I think a lot of things will happen to change things. First, before the Wuhan Coronavirus broke out, there was a lot of unrest in China, demanding of democratic reforms, particularly in Hong Kong, but elsewhere throughout the country. They were even singing Trump praises. Covid19 put an abrupt end to that, but I think we will see a re-emergence. Second, the world is increasingly holding China responsible. Angela Merkel sent China a bill for about $150 billion, for example. Pressure will be brought to bear. The deadly failures of the WHO is coming into focus. In this regard, I expect Trump to get some sort of compensation from China....he will pressure them in one way or another. He says Xi is his "friend" and a good guy....don't kid yourself. He's using the motto: "keep your friends close and your enemies closer". Third, look for trade deals with India and Vietnam, as an alternative to cheap Chinese labor. Fourth, we will see a movement toward bringing the production of essential goods back to the US, like medicines antibiotics, and PPE's. Fifth, "Made in the USA" will gain traction. The combination of all the above will help us. Those $49 muck boots made in China cost $100 if made in the USA. I think those Chinese boots might largely be replaced by $70 boots made in Vietnam and the US boots might end up costing $80....then market forces will gradually bring them both more in line. Just my guess. The result will be much improvement in trade deficits.
Edited by Bear 2020-04-19 11:12 PM
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