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This report by Timiraos in WSJ describes the tussle between supply siders led by Mike Pence and David Malpass with the zero sum advisors who advised Trump on trade during the campaign. The zero sum advisors are focussed only on how to turn trade to improve the U.S. position and cut trade deficits. The supply siders are trying to show that trade can benefit the U.S. only that it needs to be adjusted so that it works better for the U.S.

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Experts say Trump could still walk away from a trade deal with China if the key goals of ending state subsidies that lead to unfair competition, and the enforcement steps if China violates the deal are not met. China has agreed to do this in the past but no mechanism was put in place for resolving this if China violated the agreement.

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President Trump on a three day visit to the UK promised a free trade deal with Britain if it made a decisive break with the European Union. Such a free trade deal could take years, offer small benefits compared to the loss of the much larger trading relationship with the European Union. It would face hurdles in passage through Congress because Democrats controlling the House of Representatives see a decisive break with the European Union including the customs union arrangement as affecting the open border in Ireland risking the hard won peace in Northern Ireland.  Prime Minister Theresa May proposed a withdrawal arrangement that would keep the customs union arrangement but has failed to secure the support of a faction within her Conservative party that favors a decisive break from the EU. Such a break that Mr. Trump and Boris Johnson the leader of this faction -and a favored candidate to succeed prime minister May after her resignation- would reduce Britain's GDP over the next 15 years at the higher end of the range of 0.1% to 9% a year. A decisive break called a no deal Brexit with no arrangements or agreement for withdrawal with the EU, would lead to a loss closer to the 9% estimate. British experts to the EU are about $275 billion or 44% of its total exports compared to about $44 billion to the U.S., according to HMS Customs source, showing how important it is for Britain to maintain a close trading relationship with the European Union. British farmers would also face competition through agricultural imports from the U.S. in a free trade deal. During his visit Mr. Trump also stated the National Health Service, everything would be on the table in a free trade deal with the U.S.  Theresa May responded by saying that the NHS would not be open for negotiation to American corporate involvement. Public sensitivity is high on any change to the National Health Service. The trip of president Trump to London in which he supported Boris Johnson as candidate to succeed Theresa May, with discussions between Trump and Johnson for 20 minutes, and a visit by Nigel Farage to the U.S. embassy, and no meeting with Labour party leader Corbyn, only shows the widening of differences on the issue of British withdrawal from the EU making any deal for withdrawal even less likely. Labour party leader Jeremy Corbyn now favors a second referendum on whether Britain should leave the EU.  ...

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Latest data from the U.S. Treasury shows it has collected $63 billion in tariffs over the preceding 12 months. Even though there is no agreement on trade with China, president Trump says the U.S. is benefitting from higher tariffs by tens of billions of dollars. In May he estimated tariff revenues could reach $100 billion.This report in the WSJ says this could happen if the the new tariffs of 10% on additional $300 Chinese goods imported to U.S. goes into effect on September 1. This is likely considering that China sees this in different terms than the U.S. such as its sovereignty, whereas the U.S. sees it simply in terms of fair trade. With new elections China may be simply putting things off till the election is decided as Mr. Trump has pointed out. The tally of what the U.S. Treasury gets annually if $100 billion is generated in tariffs goes something like this. Of this $30 billion was generated previously for the U.S. government, so the incremental amount is $70 billion. Of this about $16 billion goes to offset the effect of loss of farm exports to farmers, mainly soyabeans exports to China, through a rescue fund. This leaves additional $54 billion for the U.S. Treasury. Money that could conceivably be put back into infrastructure that the U.S. badly needs in mobile and fixed to improve internet speeds and move up from its low rankings compared to China and other countries. A WSJ report this week shows Germany in worse shape than the U.S., both countries having dismal status in mobile infrastructure- the U.S. at No. 37, and Australia No. 4, Canada No. 3, and even Croatia No. 9. This throws some light on why this trade dispute has become intractable, for China the right of a sovereign nation to move past middle income status even as its telecom technology with Huawei 5G is top class, and for the U.S. the right not to fall behind in advanced technologies such as Telecom. It is also why one hears so much about Huawei and why it has become a flashpoint of the conflict in trade and trade practices. It is thought Mr. Trump is conducting this trade dispute. Yet less known is the fact that prominent Republicans in Congress such as Senator Warner have stated on television talk shows that they are concerned Mr. Trump may give up too much in negotiations that lead to the U.S. not being able to compete in telecom advanced technologies that matter for competitiveness and for national security. What was treated by Bush and Obama administrations routinely without much attention to the consequences is now a top concern for Republicans and others in Congress and business. ...

