Thursday , September 19 2019
Home / Managerial Econ / Effects of the trade war: Chinese selling US assets

Effects of the trade war: Chinese selling US assets

Summary:
As the trade war with China heats up, we begin to see its effects: highly leveraged Chinese firms are being forced to sell US assets so that they have enough money to service debt, especially as they earn less from trade with the US. The government’s dramatic about-face from encouraging aggressive overseas acquisitions to cracking down on risky lending and overseas transfers underscores worries over the risk that the nation could run short of enough US dollars to make the interest and principal payments on its mounting debt at a time when the current account balance is coming under pressure. HT:  MarginalRevolution.com

Topics:
[email protected] (Luke Froeb) considers the following as important:

This could be interesting, too:

[email protected] (Luke Froeb) writes Argentine peso drops 25% against dollar following leftist victory

[email protected] (Luke Froeb) writes Khan Academy video and quiz on FX and trade

[email protected] (Luke Froeb) writes Is this the reason for the trade war with China?

[email protected] (Luke Froeb) writes Did Trump’s tariffs increase domestic employment?

As the trade war with China heats up, we begin to see its effects: highly leveraged Chinese firms are being forced to sell US assets so that they have enough money to service debt, especially as they earn less from trade with the US.
The government’s dramatic about-face from encouraging aggressive overseas acquisitions to cracking down on risky lending and overseas transfers underscores worries over the risk that the nation could run short of enough US dollars to make the interest and principal payments on its mounting debt at a time when the current account balance is coming under pressure.

HT:  MarginalRevolution.com

Leave a Reply

Your email address will not be published. Required fields are marked *