In this video, Bloomberg’s International Economics and Policy Correspondent Michael McKee discusses how President Trump is “taking the credit for [the US] economy’s performance.”
We know that America is a superpower but in practical terms, what is its real contribution to the world economy? Given that the United States actually purchases over $500bn morethan it exports, the net contributionAmerica is making worldwide gives it a very impressive status within the international economy. This also leads to an enhancement of Washington’s role as a world superpower.
This gives America heightened bargaining status vis-à-vis the coordination of global economic policy. And that is the most important assignment undertaken by G-20 summits – the address for the international economic forum. This year, come June – when America’s representatives head out to Japan for the meeting – America’s position will be stronger, especially vis-à-vis its capacity to reduce its trade deficits.
Furthermore, as soon as President Donald Trump pushed back the March 2nddeadline in the US-China trade dispute. There has been progressfrom both China and US in reaching a solution but as Oxford Economics Chief US Economist Gregory Daco cautioned:
“Popping the champagne today would be premature. [The far-reaching disparity between the two nations] will prevent a significant de-escalation of trade tensions between the two giants.”
Indeed, if the end of year figures are anything to go by, the champagne bottle shouldn’t even be purchased yet. According to figures from last year, the fight to find a solution between the two nations “disrupt[ed] the global trading system and the cross-border production lines that businesses have built over recent decades.” Plus, a recent National Association for Business Economics surveyfound that 75 percent of economists believe America’s economy will slump into a recession by 2021, the China-US trade war being cited as the main reason why.
America is back in business. At least according to a recent World Economic Forum Index ranking the nation as the world’s “most competitive country,” a position it has not had for the last decade, concluding that “economic recovery is well underway, with the global economy projected to grow almost 4% in 2018 and 2019.”
While this is extremely positive, the forum also found that there is room for improvement on social issues. Caution was called for since “recovery remains vulnerable to a range of risks and potential shocks,” such as the simmering trade war between America and China. According to a recent article in The Wall Street Journal:
“The U.S. has levied tariffs on a total of $250 billion of Chinese goods and China has retaliated with tariffs on $110 billion of U.S. exports as the two nations spar over trade imbalances and other issues.”
When looking at China vis-à-vis America, with the trade war, there has been an expansion of its economic deceleration with the deterioration of the trade war. There has been a distinct loss of momentum in China’s economy in 2018, linked to the efforts made by its government to curb the high debt levels.
Clearly both America and china are losing out with the current trade war. Here, we find 11 experts offering possible exits to the war.