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After renegotiating the trade deal with Mexico and Canada, and the Phase 1 trade deal with China, the U.S. is now setting its sights on a trade agreement with the European Union. To do this the U.S. is looking at the use of economic pressure including tariffs on the European automobile industry. One goal is to get the EU to do more to end state subsidies to aircraft maker Airbus SE.  The U.S. is also working with Europe and Japan to ban 4 types of subsidies under World Trade Organization rules under a new proposal. Mr. Phil Hogan is the new EU trade commissioner who backs this proposal that is aimed at restricting Chinese subsidies to state enterprises. The U.S. also wants to see agricultural issues, including tariffs discussed in future negotiations with Europe. As part of efforts to change the way World Trade Organization rules are set the U.S. has blocked the appointment of judges at the top court of the WTO so that it lacks the quorum to operate. Mr. Vaughan who works under Mr. Lighthizer in the trade negotiations with Europe, says the Europeans should take U.S. concerns seriously, and accept the possibility that Mr. Trump could take aggressive action if the facts show he is justified in acting in that manner.  ...

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Supply chains are unraveling in many industries with the tariffs imposed by president Trump on imports from China, and renegotiated trade deals with South Korea and other countries. The growth in the value of foreign value added was possible with cuts in tariffs in the period after 1990 and the emergence of China as a low cost manufacturer with cheap labor. Foreign value added increased from 20% in 1990 to 30% in 2011. The impact on factory towns and communities in the U.S. of trade in which the U.S. manufacturing declined as it shifted to China resulted in the surge in support for president Trump. The tariffs war with China is an effort to correct this imbalance. The result is a shift in supply chains away from China in some industries and gradual shift in others. Rising wages in China had already resulted in early shifts and the the environmental costs adding to this trend. President Trump temporarily suspended a threatened imposition of duties of 25% on $325 billion of Chinese imports. A renegotiated Nafta agreement with Mexico for automobile production and determination of U.S. based content and wages was designed to reset the relationship with Mexico and the auto supply chain for production in Mexico. A threat of tariffs on European auto imports to the U.S. is set for a decision in November. The trade dispute between Japan and South Korea and threat of tariffs also shows the effect this is having in other countries. With the U.S. looking at its own interest in the global supply chain and its advantage or disadvantage, industries and companies are not free to make decisions based on which country offers the best arrangement and deal for manufacturing. Notions of competitive advantage in the tech race with China are affecting the way the U.S. and European nations are acting. ...

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The Trump administration released its framework for NAFTA negotiations. The framework is designed to reduce the U.S. trade deficit and promote "Buy America" provisions. It will challenge Mexico on labor and environmental matters, which is likely to win the support of Democrats. A mechanism for preventing countries from getting unfair advantage through currency manipulation is part of the framework, yet less of an issue with Mexico and Canada. It will also work to protect U.S. trade interests in an effort to appeal to workers who supported Trump in the 2016 election. Overall it does not deviate much from established U.S. trade policy, according to the WSJ. For this reason the new guidelines were welcomed by the Mexican and Canadian governments. Mexico and Canada also see this as an effort to modernize the agreement to reflect changes in technology and commerce since NAFTA was signed. Under fast track trade promotion authority the president's Trade Representative Mr. Lighthizer can start negotiations in 30 days. One of the matters up for change is the Chapter 19 dispute settlement mechanism which makes it easier for Canada and Mexico to avert trade sanctions. Mexico's economic prospects have improved as the NAFTA renegotiation avoids the sharp rhetoric of the election campaign. The Mexican peso which traded at 22 to the dollar in January 2017 following the U.S. election, is now trading in July 2017 at 18 to the dollar.   ...

