G.W. Bush Administration Assistant Trade Representative (now Asia Society VP) Wendy Cutler perfectly states the present state of trade affairs:
“For the foreseeable future, we’re going to be in a tariff world and we’ll see escalation,” said Asia Society Vice President Wendy Cutler, formerly a negotiator at the U.S. Trade Representative. “We’re in for a long-haul with tariffs, but eventually there will be a negotiated solution….”
I agree with the notion that there will ultimately be a negotiated solution. However, I also very much agree with her following comment:
“Everyone forgets now that the $50 billion in tariffs has only been in place a month or two, and it’s a smaller number. Once you put the $200 billion in place, even at 10 percent, and raise that to 25 percent on January 1, those are big numbers,” she said. “That’s affecting a lot of imports, both industrial and consumer. So I think that with time, we’re going to see Americans hurting from these tariff increases more and more.”
Again, there’ll be a negotiated solution; question is, will the coming pain do such a number on general conditions that said solution will come too late to stave off an economic contraction? That’s what we’re keeping a very close eye on!