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As that great and learned scholar Vizzini once noted, one of two classic blunders is getting involved in a land war in Asia. But trade wars might also qualify. “Donald Trump’s trade battle with China is starting to look like a forever war — a quagmire with no end in sight, no clear path to a resolution and more potential land mines for an already weakening global economy,” Bloomberg’s Shawn Donnan argues.
At the very least, President Trump’s “trade wars are good and easy to win” axiom isn’t playing out. Not only did the president say he’s imposing 10% tariffs on another $300 billion of Chinese goods starting Sept. 1, but Beijing looks like it’s not expecting a resolution any time soon as it lets the renminbi weaken, or “crack seven” in traders parlance. The Financial Times calls the move “a clear sign that Beijing is prepared to use the currency as a weapon and let the trade war drag on.”
And drag on and on and on to where, exactly? Neil Shearing of Capital Economics sees…
On this week’s episode of Banter, AEI visiting scholar Mark Jamison joins the show to discuss how cryptocurrencies such as bitcoin work and how they are different from government-backed currency. At AEI, Dr. Jamison’s work focuses on how technology affects the economy, and on telecommunications and Federal Communications Commission issues. He has written several pieces on cryptocurrencies including how policymakers should approach this technology.
The US Treasury is redesigning some the bills, and maybe it’s time to take another look at what we have. So let’s assume that I have somehow been placed in charge of a top to bottom redesign of the currency, and have been given carte blanche. I’m crowdsourcing the redesign out to Ricochet. I have three […]
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This from New York Times reporter Maggie Haberman: “Donald J. Trump said he would favor a 45 percent tariff on Chinese exports to the United States, proposing the idea during a wide-ranging meeting with members of the editorial board of The New York Times.”
At the heart of Trump’s reasoning is that China is a massive currency manipulator. A cheater. Stop the cheating, and the American worker will again be great. Or something like that.
But is it so clear that China’s currency is terribly undervalued, if at all, versus the US dollar? Last year the International Monetary Fund said the yuan was no longer undervalued, as did the Peterson Institute of Economics. Likewise the Wall Street Journal pointed to a report from the Boston Consulting Group that said “manufacturing costs in China had risen so much they were within 5% below those in the U.S.; and it went on to predict that by 2018 manufacturing will be a bit cheaper in the U.S.”