Wednesday , April 1 2020
Home / Mish's Global Economic / China Will Struggle to Honor Trade Commitments

China Will Struggle to Honor Trade Commitments

Summary:
The U.S. government expects China to honor its commitments to buy more U.S. goods under a trade deal signed by the world’s two largest economies in January despite the fast-spreading coronavirus outbreak, a senior U.S. official said on Thursday. China’s commerce ministry on Friday said January and February exports and imports would be hit by the coronavirus outbreak, but foreign companies in most places would resume production by the end of February. Under the deal, which took effect this month, China pledged to increase U.S. goods purchases by billion in 2020 and by 3 billion by 2021, compared with a baseline of U.S. imports from 2017, the year before the U.S.-China tariff war began. Experts had expressed skepticism that China would be able to meet such aggressive purchase

Topics:
Mike Shedlock considers the following as important:

This could be interesting, too:

Mike Shedlock writes What Happens to Companies Eliminating Dividends?

Mike Shedlock writes No WSJ, Gold is Not the New Unobtanium: Where to Buy?

Mike Shedlock writes Nightmare at Sea: Aircraft Carrier Needs Help as Social Distancing Impossible

Mike Shedlock writes How Did the Coronavirus Impact Homebuyer Sentiment?

The U.S. government expects China to honor its commitments to buy more U.S. goods under a trade deal signed by the world’s two largest economies in January despite the fast-spreading coronavirus outbreak, a senior U.S. official said on Thursday.

China’s commerce ministry on Friday said January and February exports and imports would be hit by the coronavirus outbreak, but foreign companies in most places would resume production by the end of February.

Under the deal, which took effect this month, China pledged to increase U.S. goods purchases by $77 billion in 2020 and by $123 billion by 2021, compared with a baseline of U.S. imports from 2017, the year before the U.S.-China tariff war began.

Experts had expressed skepticism that China would be able to meet such aggressive purchase commitments even before the coronavirus emerged, while reports of new cases in China and elsewhere have further intensified fears over its impact on the global economy.

But the Global Times newspaper, which often speaks for the Chinese government, reported on Thursday that China was likely to buy 10 million tons of U.S. liquefied natural gas despite a gas glut.

I am standing in line with the skeptics.

And color me skeptical on that production resumption as well.

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Leave a Reply

Your email address will not be published. Required fields are marked *