The only way this trade war will end is if Trump loses money. The tariffs on Trump wine is good start for the Chinese because they know Trump's personal fortune is much more important to him than the welfare of the country. This shows where his many conflicts of interest that the GOP allowed him to keep may actually backfire. I wonder how much money Trump will reap directly or indirectly with the $1 billion arm sales to Saudi Arabia.
7
To paraphrase a former American enemy, "China will bury us." Try buying anything today that wasn't made in China. Chances are the parts were produced elsewhere and assembled in China.
3
One wonders how much of the chaos being foisted on our economy is just yet more attempt to create a diversion by Trump, to move the headlines away from the Stormy Daniels and Playboy Playmate controversy, away from the Robert Mueller investigation.
At the same time, The Donald has little propensity to read, to really comprehend anything, let alone something as complex as the function of trade tariffs between trading countries, and the great importance of maintaining stability between nations, especially now with the world economy as we are all so interconnected.
I suspect it is both, his fear of deeper discoveries in his personal and business life, and Trump's deep ignorance about complex matters of any kind, whether it be economic, environmental or social.
I talked with a man this past summer in rural Idaho, who asked me what I thought of Trump, the man being a Trump supporter. I told him that I didn't care for Trump much and that he is a loose cannon. Without missing a beat, the man with a flushed face and indignant attitude, said that is why we need Trump, agreeing he is a 'loose cannon', that we need someone to 'shake things up'.
I wonder if this same man would think it a great idea to have a plumber who is a loose cannon, or his personal doctor or his attorney.
11
Following the example of exemptions granted to
the countries ,there may be easing off on new tariffs
as the lobbying gathers momentum. If the trade war
heats up, China has big weapon in holding more than
$1Trillion of treasury securities it can sell off. This
would play havoc in the financial market. American
leadership is ignorant of history but Chinese are not.
In 1840s Western powers forced a weak China to
open its market particularly for opium. China
remember it as the period of humiliation. It won't
let it be humiliated again. Expect the tit-for- tat
response.
8
Although the trade war between the U.S. and China would hurt the world economy the most, China stands to loose more in this war. China currently carries $450 billion trade surplus vis-a-vis the U.S. and it cannot pick up its trade markets elsewhere. Major Asian economies such as Japan and South Korea are net exporters and Europe has close ranks with the U.S., its biggest economic partner. The trade war and its trickle down effects would also drive a wedge between China and Europe and escalate. So China's muted response to President Trump's trade threats is understandable. China would be much better off negotiating against Trump's trade dispute than confronting it.
3
If China enforces higher taxes on goods and services coming out of the US, then there would be an excess supply of goods and services in the U.S. Therefore, the cost for others wanting to buy the excess would be less expensive. Not for China, but for us in the U.S.
Any reduction in consumer prices because US producers cannot export to China would be temporary. This kind of glut causes companies to go out of business, after which the survivors raise their prices (usually producing the good in question less efficiently than producers in other countries).
The idea that you can reduce costs of goods by preventing exports is amusing but not consistent with any economic theory I've seen.
4
China is muted in response to President Trump’s belief a trade war is winnable because It knows the folly of this assertion. China is on its way to becoming the world’s largest economy. It is making albeit slow but steady progress toward becoming a free trader.
No doubt President Zi Jinping is aware Britain in the 19th Century was able to become an empire after it stopped protecting its inefficient farmers so food could be imported cheaply. President Trump is unaware of any history even our own. The high Smoot-Hawkey tariffs of 1930 exacerbated the Great Depression.
If China does stop buying US soybeans, the danger to the US farm economy would be considerable. In 1973, Secretary of Agriculture Earl Butz said soybean exports to Japan posed a danger the American people would not have enough food to eat ( a symptom of the hysteria of the times).
Japanese purchasers and others have preferred suppliers from other countries. Foolish policy by subsequent Democratic and Republican Adminisrations have resulted in Brazil now being the world’s largest exporter of soybeans.
Ten years after he left Office, I asked Earl Butz why he had set such a disastrous precedent. He said either a Democratic Congress would make public grain trading companies or he had to embargo.
