BIZweek n°243 31 mai 2019
BIZweek n°243 31 mai 2019
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  • Parution : n°243 de 31 mai 2019

  • Périodicité : hebdomadaire

  • Editeur : Capital Publications Ltd

  • Format : (260 x 370) mm

  • Nombre de pages : 10

  • Taille du fichier PDF : 4,3 Mo

  • Dans ce numéro : l'Europe a la gueule de bois.

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VENDREDI 31 MAI 2019 BIZWEEK ÉDITION 243 AUTHORS EUGENIO CERUTTI - Assistant to the Director at the Research Department of the International Monetary Fund (IMF) GITA GOPINATH - Economic Counsellor and Director of the Research Department at the IMF ADIL MOHOMMAD - Economist in the Research Department of the IMF IMF BLOG POST SCRIPTUM The Impact of US-China Trade Tensions US-China trade tensions have negatively affected consumers as wellas many producers in both countries. The tariffs have reduced trade between the US and China, but the bilateral trade deficit remains broadly unchanged While the impact on global growth is relatively modest at this time, the latest escalation could significantly dent business and financial market sentiment, disrupt global supply chains, and jeopardize the projected recovery in global growth in 2019. Evolution of trade in the US and China The raising of US tariffs to 25 percent on $200 billion of annual Chinese imports on May 10, together with the announced Chinese retaliation, marks the latest escalation in the US–China trade tensions. The impact of previously imposed tariffs by the US and subsequent retaliation by China is already evident in trade data. Both the countries directly involved and their trading partners have been affected by rising tariffs. In 2018, the US imposed tariffs sequentially on three « lists » of goods from China, targeting first $34 billion of annual imports, then $16 billion more, and finally an additional $200 billion. As a result, US imports from China have declined quite sharply in all three groups of the goods on which tariffs were imposed. In cases where there was a delay between announcement and implementation of tariffs, as in the case of the $16 billion and $200 billion lists, or plans to phase in the tariff increase, as in the case of the $200 billion list, we observed an increase in import growth in advance of the effective dates. This suggests that importers stockedup ahead of the tariffs, accounting for the sharper decline in imports thereafter. As China imposed retaliatory tariffs, US exports to China also declined. While the front-loading dynamic is not evident in this case, US export growth to China has been generally weaker since the trade tensions began. Effects on consumers Consumers in the US and China are unequivocally the losers from trade tensions. Research by Cavallo, Gopinath, Neiman and Tang, using price data from the Bureau of Labor Statistics on imports from China, finds that tariff revenue collected has been borne almost entirely by US importers. There was almost no change in the (ex-tariff) border prices of imports from China, and a sharp jump in the post-tariff import prices matching the magnitude of the tariff. Some of these tariffs have been passed on to US consumers, like those on washing machines, while others have been absorbed by importing firms through lower profit margins. A further increase in tariffs will likely be similarly passed through to consumers. While the direct effect on inflation may be small, it could lead to broader effects through an increase in the prices of domestic competitors. Effect on producers The effect on producers is more mixed, with some winners and many losers. Some US and Chinese producers of goods competing in domestic markets with imports affected by tariffs, as wellas competing third country exporters, are potential winners. However, US and Chinese producers of the goods affected by the tariffs as wellas producers that use those goods as intermediate inputs, are potential losers. Trade diversion is one channel through which producers are affected. Aggregated bilateral US data does suggest that trade diversion has occurred, as the decline in imports from China appears to have been offset by an increase in imports from other countries. For example, US imports from Mexico increased significantly among some goods on which the US imposed tariffs. After the $16 billion list was implemented in August, a sharp decline of nearly $850 million in imports from China was almost offset by about $850 million increase from Mexico, leaving overall US imports broadly unchanged. For other countries such as Japan, Korea and Canada, one can observe smaller increases in US imports relative to the levels in September-November 2017. Of course, aggregate data could be masking other factors driving the bilateral trade patterns, such as the use of inventories. For example, there was little or no change in imports from third countries in the case of photosensitive semiconductor devices. The other channel by which producers could be affected is through market segmentation in the price of traded goods. This was most clearly observed in the case of soybeans, where US exports to China fell dramatically in 2018 after China imposed tariffs. The United States was China’s dominant soybean supplier, along with Brazil, in 2017. With the tariffs, the price of US soybeans fell while that of Brazilian soybeans increased, as US exports to China dropped to near zero and Brazilian exports to China trended higher. Though prices have since re-converged and soybean exports to China have resumedto some extent, US soybean farmers suffered, while those in Brazil benefited from trade diversion and market segmentation. The impact on US producers with significant exposure to Chinese markets was also captured in stock market valuations. For instance, the equity price performance of US companies with high sales to China underperformedrelative to US businesses exposed to other international markets, after tariffs linked