What's Behind Trump's 'One-China' Policy Reversal?

The transcript discusses the limited impact of the One China policy on trade leverage between the US, China, and Taiwan. It highlights surprising trade data from China, indicating economic growth and the end of deflation. The potential implications of a US border adjustment tax are explored, including its effects on currency markets and international trade relations.

What is the main reason the One China policy is not an effective tool for trade leverage?

• It is not recognized internationally.

• The policy is too important to both China and Taiwan.

• China and Taiwan are willing to negotiate on it.

• The United States has already used it successfully.

What was a significant factor affecting China's trade data in January and February?

• Increased foreign investments

• New trade agreements

• Lunar New Year distortions

• Political changes in China

What does the positive trend in China's imports and exports suggest about its economy?

• The economy is weakening.

• Deflation is increasing.

• The economy is showing signs of growth.

• Trade relations are deteriorating.

What is a border adjustment tax primarily designed to do?

• Increase domestic wages

• Act as a tax on exports

• Tax imports and rebate domestic exports

• Subsidize foreign imports

What is a potential challenge of implementing a border adjustment tax under WTO rules?

• Other countries might retaliate.

• It could lead to increased domestic inflation.

• It would decrease the value of the dollar.

• It may be seen as a permissible export subsidy.