Economics News

"Both sides are finding out that trade wars are painful," says Mary Lovely, professor of economics. "The Chinese economy is slowing. ...Foreign investment into the U.S. is down, and there is concern about domestic investment moving forward."

Mary Lovely, professor of economics, notes that some Chinese goods have no alternative sourcing, and even when workarounds from other countries are available, they are often not perfect substitutes and lead to higher pricing for U.S. companies.

Michael Wasylenko, Maxwell Advisory Board Professor of Economics, recently spoke at the Citizens Budget Commission conference on economic issues facing New York state. According to him, whose statements were featured on the GlobeSt.com article, stated that economic development programs require sustained support with horizons of 20 years

"It’s not going to put any of these banks in a good place to have these two big countries duking it out in the midst of their lending programmes," says Mary Lovely, professor of economics.

According to Mary Lovely, professor of economics, the decline in imports subject to tariffs could also be due to a slowdown in frontloading, or companies rushing orders to avoid duties.

Professor of Economics Mary Lovely argues that Trump’s trade actions "are a prime example of 20th-century tools aimed at the knowledge-embodying trade flows of the 21st century."

"People who shop at Walmart or Target are going to be hit harder than people who buy their toaster ovens from Williams Sonoma or can afford to get products from a higher-income country," says Mary Lovely, professor of economics.

"Trade policy does have an impact because it raised costs significantly for steel and aluminum, and the industry told Trump it would do that," says Mary Lovely, professor of economics. "They already weren’t able to sell enough vehicles to keep these lines productive and raising costs by a billion dollars? It doesn’t help."

According to Mary Lovely, professor of economics, the rules around Made in America labeling can be confusing, and companies can violate them without realizing it. "There are rules, and companies—even if they’re trying to abide by them—may find them complicated, so issuing a cease and desist, it might not be unreasonable."

"The president looks at this [foreign tariffs] and says it's coming from foreigners," says Mary Lovely, professor of economics. "That's not technically correct. I mean, I go to Macy's and pay a sales tax. Macy's is the one that sends the check to the government, but that doesn't mean they're the ones that pay the tax. I am."

"So there's a great deal of uncertainty and firms are really in doubt as to what they should do because moving the supply chain is costly. Before you want to do that, you want to make sure that it's something that you really need to do," says Mary Lovely. professor of economics.

"I do think we can see a strategy, but that doesn’t mean it’s a good strategy,” says Mary Lovely, professor of economics. "They’re going to use these bilateral deals to strong-arm countries into lining up behind the U.S. on China. But when we get there, what’s the next step? I don’t know what the endgame is."

"Unfortunately, I believe it may do little to expand employment in the auto sector and will hurt auto buyers," says Mary Lovely, professor of economics. "The new rules raise the cost of production in North America, raise prices for auto buyers, and reduce overall auto and truck sales."

Mary Lovely, professor of economics, says the new U.S. trade deal with Canada is a "clear signal" that the U.S. is "circling the wagons against China."