to the $34 billion retaliation list by China were implemented. The gap narrowed at the beginning of 2019 with the trade truce. But it reopened again after the US tariff increase to 25 percent on the $200 billion list was announced on Twitter. Macroeconomic effects The ratchetingup of bilateral tariffs between the US and China has had limited effect on their bilateral trade balance. In fact, in 2018, the trade deficit increased for the US as imports from China rose, which partly reflects the front-loading. As of March 2019, a small decline can be observed, but US exports to China are also falling. Indeed, macroeconomic factors—including relative aggregate demand and supply in partner countries and their underlying drivers—play a much bigger role than tariffs in determining bilateral trade balances. At the global level, the additional impact of the recently announced and envisaged new US-China tariffs, expected to extend to all trade between those countries, will subtract about 0.3 percent of global GDP in the short term, with half stemming from business and market confidence effects. The IMF’s forthcoming G-20 Surveillance Note in early June will provide further details. These effects, while relatively modest at this time, come on top of tariffs already implemented in 2018. Moreover, failure to resolve trade differences and further escalation in other areas, such as the auto industry, which would cover several countries, could further dent business and financial market sentiment, negatively impact emerging market bond spreads and currencies, and slow investment and trade. In addition, higher trade barriers would disrupt global supply chains and slow the spread of new technologies, ultimately lowering global productivity and welfare. More import restrictions would also make tradable consumer goods less affordable, harming low-income households disproportionately. This type of scenario is among the reasons why we referred to 2019 as a delicate year for the global economy. 6
VENDREDI 31 MAI 2019 BIZWEEK ÉDITION 243 OPINION JEAN PIERRE LENOIR Jean Pierre Lenoir P O S T S C R I P T U M 11 POST SCRIPTUM LETTRE D’ITALIE L’Europe a la gueule de bois... De là ou je suis, dans une ferme Toscane, rien ne semble avoir changé dans cette Italie qui a voté à 35% pour les partis populistes. Les moutons broutent toujours avec la même tranquillité tandis que le fermier vient m’apporter les œufs de ses poules pour une belle omelette... Omelette ! Voilà le terme qui semble bien convenir à cette Europe qui a tellement brouillé ses œufs que certains veulent maintenant qu’ils restent dans leurs propres paniers au lieu de continuer à les mélanger dans la tambouille bruxelloise... Il est vrai que le projet européen était très beau à son départ, en 1979, car il consistait à réunir derrière la locomotive de Bruxelles choisi pour ficeler l’attelage européen, les pays du Nord victimes du totalitarisme soviétique et les anciennes dictatures fascisantes du Sud, Italie, Grèce, Espagne et Portugal. Puis, l’attrait d’une plus large Europe aidant, la locomotive se mit à tirer d’autres wagons plus petits, et makes searching simple surtout différents de leurs grands frères du Nord. Quarante ans plus tard, le wagon des 27 n’a pas encore déraillé, mais donne de sérieux signes d’essoufflement. C’est qu’aujourd’hui plus personne ne semble comprendre à quelle gare il veut s’arrêter. Prévues pour envoyer au Parlement européen de nouveaux équipiers, les élections dans les différents pays se sont transformées en joutes électorales nationales qui ont fait la part belle aux adversaires de l’Europe actuelle. Les deux vrais problèmes auxquels ont à faire face aujourd’hui les 27 pays européens, c’est d’abord cette immigration sauvage que certains n’hésitent plus à considérer comme une invasion en règle. Critiqués depuis leur mise en place en 1985, les accords de Schengen sensés établir des frontières sur le pourtour européen ont été de vraies passoires qui ont permis l’immigration illégale que l’on sait. Devant la panique généralisée au sein de l’Union, plusieurs pays européens ont établi leurs propres frontières pour mettre de l’ordre là où Bruxelles a failli. Certes, tout récemment le Parlement européen a décidé et annoncé que le fonctionnement de protection de l’espace européen allait être revu et renforcé, mais beaucoup pensent ici qu’il est déjà trop tard. Victoires des populistes Le deuxième problème auquel font face depuis longtemps ces mêmes pays de l’union concerne le fonctionnement des institutions qui aboutit à une complication extrême sur le plan national et communautaire. Des mesures proposées par la commission, et votées par elle, ne sont souvent pas appliqué sur le terrain, car certains États pensent que leur bras est souvent tordu par la Commission qui fait alors marche arrière. Sans compter l’extrême complication des directives bruxelloises qui donnent des cheveux blancs à ceux qui sont chargés de les appliquer. C’est donc dans une ambiance plus ou moins morose que les tenants de l’Europe fédéraliste se sont lancés dans cette consultation, alors qu’en face les partisans d’une nouvelle Europe des Nations avaient, d’une certaine façon, le vent en poupe puisque un peu partout les populistes ont enregistré des progressions spectaculaires et des victoires (France, Italie et Hongrie) sur leurs adversaires européistes. Tout cela dit, et malgré les gains importants des populistes, l’équilibre au Parlement européen ne sera pas rompu. Mais l’écurie pro-européenne a senti le vent du boulet. Il faudra qu’elle sorte de ses contradictions, qu’elle se libère de l’énorme poids de la Commission et qu’elle redonne un message d’espoir lucide et cohérent si elle ne veut pas que le rêve, commencé en 1979, ne se transforme demain en cauchemar, et que tout s’écroule finalement comme un château de cartes dans les années à venir... Official online directory of Mauritius Telecom Business People 7

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