After six days at sea, already thousands of miles away from the American coast, the captain of the „Audacity“ received a message: He should not head to the Chinese port of Qingdao as planned, his shipping company told him, but go to Vietnam. There was a new buyer for the ship’s cargo, 70,000 tons of soybeans.
The „Audacity“ only had to turn a few degrees to port, but this small change in course points to something bigger: that trade flows are shifting around the world.
In the middle of the Pacific, the „Audacity“ got into the economic exchange between America and China. And she was not the only ship to have been assigned a new route in the past few weeks, according to data from the Bloomberg news agency.
„Investors make America the winner“
Since China raises tariffs on American agricultural products, farmers in Missouri, Iowa and Illinois have trouble finding buyers for their crops. The Chinese, on the other hand, are having trouble selling their printers, batteries, and solar panels to the United States after Donald Trump imposed royalties on tech goods.
The „Tit for deed,“ as the Americans call it, „Like me, so I tell you,“ has been going on for nine months. Economists now dare to make an initial assessment of who is better off doing so far. Is it the giant empire of China, or is it Donald Trump’s America?
According to Oxford Economics, some data suggest that the Chinese are more affected by the trade conflict than the Americans. The experts of the British Economic Research Institute have looked at, among other things, the financial markets. „The investors choose America as the previous winner,“ says economist Adam Slater.
He points out that since the beginning of the year, when the controversy began, the dollar has risen significantly against the yuan. The positive development of Wall Street during this period is also seen by Slater as a plus for America. At least in the perception of investors, China seems to be weakened.
Trump could add another $ 250 billion
But ships like „Audacity“ show that not only in perception something happens, but also in reality. The consequences of the conflict have hardly been reflected in export statistics so far. There it looks as if China continues to sell its goods unchecked to the United States. But according to Oxford Economics, the picture is deceptive.
The good data would come about only because American importers would have covered some of the tariffs some time ago with products from the People’s Republic. Soon they will buy less in China according to Slater. Could Donald Trump’s plan come to fruition? Will the pressure on Beijing be so strong that the government must make concessions? It looks like this right now.
Source: Infographic WORLD
It could be particularly bad for China, when Trump realizes his latest customs threats. So far, the US president has taken Chinese imports worth around $ 250 billion in taxes. But soon, he announced a few weeks ago, the US could add another $ 250 billion – which would then affect all Chinese goods.
Trump said he made it dependent on whether his counterpart Xi Jinping in a scheduled for the end of November conversation. The US president wants the Chinese to make it easier for American companies to do business in their country. In addition, Trump calls for an end to state subsidies and tougher action by Beijing against technology theft.
Ifo Institute: Chinese carry three quarters of the customs burden
The German Ifo Institute also sees China in distress, its researchers come in a study to the conclusion that the country in East Asia bears the brunt of the trade dispute. „Customs duties are nothing but taxes, the burden of which is shared between foreign manufacturers and domestic consumers,“ explains economist Gabriel Felbermayr.
And the US tariffs on Chinese goods would be borne by three-quarters of Chinese manufacturers. America, on the other hand, generates considerable revenue. „The problem with protectionism,“ says Felbermayr, „is that it can actually have a beneficial economic impact on the US.“
Trump’s customs warrior wants aggressive globalization
It’s downright outrageous theses that the British and the Germans are putting up there: Economists and company bosses around the world have long been warning of the dire consequences that Trump’s tariffs would have on his own country – and economists say that the president’s tough trade policy, se