E Trade Wars Are Killing Pandemic Cooperation

Trade wars are killing Pandemic COVID-19 cooperation. If there is a resurgence of the virus nationwide similar to what is currently being seen in Florida, the United States will have serious problems.

Wall Street is betting all on a vaccine. Maybe it will work. Maybe it won't change behavior as much as we think it should change. Will there even be enough vaccine made available to change the direction of the virus in the USA?  The mask situation alone is problematic.

I currently have a medical condition that requires the use of procedural face masks. Currently, those masks are in short supply. The situation is better than it was in April but it is not fixed. Any additional spread of the pandemic will simply make things worse. The company I deal with is getting masks directly from China.

Unlike the first round, where northern states like New Jersey and New York were hit, now the southern states including Arizona, Texas, Florida, and California are being hit with the virus and hiring has finally increased for temporary COVID nurses. The pay is high because these nurses are putting their lives on the line.

I know this because my relative recruits nurses and she reports that this new demand started about 4 to 5 weeks ago out west. She says most positions get filled, but there are jobs paying $5,000 per week that are going unfilled. Some jobs require monitoring of a group of patients for the virus. Some require emergency room nursing, the most dangerous job of all. 

Trade War Danger

Sweeping away tariff restrictions would cause a small loss to governments imposing the tariffs. But we see from Global Trade Alert PDF:

In addition to unilateral tariff elimination, calculations are presented here of the total public revenue loss if taxes on imported medical supplies and soap were cancelled worldwide and in regional groupings, such as APEC. Worldwide cancellation would involve a loss to finance ministries of between $4.5bn and $9bn per annum, which is a tiny percentage of the total value of the monetary and fiscal stimuli announced during the past 10 days. It would cost less than $2bn to compensate developing countries outside the G-20 for the revenue losses resulting from cancelling their tariffs on medical supplies and soap. 

And this can only hurt the USA, as Asia throws up export curbs for medical products produced there. China is relaxing some, which directly helps me, but export curbs are deadly if a resurgence of COVID comes in the fall or winter. Donald Trump has made the USA a sitting duck by his failure to improve relations and by his tariff wars:

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Disclosure: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment ...

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Comments

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William K. 1 year ago Member's comment

This article seems to be a concise summary of the situation, and the conclusions are quite rational.

What is horribly unfortunate is that our president is acting on his personal feelings and not using rational thought or the wisdom of his staff to make these calls.

Good advice from many sources,, including a paraphrase from the Bible, tell us "Do not pick a fight with an enemy that can stomp you into the ground." (My version is more explicit).

Underestimating China's power and ability continues to be a really dumb move. While their ideology is rather more a police state, far different from our thinking, that in no way lessens their ability to be a formidable foe. We do not need to agree with somebody in order to get along with them. And leading by example is less traumatic than attempting to lead by force.

Gary Anderson 1 year ago Author's comment

You ha e wise words, William K. From my point of view the real reason we do not cooperate with China is we are afraid to compete. But that cheapens our products. The cult of Apple is protected because Huawei and Samsung phones are as good or better for less money. Our government wants to hide that truth from the cultists so they will buy American. If China had not done good things for us in the past I could see our skepticism. But they have. And the Chinese consumer wanted to buy from the USA. That is at least tarnished.

Barry Glassman 1 year ago Member's comment

Things have definitely gotten messy with Trump expanding the #TradeWar by now going after companies. First #Huawei, then #TikTok and now #WeChat. Where does it end? And what happens if/when China retaliates.

Angry Old Lady 1 year ago Member's comment

Trump has singlehandedly done his best to destroy this country. The trade war was just one of many ways. But his pathetic response to the pandemic was so much worse. It's almost like he's trying to make the pandemic worse by encouraging people not to wear masks and ridiculing those that do. I can't wait for November when we can finally give him the boot.

Adam Reynolds 1 year ago Member's comment

Good article. But are trade wars really causing a shortage of masks? I've had no trouble getting any and can always order directly from China myself on many sites like Amazon (though they take forever to arrive).

And surely China isn't the only country in the world making PPE, are they?

Gary Anderson 1 year ago Author's comment

China is a leader in disposable surgical masks, which can be labeled as procedural masks as well. Other nations are stepping up but the reason I know there are shortages is that in the clinic where I go, masks are rationed even now. That leaves America vulnerable.

Anthony Varrell 1 year ago Member's comment

This is true.