The first round of the US-China Comprehensive Economic Dialogue was held in Washington DC. The U.S. Treasury Secretary Steve Mnuchin, Commerce Secretary Wilbur Ross and China’s Vice Premier Wang Yang co-hosted the dialogue.
This new dialogue was established by Presidents Xi Jinping and Donald Trump at the Mar-a-Lago April meeting in Palm Beach. Since then, the 100-day economic plan for cooperation between the world’s two largest economies has achieved results. The low-hanging fruit harvest addressed agricultural products, agricultural cooperation, financial cooperation, and infrastructure investment cooperation. In addition, China abolished restrictions on imports of American beef. The U.S. delegation in turn attended the international cooperation forum held in May in Beijing, as a signal of support for China’s “Belt and Road” initiative. (The Belt and Road Initiative is a development strategy proposed by China’s president Xi Jinping that focuses on connectivity and cooperation between Eurasian countries, including the land-based Silk Belt and the Maritime Silk Road.)
As we enter the second quarter of 2017, the global economy is experiencing its sixth year of stagnation, and the growth outlook does not indicate any improvement. Consumers and businesses share a sense of anxiety, uncertainty and reticence regarding both the economic and political environment across the globe.
Here we go again: The U.S president is attacked on a global scale for his thinking on trade and investments. Mrs. Merkel, chancellor of Germany even announced a “new chapter in U.S. European relations” and stated that “Europe must take our fate into our own hands’’. Similar accusations had been raised in 1980 after the election of President Reagan. He was labelled a B class actor, a cowboy and an inexperienced but lucky vote gainer. The accusers were wrong then and they are wrong now!
President Trump lived up to his convictions during the tense G-7 political summit just as he had already done during and after the U.S. presidential campaign. No surprises there when he reflected on the need for more balanced trade relations and the requirement for all nations to pay a fair contribution for the benefits they obtained from the United States.
Why should we worry about misaligned participations in trade? According to the U.S. Department of Commerce, less than 1 percent of U.S. firms export. Tens of thousands of small-business manufacturers and service sector firms could export their goods and services, but do not. These companies often fear the challenges of going overseas. But all firms entering new markets face shortcomings and disadvantages when compared to local competitors. Due to a lack of local knowledge, unfamiliarity with market conditions, insufficient insights into consumer behavior, and newness to political decision making, all new entrants encounter a “burden of foreignness.” Policymakers need to help prospective exporters overcome this burden and successfully access new opportunities overseas.