US investment rules will tighten for some countries

Significance US-China trade frictions, centring chiefly on disagreements over technology, intellectual property and the bilateral trade balance, are causing international market uncertainty. One US response to concerns about trading with China has been to expand the remit of the Committee on Foreign Investment in the United States (CFIUS), which evaluates investments into the United States from abroad. Impacts CFIUS expansion has bipartisan support and will continue regardless of the winner of the 2020 presidential election. The CFIUS intervened when a Chinese firm bought a US dating app, perhaps a precedent for seemingly non-security related investments. The CFIUS does not cover non-acquiring business partnerships or joint ventures, but general political pressure could curtail these.

Significance The outcome comes as little surprise, given the repressive tactics used by the Ortega administration in the run-up to the vote, which included the disqualification or imprisonment of numerous opposition candidates. The United States and other international actors are now poised to put increased pressure on the re-elected government. Impacts The prospect of extended sanctions will act as a further disincentive to foreign investment. Ortega’s efforts to boost regional support through increased alignment with Honduras may lead to greater bilateral trade. More undocumented Nicaraguan migration looks inevitable, whether due to continuing political repression or worsening economic hardship.


2014 ◽  
Vol 687-691 ◽  
pp. 4950-4954 ◽  
Author(s):  
Rong Sheng Lv ◽  
Chun Hui Wang

China and the United States are the two largest economies in the world, and there is a strong complementarily between their economies, so the volume of their bilateral trade is also very large. However, with the development of trade exchanges, bilateral trade friction also intensifies; especially in recent years, American trade deficit with China has grown very rapidly. In order to reverse the situation, the United States launched several trade litigations and implemented tough trade sanctions against China. It led to trade disputes between the two countries, which seriously damaged the healthy development of Sino-US relation. So we compares the similarities and differences between the two trade frictions, pointing out both valuable experience and negative lessons from Japan in handling Japan-US trade friction, so as to provide reference to China for easing Sino-US trade friction.


Subject China's options for retaliating against US firms during trade tensions. Significance US President Donald Trump tweeted yesterday that he is working with China's President Xi Jinping to get China's telecoms giant, ZTE, "back in business, fast" -- even though it was penal US sanctions that forced the company to announce last week that it was stopping operations. The Trump administration is divided on whether its objective in threatening imports tariffs on Chinese goods worth 50 billion dollars, effective May 22, is to strike a deal to cut China's trade surplus with the United States or to change China's industrial practices. Impacts Compliance costs will rise even if trade tensions subside. Investors in industries that China sees as strategic (eg, semiconductors and integrated circuits) may face unwritten screening rules. Investors in automobile, aircraft and shipping manufacturing and finance may find new opportunities to enter the market.


Author(s):  
KAZUO SATO

As a resource-poor country, Japan depends much on imports of resource goods—foods, fuels, and crude materials—to keep its economy running. This dependence has increased over time, making Japan vulnerable to supply shocks. At the same time, demand shocks emanating from its domestic economy have come to exert a greater influence on the world economy. Because Japan exports almost wholly manufactured goods and imports largely resource goods, its bilateral trade balance ends up with a surplus with industrial economies and a deficit with primary-producing countries even when Japan's trade is globally balanced. This trade structure gives rise to trade frictions, especially with the United States. Unless the structure is altered fundamentally, Japan will find it increasingly difficult to fit itself into the world economy.


Subject The threat to North Korea's political stability were supreme leader Kim Jong-un to die. Significance Seoul and Beijing both insist all is normal in North Korea, contrary to unattributed news reports -- which the United States and others are monitoring -- that supreme leader Kim Jong-un is gravely ill after heart surgery. Last seen on April 11, Kim missed a key anniversary on April 15. Impacts March was a record month for missile tests, but all were small; intercontinental ballistic missile or nuclear tests are too risky for now. A COVID-19 epidemic would dent lingering hopes of life improving under Kim. New prestige projects with tight deadlines will impose additional hardship. Despite sharply reduced bilateral trade, China will use back channels to ward off risk of regime collapse.


