Trump says the Fed should cut rates so the US could pay down its $23 trillion debt

President Donald Trump proposed to the Federal Reserve to lower interest rates with the goal of lowering the $23 trillion debt the US has incurred. He believes that the US' lending rates aren't competitive with other global markets. He believes we're two years late to begin this policy since inflation hasn't risen during that time. The current benchmark that the Fed sets is between 1.5-1.75%. He still complains about high rates even though they've lowered them 3 times this last year. During Trump's administration the national debt has risen to $23 trillion, a 16.4% increase. This is an example of an economic policy from class. Do you agree with Trump's proposal to lower interest rates more than they are now?

https://www.cnbc.com/2020/01/28/trump-says-the-fed-should-cut-rates-so-the-us-could-then-focus-on-paying-off-refinancing-debt.html

Coronavirus Impact on Wall Street

An article published by Jeffry Bartash of Market Watch on the first of February, 2020, suggests the damages that will be inflicted on Wall Street by the spread of the Coronavirus in China and other parts of the world. Bartash starts by explaining that the fear factor of the virus alone has already had a negative impact on the stock market. The Dow Jones Industrial Average, or DJIA, decreased 600 points on Friday. The impacts on the U.S. that are already present include flight suspensions and the temporary shutdown of U.S. companies in China. However, these impacts are likely to grow because of the status that China has in the world. China is home to the second largest economy and one fifth of global GDP, along with being the largest center of manufacturing in the world. It is also one of the largest trading partners of the U.S. and a decrease of good and services leaving China would greatly harm U.S. economy. Bartash also predicts a .5% decrease in U.S. GDP during 2020.

I agree with Bartash's argument that the U.S.'s economy will suffer throughout the coming year. Not only will the Coronavirus's impact on China harm the U.S., but the countries in which the virus is spreading will also have an impact. Tourism to China and neighboring countries from the U.S. will decrease, along with tourism to the U.S. from China. This will decrease revenue for both countries. The World Health Agency has declared the virus an international emergency, but it will also have a strong impact on economies.

https://www.marketwatch.com/story/coronavirus-spreads-damage-to-wall-street-could-the-us-economy-be-next-2020-02-01

Wilbur Ross Says Coronavirus Could Bring Jobs Back to the U.S.

The recent trade war has been used to help bring jobs back to the US. Wilbur Ross says that the Coronavirus could assist in these efforts. While the Coronavirus is a horrible epidemic mainly occurring in China, it will make companies reconsider where they want to locate their operations. He also cited that in the past, the SARS outbreak and the African Swine Fever, which both occurred in China, help prove the risk associated with operating in China. These are all risks that companies will have to take on if they want to operate in China. While jobs are already returning to the US, Wilbur Ross believes that the Coronavirus will help accelerate this change.

I believe that Wilbur Ross makes a good point to mention the amount of risk involved with operating in China. Having this risk, in addition to the tariffs implemented by the Trump administration, will cause more companies to move there operations back to the US, and new companies will be more willing to keep there operations in the US. Do you think the Coronavirus could have a positive impact on the US economy in the future due to the points Wilbur Ross has made?


https://www.nytimes.com/2020/01/30/business/economy/wilbur-ross-coronavirus-jobs.html

European Economic Growth Slows Almost to Zero

Recent economic figures, from the European Union, have shown that the European economy is stagnating and in danger of falling into a recession. Specifically, these figures show “the 28 countries in the European Union growing by only 0.1 percent during the last three months of 2019.” The article notes that several economic and political factors have played an important role in this economic stagnation. Some of these factors include Brexit, widespread transportation strikes in France, and declining world trade. Also, the author notes that the threat of the coronavirus is another unknown and may have negative effects on the European economy as a whole.

https://www.nytimes.com/2020/01/31/business/economy/european-union-eurozone-economy.html

Is the UK Leaving a Defeat for the EU

With Britain's recent departure from the European Union it comes into question how the two parties will be affected. In the article titled A Texas-Size Defeat for the EU: Brexit is Here, the author compares the separation to Texas leaving the United States. While the article mainly focuses on the European Unions side of things it's noted that both parties are in for troubles. The European Union hopes that it can maintain a close relationship with Britain but a lot of internal factors need to be handled as well. 

