China vs. U.S.: Is a Trade War Inevitable?

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May 28 (Bloomberg) –- “The Coming Collapse of China” Author Gordon Chang, Heritage Foundation Chief Economist Steve Moore and Eurasia Group Asia Director Nicholas Consonery discuss U.S.-China trade relations. They speak with Trish Regan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

How much do we need china and are we at risk for a potential trade war right now ashen mark -- now?

I would make the case we need china more than -- they need china more than we need them.

We saw the numbers on the name effect that china's those us a lot more than we owe them your it we are by far the biggest market in china.

God -- god for bid we have a big trade work.

China has a lot to hear.

China is very counterproductive.

Qwest the fact that it does have so much to -- at stake economically, will that keep them in check as is all unfolds?

What's it should.

Our merchandise trade deficit with china last year was or billion dollars.

To put that into context, that was 120 2.6% of china's overall trade serve us here they clearly need us a lot more than we need them because they cannot replace our market.

The problem is, inside china right now, you have entrenched interest ear they become lyrically powerful and are taken advantage of the jewish and.

This will get worse and even though china needs us more, they will do is that art your rational from economic when of you.

Qwest but may rational from a political point of view 30 go to nick and these the and they say, you were spying on us.

At the end of the day, does this turn into a tit-for-tat situation?

Lets it is clear the obama administration has determined they want to continue to escalate the story.

The calculation is the downside risk to u.s. industry is so high in doing nothing that the u.s. government has no choice but to on and they will continue to do that here it is determined they want to continue to escalate the story.

So, does this situation than the common lame more than we have seen thus far?

It certainly does.

As nick went out, we have very little fuss bodhi.

Every year, we lose about $110 billion in intellectual robbery to chinese cyber theft.

That is two point one american jobs very but why.

Why don't we clench down on this and a enough?

This issue of the theft, and theft is the right word here, of american intellectual property, which is, in this information economy we have thomas that is what we produce third it is true china is stealing that.

You known me for a long time and i am a free trader.

But i do inc.

Common we have to get a lot tougher when it comes to china's dealing our patents and technologies and not paying for the right.

It undermines the whole capitalist system and a free-trade system.

You hear more and more companies, is actually in the technology industry, that are completely frustrated by that.

Qwest is that not what we're doing?

-- isn't that what we are doing?

Absolutely.

The indictments announced on may 19 were like the first shot.

China has really shown it will be in transit and your different the dialogue on cyber as you not.

We saw the retaliation against kinsey and ibm.

Class consulting firms come a big tech firms request the last one a few hours ago, the media went after cisco.

This will get ugly because nothing will pull back the chinese.

Their political system is going off the rails.

Qwest -- what does it mean for investors?

We haveif you are investing in companies relying on china for the bulk of their profit, or at least them of their profit, should you be factoring this into their thinking?

We have to recognize in the post to snowden environment tom of this tide of regulatory risk in china is owing to increased.

What we have seen going on right now with companies like this go and ibm, this has a network for a year or more.

A convenient opportunity to showcase what they have had in the works for some time.

Is there risk for u.s. tech industry, elite.

-- absolutely.

Those are the kinds of things we need to think about.

Qwest do not forget back in the 2012 election, mitt romney, the republican, was the one who was very tough on china with first act to some of the stuff going on.

He talked a lot about the trade imbalance.

When you have a fragile economy like we do in the nice it's with a real and women rate of 10%, the american people are not real happy with the huge trade deficit we are running with china.

Keep in mind the political risk, the clinical retaliation among voters.

Qwest it is a topical is june -- it

This text has been automatically generated. It may not be 100% accurate.

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