[Anne Stevenson-Yang] Trump’s trade war may spark Chinese debt crisis

There’s no chance China will cut its trade surplus with the US in response to President Donald Trump’s tariff threats. For starters, Washington has made no specific demand to which Beijing can respond. But its efforts may have an unexpected side effect: a debt crisis in China.　The 25 percent additional tariffs on exports of machinery and electronics looked, at first blush, like a stealth tax on offshoring. The focus on categories like semiconductors and nuclear components, in which US-owned manu

July 19, 2018

[Noah Feldman] Search for logic of Helsinki

How’s this for a thought experiment the day after President Donald Trump provoked bipartisan disgust over his performance with Russian President Vladimir Putin: Try to think charitably and ascribe rational, noncorrupt motives to political actors.　Looking at domestic politics, Trump may simply think that any acknowledgment on his part of Russian efforts to elect him discredits his presidency. Looking internationally, it would be possible to explain Trump’s behavior as an expression of a radically

July 19, 2018

[Daniel Moss] How strong is China’s economy? GDP alone won’t say

It’s the go-to measure of an economy. But sometimes gross domestic product doesn’t tell you much.　A glance at China’s second-quarter GDP, released Monday, might suggest things are holding up pretty well in the world’s second-largest economy. The 6.7 percent increase from a year ago -- just barely below the prior period -- points to a China that weathered the early skirmishes of a trade war, continued its transition to a consumption-driven economy and isn’t suffering too much from a state campaig

July 19, 2018

[David Ignatius] Trump’s stunning answer to ‘who do you believe?’

US President Donald Trump was doing pretty well in Helsinki, really, laying out a modest but achievable agenda for improving US-Russia relations. And then came the final question about whether Trump believed his own intelligence chiefs or Russian President Vladimir Putin -- and in his weird, waffling answer, you could almost hear the fabric of his presidency rip at the seam. Jonathan Lemire of the Associated Press was the reporter who asked Trump bluntly: “who do you believe” about Russian elect

July 18, 2018

[Douglas Frantz] We’ve unleashed AI. Now we need a treaty to control it

Fifty years ago this month, in the midst of the Cold War, nations began signing an international treaty to stop the spread of nuclear weapons. Today, as artificial intelligence and machine learning reshape every aspect of our lives, the world confronts a challenge of similar magnitude and it needs a similar response.　There is a danger in pushing the parallel between nuclear weapons and AI too far. But the greater risk lies in ignoring the consequences of unleashing technologies whose goals are n

July 18, 2018

[Andy Mukherjee] Harley, Trump and Thailand’s $51 billion trade gamble

Democracies look to voters for validation of their economic policies. For Thailand’s military junta, the affirmation is coming from Beijing, bankers and the likes of Harley-Davidson.　Harley’s decision to build a new Thai factory to supply Southeast Asia should be reassuring to Prime Minister Prayuth Chan-Ocha. The former army chief, who ousted a civilian government in a 2014 coup, has a $51 billion, five-year plan to mold the country’s eastern seaboard -- already a large manufacturing hub -- int

July 18, 2018

[Noah Smith] If you love capitalism, worry about small business

Capitalism has lost some of its luster in the US. The percentage of Americans aged 18 to 29 who say they support capitalism checks in at only 39 percent.　Other polls find similar results, and anecdotes seem to support the story. Meanwhile, openly socialist candidates are winning primary elections in the Democratic Party.　Why is this happening? The fading memory of the Cold War might be part of it. Young people also might simply be more idealistic than adults, and less accustomed to the business

July 17, 2018

[David Fickling] BASF playing China matchmaker should worry US

If you want a look at how China is playing the economic diplomacy of its simmering trade war with the US, consider BASF SE.　The world’s most profitable listed chemical company agreed on July 9 to spend as much as $10 billion on a giant plant in Guangdong province, at a ceremony in Berlin attended by Chinese Premier Li Keqiang and German Chancellor Angela Merkel.　The announcement was the centerpiece of a series of paper partnerships between Chinese companies and pillars of German industry last we

July 17, 2018

[Michael Abramowitz and Sarah Repucci] Americans still want their government to support democracy abroad

A flood of commentaries concluding that Americans are more inward-looking, indifferent to international engagement and skeptical about the country’s obligation to influence change in repressive environments might lead us to believe Americans are cooling on democracy.　These perceived signs of neo-isolationism have been reinforced by a president who uncritically lauds leaders like Vladimir Putin and Kim Jong-un while picking fights with democratic allies like Angela Merkel and Justin Trudeau. And

July 17, 2018

[Tyler Cowen] What’s holding Mexico’s economy back

With the election of Andres Manuel Lopez Obrador as president of Mexico, the perennial question resurfaces: Might Mexico see a higher rate of growth? Its economy has grown at a rate of about 2 percent per year for about a quarter century, about half the pace of other emerging nations. 　The sad reality is that the new Mexican regime probably cannot improve its economic performance unless it can address basic problems with education and productivity.　Mexican economic policy gets many things wrong,

July 16, 2018

[Scott Cowen] Is Trump an “effective leader”?

No matter how much chaos and disruption US President Donald Trump causes -- to trade, business, and even America’s core alliances -- his supporters regularly insist that Trump is a leader who gets things done. While Arkansas Sen. and almost-CIA director Tom Cotton regards Trump as an “active, engaged and effective leader,” former Speaker of the US House of Representatives Newt Gingrich has gone so far as to describe Trump as “stunningly effective.”Given these accolades, I was curious about what

July 16, 2018

[Ramesh Ponnuru] Trump’s four rules for conducting a trade war

New tariffs on Chinese imports went into effect only on July 6, so it is too early to say how the trade war is going and which country, if any, will win it. Even the most die-hard free trader should admit that in theory it is possible that the threat of tariffs can induce other countries to make concessions that leave us (and possibly them) better off. Lose-lose scenarios are, however, also all too possible.　What we can say with certainty is that we are learning four rules for conducting a trade

July 16, 2018