Showing posts with label tariffs. Show all posts
Showing posts with label tariffs. Show all posts

Tuesday, January 21, 2020

US pay the price on intellectual property and tariffs - Harry Broadman

Harry Broadman
The US gained very little in its trade agreement with China, says trade veteran Harry Broadman on NBC News. The text on trade secret does not add any value, and the US firms and consumers pay the price for tariffs, he says.

NBC News:
“On trade secrets, to be honest, the language that’s in the agreement is pretty loose and generic,” said Harry G. Broadman, managing director at Berkeley Research Group who chairs the firm’s emerging markets practice. “On the face of it, I don’t see — at least on that portion of the agreement — a lot that’s significantly different from previous types of agreements.” 
Some of the practices and changes agreed to by Beijing were changes that were already in the works or had been previously agreed-upon...
“The people who are paying the tariffs are U.S. firms and U.S. consumers,” Broadman said. “It’s not clear to me what the actual economic impact will be as a dispute resolution measure to ‘threaten’ China with more tariffs.”
More at NBC News.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

At the China Speakers Bureau we have started to explore WeChat Work as a social platform, next to Twitter, Facebook and LinkedIn. Are you interesting in following us on this journey? Check out our instructions here.

Tuesday, June 04, 2019

What Mr. Trump has been missing - Harry Broadman

Harry Broadman
As a former US negotiator Harry Broadman looks with shock at how US president Trump is using his tariffs to get his trade policies in place. For Forbes he describes what has been going wrong at the misinformed White House.

Harry Broadman:
Regrettably, for Mr. Trump, there are other constituencies of his base throughout America’s heartland, Rustbelt and elsewhere that are feeling as much pain as farmers from his 2018 tariffs—or will do so shortly as the bite of his newest wave of tariffs kick in. Perhaps saddest of all is the fact that imposing tariffs on merchandise imports—the president’s choice, if not sole, instrument to seemingly induce WTO-sanctioned “behind-the-border” reforms of China’s economic regime, such as a hold by the state on the free play of prices, weak protection of intellectual property, provision of huge subsidies to state-owned enterprises by state-owned banks that only pretend to require debt repayments, and artificial barriers to market entry and exit—simply will not work. 
We Americans are willing to endure pain for gain. But let’s not fool ourselves into thinking as Mr. Trump does, that simply eliminating our bilateral merchandise trade deficit with China, which in and of itself is not an economically meaningful objective but which his tariffs may well do, will alter the core of China’s conduct in the global trading system. 
In a nutshell, no matter how high or expansive are tariffs, they will not create effective incentives for China to execute the fundamental market-oriented reforms Beijing legally obligated itself to undertake in its 2001 WTO Accession Agreement. That is the real endgame. 
Achieving that goal--necessitating a reduction in the fundamental role of the state in China's economy, which of course Chinese President Xi Jinping is loathe to do since that is the raison d'etre of the Communist Party--is a wholly different matter. That would require both using a different arsenal and employing a fundamentally different strategy, especially marshaling a multilateral coalition of the world's leading trading partners. Our president seems to be moving us further away from that path each passing day.
More at the BBC.

Harry Broadman will be in London on June 27-30 and in Edinburgh July 1-3.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Do you need more experts on the ongoing trade war between China and the US? Do check out this list.  

Tuesday, May 07, 2019

The odds are still in favor of a trade agreement - Arthur Kroeber

Arthur Kroeber
US-president Donald Trump gave the financial market a hit this week by announcing a sudden increase of tariffs on Chinese goods, but veteran economist Arthur Kroeber still believes a trade deal could be done next month, he tells Bloomberg.

Bloomberg:
“The most likely outcome is that a deal will still be done,” said Arthur Kroeber, the head of research at Gavekal Research. “The main reason is that global markets have priced in a deal, so a failure of the talks will trigger a massive sell-off,” he wrote in a note to clients. “The odds still favor an agreement in time for Trump and Xi Jinping to sign it ahead of the G-20 summit in Osaka on June 28.”
More in Bloomberg.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on the ongoing trade war between the US and China? Do check out this list.  

Thursday, December 06, 2018

How Trump is missing the point on China - Harry Broadman

Harry Broadman
The world, including China, is still trying to make sense out of the Trump/Xi trade talks. The Trump trade team is fighting the wrong battle, argues former U.S. Assistant Trade Representative Harry Broadman for Gulf News. "The Trump trade team continues to fight the wrong battle with China."

Harry Broadman:
For the US — as well as for the rest of the world — the strategic challenge with China is that fundamentally it is not a bona fide market economy. More importantly, it has not lived up to its legal commitments under its 2001 WTO accession agreement to reform into one.
Yet the White House — whether in Buenos Aires or Beijing or Washington — does not squarely focus on this issue. 
Instead, the Trump trade team continues to fight the wrong battle with China, uses the wrong weapons, and is in the trench alone while China’s harm to the US is little different than what it inflicts on the world’s other major trading partners. What do I mean? 
Trump’s preoccupation — actually it borders on being a fetish — with reducing the US bilateral merchandise trade deficit with China is a wholly misplaced battle. Bilateral trade deficits in and of themselves are not economically meaningful — especially in a world where supply chains are multinational. 
If anything, they reflect symptoms rather than a disease. 
At the same time, tariffs, which, after all, are really taxes on imports, are very crude instruments to try to induce economic change “upstream” in a supply chain. Perhaps if China were truly a market-driven economy, where prices are set freely by supply and demand, tariffs might bring about some changes “behind-the-border”. 
But in non-market economies, prices do not hold the import in conveying value as they do elsewhere. 
More to the point, in the case of China, the core trade problems are inherently part of the underlying fabric of the country’s domestic economy. 
The backbone of China’s economic engine remains dominated by large state-owned enterprises (SOEs), propped up by large state-owned banks (SOBs). The rub is that the SOEs and SOBs are at the core of the Communist Party’s raison d’etre and the “socialist market economy” philosophy that has underpinned China’s political economy structure since 1978. 
To say it’s going to take a lot more than tariffs to unwind these would be an understatement. 
It’s no surprise Trump prefers to negotiate bilaterally. But structuring one-off real estate transactions in New York are no match for today’s complexities of crafting global trade deals. In fact, when an opposing party engages in trade practices that many of your closest allies also judge to be unfair, it makes no sense to not bring them into the fold to strengthen your negotiating leverage. 
Yet that is exactly the formula Trump has been following — and not just with respect to China but all other trading partners. 
Finally, the accord Trump struck with Xi at the dinner has only deepened the openly contradictory US trade policy the White House has been pursuing with China. Here’s the contradiction in a nutshell: the US asserts it is appalled over China behaving as a non-market economy but then goes ahead and asks the Chinese government, itself, to purchase more US exports. 
Is it any wonder why Xi thought the dinner was a great success and his top economic advisers continue to shake their heads trying to make sense of US trade negotiation strategy?
More at Gulf News.

