Economic Effects

Had Donald Trump singed the TPP agreement the economic effects in the U.S, almost 75 percent of goods tariffs would be cut out after TPP comes into force, with 99 percent eliminated over 30 years. In addition TPP’s impact on non-tariff and FDI barriers, such as regulations and trade quotas, that particularly impede services trade. Cutting out these tariffs would really benefit the U.S there was speculation that by 2025 it could raise the national income by 77 billion a year, and could also boost exports by 124 billion a year. A different study found things to be a little different, they found that the TPP would result in a .5 percent decrease in GDP by 2025, along with the fact that the U.S would loose up to 450,000 jobs. Clearly there are positive and negative outlooks on the U.S in terms of ever entering the TPP I am for free trade so i do hope that they eventually join.  

                                                                                         

https://www.wsj.com/articles/study-projects-tpp-will-provide-modest-gains-for-u-s-economy

https://www.americanactionforum.org/insight/what-is-the-real-economic-impact-of-tpp/

Trump Finally Makes His Decision

www.beroeinc.com/infographics/trans-pacific-
partnership-tpp-trade-deal/

It looked like the U.S was heading in the direction of the TPP Trump pulls out of deal. After having his advisers look into the contract, he was turned away from the deal because of our ongoing trade dispute with China that could hit Midwestern agriculture particularly hard. He was also convinced of the security benefits of binding Asian allies ever closer together as a rising China exerts its territorial ambitions. On Tuesday Trump took to twitter “While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States. Too many contingencies and no way to get out of it if it doesn’t work. Bilateral deals are more efficient, profitable and better for OUR workers.” What this means to me is that he wants the keep our jobs in the U.S, but these are the types of things that people get upset about and with China's territorial ambitions, t’s revamped Cabinet might have convinced Trump likes benefits of binding Asian allies.

http://www.startribune.com/trump-wrong-about-tpp-again/480423693/

Japan Expects USA Wants a Bilateral Trade

Japan's Finance Prime Minister Taro Aso said in a statement that he believe's that the U.S.'s consideration of rejoining TPP is a preference to be had, however he feel s that the U.S. will only join if there is a deal/consideration of having bilateral free trade agreement with Japan. President Trump withdrew from the Trans-Pacific Partnership. Finance Prime Minister Aso will be traveling to the U.S. Tuesday and Wednesday to keep the close relationship between Japan and the U.S.

https://www.reuters.com/article/us-usa-trade-japan/japan-finance-minister-suspects-u-s-wants-bilateral-fta-idUSKBN1HO0B8

Trump reconsiders TTP

In a move that shocked new reporters this week Donald Trump told his trade advisers to re-look at the Trans Pacific Trade Agreement on Thursday. Trump has asked Larry Kudlow and Robert Lighthizer to see if a better deal could be renegotiated. This decision came as Trump faced calls from republican lawmakers urging him to rejoin, along with farmers and other businesses who are concerned about trade tariffs effecting their jobs and wages. This was mentioned in my previous post. Rejoining the agreement would benefit a lot of businesses that compete in overseas markets. Farmers especially would be able to compete with China's growing economy. It will be interesting to see if the 11 countries in the CPTTP will consider allowing the U.S. to rejoin since the deal been signed after 1 year of renegotiation. Would those countries even want to spend more time renegotiating the changes they made again, to allow for the U.S. to join. In a New York Times article on the subject said that Japan maybe be hard to negotiate with since they feel like they have made all concessions they can. Japan's chief cabinet secretary cautioned against renegotiating the CPTTP "calling it a “well-balanced pact” that addressed the needs of the 11 nations that signed the deal." Its a big decision to make. The U.S. is in the spot light we will have to wait and see Trumps next move.



https://www.cnn.com/2018/04/12/politics/trump-tpp-reconsidering/index.html
https://www.nytimes.com/2018/04/12/us/politics/trump-trans-pacific-partnership.html
https://www.forbes.com/sites/salvatorebabones/2018/04/13/trump-may-join-the-new-tpp-but-only-because-the-old-one-was-gutted/#394fd4cb584b
http://www.business-standard.com/article/international/trump-takes-a-u-turn-hints-at-rejoining-trans-pacific-partnership-118041300095_1.html

U.S. China trade dispute soybeans hang in the balance

               

On Tuesday April 5th, President Trump and the U.S. Trade Representative unveiled a list of over 1,300 Chinese products that are to have increased tariffs, in an attempt to punish China for its unfair Trade Practices. The list covers $50 billions worth of products, such as heavy machinery and high tech components. Wednesday, China responded by announcing a list of 106 American products they are planning to put tariffs on worth about $50 billion. This list includes soybeans, cotton, corn, and other agricultural goods. This response by the Chinese has worried lots of American farmers. Soybeans are the number one U.S. agricultural export to China. China buys half of U.S. soybean exports at $14 billion annually. Market prices for soybeans have already plummeted and went down 33 cents on Wednesday. Tariffs could make the soybeans less competitive to Chinese buyers and cause them to turn to Brazil, which is already China's biggest soybean supplier. This could cause a huge impact to the U.S. farming economy. CNN Money has a really informative video on the subject.