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Global supply chains in industries such as clothing and other consumer items, in autos, and in tech products are changing as the shift away from China continues with the Trump administration's tariffs war. The clothing and other consumer products manufacturing is shifting away from China. Auto production is centred on regional hubs for manufacturing under renegotiated trade agreements such as the one that replaced NAFTA in North America, correcting imbalances in wages and U.S. content. Mexico gets to stay as a auto hub with exports of $50 billion in 2018 but under new rules that the Trump administration sees as fair. India is being considered as an auto production hub in Asia. In tech products China continues to have an edge but this is changing gradually. Samsung has built a huge smartphone manufacturing complex in Vietnam. South east Asia is a beneficiary, so is Mexico. In the future India stands to gain as its manufacturing base expands and infrastructure develops. In this changed scenario China will be moving to produce more advanced technological products, as it shifts away from lower end products. This will also correct some of the grossly unfavorable trade imbalances that have developed with the U.S. ...

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China's exports to all countries surged in November by 21% from a year earlier. Chinese made consumer goods and electronic goods were the main products with increased exports. According to WSJ calculations November exports were up 10% to the U.S. and 46% to Asian nations in ASEAN trade group of countries. Some of the exports to ASEAN including Vietnam and Malaysia find their way to the U.S. New tariffs by U.S. on China lead to some products diverted to Asian destinations and reexported to the U.S. China's imports of goods from the U.S. were up 33% from a year earlier but imports of farm, energy and other products and services were below what was expected under trade deals. Experts say Chinese imports of goods covered in the agreement were 55% of the year to date targets. The Biden administration will leave the tariffs on $370 billion in Chinese goods in place. China is not expected to make up the gap by the end of 2020. Experts also say the exports of Chinese goods has accelerated during the pandemic in 2020 and with the size of the second wave in the U.S. In 2021 U.S. imports from China should slow as the U.S. manufacturing recovers following the vaccination effort.  Also expect increased focus on the trade gap as U.S. trade policy continues to focus on closing the trade gap and continuing policy of the Trump administration. ...

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BBC News covers the opposition by business leaders in the U.S. to president Trump's decision to withdraw the U.S. from the Paris climate change agreement. Elon Musk of Tesla and Robert Iger of Disney say they will quit working on the president's advisory councils. Walmart, Apple, Google and other companies also opposed the move. Energy companies Exxon and Chevron also opposed the move. This reduces the business community's confidence in and support for the Trump administration. Some analysts see the Trump move as a way to satisfy the mood of his own election base of support among people who see the climate change accord as one more aspect of a rigged system of globalization, a theme Trump has used during his campaign in 2016. During the first 100 days many of the decisions Trump made took into account the views of business leaders from Boeing on the Export Import Bank, of Gary Cohn on tax reforms, of Wilbur Ross, the Commerce Secretary on NAFTA trade agreement. With the investigations in Congress underway the analysts see the move as political to shore up support with the Trump base. Yet it also brings with it the cost of losing support in the business community that has traditionally supported Republican presidents. ...

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This opinion in DW.com says Donald Trump has done exactly the opposite of what he said during the election campaign when he was severely critical of China on trade issues. This report cites the many statements in some detail made by Trump about China. During a recent visit to China he says president Trump seemed to go out of his way to show agreement with president Jinping, quite the reverse of what he said he would do during the election campaign. U.S. influence and prestige is seen as declining as a result of president Trump's policies.