Economically, Britain was the leading economy for the European Union, with their departure there is fear that the other strong nations such as Germany and France will be unable to keep the regional unit afloat without the help of the United Kingdom. It also comes into question how trade will be handled between the two now given that the European Union has made up around 50% of the United Kingdoms imports and exports during their time in the EU. Finally politics come into play, the United Kingdom held a large amount of pull when it came to decisions in the European Union and without them there is a  noted fear that tensions between other member countries may rise due to the United Kingdom no longer playing an intermediary. The one thing that is positive for the European Union is that there is little to no fear that other member countries are going to be leaving the EU any time soon. The United Kingdoms separation from the EU was nothing less of an internal struggle for Britain and this has led other member countries to see it as much more of a hassle then a way out at the time being. Only time will tell the fate of these two but until they both find an equilibrium internally, their relationships with each other may be strained. 
https://www.nytimes.com/2020/01/29/world/europe/brexit-brussels-eu.html?searchResultPosition=1

Trump Just Signed the U.S.M.C.A. Here’s What’s in the New NAFTA.

President Trump has finally signed the new trade agreement between the United State's foreign neighbors, Mexico and Canada. The United States-Mexico-Canada Agreement, or the USMCA, was set in place to overturn the North American Fair Trade Agree, or NAFTA. The USMCA is more so revision of this 25 year old year old foreign trade agreement. The Trump administration classifies this agree as a hug win for themselves. Some of the biggest changes of the agreement impact the dairy and automobile industries. Under the USMCA, Canada has increased trade further with the American dairy industry by opening up trade in products such as milk and cheese. Regarding the automobile industry, companies manufacturing cars now much have at least 75% of the parts in the automobile sourced from either Canada, the US, or Mexico to qualify for zero tariffs. This number was only around 62% under NAFTA. The USMCA is set to be reviewed every 6 years, and if one of the three countries decides to pull away from the agreement, the USMCA will be repealed after 16 years. Do you think the USMCA is an improvement from NAFTA? Will the USMCA have more success the its predecessor trade agreement?


https://www.nytimes.com/2020/01/29/business/economy/usmca-deal.html

Trade War With China

The ongoing trade war with China has not been easy to fix. It is as well, difficult to be able to tell what president Trump plans to do, and what he will do. According to the article, Mr. Trump said his plan was to take all American companies out of China, but looking from an economic perspective, this would not be the best idea. One of our biggest trade partners is China, and with the planned rising tariffs, the domestic prices of goods will increase significantly. On top of that, China is beginning to trade more with other countries in order to replace what we are costing them. This will have a negative downturn on the U.S. economy in the long run. As proven in economics before, trade allows us to reach a potential of efficiency and production much higher than we would on our own without trade. Trump shortly after his statement took it back by saying he only wishes he imposed even higher tariffs sooner. The article states "..American leverage in the trade war is weakened by the president's failure to work with allies in a concerted approach to change China's course." Going off of this, they are right by saying this has had a negative impact because this trade dispute has impacted U.S. allies like Germany.

It appears that president Trump keeps changing his mind and/or perspective on his decisions and his thinking. This has been shown through numerous Twitter posts he has had about what he may or may not do in order to end or win this trade war. With the confusion back-and-forth, it is difficult to tell what will happen in the future regarding this trade war with China. It will be interesting to see how this will also affect prices and other allies of the U.S. as well as China. What do you think the best step forward would be?

https://www.nytimes.com/2019/08/25/world/europe/trump-offers-contradictory-signals-on-china-trade-war.html

Policymakers fret over risk to global growth from China virus outbreak

Many policymakers have spoken out about how China's virus outbreak could effect the global economy. Jerome Powell, the U.S. Fed Reserve Chair, held a conference on Wednesday, highlighting keys facts about he virus. He explained that if China's economy slows down, it will affect the U.S. economy as well as many other countries that are in connections with China.

Even though many policymakers have spoken out about the outbreak, The International Monetary Fund is being more cautious about the matter, and has explained that it is too early to tell the effects it will have on the economy. 

I think that the slow down of the U.S. economy, along with the global economy, will all depend on how quickly the outbreak is contained.

People are also comparing this outbreak to the 2002-2003 SARS (Severe Acute Respiratory Syndrome) which ended up leading to around 800 deaths. 

Many people are saying that the global economy will be hit harder this time around seeing as China accounts for a larger share of the world economy? Would you agree with this statement? Why or why not?

https://www.reuters.com/article/us-china-health-global-economy/coronavirus-outbreak-poses-risk-to-u-s-feds-economic-outlook-idUSKBN1ZS38E

Despite a Truce, US-EU Trade Relations are Still Tense

Recently, there was a tense meeting at the World Economic forum in Davos, Switzerland, and at center stage was a potential dispute between France and the United States. The US (specifically President Trump) expressed their displeasure over France's recent tax on digital services, affecting mainly US companies like Amazon, Facebook, and Google. The United States planned a response with $2.4 billion in potential taxes on French champagne and other luxuries.

