Trump’s Tariff Hike will Return China to the Negotiating Table

The Chinese government suddenly walked away from a trade deal that was close to being finalized because they thought their economy could weather the moderately negative short-term effects of Trump’s initial round of tariffs.

But now that Trump has raised tariffs to a higher level, the cost-benefit analysis has changed to a point where I expect China will return to the negotiating table because the short-term economic costs of tariffs are now higher than the costs of making a deal.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.