Daily Archives: October 10, 2019

The Unwinnable Trade War

By Weijian Shan – There are at least two reasons why Chinese exports to the United States have not fallen as much as the Trump administration hoped they would. One is that there are no good substitutes for many of the products the United States imports from China, such as iPhones and consumer drones, so U.S. buyers are forced to absorb the tariffs in the form of higher prices.

The other reason is that despite recent headlines, much of the manufacturing of U.S.-bound goods isn’t leaving China anytime soon, since many companies depend on supply chains that exist only there. (In 2012, Apple attempted to move manufacturing of its high-end Mac Pro computer from China to Texas, but the difficulty of sourcing the tiny screws that hold it together prevented the relocation.)

Some export-oriented manufacturing is leaving China, but not for the United States. According to a May survey conducted by the American Chamber of Commerce in Shanghai, fewer than six percent of U.S. businesses in China plan to return home. Sixty percent of U.S. companies said they would stay in China.

The damage to the economy on the import side is even more pronounced for the United States than it is for China. Economists at the Federal Reserve Bank of New York and elsewhere found that in 2018, the tariffs did not compel Chinese exporters to reduce their prices; instead, the full cost of the tariffs hit American consumers. As tariffs raise the prices of goods imported from China, U.S. consumers will opt to buy substitutes (when available) from other countries, which may be more expensive than the original Chinese imports but are cheaper than those same goods after the tariffs. The price difference between the pre-tariff Chinese imports and these third-country substitutes constitutes what economists call a “dead-weight loss” to the economy.

Beijing’s nimble calculations are well illustrated by the example of lobsters. China imposed a 25 percent tariff on U.S. lobsters in July 2018, precipitating a 70 percent drop in U.S. lobster exports. At the same time, Beijing cut tariffs on Canadian lobsters by three percent, and as a result, Canadian lobster exports to China doubled. Chinese consumers now pay less for lobsters imported from essentially the same waters.

The uncomfortable truth for Trump is that U.S. trade deficits don’t spring from the practices of U.S. trading partners; they come from the United States’ own spending habits.

The United States has run a persistent trade deficit since 1975, both overall and with most of its trading partners. Over the past 20 years, U.S. domestic expenditures have always exceeded GDP, resulting in negative net exports, or a trade deficit.

The shortfall has shifted over time but has remained between three and six percent of GDP. Trump wants to boost U.S. exports to trim the deficit, but trade wars inevitably invite retaliation that leads to significant reductions in exports.

Even a total Chinese capitulation in the trade war wouldn’t make a dent in the overall U.S. trade deficit. more>

Introducing Cybersecurity Insights: Director’s Corner

By Matthew Scholl – The Director’s Corner will highlight how NIST’s cybersecurity, privacy, and information security-related projects are making a difference in the field and leading the charge to make positive changes.

I believe the greatest accomplishment for the division, and what I am most proud of, is how we work globally — and the way we work in an open, transparent, and inclusive process. This is especially true in the development and standardization of cryptography. This process, coupled with NISTs technical excellence in crypto, results in NIST encryption used by commercial IT products across the world. This underlying encryption enables billions of dollars of electronic commerce to function­; such as swiping credit cards at the grocery store — to online purchases — to major financial exchanges.

As we look at 2020 and beyond, NIST will update our encryption standards and ensure that encryption will continue to enable the economy and protect our livelihood. The biggest thing coming in the future (that you will hear more and more about), is in the area of quantum resistant cryptography. NIST is building open, transparent, and inclusive encryption methods with our global partners for new sets of encryption that are needed when quantum computing becomes a reality.

Quantum computing is a completely new method and architecture of conducting computational activity (or way to generate information). When a quantum computer finally is strong enough, some of our current encryption will become vulnerable. Therefore, NIST is proactively working to create new encryption standards. more>

Updates from Ciena

Cable plays nice: Service convergence on the CIN
By Fernando Villarruel – At the start of 2019, the cable industry announced its vision for delivering 10 gigabit networks, ramping up from 1 Gbps service offerings to symmetrical speeds of 10 Gbps and beyond while enhancing the customer experience and achieving operational efficiencies. Industry bodies, cable MSOs, and vendors are working together to address industry-wide challenges associated with moving to next generation networks. Moving forward, even more interaction may be necessary if we want to maximize the potential of these new networks – particularly around convergence.

Recently, I’ve had the opportunity to meet with many MSOs in North America and other regions to talk about one of my favorite topics, the Converged Interconnect Network, otherwise known as CIN.

Some MSOs plan multi-service convergence in the CIN from the beginning, while others reserve the idea for future contemplation. For those considering service convergence “out of the gate,” it must be capable of providing (or delivering) different revenue services such as residential, mobile backhaul (small cell and macro-cell) and enterprise connections – and this is independent of delivery systems such as R-PHY, R-MACPHY, Flexible MAC Architecture (FMA), and even PON. In many cases, MSOs outside of the United States also have telco services (e.g. mobile networks – LTE, 4G, moving to 5G) and are interested in creating an environment where the last tentacles of the network – the access network – can fully participate in the convergence of services to maximize operational efficiencies. more>

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Updates from ITU

ITU Green Standards Week adopts Call to Action to accelerate transition to Smart Sustainable Cities
ITU News – ITU Green Standards Week has brought together governments, city leaders, businesses and citizens to share their experiences in driving the behavioral change required to achieve smart city objectives.

These participants have adopted a ‘Call to Action’ urging city stakeholders to accelerate the transition to Smart Sustainable Cities.

These participants have adopted a ‘Call to Action’ urging city stakeholders to accelerate the transition to Smart Sustainable Cities.

The Call to Action highlights that our cities – as powerful hubs of innovation, and a central force behind humanity’s impact on our environment – must make a defining contribution to the achievement of the United Nations Sustainable Development Goals (SDGs). more>

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