Issue 99 | Sept. 24, 2018
South Korean finance minister optimistic about revised US trade deal
''When it comes to ratifying the Korea-U.S. free-trade agreement, I have an optimistic view,'' said Korean Finance Minister Kim Dong-yeon. This is despite lawmakers in Seoul threatening to block the deal if the U.S. imposes new tariffs on Korean automobiles and parts. U.S. President Trump, who had loathed the original 2012 trade agreement, has praised its revision as a "great" deal.
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Freeland returns to Canada empty handed

Canadian Foreign Minister Chrystia Freeland returned to Canada on Thursday night without a NAFTA 2.0 breakthrough to announce as negotiators from the U.S. and Canada remain under pressure to reach a deal this month. Even if the U.S. and Canada reached a deal, trilateral trade talks still need to be held. Hold-ups in negotiations remain. U.S. access to Canadian dairy markets, Canada's push to preserve the dispute settlement mechanism housed in Chapter 19 of the existing deal and U.S. efforts to reduce Canadian access to the U.S. government procurement markets are still among the outstanding issues in the U.S.-Canada talks, said Mexico's chief NAFTA negotiator Kenneth Smith Ramos.
 
Fourth US-EU Japan meeting set for Tuesday
 
U.S. Trade Representative Robert Lighthizer will meet with EU Trade Commissioner Cecilia Malmström and Japanese Trade Minister Hiroshige Seko in New York on Tuesday to discuss how to counter Chinese trade practices that hurt workers and companies in all three economies. This is speculated to be a precursor to Trump meeting with Japanese Prime Minister Shinzo Abe after the UN General Assembly meeting taking place this week.
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Reality of painful tariffs point to long-term test for China
 
When U.S. president Donald Trump began imposing tariffs on China, several American companies and industry representatives pleaded for exemptions to protect their own businesses and criticized the administration's trade policies. Some Chinese sectors were spared, but many others, from seafood to white-goods makers, were hit when Trump put a 10 percent tariff on about $200 billion worth of imports from the world's second-largest economy. He is threatening to increase the levies to 25 percent in 2019 if no China-U.S. trade deal can be agreed on. Chinese premier Li Keqiang pledges pro-business measures in response to U.S. tariffs. Jonas Short, who oversees policy research at investment bank Everbright Sun Hung Kai, echoes that view, saying that "The overall cost of U.S. tariffs is very manageable for China. The cost of the current tranche of tariffs -- $20 billion -- is easily offset through fiscal policy."
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OCED, citing trade tensions, says 2018 trade growth "softer" than anticipated
The Organisation for Economic Cooperation and Development (OECD) says trade tensions are having "adverse effects" on the global economy, hurting trade and investment growth. The study says that while global GDP "remained solid" in the first half of 2018 growing approximately 4 percent, there are "signs that the expansion may have now peaked." The OECD warns that an "intensification" of trade restrictions will have significant costs for the global economy.
 
Azevêdo "Very concerned" US-China trade conflict will extend beyond tariffs

World Trade Organization Director-General Roberto Azevêdo is "very concerned" that the trade conflict between the U.S. and China will extend beyond rising tariffs because both economies have "lots of ammunition," he said last week. The U.S. is imposing tariffs on $250 billion worth of Chinese goods, and President Trump has threatened to slap tariffs on an additional $267 billion. The combination would essentially cover all products China exports to the U.S. China, in turn, is imposing tariffs on $110 billion worth of U.S. goods, which is roughly the amount the U.S. exports to China. Businesses have said China could retaliate against the U.S. in ways that extend beyond tariffs. According to a U.S.-China Business Council survey released this week, businesses are beginning to face non-tariff blowback from Beijing.
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Analysts warn of fallout from escalation of US-China trade war
Global markets have shrugged out the escalating trade tensions between the U.S. and China, but analysts and economists are warning that the latest round of tariffs is credit negative for both countries. Beijing will likely retaliate with further non-tariff measures. Nomura analysts said China's possible retaliatory measures included import quotas, higher barriers to entry for US products in China, complicating customs processing for US imports, restricting Chinese travelling or receiving education in the US as well as tax breaks to help Chinese businesses hit by the US tariffs. JPMorgan economist Haibin Zhu notes that counter tariffs from China would do little to mitigate the negative shock from the US tariffs.
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The Fourth Industrial Revolution
Oct. 17, 2018
Join the Global Initiatives Council for a closer look at new government regulations surrounding the tech sector and an institution spearheading emerging technology policy governance. RSVP here.
 
Compiled by Center for Global Trade & Foreign Investment intern Tanya Soni.

For more information, contact Jasmin Sakai-Gonzalez, 213.580.7569.