NOW.
chinalawblog.com/2020/01/chinas… #coronarvirus #CoronaOutbreak #coronavirus #ChinaPneumonia #chinaCoronovirus #china

“Will SARs rejuvenate the Communists?”

And from the vault with a piece from 2003: yours truly considering what the ultimately successful tamping down of SARS meant for the Communist Party some 17 years ago (spoiler: it arguably made the Party even stronger - And Xi Jinping is likely to push for even more centralization and control, in the eventual aftermath of this latest health crisis too.)

Free Trade Is Dead. Long Live Managed Trade

On to trade: smart economist and former colleague Peter Coy from Bloomberg Businessweek announces the onset of a new era of “managed trade” in an interesting piece.

Soviet-style managed trade

Over at PIIE, Gary Clyde Hufbauer argues that the only way for China to reach its purchasing commitments is “to resort to Soviet-style managed trade,” which will lead to “distortions, lots of favoritism, and inevitable corruption.”

Apparently part of “managed trade” is a looseness with the numbers. In a speech at Davos, Trump unilaterally added an additional $100 to what purportedly the Chinese have promised to buy (like many of Trump’s numbers, best to ignore.)

Dealmaker is a better look than arsonist

And some words of caution in a tweet from David Henig, the UK director of the European Centre For International Political Economy: despite the “phase one” deal and other trade truces, don’t expect frictions to fall away. “The global system and WTO is still under serious threat, but there’s an election to be won, and dealmaker is a better look than arsonist.”

Historic tech war in an era of techno-nationalism

Meanwhile, any signs of truce in the trade war are likely to be overshadowed by an intensifying tech war, with semiconductor production at the heart of it, warns a new report from the Hinrich Foundation. “The United States and China are in the early stages of a historic tech war in an era of techno-nationalism.”

“The intensifying nature of the US-China tech war, combined with the scale and depth of China’s market — and the massive economic gains it provides to American and foreign semiconductor companies — creates a collision of vested interests that has sparked a flurry of protectionist policies in Washington and elsewhere.”

Notable/In Depth

A very good blog by the Peterson Institute’s Chad Bown on why the purchase promises of "phase one" are extremely unlikely to be met, and how the deal is sure to have serious negative consequences.

This site has lots of data with very cool graphics showing US-China investment flows; From the Rhodium Group and the National Committee on US-China Relations.

And here are two charts showing how China usurped the US as the world’s trading partner of choice, in the years from 1980 to 2018.

Trade War

Newsletter 7 - January 20, 2020

Welcome to the first edition of “Trade War” to come after the supposed resolution of the trade war—or at least after the “phase one” deal that was signed last Wednesday. Of course the idea that there has been any serious resolution is, I’m afraid, nonsense. No one but the supremely gullible or willfully ignorant expect US-China trade frictions to now magically go away.

“Will you say, ‘Thank you, Mr. President’”

The “phase one” event itself was notable for its unusual tenor: while the visiting Chinese dignitaries led by Liu He stood in apparent befuddlement, Trump presided over a bizarre and rambling 75-minute long event that seemed focused on him calling out the names and congratulating the dozens of corporate chieftains in attendance, while simultaneously taking credit for the business success of many of them.

“Will you say, “Thank you, Mr. President” at least? Huh?” he said to one JPMorgan Chase exec, before bragging that “I made a lot of bankers look very good.” He continued in the same vein, later saying “most of you, I can say, you’re doing fantastically well. “Thank you, Mr. President.” Don’t worry about it. Don’t feel guilty.” Attendees included top execs from Honeywell, Boeing, Micron, Citibank, AIG, and many more.

Cheerleaders for outsourcing jobs to China

That didn’t resonate well with everyone, including those who focus on workers and jobs. “There were a lot of Wall Street guys and big cheerleaders for outsourcing jobs to China,” said Scott Paul of the Alliance for American Manufacturing, “I didn’t see many working-class folks in that room.”

“The only question that matters: does the US-China #tradedeal have enforceable penalties if workers are denied internationally recognized labor rights (esp independent unions & collective bargaining)?,” tweeted one researcher on China labor rights. “No? Then the US can't compete on manufacturing. *period* The rest is fluff.”

Look at our penmanship

In any case, Trump and top Chinese trade negotiator Liu He finally got to signing it and even showed their penmanship for the cameras, as pictured below:

The tally: 105 “China shall” vs. 5 “United States shall”

So what’s in the deal—a lot of “shalls” which were helpfully tallied up by one China watcher (the former head of the World Bank to China, in fact). Here’s what he found: 314 "shall" in total, 105 "China shall", 88 "parties shall" or "party shall" or "China and the United States shall", and only five "the United States shall"

Government dictates rather than market forces

Adds trade reporter David Lynch, writing in the Washington Post: “The deal reflected the president’s distinctive reshaping of American trade policy, relying on government dictates rather than market forces and establishing a direct enforcement system outside the World Trade Organization.”

