By: Alex CurranTrade war tensions ramped up this week when the U.S. Senate unanimously passed a bill on Tuesday in support of protestors in Hong Kong. The “Hong Kong Human Rights and Democracy Act” would allow for sanctions against anyone found violating Hong Kong’s autonomy. It would also ban the export of crowd-controlling munition to Hong Kong police forces. Following the passage of the Bill, Senate Democratic leader Chuck Schumer added, “We have sent a message to President Xi (Jinping): Your suppression of freedom, whether in Hong Kong, in northwest China or in anywhere else, will not stand.” However, if the measure passes in the House next and ultimately reaches Trump’s desk, the act would face more opposition, as it could undermine trade talks. In fact, China has already threatened to impose “strong countermeasures” against the U.S. because of the Senate vote. According to the Chinese foreign ministry spokesperson, Geng Shuang, “The act neglects facts and truth, applies double standards and blatantly interferes in Hong Kong affairs and China’s other internal affairs… China condemns and firmly opposes it.” Another setback this week was Trump’s warning of tariff increases against China if the country doesn’t make a trade deal. The threat came after a recent stalemate in trade negotiations since the “phase one” deal negotiated in October. It is now predicted that negotiations of the deal will extend into 2020. If it is not agreed upon by this year, some $156 billion in Chinese goods are set to take effect on December 15th, including holiday items like electronics and Christmas decorations. Currently, The U.S. has imposed tariffs on about $500 billion in Chinese goods. China has retaliated with tariffs on about $110 billion in American products. Both of these trade war disputes caused stocks to dip across the globe. The Hong Kong Hang Seng Index lost as much as 1.1% Wednesday, while the S&P 500 and Dow Jones Industrial Average both slid 0.7%, and the Nasdaq Composite dropped 0.8%. For both sides, the trade war has had very damaging effects on their respective economies. According to Goldman Sachs economists, the trade war has impacted China the hardest. Ultimately, it has decreased by about 0.5% of the U.S. GDP and 0.7% of China’s GDP. On the other hand, the bank also does not expect an “extended truce” and sees the drag on growth decreasing next year, “assuming that tariffs stay at current levels through 2020.”China is not projected to recover until the latter half of 2020, while the U.S, nearer to 2021.Sources:https://www.cnbc.com/2019/11/20/dow-futures-us-china-trade-and-federal-reserve-minutes.htmlhttps://www.wsj.com/articles/global-stocks-edge-higher-as-investors-see-fewer-risks-11574159706https://markets.businessinsider.com/news/stocks/goldman-sachs-charts-show-damage-of-us-china-trade-war-trump-tariffs-2019-11-1028699500#china-has-been-worse-off-in-terms-of-the-hit-on-gdp-but-only-just-3https://www.bloomberg.com/news/articles/2019-11-19/even-hong-kong-s-homegrown-bankers-are-considering-moving-awayhttps://www.reuters.com/article/us-hongkong-protests-usa/us-senate-passes-hk-rights-bill-backing-protesters-angers-beijing-idUSKBN1XT2VRhttps://www.reuters.com/article/us-usa-trade-china-timing/phase-one-u-s-china-trade-deal-may-not-be-completed-this-year-trade-sources-idUSKBN1XU2C7https://www.rt.com/news/473846-senate-pass-hong-kong-bill/
