In the first quarter, the U.S. trade deficit in manufactures rose by 4%, or $7 billion, compared with 2015. This is a big improvement from the 14% increase for calendar 2015, but still resulted in a trade-related loss of 50,000 American manufacturing jobs.
The following is a note in advance of a full report on the 2015 U.S. and China trade statistics from Ernie Preeg, Ph.D., senior advisor for internatiional trade and finance for the MAPI Foundation, the research affiliate of the Manufacturers Alliance for Producticity and Innovation.
Risk aversion, high unemployment, growth slowdowns, recessions, and geopolitical crises in key global economies are just a few of the factors holding back global growth. Overall, tighter financial conditions are leading to stock market corrections and a loss of confidence.
While there is no debating that China must engage in acceptable trade practices, the world must recognize significant shifts in the Chinese landscape. Far from just slowing, China is seeing changes to its growth composition and to its potential growth that might turn the economic policy focus more inward, although, without a doubt, China will remain a critical player on the global economic stage. A broad understanding of such shifts in the nation is needed for an optimal answer to the “China question.”
Last week, MAPI hosted a virtual roundtable for manufacturing executives to discuss escalating trade tensions with China. The discussion leader shared an overview of the impact that the recent tariffs have had on the U.S. economy and manufacturers specifically, what measures companies can take to mitigate risk, and an over/under on an all-out trade war. Some key insights are below.
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