The Case Is Only Growing For An Economic Forever War

The Case Is Only Growing For An Economic Forever War

Want to receive this post in your inbox every day? Sign up for the Terms of Trade newsletter, and follow Bloomberg Economics on Twitter for more. President Donald Trump鈥檚 trade war with China has become a bigger, broader economic forever war. It鈥檚 hard to look ahead and see any outcome that undermines that emerging reality. A 鈥減hase one鈥?deal may be in what U.S. But that deal, if it comes, will be partial and more ceasefire than game changer. It also doesn鈥檛 mean a larger peace is nigh. While both the U.S. China have worked hard to maintain a wall between their trade talks and other political developments, that鈥檚 becoming harder with each passing week. The events in Hong Kong over the weekend, with police laying siege to a university, are escalating as are the calls in Washington for U.S. The weekend publication by the New York Times of documents detailing the official Chinese campaign against Muslim minorities in Xinjiang will only add to that sentiment. The art of the trade deal is the art of knowing how to exploit the domestic politics of your opponent.

It鈥檚 hard for a dispassionate observer to look at the impeachment inquiry, or the weekend gubernatorial election win for Democrats in Louisiana, and see strength for Trump. Beijing has long been best at misreading American politics and Trump has been a unique political phenomenon. But the reasons are only growing for China to hold out for elections that are now less than a year away. The search for survival strategies is afoot. At this week鈥檚 Bloomberg New Economy Forum in Beijing the dominant discussion will be how to navigate a new era of technological competition between the U.S. China. And the ideas are already flowing fully. In a Bloomberg Opinion column published last week, Jude Blanchette and Scott Kennedy called for a new strategy of 鈥渕anaged interdependence.鈥?In another over the weekend Gabriel Wildau called for the U.S. None of these things will go away if the U.S. China, whose top negotiators spoke again late Friday, close an interim deal. Much as that may pacify 鈥?or even cheer 鈥?financial markets.

The U.S.-China trade war reignited the debate over which developing countries in Asia could take over the mantle of the world鈥檚 workshop. Falling barometer | Global trade in goods will likely remain below trend because of heightened tensions and rising tariffs in key sectors, according to a WTO report. Limited damage | Japan鈥檚 trade curbs on South Korea have so far been a case of 鈥渢he bark was worse than the bite,鈥?with only limited fallout for South Korea鈥檚 economy, according to Citigroup. Eyeing China | Ford is considering making its new electric Mustang Mach-E in China, depending on how the trade war plays out, the automaker鈥檚 CEO said in an interview. Core constituency | Trump plans to tour an Apple plant in Texas this week to highlight how the company is assembling computers there after getting some Chinese parts excluded from tariffs. Adriatic dreams | Chinese money for a new high-speed rail line serving Italy鈥檚 Trieste port is another example of President Xi Jinping鈥檚 efforts to revive ancient trading routes under his Belt and Road Initiative. Outlook 2020 | Bloomberg Economics releases forecasts for the world economy in the year ahead. Three scenarios | Truce, peace, or war? Here are several scenarios for the global trade disputes. Like Terms of Trade? Don鈥檛 keep it to yourself. Colleagues and friends can sign up here. We also publish Balance of Power, a daily briefing on the latest in global politics. For even more: Subscribe to Bloomberg All Access for full global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close. How are we doing? We want to hear what you think about this newsletter. Let our trade tsar know.

Ford Mustang, originally introduced by Ford in August 1968 as a package for the 1969 model year. As part of a Ford heritage program, the Mach 1 package returned in 2003 as a high performance version of the New Edge platform. Visual connections to the 1969 model were integrated into the design to pay homage to the original; this generation of the Mach 1 was discontinued after the 2004 model year, with the introduction of the fifth generation Mustang. Ford first used the name "Mach 1" in its 1969 display of a concept called the "Levacar Mach I" at the Ford Rotunda; this concept vehicle used a cushion of air as propulsion on a circular dais. The Ford Mustang was successfully introduced in April 1964 as a sporty "pony car" to attract younger buyers into Ford products. After a few years of development, Ford saw the need to create performance Mustangs to compete with GM and their release of the Chevrolet Camaro and Pontiac Firebird.