Donald Trump and the Future of US-China Trade

Antonio Graceffo, PhD, China MBA

标题：唐纳德 · 特朗普和中国贸易的未来安东尼博士上海大学经济学院

Shanghai University, Department of Economics

( 安东尼博士 ))

The world is waiting anxiously to see what America’s new president Donald Trump will do first when he assumes the powers of the President

on January 20, 2017.

Donald Trump has said that the US will leave the Transpacific Partnership (TPP)

AndHe has also vowed to raise a 45% tariff on products imported from China.

We can only speculate about what he plans to do, but he has said two things which will impact China.

Antonio Graceffo ( 安东尼博士 ))

Donald Trump 将于2017 年 1 月 20 日成为美国总统。没有人知道他会做什么 ..他说他希望美国退出跨太平洋伙伴关系 (TPP) 。他还表示，他想对所有中国产品征收 45 ％的贸易关税。

A Brief Overview of China-US Trade

Antonio Graceffo ( 安东尼博士 ))

In 2015, China exports to the US totaled $481.9 for US exports to China totaled only $116.2 billion (Amadeo 2016).

The US accounts for a total of 20% of China’s exports (Elliott 2016). And this number increases almost every year.

 The US runs a trade deficit with China美国是中国第一大出口伙伴，占中国出口总额的 20 ％（ Elliott 2016 ）。 它几乎每年都增加。 美国与中国发生贸易逆差2015 年，中国对美出口总额 4819亿美元美国对华出口总额仅为 1162 亿美元

( 安东尼博士 ))Antonio Graceffo ( 安东尼博士 ))

Donald Trump says China is beating the US in trade because Chinese wages and Chinese currency are too low. Therefore, he wants to raise a 45% tax on Chinese products to make them more expensive and make trade between US and China more even.

他说，中国有一个贸易优势，因为中国的工资和中国的货币太低。因此，他想对中国产品征收 45 ％的税，使它们更贵，使美中贸易更平均。

( 安东尼博士 ))Antonio Graceffo ( 安东尼博士 ))

Lower wages

The average factory worker in US earns $11.93/hour $1,9080/month (Payscale.com)While the average factory worker in China earns around 3000 RMB per month ($463) (Thayer Consulting, 2016)

Chinese products are cheaper than American products on world markets, including inside of the US. One reasons for this is that Chinese wages are very compared to other developed countries.

他说，中国有一个贸易优势，因为中国的工资和中国的货币太低。因 此 ， 他 想 对 中 国 产 品 征 收45 ％的税，使它们更贵，使美中贸易更平均。 ( 重复了 ?)

美国的平均工厂工人每小时得到11.93 美元，每月 1,9080 美元（ Payscale.com ）中国的平均工厂工人每月约3000 元（ 463 美元）（ Thayer Consulting ， 2016 ）

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Many economists feel that China’s wages are too low, given how rich China is.

Per capita GDP (used as average income)  China $7,924.7Malaysia $9,766.2Gabon$10,966 The country in western Europe with the worst economy is Greece, which has a per capita GDP of $18,035.6 (Worldbank 2016)

A number of countries which are much poorer than China have higher incomes.

许多经济学家认为，考虑到中国的富裕程度 , 中国的工资太低。 许多比中国贫穷的国家收入更高。人均 GDP （用作平均收入）中国 7,924.7 美元马来西亚 $ 9,766.2加蓬 $ 10,966西欧经济最差的国家是希腊，人均 GDP为 18,035.6 美元

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One reason why Chinese products are cheaper and wages are lower is because the Chinese currency is low. 1 US Dollar equals6.88 Chinese Yuan(XE Converter 2016, viewed December 1) If the exchange rate were 1 USD = 3.44 Yuan, The income of Chinese people would double, but Chinese products would become more expensive.

Low currency value

中国产品更便宜，工资更低的一个原因是因为中国的货币很低。1 美元等于 6.88 元（ XE Converter 2016 ，阅读12 月 1 日）如果汇率是 1 美元 = 3.44 元，中国人的收入会增加一倍，但中国产品会变得更贵。

( 安东尼博士 ))Antonio Graceffo ( 安东尼博士 ))

As of September 2016, the China Central Bank was holding CNY 3,121 billion of foreign reserves, mostly US Dollars as of October of 2016 (Trading Economics 2016).

Macroeconomic theory says: If the Chinese government spent this money, it would increase the number of US Dollars on the world markets, decreasing the value of US Dollars, and decreasing the number of Yuan, which would make the Yuan go up in value.

Donald trump accuses China of currency manipulation

截至 2016 年 10 月，中国人民银行拥有外汇储备 31.2亿元。 大多数外汇储备是美元。如果中国政府花这笔钱，就会增加世界市场上美元的数量。 美元的价值会下降。 此外，世界市场的人民币数量也会减少。 而元的价值会增加。

Charges of currency manipulation are not as simple as they seem.

