China threatens retaliatory tariffs after Trump's tweets

Channel: Fox Business
Published: 05/09/2019

Description
Former OMB Chief Economist Joseph Minarik on the Trump administration trade negotiations with China. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact both Main Street and Wall Street. Headquartered in New York — the busines...



Transcript
We are, of course, watching the talks this morning. Investors are watching what what body language they could glean from today's meeting. China is threatening retaliatory tariffs in response to president trump's announcement that tariffs will go up to 25 percent from 10 percent on two hundred million dollars worth of chinese goods coming into this country. That sets to go into effect first thing f ...
iday morning, the president talked about it last night during a rally that he had in florida watch. By the way you see the tariffs were doing because they broke the deal they broke, the deal they'll be paying. We don't make the deal nothing wrong with taking in over a hundred billion dollars. Ayear [ applause ], the united states lost nearly a quarter of a million manufacturing jobs. You remember that they let other countries raid our factories, steal our jobs and robbed us blind other than that they were very nice. They allowed china to freely loot our economy, plunder our intellectual property and target our industries for destruction. That'S what was happening and look. President xi is a friend of mine, great guy, but he was vagina, i'm for the usa, i'm for the usa. Now we won't back down until china stops cheating our workers and stealing their jobs, and that's what's gon na happen.

Otherwise, we don't have to do business with them. We don't have to do business. We canmake the product right here. If we have to like we used to remember like we used to and join me right now, is the former office of the management and budget chief economist and the committee for economic development chief economist joseph min arc great to see it joseph thanks very much for Joining us this morning, your reaction to all that's taking place. This is the 11th around that these two go in. Do you think that there's going to be wiggle room here for a deal between the two countries which have completely different approaches to their economies? Well, nobody wants this deal to fail. There is space for for concession. It'S getting to be very hardit's one on one, as you noted maria, and i think it's the key point. These are very different modes of economic management. A lot of what china does is not very transparent, it's very hard to write rules and it's very hard to enforce them, and that's part of what's making this so difficult, which is why that article from reuters yesterday really was so stunning, but also very much apropos Saying that china backtracked on virtually every point on this deal most notably the forced transfer of technology, that the us is telling china that you can't keep forcing companies to transfer all their technology over to a chinese company. When that company does business in china andthe ip theft, these are things that i don't know, in my view, our cultural. So can you move the needle on that? We have to hope that our negotiators can do that.

But again, how do you write the rules? How do you make sure that what are now ostensibly voluntary agreements within with us firms who want to get into the chinese market and are willing to pay a price in intellectual property? To do it are not forced to do that? That is not the normal rule of commerce around the world and we do have these differences with china. China does see its place in the world and a very expansive sense and it's going tobe difficult to make a change in that mentality. So what are? What are the downside risks of no deal right now? The us economy is suffering we do have, for example, in some of those tariffs goods. You have increases in prices for us, consumers washing machines, a lot of imports. You know roughly half of imports worldwide. China may be a little bit different, but roughly half of imports worldwide are materials or components that go into products that we then sell and possibly even on export. So the u. s. becomes less competitive costs become higher for us manufacturers, which means that third parties importing into the united states might become more competitive as an unintended consequence ofall. This can be coke, it can be costly. Yeah we've been speaking with a number of businesses who say yeah it's likely in the cards. If this continues that we will be raising prices, we're the head of trek bikes on bicycle maker, just the other day who said yeah, it is in the plans that will likely have to raise prices on bikes.

So i guess if consumers are going to be faced with higher prices for all sorts of goods that they're buying it's better to do it now, while you're talking about 3. 2 percent economic growth and a backdrop that is pretty strong in the us right, well, inflation right Now is very low and wedo have you know relatively robust economic growth. We could be, however, eroding our competitiveness over the long term and in the long term, as settlement is, of course much better than allowing this kind of a disagreement and higher tariffs on both sides. To go on yeah, this is a really good point. I will be watching this joseph's great to get your insights thanks. So much thanks for having me joseph min eric they're joining us this morning.


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