Trump’s tariffs may result in disaster for our soybean farmers Their fate may be in the hands of the Chinese leadership.
http://www.joelsolkoff.com/book-store/audio/interview-with-earl-butz/
2
The Trump Administration announces tariffs on steel and aluminium products imported into the United States as a matter of 'national security', but then, oddly enough, temporarily exempts the countries producing the majority of these imported goods (when it comes to steel, China, for example, doesn't even rank in the top ten). One gets the impression that this flexibility when it comes to 'national security' has rather more to do with corralling certain other countries into participating into a US trade war with its primary target, i e, China....
The lessons so painfully learned in the 1930s, when the Smoot-Hawley Tariff Act and retaliatory measures from other countries turned a Wall Street crash into the Great Depression (with all its ensuing evils) and which resulted after WW II in the careful construction of a rule-based order with the GATT and its successor, the WTO (admittedly designed to primarily serve the interests of the United States, but beneficial to others as well) seem now to have unlearned, and with the abandonment of prerogatives of the US Congress to the Imperial Presidency, any old US president is allowed to start a trade war on his (or her) own....
It's not merely that we never learn, it's that we so easily forget what we think we have learned (Glass-Steagall is another example)....
Henri
3
Maybe I can concur with you on Glass-Steagall, but the economies of the 1930's are vastly different and the economics of today are far more resilient than in the past. We never would have survived the economic crisis of 2008 if we adhered to the same economic principles we operated on in the 1930's up through the early 1990's. Comparing the 1930's economy to today's economy is, quite frankly, obtuse.
2
Trade war will only expose more of our weakness than strength. If China will use the trade surpluses to buy our Treasury bonds again, everything will be fine. Since we don't want to sell our commercial properties, valued companies, and technical expertise, we have nothing Chinese wants. Thus they diversify our surpluses to other currencies & gold. Too bad that we cannot lower down our insatiable spending habit. Recent Treasury auction was another disaster that few wants to own them on a rising interest environment. We have to learn that there is no free lunch on earth anymore.
3
Interesting that China is considering a tariff on American wine. Is that in addition to the whopping 50% that they already charge? And what we charge them for that bottle of Great Wall Wine is practically nothing. This might be a trade war, but they started it a long time ago and our geniuses in DC did nothing. Now that someone with a brain is trying to reverse this mess he catches the scorn of an ignorant public. Trump is doing the right thing. Tit for Tat tariffs cant be contested.
4
Now that China has risen and the U.S. is falling behind in many areas, folks are suddenly crying foul. We have had it so good for so long with the $90 air conditioners, $60 microwave ovens, $12 pair of blue jeans, $20 pair of Payless shoes, etc., etc.,We love our Walmarts and Targets dearly while the CEO's and Wall Street titans were reaping the profits from under our nose. Reading some of these comments, Trump, of all people is now suddenly the champion speaking on behalf of the common folks while the Trump store still sells things made in China. With the trade war looming, the farmers in the Midwest who overwhelmingly voted for Trump will suffer the most. How about let's waste the tax payers money and build that stupid wall and keep all the immigrants out while our young people are busy firing their guns in schools and shoot themselves up with needles. Look in the mirror and wake up, people. We have no one to blame but ourselves.
11
Trump playing checkers, Chinese playing chess.
4
That person in the White House is leading us down the road to doomsday with all of his ridiculous ideas. And, when we are finished he'll go off to Russia and hang out with his BFF. How sad that no one can contain him. So far most of his term in office has been ridden with investigations and accusations. Isn't he overdue for impeachment?
8
One way or the other the scales will balance. The Times is constantly screaming the sky is falling.....it isn't.
1
Trade tariffs do not make much sense historically speaking; as effective remedy. Surely to decrease US imports across the board the answer is to simply devalue the US dollar by 35 per cent. Less German luxury cars and China off the hook. Trump fishing for big fish to fry; the trouble is China is a whale and not that easy to harpoon. China is a friend of the USA if anybody wants to know at this stage.
China must be run by autocrats but they are not crazy. They understand their fate ultimately rests in pleasing the masses. When the masses can have their iPhones and traveling aboard too, they are less prone to social malcontent.