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Following president Trump's decision to increase tariffs on $200 billion of Chinese goods on May 9, 2019, the WSJ looks at the mistakes made by both sides in misjudging each other's negotiating position. Mr. Trump says he is willing to increase the pressure on China by imposing tariffs on all Chinese imports into the U.S. after what he sees as China reneging on its commitments on trade by deleting key sections on enforcement provisions and Chinese legislation for enforcement to take place in the 150 page agreement prepared for both presidents to sign.  Early on in the negotiations between Liu He and Mr. Lighthizer, China misread the thinking on the U.S. side. Chinese thinking was that president Trump's urging for the Federal Reserve to lower rates was a perception sign of the weakening U.S. economy. It also may have misread the extent to which Mr. Trump trusts Mr. Robert Lighthizer, who Mr. Trump respects for winning a good deal with the Japanese in similar situation of Japanese rejection of U.S. demands. Mr. Trump also thinks the U.S. has a strong economy, is the largest world producer of oil, strong economic growth in the last quarter of 2018, is also negotiating better deals with other countries including the ones with Mexico, Canada and South Korea. It is also much less dependent on exports to China, giving it a stronger position with more experienced negotiators. China has whole sectors of its economy dependent on exports to the U.S., and crucial numbers of jobs at stake.  China also misread the signals from its stronger than expected economic growth from stimulus efforts in the last quarter, leading to it staking out a tougher position than the U.S. would accept. The U.S. position was set after decades of waiting for China to change and was unlikely to be affected by any temporary considerations.  As a result the U.S. not anticipating the Chinese response of deleting key sections agreed to in advance from the 150 page written agreement gave a strong response. Mr. Mnuchin who accompanied Lighthizer in talks says Mr. Lighthizer "read them the riot act" to the Chinese side. For the Chinese side the effort now shifted to continuing good faith talks without appearing to back down. ...

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Japan and the European Union announce a new trade agreement, in a response to the protectionist tone of the Trump administration in the U.S. The deal is announced at the time of G-20 meetings in Hamburg, Germany. The deal removes the 10% duty on Japanese car imports to the EU, and removes barriers to European automakers in Japan. Experts say the deal comes at a time when the European Union wanted to come up with a response to Brexit and Trump style protectionist sentiment. European automakers say they need assurances that they will have better access to the Japanese market.

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Mexico's GDP decreased slightly in each of the 4 quarters in 2019. GDP growth was 2.1% in 2018. Cancellation of some infrastructure projects and policy changes lead to lower private and public investment and decline in industrial production of 1.8% for 2019.  Foreign investment held steady at $33 billion and the passage of the new North American trade agreement signed by president Trump is expected to lead to better growth in 2020.

Under Mr. Obrador revision of energy contracts, and cancellation of some projects due to budget constraints, led to decline in public and private investment of 5.1% through November 2019. 

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For the first time a senior figure in Beijing tells why China rejected a U.S. offer for a deal in May 2019. Mr. Trump said at the time that China withdrew its agreement on the deal after initially agreeing to it, creating a lack of trust. 

Senior economic official Li Deshiu says "it was a wholly unfair treaty that seeks to colonize China's economy. If this is accepted it is giving up China's development path, giving up China's rights for development, and making China a vassal of the U.S."

He says the trade war is a broader U.S. strategy to limit China's development in key industries. This is the Chinese perspective on the situation which was not stated in clear terms but alluded to till now.

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Hamburg is the key city in Germany's trade with China. About half of $200 billion in trade between Germany and China passes through the port of Hamburg. The South China Morning Post looks at the dilemma in Hamburg over relations with China in the post Merkel era. Merkel maintained strong and close ties with China signing an agreement with China her last year in office. This was when Mr. Trump was US president. Since then president Biden has changed US policy towards Europe. The South China Morning Post points out that The Greens and the FDP key partners of Scholz in a new coalition government, are critical of Merkel's policy towards China in its overall relationship with the US and the rest of the world. Scholz was mayor of Hamburg, and a partner in Merkel's coalition government in which he was vice chancellor. Scholz has talked very little on what the new German policy would be. China seeks to maintain its economic ties in the next few years with Germany while reducing its dependence on other countries under Xi Jinping's new vision for China that seeks to depend less on trade and real estate for its economy and growth. Yet the pace of change has accelerated during the pandemic with a new global supply chain emerging from the chaotic years of 2020-2021. US policy under president Biden is similar to policies under Franklin Roosevelt in the 1930's during the economic and political crises, and look to be setting a new path to the future for the rest of the world. ...

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The U.S. trade agreement with Mexico is for 16 years, to provide business with a stable rules environment to operate in. It includes a clause for review after 6 years. The content made in the U.S. is increased to 70% from 62.5%. This has to be made by workers earning at least $16  an hour. Aluminium and steel going into the cars has to come from the U.S. helping push U.S. steel plant capacity utilization to 80%. Labor collective bargaining is strengthened in Mexico through new provisions, a provision supported by new Mexican socialist president Obrador. Free trade in agricultural products is maintained. $4.7 billion was added in help to U.S. farmers as aid for the effects of China's tariff retaliation. New rules are set for textiles, chemicals, and steel intensive products that set requirements to qualify for tariff free import into the U.S. This is intended to help bring more jobs and investment in these industries in the U.S.     ...

