U.S.-China Trade-Deal Targets May Be Too Ambitious
Purchase targets in the Beijing-Washington trade deal would boost U.S. exports of goods and services to China.
(Bloomberg) --
Purchase targets in the Beijing-Washington trade deal would boost U.S. exports of goods and services to China from roughly $160 billion in 2019 to $309 billion in 2021 -- a near-doubling of exports in two years, with the bulk of the increase reached in 2020. If these ambitious targets are met in full, and wholly reflect increases in volumes -- not prices -- the expansion of trade would amount to a contribution in excess of 50 basis points to GDP growth in 2020, and 10-20 basis points in 2021. There are reasons to discount the full impact, according to research by Bloomberg Economics: BE estimates exports will add no more than 20 basis points to GDP in 2020, and for net trade to continue to subtract from full-year growth.
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