US: Confrontation with China over trade is intensifying - Nomura

Takahide Kiuchi, Executive Economist at Nomura, notes that the confrontation between the United States and China over trade is intensifying.

Key Quotes

“A key proponent of the protectionist trade policies shaping the Trump presidency is Peter Navarro, a professor emeritus at the University of California-Irvine. According to Navarro, trade deficits suppress a country’s economic growth. His theory completely rejects the common economic view that free trade brings economic benefits to all countries. This is a flawed way of thinking.”

“The Trump Administration’s trade policies based on this theory that runs counter to commonly accepted economic theory is quite dangerous.”

“US-China trade talks are about to resume, and concessions from the Chinese could lead to a temporary ceasefire in the US-China trade war. However, with China hardliners like Navarro and Robert Lighthizer continuing to occupy the key White House trade-related positions of Director of the National Trade Council and US Trade Representative (USTR) and strongly influencing the thinking of President Trump, the Trump Administration’s basic stance on trade is unlikely to veer from the hardline position being taken against China—a position that essentially seeks to preserve US economic and militaristic hegemony, including its dominance of advanced industries.”