Remember where things were just a few months ago? The mainstream media, the Democrats and the "experts" were telling us that trade war with China would be the result of President Trump's trade policies. That would be followed, or so we were told, by a world-wide recession as the two largest economies contracted as a result. They were wrong it seems.
It is being reported that the USA and China have reached an initial agreement to reduce the US trade deficit with China. All that we know for certain is that the Chinese will dramatically increase their purchses of agricultural product and energy from the USA. Numbers haven't been announced, but the figure of $200 billion per year has leaked.
Think about that for a minute. If China buys an extra $200 billion from the USA over the next 12 months, that will increase the US GDP by more than 1%. That will mean something like a million new jobs. It will mean greater prosperity for America's farmers and energy producers as well as for the countless firms that support these industries. In short, it's a big, big deal.
We don't know yet what, if anything, the USA is giving to China in return. It may be that the sanctions on the Chinese telecom firm ZTE will be reduced as President Trump is considering. It may also be that something else will be swapped. We will have to wait and see what the deal actually consists of.
It seems that what actually happened here is that Trump was correct. It's a lot easier to win a trade war when you have a huge trade deficit. China's companies risked losing a huge market for their goods. For American companies, there would have been pain, but it would have been next to nothing compared to what the Chinese would have had to endure.
Once again, the "experts" were just wrong. I bet they're getting tired of losing.
It is being reported that the USA and China have reached an initial agreement to reduce the US trade deficit with China. All that we know for certain is that the Chinese will dramatically increase their purchses of agricultural product and energy from the USA. Numbers haven't been announced, but the figure of $200 billion per year has leaked.
Think about that for a minute. If China buys an extra $200 billion from the USA over the next 12 months, that will increase the US GDP by more than 1%. That will mean something like a million new jobs. It will mean greater prosperity for America's farmers and energy producers as well as for the countless firms that support these industries. In short, it's a big, big deal.
We don't know yet what, if anything, the USA is giving to China in return. It may be that the sanctions on the Chinese telecom firm ZTE will be reduced as President Trump is considering. It may also be that something else will be swapped. We will have to wait and see what the deal actually consists of.
It seems that what actually happened here is that Trump was correct. It's a lot easier to win a trade war when you have a huge trade deficit. China's companies risked losing a huge market for their goods. For American companies, there would have been pain, but it would have been next to nothing compared to what the Chinese would have had to endure.
Once again, the "experts" were just wrong. I bet they're getting tired of losing.
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