1/5 "President Joe Biden’s administration is poised to unveil a...
Michael Pettis@michaelxpettis
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May 11, 2024
~1 min read
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1/5
"President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs that target key strategic sectors. The new tariffs will focus on industries including electric vehicles, batteries and solar cells, with existing levies largely being maintained."
bloomberg.com/news/articles/… via @bpolitics
"President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs that target key strategic sectors. The new tariffs will focus on industries including electric vehicles, batteries and solar cells, with existing levies largely being maintained."
bloomberg.com/news/articles/… via @bpolitics
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2/5
This doesn't really deal with overall deindustrialization. The tariffs will certainly reduce US imports of electric vehicles, batteries and solar cells from China, but they will not affect trade imbalances for either country. That's because as long as China continues to...
This doesn't really deal with overall deindustrialization. The tariffs will certainly reduce US imports of electric vehicles, batteries and solar cells from China, but they will not affect trade imbalances for either country. That's because as long as China continues to...
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3/5
generate large amounts of excess savings, and as long as these are exported directly or indirectly into US financial and asset markets, China will continue to resolve weak domestic demand with trade surpluses, and the US will continue to run the corresponding trade deficits.
generate large amounts of excess savings, and as long as these are exported directly or indirectly into US financial and asset markets, China will continue to resolve weak domestic demand with trade surpluses, and the US will continue to run the corresponding trade deficits.
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4/5
This means that any strengthening of the American electric vehicles, batteries and solar cells sectors is likely to come at the expense of other manufacturing sectors.
This works as industrial policy, in other words, but not as trade policy.
carnegieendowment.org/chinafinancial…
This means that any strengthening of the American electric vehicles, batteries and solar cells sectors is likely to come at the expense of other manufacturing sectors.
This works as industrial policy, in other words, but not as trade policy.
carnegieendowment.org/chinafinancial…
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5/5
If the US wants to regain comparative advantage in the targeted sectors, these tariffs will help. But if the US wants to reduce its trade deficit and reverse the decline in its share of global manufacturing overall, they'll make little difference.
ft.com/content/879f5d…
If the US wants to regain comparative advantage in the targeted sectors, these tariffs will help. But if the US wants to reduce its trade deficit and reverse the decline in its share of global manufacturing overall, they'll make little difference.
ft.com/content/879f5d…