For the first year, China has promised to buy an additional $76.7 billion in U.S. goods and services, up 41 percent jump compared to what it spent it spent on American exports in 2017, Lynch writes.

Also, notable: the fact that the agreement will not rely on independent parties to resolve any possible future disputes. “Rather it’s up to each side to decide on its own whether the other is violating its commitments. How this will play out remains to be seen,” Wendy Cutler, vice president of the Asia Society and a former U.S. trade negotiator, said to the Washington Post.

The bottom line

While the agreement does indeed have the Chinese promising to buy more, it focuses much more on a managed trade approach than on trying to solve the serious systemic issues that have long upset US and foreign investors in China—industrial subsidies benefitting Chinese state enterprises and restrictions on foreign investment in many industries, to cite just . two that were left largely untouched.

“The agreement is a limited one, primarily capping the potential for further escalation of protectionism on both sides rather than taking serious steps to address long-standing issues in Chinese trade practices,” write the Rhodium Group’s Dan Rosen and Logan Wright, noting that while China has promised more US imports, its “capacity and willingness to meet these targets remains in question.” Meanwhile, “the broader decoupling trends in security-sensitive areas of the bilateral relationship will continue.”

“So-called” Phase 1

While it’s not surprising democrats, particularly those who hope to run against Trump for president later this year (see Biden below), are critical of the deal, even some of Trump’s usually sycophantic supporters are expressing their disproval. “This so-called Phase 1 agreement will make sure American capital continues to directly fund China’s state-run economy,” wrote Marco Rubio.

“China is the big winner,” says Biden

For a roundup of their views on China —not trade but general - of all the leading US democratic presidential candidates, here’s a helpful piece from Bethany Allen-Ebrahimian of Axios (as she point out, they are all “short on details”):

Meanwhile, U.S. is still going after Huawei, trade deal or not…

And China is sticking with Made in China, its sweeping industrial strategy…

US manufacturing says ‘No thank you, Mr. President’?

And is even in recession…

“US manufacturing was in a recession in 2019, according to Fed data out today,” writes Heather Long, economics reporter at the Washington Post, on January 18. “Output declined last year. Job growth slowed sharply. Job openings fell 32% since July. It's the sore spot in the US economy.”

Disappointed US soybean farmers

“A lot of American farmers are going to be disappointed with this trade agreement. Soybean prices are plummeting after the deal failed to include a specific $ amount for China's purchases of U.S. soy. All this just a few months before planting season!” writes Bloomberg’s Tracy Alloway.

And then you got global trade

It was down last year for the first time since the 2008-2009 global financial crisis..

Notable/In Depth

Watch the movie! The Peterson Institute for International Economics has made a short video about the tariffs:

Worth checking out what looks like a bunch of interesting articles from experts on trade wars, in the Journal of International Economic Law:

Vineet Hegde@vineethegde_
JIEL Trade Wars issue is out! From Smoot-Hawley, to US-China trade war, from subsidies to investment, it’s all there. Articles by @J_A_Hillman @ChadBown @nicolas_lamp @AntheaERoberts @choermoraes @SimonEvenett @jkurtz4 @JBonnitcha @atflang
academic.oup.com/jiel/issue

Joost Pauwelyn@JoostPauwelyn

JIEL Special Issue on **TRADE WARS** is now out https://t.co/0x6LWjwWjl Excellent work on legal, economic & historical lessons by i.a. @ChadBown @J_A_Hillman @atflang @SimonEvenett @jkurtz4 @JBonnitcha @AntheaERoberts @nicolas_lamp @choermoraes https://t.co/3GQXu6AUT1

What lobster sales tell us about the trade deal: Maine’s live lobster sales to China fell dramatically in the twelve months after tariffs were imposed in July 2018—down by 46.7 percent—as Chinese buyers instead turned to Canadian lobster. But will “phase one” make a difference? Much as with soybeans and other products, no one is really sure.

“The deal includes a commitment that China will purchase lobster in the coming years – but I am concerned the language does not appear to specify a minimum purchase amount, nor does it remove the existing tariffs so our lobster can be competitively priced with Canadian lobster,” frets Sen. Angus King in the Portland Press Herald.

Finally a big new report is out on China’s Belt and Road Initiative, the massive state-led push to expand economic power overseas, highlighting how it is strengthening China Inc. “China’s colossal national champions—boosted by state-aid and cheap financing—are securing an unusually large proportion of contracts when compared to multilateral development schemes,” said Joerg Wuttke, president of the European Union Chamber of Commerce in China.

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