US-China Trade Ties

Important and timely new research: Reconsidering the ‘China shock’ in trade by Robert Feenstra, Hong Ma, Akira Sasahara, and Yuan Xu

http://voxeu.org/article/reconsidering-china-shock-trade

“International trade has become a focus of political debates in the US and around the world, but while previous studies focus on the job-reducing effect of the surging imports from China or other low-wage countries on the US employment, the job-creating effect of exports has received much less attention. This column employs two approaches – an instrumental variable regression analysis and a global input-output approach – to argue that the negative effects of import competition on US employment are largely balanced out once the country’s job-creating export expansion is taken into account.” 

A trade war with China would backfire on Trump — and America

https://www.washingtonpost.com/news/posteverything/wp/2018/01/16/a-trade-war-with-china-would-backfire-on-trump-and-america/

Zachary Karabell notes:

“China’s hints about curtailing bond purchases were a quiet but unsubtle reminder from Beijing that it is economically armed — and dangerous — if need be. Over the next decade, China will diversify its economic relationships even more and become that much less dependent on the United States as a market. Accepting, acknowledging and acting as though the U.S.-China relationship were approaching one of economic equals would be the foundation of wise policy; proceeding as though we’re still an unrivaled hegemon will not restore American dominance, but it will hasten America’s relative decline.”