Things are not so simple: Over the past two years, China has had three major selloffs of US debt. In August, 2015, they sold $94 Million. In December, 2015, China sold $18 billion of U.S. Treasury debt. In October 2016, after the Offshore Yuan hit a record low of more than 6.92 to the US dollar. In December of that year, the government dumped $41.3 billion in US debt. And yet, in December, the Yuan (domestic RMB) continued to drop to 6.94.

Antonio Graceffo ( 安东尼博士 ))

China, and many China watchers reject the charges of currency manipulation say that China is actually doing everything they can to prop up the Yuan. The argument is that market factors are driving down the price of the Yuan and the government is not to blame.

 This plan is in keeping with the China government’s strategy to “move up the value chain” (Hua and Hu 2015).

The problem with allowing the Yuan to increase in value is that Chinese products would become more expensive, and sales would decrease.

One possible solution is that China could move away from low-end manufacturing and up to higher skilled production and technology which generates higher income for citizens and creates more jobs for university graduates.

Antonio Graceffo ( 安东尼博士 ))

允许人民币增值的问题是，中国产品会变得更昂贵，销售会减少。 一个可能的解决方案是，中国可以从低端制造转向高技能生产和技术，为公民创造更高的收入，为大学毕业生创造更多的工作机会。 这一计划符合中国政府“提升价值链”的战略

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 "The Trans-Pacific Partnership (TPP) is a 12-nation trade pact that would cut tariffs and deepen economic ties between the signatories" (Haas, B. 2016). The trade agreement, signed in 2016, comprised of 12 member states: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam (but not China) represents 40% of global commerce (Haas 2016).

Donald Trump has said that he wants to leave the Transpacific Partnership

“ 跨太平洋伙伴关系（ TPP ）是一个 12 国的贸易协定，将降低关税和加深签署国之间的经济联系”（哈斯， B 。 2016年）。 2016 年签署的贸易协议由澳大利亚，文莱，加拿大，智利，日本，马来西亚，墨西哥，新西兰，秘鲁，新加坡，美国和越南（但不是中国） 12 个成员国组成。 TPP 占全球商业的40 ％（ Haas ， 2016 ）。

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Senator Sanders even published a paper entitled The Trans-Pacific Trade (TPP) Must be Defeated (Sanders n.d.).

President-elect Trump wants to leave the TPP because theTPP commission would make decisions for US workers.

US labor unions want the US to leave the TPP , because they say the TPP will export American jobs.

US Environmentalists want to leave the TPP because of potential environmental damage.

Obama administration Democratic party members, such as Senator Bernie Sanders and Senator Elizabeth Warren, also oppose the Partnership.

Donald Trump 说 他 希 望 美 国退 出 跨 太 平 洋 伙 伴 关 系 (TPP) 。唐纳德 · 特朗普希望美国退出跨太平洋伙伴关系因为TPP委员会是为美国工人做出决定。美国工会希望美国退出跨太平洋伙伴关系，因为他们说 TPP将输出美国工作。由于潜在的环境破坏，美国环保人士希望美国退出跨太平洋伙伴关系。奥巴马政府民主党成员，如参议员伯尼 ·桑德斯和参议员伊丽莎白 ·沃伦，也希望美国退出跨太平洋伙伴关系参议员桑德斯出版了一篇题为“跨太平洋贸易（ TPP ）必须击败”（ Sanders n.d. ）的文件。。

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China proposed forming the Regional Economic Comprehensive Partnership (RECP), RECP includes the ten Asian countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam, plus 6 states with whom ASEAN has standing free trade agreements: China, Japan, India, South Korea, Australia New Zealand (Carlson 2016).

The US leaving the TPP would benefit China

The US leaving the TPP creates opportunity for China, whether to fill the vacant seat in the TPP, or through promoting the RECP (Campbell 2016)

美国退出 TPP 将有利于中国中国提议成立区域经济全面伙伴关系（ RECP ）， RECP包括十个亚洲国家：文莱，柬埔寨，印度尼西亚，老挝，马来西亚，缅甸，菲律宾，新加坡，泰国和越南，加上东盟有 6 个国家 贸易协议：中国，日本，印度，韩国，澳大利亚新西兰（ Carlson 2016 ）。 美国离开 TPP 为中国创造机会，无论是填补 TPP 中的空缺席位，还是通过推广 RECP （ Campbell 2016 ）

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A third option for Beijing is to promote the Free Trading Area of the Asia Pacific (FTAAP). Chinese President Xijinping has also called on his trading partners to increase the FTAAP (Carlson 2016).

The Free Trading Area of the Asia Pacific (FTAAP).

北京的第三个选择是促进亚太自由贸易区（ FTAAP ）。中国总统习近平也呼吁他的贸易伙伴增加 FTAAP（ Carlson 2016 ）。

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 Donald Trump has stated that he would levy a 45% tariff on Chinese goods. Some argue that this tariff would be in violation of WTO agreements (Reuters 2016).