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The coronavirus is making implementation of the U.S. China trade deal less likely as Chinese imports from the U.S. decrease and China's exports continue to grow. China's exports to U.S. decreased by $60 billion but increased to other countries by $70 billion in 2019.

As a result the Trump administration is shifting its focus to another approach. The new multilateral approach is to combine the effort with allies Australia, India, Japan, South Korea, Taiwan, and France. This would take the shape of a Comprehensive and Progressive Agreement for Trans-Pacific Partnership to replace the old Obama period Trans Pacific Partnership which becomes defunct. The goal would be to build new supply chains with allies in Asia outside of China with the help of France and other countries that are wary of excessive dependence on China and have deep reservations of China's handling of the coronavirus outbreak.

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Greg Ip points out in this WSJ analysis that the new NAFTA after negotiations and warnings from Mr. Trump to scrap NAFTA, is not very different from the old NAFTA. Mexico made concessions on auto exports and labor rights, wages. Canada made concessions for the dairy industry. Yet the combined influence of business interests, Canada's lobbying in U.S. Congress and state governments, and the restraint shown by Trump's own advisers prevailed in limiting Mr. Trump's tendencies to go for a "America first" agenda. It shows, says Ip, that there is resilience in the existing order.  It also shows what future trade negotiations with the European Union and Japan over steel and autos could look like. President Trump will continue to face resistance within from his advisers and from exporters, business, Congress, on following an exclusively "America First" agenda. President Trump will need to extol NAFTA in its current version the USMCA, U.S. Mexico Canada Agreement, to get it through the U.S. Congress in 2019.   Mexico's main concessions on autos were to agree to potential tariffs if exports exceed 2.6 million vehicles.  This keeps Mexico's status as a major auto export hub intact. Auto experts say VW and Mazda may simply pay the tariff of 2.5% for lower priced models assembled in Mexico that do not qualify for duty free entry instead of shifting production to the U.S. Current shipments from Mexico are not affected as U.S. demand is weak. Labor rights and higher wages in Mexico's auto industry are a win-win for Mexico and the U.S.. They are supported by the socialist administration of newly elected Mexican president Obrador. Canada's main concession was to expand U.S. access to Canada's protected dairy industry, with Canada already prepared to make the concession. Mr. Trump had also to consider the possibility that excluding Canada from the USMCA would have not passed Congress, and face even more resistance in a Democratic controlled Congress after 2019 elections.  The support Canada has received in Congress does not extend to China, which gets much less support in Congress, leading to higher uncertainty in the negotiations with China and possibly different outcome with the size of the trade imbalance of $1 billion a day factored in.   ...

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The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...

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Japan's car exports have grown in the last six years to double what they were before, growing to $40 billion. This includes a jump in export of SUV's vehicles. Just in the first quarter of 2018 the export of automobiles from Japan to U.S. is up by 10%. Japan is not keen on talking about this issue. President Trump is looking at negotiating a one on one trade deal with Japan instead of through the TPP agreement. as this is seen as a better way to address a $60 billion trade deficit. TPP is not a solution for the U.S. imbalance in trade with Japan as Japan already has no tariffs on imported cars. Yet other barriers exist that make it difficult for U.S. automakers. Ford exited Japan in 2016 and the U.S. has only 1% of the Japanese market. Japanese buyers stay away from American cars and prefer the smaller highly fuel efficient cars made in Japan by Japanese automakers. Perception of buying home made also exist. Other barriers also exist such as zoning and for setting up dealerships, unique safety standards. Japanese automakers make most of the sedans in the U.S. but export the SUV's from Japan. ...

