Maxwell School News and Commentary

"As an economy develops, growth rates come down," says Mary Lovely, professor of economics. "Over the long term, we have seen China’s average growth rate decline, which is what we would expect."

"If differentiating the Huawei issue into trade and security strands makes it politically more palatable for the Trump administration to make a limited deal that lifts the ban on non-security related Huawei transactions, it is hard to see what the Chinese side stands to gain from not playing along," says Dimitar Gueorguiev, assistant professor of political science.

"Higher taxes on these goods are likely to be highly regressive, in that lower and middle class Americans spend a higher portion of their income on these Chinese imports than do higher income Americans," says Mary Lovely, professor of economics.

Yilin Hou, professor of public administration and international affairs, won a joint best research award from the Deng Ziji Foundation and the Journal of Trade and Finance Economics in China for a co-authored paper published in the journal. The paper provides evidence to advocate for a broad-base property tax in order to capture the capitalized value arising from improved public services.

"We’re going to see permanently higher prices because the system as a whole will be less efficient," says Professor of Economics Mary Lovely. "President Trump’s actions are cementing firms’ view that this is going to go on for a long time."

"This new bundle of taxes falls heavily on final goods, such as clothing, shoes, household goods and baby products. If the tariffs start on September 1, as suggested by the president's tweet, shoppers will see the impact immediately, as they begin their back-to-school shopping," writes Professor of Economics Mary Lovely. 

Slowing demand in China could depress their revenue, earnings and stock market value, says Mary Lovely, professor of economics. "President Trump is probably happy that he’s starting to tank the Chinese economy," Lovely says. "But it’s a case of ‘be careful what you wish for.’"

"I think whatever jobs are created by President Trump's war on global supply chains are going to be dwarfed by losses in the U.S. export sectors," says Mary Lovely, professor of economics.

"We're looking at politics here so he [President Trump] may be looking for some gigantic sign that he has won, that he as somehow brought the Chinese to the table in a way that no one else could," says Mary Lovely, professor of economics. "And I think that's where the danger lies because that's what the Chinese are not going to want to give him."