2021 ◽  
Vol 3 (2) ◽  
pp. 144-168
Author(s):  
Rajesh Chadha ◽  
Sanjib Pohit ◽  
Devender Pratap

The growing protectionism globally and the outbreak of a major US–China trade war led Indian exports facing higher tariffs. This article has tried to investigate how India should react to the trade tensions between the two largest economies of the world. This will help policymakers in India to assess the impact of the likely developments and choose between different policy responses. In a bilateral US–China trade war, while both the United States and China stand to lose in terms of GDP, exports and imports, India stands to gain. India stands to lose when the US–China trade war applies also to India, which faces higher tariffs from both. India’s losses increase further when India responds by increasing its tariffs on imports from the United States and China. In fact, reducing own tariffs could be a wiser step. Enhancing productivity measures by raising port efficiency and making trade and transport sector more efficient appear to pay dividend. India gains even more from joining the RCEP-like trading block when the United States and China are indulging in bilateral trade war. Last but not least, US–China trade war seems to affect Asian countries, some positively some negatively. JEL Codes: F13, C68, F14


2018 ◽  
Vol 17 (1) ◽  
pp. 101-120 ◽  
Author(s):  
Meixin Guo ◽  
Lin Lu ◽  
Liugang Sheng ◽  
Miaojie Yu

During his U.S. presidential campaign Donald Trump threatened China with the imposition of high import tariffs on its exports to the United States. To evaluate the repercussions of such an action, this paper uses Eaton and Kortum's 2002 multi-sector, multi-country general equilibrium model with intersectional linkages to forecast how exports, imports, output, and real wages would change if Trump's threat of 45 percent tariffs is carried out. To view plausible scenarios, we evaluate the case of a unilateral action on the part of the United States, as well as a scenario where China retaliates by imposing an equally high 45 percent tariff on its imports from the United States. In addition, because the high U.S. trade deficit with China is a factor that underpins calls for tariff action, we explore simulations where the trade balance is restored to balance as well as a scenario in which the trade balance is unchanged. In all of the scenarios, the calibration exercise suggests that a trade war triggered by high U.S. import tariffs will lead to a collapse in U.S.–China bilateral trade. In all of the scenarios, the United States will experience large social welfare losses, whereas China may lose or gain slightly depending on the effect of trade war on the U.S.–China trade balance. Globally, some small open economies may experience small benefits, while other countries may suffer collateral damage.


Subject The impact of the US-China trade wars on US manufacturers. Significance The United States and China reached a tentative agreement in trade negotiations on October 11 that President Donald Trump described as "a substantial phase one deal". The deal, which is yet to be finalised, centres on China's agreement to purchase some 40-50 billion dollars' worth of additional US agricultural goods annually, and Trump's agreement to suspend a planned increase in tariffs on 250 billion dollars' worth of Chinese goods, from 25% to 30%, that was due to take effect tomorrow. However, existing tariffs on both sides remain in place. Impacts A manufacturing recession could lead to greater upper Midwest voters’ discontent. Midwestern voter discontent could help a Democrat win the presidency in 2020, and a populist win the party’s nomination. US-based manufacturers could benefit from new contracts as supply lines are revised, but costs would rise. A second Trump tax cut in 2020 could temporarily help US-based firms avoid competitiveness gaps.


Subject Trade in pharmaceuticals and narcotics between China and the United States. Significance The flow of drugs between China and the United States -- both legal and illegal -- has a huge impact on each society, especially those going from China to the United States. Leaders in both countries have consciously sought to separate the bilateral trade and trafficking of drugs from their trade war. Impacts Although US pharmaceuticals firms should avoid tariffs on their products, tariffs may affect other areas of their supply chain. Other producers of pharmaceutical products, such as India, could benefit from any active US effort to diversify sources. If China were successfully to curb fentanyl production, production would probably shift to another country with lighter regulation.


2009 ◽  
Vol 9 (4) ◽  
pp. 1850183 ◽  
Author(s):  
Mohammed B. Yusoff

This study attempts to examine the effects of real bilateral exchange rates on Malaysia's bilateral trade balances with its three major trading partners: the USA, Japan, and Singapore. The results suggest that the bilateral trade balance, real exchange rate, domestic and foreign incomes are cointegrated. In the long-run, Malaysia's bilateral trade balances are found to be responsive to the changes of bilateral exchange rate in the cases of the USA and Singapore but irresponsive for Japan. There is a clear evidence of the J-curve effect only in the case of Malaysia's trade balance with the United States. The results also indicate that devaluation tends to be recessionary. The findings suggest that Malaysia could use undervalued exchange rate strategy to improve its trade balances with the United States and Singapore but not Japan.


Sign in / Sign up

Export Citation Format

Share Document