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U.S. - China trade conflict/war/unpleasantness?

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U.S. - China trade conflict/war/unpleasantness?

Old 14th May 2019, 00:20
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U.S. - China trade conflict/war/unpleasantness?

I realize that there is a U.S. politics hamsterwheel for discussions regarding Mr. Trump per se, but I am wondering if this little trade malentendu between the Yanks and the Chinese will have blowback for the rest of us.

I know that global supply chains are complicated and far-reaching, but as we saw with the 787 development, problems can get out of hand rather quickly.

This section from a NYT report today worried me a bit:

I love the position we’re in,” Mr. Trump said, adding that the United States was “taking in billions of dollars in tariffs.”

Mr. Trump, appearing to relish the renewed trade war, suggested that his approach would ultimately drain business activity from China as companies shifted production to the United States or other nations that did not face American tariffs.

I don't know about you, but "relishing" any kind of war seems to be a bit foolhardy.

If intellectual property rights are a concern, why are they not mentioned in any of the tariff pronouncements? I can only hope that there are wise heads who are guiding this...

I guess the next big aircraft buy out of China will be Airbus.
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Old 14th May 2019, 00:26
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Originally Posted by Uncle Fred View Post
............ I can only hope that there are wise heads who are guiding this...

......
A bit of an ask, Skipper.

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Old 14th May 2019, 00:44
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Originally Posted by WingNut60 View Post
A bit of an ask, Skipper.
True...true.
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Old 14th May 2019, 00:56
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I love the position we’re in,” Mr. Trump said, adding that the United States was “taking in billions of dollars in tariffs.”

Mr. Trump, appearing to relish the renewed trade war, suggested that his approach would ultimately drain business activity from China as companies shifted production to the United States or other nations that did not face American tariffs.
Inserting this kind of quote into the discussion just means it will turn into another political thread

Start with the facts

The tariffs are now in place

Now we can discuss the famine and pestilence on either side and predict the next phase on and on until a new treaty (unsigned) is agreed. Both sides peoples want it to go away but at the same time they need some sign of a win.

We have plenty of losers taking up our air-time over here with sob stories, but nobody smacking their lips over what a win actually looks like

I have a hunch that a great deal more people in China will be out of work then in the US
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Old 14th May 2019, 01:28
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I honestly did not mean for the quote to inject politics Lomapaseo, but there is the reality of the matter and when someone says they relish a trade war then one should pay close attention.

I understand that there is a great deal of posturing here, but it seems that unless all this is carefully managed, then consumers and companies are in for a rough ride.
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Old 14th May 2019, 01:30
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From what I am reading, plenty of "experts" on trade, tariffs, and economics, both in North America and in most of Europe are pleased to see this issue finally bring hashed out. China has enjoyed an unfair trade advantage for years. They play games with their currency, they steal manufacturing and intellectual property from everyone else, and then plead victimhood. They convinced the greenies to leave them out of coal restriction (see "Paris accord").

But nobody has been ballsy enough to upset the apple cart. Then along comes Donny. Doesn't mind pissing off TPTB.

I think most of this is Trump confronting the Chinese, and being willing to back up his BS. I think the Chinese will eventually have to change their ways, as they can ill afford to lose their markets. I doubt these tariffs will be in place a year from now, but in the short term it is the only way to get their attention.

And yes, I recognize the political fallout, but believe Trump does too.
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Old 14th May 2019, 02:20
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Originally Posted by obgraham View Post
I think most of this is Trump confronting the Chinese, and being willing to back up his BS. I think the Chinese will eventually have to change their ways, as they can ill afford to lose their markets. I doubt these tariffs will be in place a year from now, but in the short term it is the only way to get their attention.
President for life; you don't have to worry too much about "short-term".
In any event, the Chinese focus, the Chinese business philosophy, is always about the long game.

......China has enjoyed an unfair trade advantage for years. They play games with their currency, they steal manufacturing and intellectual property from everyone else, and then plead victimhood. They convinced the greenies to leave them out of coal restriction (see "Paris accord").
When you (the US) pushed for them to be admitted to the WTO did you really expect that they would suddenly start playing nice?

............... they steal manufacturing and intellectual property from everyone else, and then plead victimhood. .....
A sore point in Australia right now after what the US courts just did with Ugg Boots.