Harry Broadman is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts on the trade war between the US and China? Do check out this list.  

Monday, October 29, 2018

The US-China trade war: in for the long haul - Arthur Kroeber

Arthur Kroeber
The trade war between the US and China might only be starting, the fight is going to be one for the long haul, says economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®, according to Dow Jones. “The U.S. and China are in for a long and acrimonious confrontation,” he says.

Dow Jones:
Officially, the U.S. is imposing tariffs on Chinese imports as a hard-nosed but hopefully temporary tactic to force China to treat U.S. companies and goods more fairly. Yet, Beijing has shown no sign of caving to U.S. demands that, in totality, entail a wholesale end of the industrial policy that has long guided Chinese economic development. Some suspect the U.S. goal isn’t a negotiated solution, but to disentangle the two economies permanently. 
“The U.S. and China are in for a long and acrimonious confrontation,” Arthur Kroeber of Gavekal Dragonomics, a China-based research firm, wrote last week. This isn’t driven by President Trump alone, he wrote, but “by a powerful coalition of security and economic officials who believe the U.S. is entering an existential conflict with China for global economic, technological and geopolitical dominance.”.. 
Mr. Trump is mainly motivated by the U.S. trade deficit with China. Tariffs aren’t likely to fix the imbalance: If a company shifts production from China to Vietnam to avoid U.S. tariffs, America’s trade deficit with Vietnam will go up while its deficit with China goes down. But China critics who don’t share Mr. Trump’s deficit obsession see a different benefit. 
Tariffs and other penalties, such as forthcoming restrictions on the export of key technologies, weaken China’s appeal as a destination for foreign investment and start to unravel the supply chains that tie the U.S. to China. The longer tariffs remain in place, the more multinationals that want to sell to the U.S. will seek alternatives to China to source production. Taiwan and Thailand are already marketing themselves as alternatives. 
Yet, moving a supply chain out of China is harder than it sounds. Mr. Kroeber notes in an interview that China doesn’t offer just low labor costs, it also has well-developed infrastructure and logistics, skilled labor such as engineers, and access to China’s own huge internal market. “That can’t be matched somewhere else.” Multinationals may need two supply chains: one with access to the U.S., and one with access to China. They would then have to decide whether their U.S.-centric or China-centric supply chain serves the rest of the world. 
In the short run, China would clearly be the loser: It still depends heavily on the U.S. for intellectual property, know-how and investment, and as a market for exports.
More in Dow Jones.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form. 

Are you looking for more experts on the trade war between the US and China? Do check out this list.

Thursday, September 27, 2018

Tariffs will hit US consumers - Sara Hsu

Sara Hsu
The trade war between the US and China has up to now mainly hit headlines, nervous traders and heated political debates, but there is no doubt consumers will feel the burnt too, says financial analyst Sara Hsu to Reuters. Moving away from China is mostly not an option, she says. "It can take up to five years to move from China to another country."

Reuters:
U.S. tariffs on imports from China will not only impact companies but also the consumers said an expert in an interview with China Global Television Network in Beijing on Tuesday. 
Sara Hsu is an associate professor of economics at the State University of New York at New Paltz. She said it was not clear what percentage of the tariffs the companies would pass on to the consumers but it would definitely impact the consumers. 
“It’s definitely going to impact the consumers in terms of higher cost as well as the companies. So there might be a split in terms of the company taking part of the hit and passing part of cost on to the consumers as well. And starting from January 1, the tariffs will go from 10 percent to 25 percent. So that’s a really significant increase,” said Sara. 
China is the largest supplier of textiles and apparel to the U.S. market, accounting for about 40 percent of American imports in the sector, according to the statistics of the United States Fashion Industry Association (USFIA). 
The industry relies on sourcing from China to provide American consumers with affordable and varied choices. But the tariffs will impact the multinational companies in the U.S. in the industry, said Sara. 
“A lot of the American multinational firms are producing their goods overseas. So that’s why the tariffs on exports from China are going to impact the American multinational companies. And these multinational companies would like to move to a different place, especially given the tariffs that just kicked in. But it’s really hard for them to do,” said Sara. 
She added that there would be a high cost for the companies to move and set up shops in other countries with a level of development and have low wages. 
It can take up to five years to move from China to another country, Sara said. The situation hasn’t happened yet, but a lot of companies are not reassuring to the U.S. instead of relying on automation in order to produce their products because American labor costs so high.
More at Reuters.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more experts at the ongoing trade war between the US and China? Do check out this list.