Donald Trump’s Proposed Tariffs on Chinese goods

唐纳德 · 特朗普对中国商品的建议关税唐纳德 · 特朗普表示，他将对中国商品征收45 ％的关税。 一些人认为，这种关税将违反WTO 协议（路透社 2016 ）。

( 安东尼博士 ))Antonio Graceffo ( 安东尼博士 ))

If the US raises tariffs against Chinese products, China could raise tariffs against US products. American airplane manufacturers, automakers and makers of farm machinery, and US soybean exporters (Bradsherbov 2016 and Smith et. al. 2016).

Economists argue that a trade war could start

Although a trade war would most likely hurt the surplus country, China, more, it would also hurt the US.

经济学家认为贸易战争可以开始如果美国提高对中国产品的关税，中国可以提高对美国产品的关税。 美国飞机制造商，汽车制造商和农业机械制造商，以及美国大豆出口商（ Bradsherbov 2016 和 Smith 等人 2016 ）。

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US consumer goods manufacturers, such as Nike or Apple, could simply relocate their China-based manufacturing facilities to Indonesia or Vietnam (Smith et. al. 2016). But even if they relocate, the jobs will not return to the US.

因为中国有贸易顺差，贸易战争很可能伤害中国，超过美国。 但贸易战争也会伤害美国。美国消费品公司，如耐克或苹果，可能将他们在中国的制造设施迁移到印度尼西亚或越南（ Smith 等人 2016 ）。 但即使他们搬迁，工作也不会回到美国。。

( 安东尼博士 ))Antonio Graceffo ( 安东尼博士 ))

Moody’s ran a simulation to see what the effects of the Trump-China Tariff would be. In the short run, it hurt the Chinese economy, but in the long run, it caused a recession in the US, and eventually crippled the global economy. The Trump tariff was compared to when President Herbert Hoover increased tariffs in 1929, with the Smoot-Hawley Act, which experts feel is what drove the US and the world deeper into The Great Depression (Schmitz 2016).

穆迪的计算机模拟确定，贸易关税将在短期内伤害中国经济。 但从长远来看，这将导致美国经济衰退。 它最终会削弱全球经济。一些专家说，特朗普的关税类似于美国总统赫伯特 ·胡佛在1929 年增加关税。专家认为这种关税恶化了 1929 年的经济大萧条（ Schmitz 2016 ）

( 安东尼博士 ))Antonio Graceffo ( 安东尼博士 ))

 Currently, The Office of the United States Trade Representative (2016) sets US exports to China at more than $161 billion. Fears are that if a trade war escalated US exports to China would stop. And this number could increase with a free trade agreement.

Experts against a China tariff

Schuman (2016) reporting for Bloomberg.com, suggested that Trump’s best China strategy would be to arrange a free trade agreement.

China has a tremendous population with an economy growing at the rate of around 6% per year. China now represents an extremely attractive market of more than 1.3 billion consumers with a per capita GDP of over $7,000 per year, according to the World Bank (2016).

有的专家建议不要对中国进口增加关税Schuman (2016) reporting for Bloomberg.com, 他建议特朗普最好的中国战略是安排自由贸易协定。中国人口众多。 经济增长率超过 6 ％。 现在，中国是一个非常有吸引力的市场。 中国有 13 亿消费者，每年人均 GDP超过7000 美元，根据世界银行（ 2016 ）。

Author’s recommendation: The US and China could come to the negotiation table and see if a compromise could be reached by which the US leader would feel the playing field was fair, after which, a free trade or expanded freed trade agreement could be reached.

Antonio Graceffo ( 安东尼博士 ))

Conclusion

The US leaving the Transpacific Partnership (TPP) would benefit China, either through China filling the US seat in the TPP, or leading the the Regional Economic Comprehensive Partnership (RECP), or the Free Trading Area of the Asia Pacific (FTAAP).

The US levying a 45% tariff against Chinese imports would probably hurt China worse than the US, but in the long run, it would hurt both countries, and in an extreme scenario, it could destroy the world economy.

结论美国离开太平洋伙伴关系（ TPP ）将使中国通过填补美国在 TPP 中的席位，或领导区域经济综合伙伴关系（ RECP ）或亚太自由贸易区（ FTAAP ），而受益。美国对中国进口征收 45 ％的关税可能与美国相比会更加伤害中国，但从长远来看，它会伤害两国，在极端情况下，它可能摧毁世界经济。作者的建议：美国和中国可以进入谈判桌，看看是否可以达成妥协，美国领导人认为公平竞争的领域之后，可以达成自由贸易或扩大的自由贸易协定。

Dr. Antonio Graceffo, PhD, China MBA (安东尼博士 )Shanghai University, Department of EconomicsContact: antonio_garecffo@hotmail.comLinkedin: https://www.linkedin.com/in/antoniograceffo

Antonio Graceffo ( 安东尼博士 )

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