20190211 CNBC The Exchange with Kelly Evans on US/China Trade Talks

Summary: I love working on Kelly Evans’s new CNBC show, The Exchange. Today our topic was whether I expect any positive results from the trade talks that started in Beijing today. Last week I gave a private briefing to a Cabinet group in the White House on China’s economy, currency, recent policy actions, and what might be achievable in a trade deal. You can see why I am more optimistic than I have been in the past by clicking this video link or by clicking on the image below. 

I love working with Kelly on her new show! She is smart, a good friend, and asks great questions. And the format is perfect for digging deeper into topics than TV usually allows. No debate, no battle of the bands, just an uninterrupted conversation with Kelly on a single topic. Today our topic was whether I thought the US trade talks that started in Beijing today were likely to make progress. For the first time, I am more optimistic.

I can’t post the details of the meeting but I will post a more detailed summary of the briefing points that I brought to the meeting. A few of the topics I covered include:

  • merchandise trade (stuff on ships) is the wrong measure of trade to target. The current account, including the services that fly back and forth on optical fiber, is a better target.
  • Value-added is a better measure of trade than gross exports.
  • The Chinese government has been propping up the RMB, not pushing it down.
  • The Chinese economy is very weak. The cause is not tariffs, it is a credit crisis for small, private firms.
  • Recent policies of the PBOC are not going to fix the problem.
  • When you are doing a deal, you have to find a way to let the other guy rep[resent that he has won something.
  • Best area for a US win is IP. There is a huge group in China that wants more IP protection too.

More to come later.

JR

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