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Old 14th May 2019, 04:02
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Originally Posted by WingNut60 View Post
When you (the US) pushed for them to be admitted to the WTO did you really expect that they would suddenly start playing nice?
.
I agree completely. China into the WTO was pushed by US administrations of both parties for years. Likely greased by a lot of cash to politicians. No right-thinking person would believe that they would really change their ways.
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Old 14th May 2019, 06:31
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"Trade wars are good and easy to win," said Trump. If he had stopped to think that one through he would have understood that he was saying that trade wars also are easy to lose, given that trade wars may be binary, ending with one winner and one loser. Trump, despite his long history of losing bigly, always expects to end as the 1, never as the 0.

A gunfight can be easy to win, but do I really want to get into one with someone of somewhat equal ability? I might want to ... if I thought of myself as the World's Greatest Gunfighter! Since I have always understood that if a gunfight is easy to win then it must also be easy to lose, I never wanted to provoke a gunfight. Some end with two losers, in fact.

Now we are in this strange situation where money being paid into the Treasury by American consumers of Chinese goods is going to be paid right back out to American farmers hurt by Chinese retaliation. If that is easy, show me something difficult.
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Old 14th May 2019, 08:02
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When it comes to trade wars, Trump obviously doesn't understand. China is not paying his tariffs; they are (theoretically) being paid by US consumers. To the US government. Even his top trade advisors have informed him of this but he doesn't seem to want to listen.
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Old 14th May 2019, 09:48
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Back to the Hamsterwheel for answers to such questions!

What Trump understands or fails to understand is grist for the Hamsterwheel to grind fine.

Here, to answer Fred's starting question, "Is this a trade war with China or not?" it sure looks as if it is shaping up to be at least a short, sharp skirmish if not an all-out war.

What happens next depends on Trump's poll numbers, I think. If they trend strongly negative among people from his base then he will probably declare victory, have a parade, do whatever he has to to end the trade conflict with China, and move right along to start some other trouble that will be a better sell. My bet for now is that we get into some big trouble with Iran because "Why not?" We have overwhelming military superiority (but little chance of "winning" a war with Iran) and that should be good enough to be going on with.

Give it a few weeks, to see what happens to the US economy and thus to Trump's numbers. I bet this becomes just a little misunderstanding, easily resolved by a (claimed) total, abject surrender by China, another win by the Greatest President Ever ... and never mind the details of what is actually agreed to by both sides. We continue to buy their gadgets, they continue to buy our grain, and everybody from Trump's base then turns their attention to the next distraction.

How about a trade war with Germany over cars? Germans hardly buy American cars anyway, so that it should be easy for them to cave on this one, and reduce their tariff on US cars to 2.5% from 10%.

No, wait ... that 10% is an EU tariff, not a German tariff. Oh, fudge! Well, who could have known? It's not as if Trump had access to experts who could brief him on this sort of thing.
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Old 14th May 2019, 09:52
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The Chinese plan long-term, looking decades ahead.
Trump thinks for as long as it takes him to pick up his phone and send a tweet.
Who will win this?
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Old 14th May 2019, 10:01
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How about a trade war with Germany over cars? Germans hardly buy American cars anyway, so that it should be easy for them to cave on this one, and reduce their tariff on US cars to 2.5% from 10%.
Now, why US made cars aren't being exported very much, I find interesting, although completely off topic...
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Old 14th May 2019, 10:43
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The answer to that one is very simple: US-made vehicles do not suit German demands for the most part.

We loves us our pick 'm up trucks; the best-selling vehicle in the USA is the Ford F-150 pickup truck. Try parking one of those things in a German inner city, or taking it on a run down the Autobahn. If you are a masochist, try filling it up with 95-octane at about five and-a-half bucks per gallon and then running it dry pretty darned quickly. So there's a bit more to it than just a 10% tariff on US vehicle exports to Germany: what we make is simply not what the average German motorist wants.

You do see the odd Dodge Ram pickup as a hulking presence on German roads, but part of its appeal is its rarity. It is like having an Unimog in the States, I guess: running something both rare and exceptionally large compared to the average vehicle population.

For one example, Cadillac sold about 1,100 cars in Europe, all of Europe last year. Is that worth having a big fight over?
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Old 14th May 2019, 11:03
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Originally Posted by Gargleblaster View Post
Now, why US made cars aren't being exported very much, I find interesting, although completely off topic...
Basically because they are crap from the old Ford / GM etc days.

Attended a lecture some 15 years ago that was looking at quality in Manufacturing and Services. One of the lectures was given by a senior member of a US company who supplied products used by manufacturer but were not part of the vehicle.