This was all resolved on January 19th, with a truce of sorts between the two countries cancelling any taxes or tariffs between each other. But this did not stop any further issues. The US pressured the British government that any similar digital tax that was proposed similar to the French would not go unpunished. Britain then announced they would negotiate trade talks with the European Union before the States. With deals to formalize with China, and then Canada and Mexico, it is interesting to wonder how free these trade deals are with the leverage the American government has been attempting to use for their own benefit.

 https://www.economist.com/finance-and-economics/2020/01/25/despite-a-truce-us-eu-trade-relations-are-still-tense

U.S. 2019 GDP was Slowest Growth in 3 Years

Reporter, Jeff Cox, analyzed the percentages of growth of the the past three years and the main contributors that have caused these fluctuations between them. In 2019,the U.S. fourth quarter GDP only rose 2.1%. Overall, 2019 had only 2.3% of growth which is the slowest it has been since 2016. It has been reported that this is directly due to lack of business investments and is a consequence of the major trade war with China. Due to the trade war, imports fell 8.7%. Not only has the trade war impacted imports but it has severely impacted private domestic investment. Investments fell 6.1% this past quarter which is a huge difference from the 1% it dropped the previous quarter. To think things couldn't get any worse, the national debt is now past $23 trillion. Trump has been pushing for Jerome Powell to cut interest rates in order to help pacify the debt but can that really help in the long run? 

https://www.cnbc.com/2020/01/30/us-gdp-q4-2019-first-reading.html

Stocks Fall As Global Fears Of Coronavirus

Officials have confirmed nearly 2,890 cases of the deadly virus around the world, including five in the U.S Stocks fell Monday as concerns surrounding spread of the deadly coronavirus triggered fear around the globe. The Dow Jones Industrial Average fell 384 points, 1.32%. Monday and the S&P 500 dropped 43 points or 1.3%. The Nasdaq composite also slid, falling 145 points, or 1.56%, as deaths from the coronavirus climbed to at least 80. 

Health officials have confirmed nearly 2,890 cases of the virus around the world, including five in the U.S. across four states. At its lowest level since October, the yield on the 10-year U.S. Treasury fell as much as 1.61% on Monday.As fears rise, tourism is taking a hit and airline stocks United and Delta tumbled nearly 4%, while American slid 5.3%. Travel stocks Expedia and Marriott International dropped 2.3% and 1.6% respectively.Consumer stocks with exposure in China, including Apple and Nike dipped 2.35% and 1.5%, respectively.

As the virus throws global stocks into a state of fluctuation, Will this have a further shock in the stock market due to the scale of the problem? 

https://www.usnews.com/news/economy/articles/2020-01-27/stocks-fall-as-global-fears-of-coronavirus-rise 

China’s Slowing Growth Underlines Stress Facing Its Economy in 2020 

According to the article posted by the Wall Street Journal on January 17, 2020, 

the authors James T. Areddy and Chao Deng try to prove China’s economy has lost 

business confidence because China’s GDP growth decreased from 6.6% in 2018 to 6. 

1% in 2019. Additionally, some private-sector economists warn that China’s economy 

could slip even further this year to GDP growth below 6%. It is the lowest level in nearly 

three decades. Even China’s government policy for this year includes finalizing a 

decade-long push to double income levels and the size of the economy from 2010, 

while lifting living standards for a remaining five million people still considered severely 

impoverished. 

The two authors try to analyze and predict the whole of China’s economy based 

on the situation of the Shenzhen market. Shenzhen’s electronics makers were hurt by 

tariffs on their goods in the US, but also by the more cautious business appetite in other 

countries. Because of the trade war between the US and China, many investors and 

companies are more careful to make investments in China. There are a number of non- 

trade factors, too, including mass protests that roiled next-door Hong Kong for more 

than half a year, which drew attention to the risk of social unrest. Shenzhen’s celebrated 

technology companies like telecommunications-equipment maker Huawei Technology 

Co. and drone maker SZ DJI Technology Co. are facing new security from the US and 

other countries. 

In order to keep the headline growth figures up, China’s government has 

invested more in construction, which carries the risk of undoing the effort to limit debt. 

