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New Military and Trade Deals Between U.S. and China
Fox Business News
November 13, 2014
NEW MILITARY DEAL
There’s a new military-to-military agreement concerning rules of conduct for encounters between aircraft and vessels, which might be the most important new agreement.
You don’t need a Chinese fighter bumping into a U.S. surveillance craft, or a Chinese fishing boat bumping into a U.S. destroyer. That’s the kind of thing that can escalate.
China resisted an agreement for a long time because they said, “We’re your friends. We don’t need these rules of engagement. We don’t have them with Canada, or places like that, who are our friends.”
They might be saying with this deal that the U.S. really aren’t their friends, but they don’t want a fight.
The People’s Liberation Army in Beijing has a unit that does nothing but cyber warfare all day. We aren’t going to open our systems to them, but they’re opening them whether we like it or not.
The cyber war is going on behind the scenes and the U.S. is very good at it too. They get each others’ secrets.
The new agreement is a sign that they aren’t enemies, but they aren’t exactly trusting each other either.
Rules of engagement are a good idea. That agreement was important.
NEW TARRIFF DEAL
The new tarriff deal is the most positive thing to come out of the meetings economically.
The U.S. has a deficit with China, and China has a surplus with the U.S.– China buys more of U.S.’s stuff than the U.S. buys of China’s stuff.
One of the few things that all economists agree on, liberal and conservative, is that free trade is a win-win.
Even if China’s stuff is coming into the U.S. it doesn’t matter, because the U.S. would have bought it anyways, and now the U.S. stuff can get into China tarriff free, so the Chinese might buy more U.S. stuff now.
They are going to take this free-trade deal over to the World Trade Organization (WTO) next year and make it part of a larger WTO effort. That’s good news.
Under the old rules, if I had high tarriffs in China then I’d have to put my plant in China to sell to that market.
Now I could manufacture in the United States, and then export to China without the tarriffs. This will create U.S. jobs and help China. It’s a win-win.
It’s not a zero sum game it’s a positive sum game.
Another Week on Wall Street
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