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By Ana Swanson
President Trump holds up an executive order withdrawing the U.S. from the Trans-Pacific Partnership. (Saul Loeb/AFP/Getty Images)
The United States and Vietnam are slated to announce trade deals worth between $15 billion and $17 billion on Wednesday afternoon, when President Trump and Vietnamese Prime Minister Nguyen Xuan Phuc meet at the White House.
Speaking at a dinner for the U.S. Chamber of Commerce Tuesday night, Phuc said that the new deals would be concentrated largely in the high-tech sector. Even as Vietnam exports products like fish, seafood, apparel and footwear to the United States, it is a hungry consumer of U.S. corn, soybeans, planes and machinery, he said.
But the newly announced deals may be little comfort for Vietnam after the collapse of the Trans-Pacific Partnership, the 12-country trade deal that Trump officially withdrew from shortly after he entered office.
Economists say Vietnam would have been one of the biggest winners of the deal. A 2016 study by the Peterson Institute of International Economics found that the Obama-era trade deal would have increased Vietnam’s gross domestic product by 8.1 percent by 2030, the most of any country in the deal, and expanded its exports by one-fifth. Economists expected the deal to expand access to foreign markets for Vietnamese producers of apparel, footwear and seafood, as well as stimulate economic reforms within the country.
In comparison, the TPP would have boosted U.S. GDP 0.5 percent and Japanese GDP 2.5 percent by 2030, Peterson estimated. Even countries with smaller economies, like Brunei and Peru, would not see as large of a percentage increase as Vietnam would have, according to Peterson’s estimates.
The deal also had strategic implications for Vietnam, a country of 90 million nestled against China’s southern border. By excluding China, at least initially, the makers of the TPP sought to strengthen rival economies and balance …read more
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Not many people say their goal in life is to be boring. But that’s the case for John Williams, the president of the Federal Reserve Bank of San Francisco, who is charged with overseeing the financial health of everything West of the Rockies.
Things in the economy have been far too exciting in the last decade, says Williams. And while he says the economy is generally on a strong track today, there are areas he’s watching closely — including the effect of government policies proposed by the Trump administration.
While many have emphasized the potential boost to growth from tax cuts and other measures the administration has discussed, Williams says other measures could pose a potential risk to growth, like trade restrictions or cuts to Medicaid.
This interview has been edited for length and clarity.
President Trump’s budget proposal released last week proposed pretty dramatic cuts to programs that help the poor, including Medicaid. What would that mean for the U.S. economy?
First, I don’t know what will happen in fiscal policy. There are a lot of proposals, but what really matters is what Congress enacts and the president signs. Second, some of these proposals would boost growth in the short run— like more spending on defense. But other changes that have been talked about, including trade restrictions, would have a negative effect in the short run.
Significant cuts in Medicaid or other programs affect money in people’s pockets that gets spent pretty much dollar for dollar. So cutbacks in spending that go to lower-income people have the biggest effect on the short-run of the economy. It’s different for tax cuts, especially for …read more