In Shenzhen, policymakers are pushing construction of a new district called Qianhai, 

pitching it as an experimental financial hub in the shadow of China’s increasingly 

unreliable financial hub, Hong Kong. At the same time, Shenzhen’s exports and 

consumption weakened, dragging down the city’s growth from a pace of 6.6% by the 

third quarter compared with 7.4% in the first half of 2019. The authors cite someone’s 

opinion: “if Shenzhen’s economy can’t survive, then forget about China’s,” to guess the 

whole country’s economic problem just based on one city. 

The authors overemphasize the decrease in the growth rate of GDP in China. 

Even as the growth rate of China’s GDP decreases, it still grows. There are lots of 

internal and external factors for the decrease in the growth rate of GDP. If China has a 

good deal with other countries, such as signing a deal marking a pause in the trade war 

with the US., the trade will recover. As technology keeps developing, 5G technology 

might recover some growth rate of GDP in China. The authors are very biased to 

conclude that China’s economy is slowing, just based on the situation of Shenzhen, 

which is just a single city in China. Even in China, there remain five million people who 

are still considered severely impoverished. China has 1.435 billion of people. Five 

million is only 0.35% of the whole population. By comparison, in the US, the rate is 11.8 

percent. The authors still want to use this evidence to prove China’s economy is 

weakening. 

Do you think China’s slowing GDP growth rate in recent years will have significant 

effects on China’s economy in the future? 

https://www.wsj.com/articles/chinas-economic-growth-slows-to-6-1-as-trade-and- 

business-confidence-suffer-11579236022?mod=searchresults&page=1&pos=2 

https://www.statista.com/statistics/200463/us-poverty-rate-since-1990/

The U.S. economy still isn’t firing on all cylinders. Here’s what needs to change

https://www.marketwatch.com/story/the-us-economy-still-isnt-firing-on-all-cylinders-heres-what-needs-to-change-2020-01-18

In the past few quarters the U.S economy has been slowing down, while also the consumer side has been the reason that GDP hasn't gone off a cliff. There has been an incredible amount of turmoil due to the trade war, and because of that other factors of GDP have slowed down, most notably investment. The recent trade deals may be helpful with investment but that is unlikely to actually help enough to get the economy "firing on all cylinders". Economists are still hopeful that with time that the economy will get back to what they think it can be at. What do you believe businesses will be doing in the upcoming quarters in terms of investment? And along with that, what do you think will be happening to consumer confidence if investment does increase/decrease?

China Poised to Buy More From U.S., at the Expense of U.S. Allies

As the United States and China have reached a temporary truce in their costly trade war, Beijing has agreed to buy $200 billion of American-made goods in over two years. Critics wonder how China can continue with its commitment to purchase a large quantity of goods from the United States over a short period of time. Simple, by reallocating orders that have gone to American allies (agriculture for Latin America and manufactured goods from Europe and East Asia) to American exporters and the Chinese government's ability to tell state-run companies to purchase more American goods.

But with the signing of Phase 1 deal between the two countries, American allies will soon face a loss of a substantial amount of business that they have enjoyed the past few years with China when they decreased imports of American goods and found other substitutes in Europe and Latin America. Other than the loss of China's giant consumer economy with the trade deal, American allies also dislike the continuation of the 25% tariffs the United States has on a wide range of Chinese-made goods subsidized by the government. The tariffs could divert the Chinese-made goods to Europe and other places when the allies would rather export their own goods instead of being flooded by Chinese alternatives.

Is the beginning of the U.S.-China trade agreement alleviating the battered global economy or is it undermining the international trading system?

https://www.nytimes.com/2020/01/23/business/economy/china-us-trade-deal-allies.html

World financial markets rocked by China coronavirus

https://www.theguardian.com/business/2020/jan/23/financial-markets-china-coronavirus-outbreak-economy


There is a new virus outbreak that started in one of China's booming car manufacturing city. With the growing concern over the spread of the virus, China is trying to contain the virus and shut down four other cities, and also banned travel during the Lunar New Year, where people are expected to travel across the country to celebrate with their friends and families. With this travel ban, people are now fearing that this virus would affect economic growth and slow down the economy. But, China has dealt with a similar situation before in the 2003 Sars virus outbreak, which caused an estimated decline in China's GDP growth between one and two percentage points. But, it's a different time now and China is a booming economic giant for countries worldwide. There was a strong recovery following the Sars outbreak and this gives hope to people that the coronavirus may also have little impact if it can be contained. According to some of the economists, if this virus is not contained, tourism, retail sales, and travel would be hit in the next few months.
Do you think this coronavirus could be contained and how big of an impact would this virus had on the world's economy?