He told of GM management being really proud of their rework factory they had spend $200 m is building, Ford had similar, basically pretty much every car made at one of their plants went into this to put right the crap that was coming off the production line, you name it they did it and got the car ready for release to dealer showrooms. Said Individual dealt at higher level with Auto makers and in a meeting with Japanese manufacturers in US plant. He told the story and they struggled to understand, Initially assummed it was because he was a Brit and a common language etc. It was then someone said that Japanese manufacturers had no such facility, nor would be building one because they couldn't understand the concept of actually allowing something off the production line that wasn't fit or safe to drive to drive.

Go to make something of quality that people want to buy.
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Old 14th May 2019, 11:31
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China has $1 Trillion dollars in US Treasuries or 25% of the total. It has offloaded $46 billion in the year to Feb and could easily dump another $100 billion in May. Debt starts to become very expensive for US taxpayers as they need to offer more to get the same amount of cash in.

https://ticdata.treasury.gov/Publish/mfh.txt

So who has all this cash that could invest in lending to the US ? Saudi's...... right. US owes minimum $22 Trillion and it costs more now to service than is spent on Defense Budget.

Russia dumped ALL of their US treasuries from 2014 to last year because US targeted their economy with sanctions, a huge offload in April of last year resulted in US needing to increase rates to get buyers in the market place.

China has been heavily investing in Gold over last 15 years where the official reported figures are believed to be false with potentially holding twice the gold stocks as the US. Russia has also been doing likewise with Russia now being in a position to pay off ALL foreign debt from its reserves and it can borrow from China or Asian banks. In addition Russia has $100 billion in trade surplus every year.

The strategic play by US administration is about ENERGY. They want China to buy US LNG not Russian.

US under Obama bullied Europe under Sud Stream 2 (gas from Russia to go via Romania and Bulgaria) into Southern Europe to supply gas, that was killed but now pipeline will be supplying Turkey, with a branch to Greece and Italy eventually. Nord Stream 2 will be completed in December despite the continued threats by US Ambassador to Germany. Europe will be importing direct without having Ukraine steal it or shut down the pipeline. US demanding Europe build terminals to import US LNG at twice the price and everybody nodding and saying yes but they will not be built.

Russia has done mega deals with China and they will be using Russian gas for decades, US will sell some but there will not be a primary supplier.

China via the Silk Road project is investing billions for trade around Asia and Africa, a lot of this goes via land. Shipping gas continuously via pipeline is both cheaper and more secure than sending it by sea, USN can do little about a pipeline in Asia.

China is playing a long game and it sees what US have done in previous decades, the next step will be major Oil and Gas pipelines to Russia from Iran.

China knows it can dump US debt and watch the markets go into freefall. US knows this as well.
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Old 14th May 2019, 11:53
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WASHINGTON (The Borowitz Report)—Asking for their solidarity in his trade war with China, Donald Trump is urging Americans to boycott Chinese goods and “just buy things at Walmart.”

Trump made his request via Twitter, where he told his fellow-citizens that it was their “patriotic duty” to punish China by buying as many goods at Walmart as possible.“If you go to a GREAT AMERICAN STORE like Walmart, you’ll find lots of cheap sportswear, shoes, and other items for you and your family to enjoy,” he tweeted. “What better way to show China that we don’t need their DUMB STUFF!"

Shortly after Trump sent those marching orders to his countrymen, the Chinese President, Xi Jinping, offered a muted response. “I’m beginning to see how he lost a billion dollars,” Xi said.




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Old 14th May 2019, 13:58
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History...
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Old 14th May 2019, 15:11
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What Trump now says about it is of little impact except from a political impact within the US. We have a long running thread on that matter so why beat you gums about here.

Most of the public is so short sighted that all they want to believe or discuss is the political impact on their lives in their expressions on the net.

Why don't we continue a thread discussion on the actual impacts within our local sphere of living as well as the more global impact to a states economy from the actions now taking place.

Is not the intent of the latest moves to improve the economy of the US and minimizing the damage to the economy of our other trading partners?

If so how do we know if this is working that way?
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Old 14th May 2019, 16:33
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Originally Posted by chuks View Post
<snip> How about a trade war with Germany over cars? Germans hardly buy American cars anyway, so that it should be easy for them to cave on this one, and reduce their tariff on US cars to 2.5% from 10%.

No, wait ... that 10% is an EU tariff, not a German tariff. Oh, fudge! Well, who could have known? It's not as if Trump had access to experts who could brief him on this sort of thing.
Yes, of course... providing the US reduces its import duty on pickup trucks from 25% down to 2,5%...
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