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During the primaries Trump appealed to blue collar voters of a white working class that felt neglected by leaders and policies of both parties that did not seem to work for ordinary people. Having caught onto this early long before Republican candidates, Trump registered a series of wins in the Republican primaries. He continued this theme in his acceptance speech at the Republican National Convention on July 21, 2016, saying- "The forgotten men and women of our country- people who work but no longer have a voice: I am your voice." The idea was to couple this with the theme of law and order and put perception of Hillary Clinton as part of the rigged system of the past that Trump would change, with Clinton's legacy described in terms of "death, destruction, terrorism and weakness." As a change agent Trump described his entering the political arena in terms of coming into this election only to help blue collar people "so that the powerful can no longer beat up on people that cannot defend themselves." The two themes for the rest of the election season- law and order, and blue collar lives- and who can best defend them a traditional Democratic politician with a fighting spirit for traditional Democratic values, or a blustery newcomer adept with slogans and the public mood and ironically representing the Democratic values of representing the working class to become the  Republican nominee, with the law and order theme thrown in. The voter or independent listening in to all this will hopefully ask what all this means. As the WSJ, July 19, 2016, pointed out in a recent look at economc policies under the two candidates- on Glass Steagall Act being reinstated to increase safety of the banking system that caused many of today's problems through the 2008 financial crisis both Trump and Clinton are similiar, on opposing trade agreements similiar except that Trump's bluster is a riskier approach, on infrastructure building similiar with Clinton's $275 billion plan spelled out out for source of financing and Trump's unclear as to source of financing. On immigration the candidates are different, on the minimum wage which impacts low income people Clinton supports $15 minimum wage and Trump has not taken a stand. On ISIS and the Middle East Clinton is in reality a hawk and not much difference in the candidates, on law and order more chance of divisions in the country with Trump than Clinton. Overall for the working class and blue collar voter his life will take a decade or more to rebuild, with both candidates commiting to go in that direction. And the bluster and ads to come- just that.  ...

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Xi Jinping, president of China says at the Davos Forum that world leaders should "join hands and rise to the challenge" from protectionism coming from the new U.S. administration. He called on world leaders to support the Paris climate accords- "to stick to it instead of walking away from it."

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Nathaniel Taplin of the WSJ says the tariffs put on $50 billion high tech products by the U.S. and retaliatory tariffs on $50 billion products are not about a trade war but a way both countries will negotiate setting out their two positions.  A look at the role of foreign firms in China shows China has access to new technology using these firms as a conduit and these firms are also generating more jobs, being highly productive. These firms Taplin says will set back their investments if no agreement is reached or if it is harder to bring Chinese made products into the U.S. At this time China badly needs this investment and technology access because of their dynamism compared to inefficient state run firms as it struggles under a massive debt load with very high debt to GDP ratio.  A major issue is job growth as companies getting foreign investment are much more effective in jobs generation, delivering 10% of all urban job growth from 2007 to 2016, using just 5.5% of total investment. Return on assets at 9% compares to 4% at state run firms. If this dynamism is reduced or affected in some way China could have to provide more unproductive debt buildup stimulus.  For these reasons China has good reason to make concessions, says Taplin. Trump administration will ask for greater semiconductor purchases, much looser joint venture or foreign ownership requirements, higher Chinese payment for U.S. intellectual property. For all these reasons this is not about a trade war but about serious negotiations taking place so that there is a level playing field in the next phase of competition in high tech between the U.S., China and the E.U. changing the dynamics of the trade relationship in ways that reverse the trends of the past. ...

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This article in Zeit Online emphasizes that the deep sense of unease and anxiety about the future among working class white people is behind the shift in American politics. This shift has a lot to do with the basic identity of the U.S., the borders, and  the ability to generate decent jobs at decent wages. The populous states of the midwest in Pennsylvania, Michigan and Wisconsin helped tilt the outcome to Trump. It is pointed out that this shift is not simply a result of tax breaks for wealthy people and corporations. It goes a lot deeper than that- a growing anxiety about identity, borders and decent wages with decent jobs is what worries non college educated people who make up a larger proportion of voters in some midwestern and eastern states. Democrats also put themselves in an unsustainable position by pushing trade agreements such as TPP as an Obama legacy- even in the face of strong evidence that core working class Democratic voters, unions, and other working class groups had fervently opposed it. It is not that there are fewer liberals today- about 21% in 2012 and the same in 2016. Simply that the anxiety was too high about issues such as borders, identity, and manufacturing jobs that Democrats lost sight of. ...