In response to China's attack on U.S. agricultural industry, President Donald Trump said on Thursday that the United States would consider slapping tariffs on an additional $100 billion worth of Chinese goods, escalating a potentially damaging trade dispute with China. According to the New York Times, "On Friday, a spokesman for China’s Ministry of Commerce accused the United States of starting the conflict and said that 'the Chinese position has been made very clear. We do not want to fight, but we are not afraid to fight a trade war.'”

Concerns have been raised about how far this trade dispute will go and how it will hurt jobs and business that depend on China. We will have to wait and see what this trade conflict means for the future of soybeans and other American exports and imports.

https://www.nytimes.com/interactive/2018/04/05/business/china-us-trade-conflict.html
https://www.cnbc.com/2018/04/03/us-names-chinese-products-under-proposed-tariffs.html
https://www.cnbc.com/2018/04/05/trump-asks-us-trade-representative-to-consider-100-billion-in-additional-tariffs-on-chinese-products.html
https://www.cnbc.com/2018/04/07/us-farmers-in-precarious-position-with-china-amid-trade-war-fears.html
https://www.nytimes.com/2018/04/04/business/stock-markets-trade-war.html?action=click&contentCollection=Politics&module=RelatedCoverage&region=Marginalia&pgtype=article

TTP moves forward without the U.S.

                           
        

On March 8th, 2018, the eleven countries remaining in the Trans-Pacific Partnership met to sign a new trade agreement called The Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP. This new trade agreement is similar to the TPP, but without U.S. involvement it has been altered. It now excludes over twenty provisions that were added to accommodate the U.S. The new version also removes the condition that required final members to account for at least 85% of the combined GDP of the original signers. The scope of the deal has also changed, the original TTP deal covered 800 million people and 40% of the world's economic output. The remaining members of the CPTPP represent 500 million people, and 13% of world trade. The remaining members of the deal are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It will be interested to see how this trade affects the U.S., as President Donald Trump signed an order on the 8th that imposes tariffs on steel and aluminum products to counter the free trade impulse represented in the CPTPP. This move has sparked fears of a trade war.

https://www.npr.org/sections/thetwo-way/2018/03/08/591549744/the-tpp-is-dead-long-live-the-trans-pacific-trade-deal
https://www.reuters.com/article/us-trade-tpp/asia-pacific-nations-sign-sweeping-trade-deal-without-u-s-idUSKCN1GK0JM
https://i2.wp.com/noticieros.televisa.com/wp-content/uploads/2018/03/mexico-tendra-acceso-a-seis-nuevos-mercados-con-el-tratado-transpacifico.jpg?fit=594%2C354&quality=100

Benefits and risks of the TTP

In this post I thought it would be helpful to provide a bit more background on the TTP and some of the benefits and risks involved with it. The Trans Pacific Partnership removes tariffs on goods and services and sets reciprocal trade quotas. "TPP focused on a suite of reforms that include liberalizing protected sectors, streamlining customs and regulations, strengthening intellectual property protections, promoting competitive and transparent business laws, and enforcing labor and environmental standards." This agreement will open markets and address issues in the global economy.

Pros

It boots exports and economic growth. All countries involved agreed to cut down on wildlife trafficking. Countries that don't comply face trade penalties. China is not involved, which will allow the U.S. and other countries an upper hand in trade in Asia. U.S. involvement in the TTP was expected to have an increase in income due to lower prices on purchased goods from countries involved in the TTP.

Cons

The TTP protects patents and copyrights, and it will raise the price of generic drugs. The U.S. labor movements argue that trade agreements will make it easier for corporations to take their labor offshore. When President Trump left the TTP last year he argued that the agreement would have accelerated the movement of U.S. manufacturing jobs offshore. 

https://www.cfr.org/backgrounder/trans-pacific-partnership-and-us-trade-policy 

https://www.thebalance.com/what-is-the-trans-pacific-partnership-3305581 

https://www.investopedia.com/articles/forex/052915/capital-and-labor-who-wins-transpacific-partnership.asp