China, President Trump, United States discussed on The Indicator from Planet Money

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He's going to scale back. The tariffs that he had imposed in September and that was on about one hundred fifty sixty billion dollars worth of clothes and shoes. Those will go from fifteen in percents where they are right now. Down to seven and a half percent We don't know what exactly China has agreed to but president trump has said that they're going to agree to buy a lot more edgar cultural products manufacturing products energy products. And they're going to buy more of our stuff. They're going to buy a lot more of our stuff. Hopefully and I think like most importantly take on some of the commitments to do some of the structural reforms that are really. What's behind the trade war in the first place now? That's obviously the hardest. There's part of this property stuff. Well we'll have to wait and see But I think that's that's what everybody's hoping But I think that's still a little bit early to tell and immediate idiot economic effects of this deal Chad you expect any no Sweaters cheaper and stuff for the Holland. No I mean basically I think for yeah unfortunately prices are probably gonNA stay the same. which is they're not going to go up? I think had a tariffs of December fifteenth. Gone on That that would have been a a big impact but probably would have started showing up. You know january-february Once the shipment started showing up on store shelves. But I think overall we're all It's it's better news but it's probably not a huge economic impact and Chad. What are some of the industries that are going to be affected by this like? Are there any goods that will still will be taxed at really high levels. Are there some industries that are going to get a big break so it is important to say that even with this deal all of the tariffs that president trump put on last year on China In that were ratcheted up earlier this year in June and so this is twenty. Five percent tariffs on two hundred and fifty billion dollars worth of products. Those are still going to stay on and and those are those are not things that you and I buy. Those are what economists call intermediate input so those are the things that the companies by that that are parts and components that they use to make other things You know if they're making cars. There's there's a lot of auto parts we might buy from China Some steel and aluminum those kinds of things all those tariffs they on. And so there's still a lot of work to do before we can say we're really out of the trade war woods and chide can't tell us a little bit more more about exactly what president trump and his administration are trying to get from China especially what they're hoping China will start buying from the US us well. The administration is a long list of things that they want from China. They they certainly want China by more soybeans more pork products You know corn wheat lots of agricultural products that help the American farmers. We'll see what happens there. But bigger issues are really more substantive there's a real L. desire to try to get the Chinese economy to transform to become more market oriented to get rid of a lot of the subsidies that they give out to their companies that we think are unfair or when they don't protect patents trademarks copyrights intellectual property of American companies in steeler ideas. Those are the bigger challenges that the administration is trying to address with these policies but those are also some of the really hardest things To get the the Chinese system to fix and Chad. We've we've discussed with you before on this. Show the idea that maybe the goal all along of not just the trump administration but of the Chinese government to might I te be for the two economies to just trade last to become less dependent on each other to start to decouple. And I'm wondering if this agreement makes you rethink that at all. No it really. Doesn't I think if anything You know the Chinese have been woken up by the trump administration's tactics and this whole thing thing and they've seen how vulnerable they are To you know the trade policy actions of of one single country the United States. It's not just these tariffs that we'd composed but we have done things like restrained the ability of American companies to sell certain high-tech products to China that their companies really need to have access to to be successful a lot there in the world and so what they've decided as well. They need to produce more of those things themselves in in in that sense. So I think we're now we just now are in a different state of the world. After all of this and we're probably not going to go back there is going to be a certain amount of decoupling that's going to take place even if this deal does ultimately stick whereas this is not the only trade news that we've been seeing the big trade the new Nafta deal. US MCA between the US. Mexico and Canada was finalized. It's now heading to Congress for approval. Approval I guess would you mind summing-up kind of what is happening with the. US and trade right now. Are things normalizing Is this sort of the end of the trade war. Did you see twenty twenty as sort of a more trade normal year. I don't think also you must be exhausted. I well you know. Hey but I think with with President Trump Yep He just likes trade conflict so much that. I don't think I'm ready to to it. Even hint at suggesting that twenty twenty might be a more calm year for for trade we. We did see resolution we think to the US MCA the NUDE NAFTA The new trade agreement between the United States Canada and Mexico. There seems to be a deal between The Democrats in Congress with both the trump administration the government of Mexico and the very powerful labor unions in the United States to agree to some tweaks weeks on the deal that president trump had negotiated to change it up slightly in a way that they might be able to put forward to a vote and to get it passed through. Congress hasn't happened yet but it looks possible but that being said the trump administration likes trade conflict and likes to start trade fights so I think the really big concern that I have looking into next year is Sir who's next on their list Over the last few weeks as well. They've started some new trade fights with Europe with France And so the concern is that once they get pass you. MCI US MCA get past some of the US China conflict though. I don't think that one is is really ever going away. They may simply turn their sights To to other countries altogether altogether and start some new trade fights Chad bound. Thank you so much for talking with us. Thanks again for having me. Are you GONNA go sleep for fifteen eighteen hours or are you kidding me. I have three podcasts. Drake Hawks this episode of the indicator is produced by Rafi on our intern. It is not a Louis. Our editor is Paddy Hirsch and the indicator is a production of N._p._R...

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