America is now subjugated by a group of plutocrats who used their money to buy gerrymandering and subvert an election, even if it is done by turning a blind eye to Russian meddling.
Real insanity is when you turn on your own people, using your own people to suit your baser basis. Before the 2016 election, I have warned on many NYT columns that America could become an analogous Syria or Venezuela but no one listened. Alas, it has since come to fruition. When people give up rational thinking about gun violence prevention and allow NRA to do what it pleases, trade wars or even real wars seem appropriate behavior.
So yeah, China may be plotting to take over the world with its One Belt One Road initiative, America is crazy enough to give up TPP, a reasonable defense against China's encroachment. And there are labor unions who were dumb enough to listen to Trump's anti-world nonsense.
4
The Chinese are taking a long term measured approach. They are waiting to see what comes next from the mouth of DJT. Just like the steel tariffs where DJT imposed high tariffs then exempted just about everyone (thank god we have a strong principled leader.....)
The Chinese are playing 3D chess, DJT is playing marbles.
Guess who will win?
3
Actual economics are irrelevant to Trump. Whenever he hears, sees or thinks the words 'war', or 'conflict', certain neurons in his brain fire in a way that delivers him immense pleasure - whereas for normal people different brain neurons (mostly fear .. or at least the 'be careful' neurons) light up. He will not stop until we actually have all out war (both the economic kinds, and ultimately the military or nuclear kinds).
5
Forget about tariffs, all China has to do is stop buying treasury bonds or even selling what they have. That will get the stable genius's attention.
China has the cards to play, we don't.
9
Fed can print money and buy treasury bonds. Japan's BOJ buys all of their government bonds with new money. Japan and China even allow their central banks to prop up their stock markets. China did that yesterday, when the prospect of a trade war became more realistic and the local stock markets fell. East Asian countries' money printing is also used to buy US and Euro bonds, which makes the USD and the Euro strong and sustain their trade surpluses.
You can't plead with these East Asian countries. They'll only interpret this as a sign of weakness. They'll tell you they'll change this and that, but they won't. They'll just continue to do what they've been doing for the last 40 years: buy more time, so that technology transfer can continue uninterrupted until they become the dominant economic, political, technological and military force on the planet -- and beyond. So can all you western China apologists please man up and show a minimum level of patriotism.
Waving the flag is no longer enough. A true patriot is willing to take some pain in the short term, so that our future generations don't have to live in poverty. This is especially true for our western politicians and corporate leaders, who only think of themselves. We need to elect a new breed who are not afraid to make the necessary decisions, or take the pain and the negative short-term political fallout which comes with it.
Where are you? Not in our western capitals, that's for sure.
China plays the long game. The US plays the short game - 3 years or less.
6
China's trade surplus with the US rose to $288 billion in 2017. It is an unhealthy gap! No good for both countries!
Best solution: Big
China has to come to table of negotiations and agree to buy more from the US.
And what if China doesn't? China doesn't have to do anything it doesn't want to. Has Trump even thought of that for a second?
2
China is treading lightly because of guilt over its economic aggression, some commenters would like us to believe. Really, though, guilt? China's audience for its muted response is not the American people, it is other countries. They probably want to appear like the adult in the room, the one who plays by the rules; in this case the rules of the Workd Trade Organization. China seeks cred with other countries, as America abdicates its leadership role around the world.
13
It's all about technological know-how.
If we lose our manufacturing, we'll also lose our ability to invent, because the practical aspects of manufacturing are important if you want to understand the limitations of technological solutions. Automation or not, we need to bring back manufacturing.
We need to remove all trade quotas in general and all trade tariffs on things that are not technology. And then to encourage companies to invest in western countries by imposing an import tariff on technology, and technology only: hardware, software and technology service.
This tariff has to be high enough to encourage companies to invest, but not so high that it becomes impossible to import technology. So why not set it at 20 % if the technology is imported from a country which is a military ally and 40 % if it's from a neutral country? This way we'll encourage companies to invest in our own countries first, and if this is not possible, then we'll encourage them to invest in countries which are military allies.
This is important. How could we expect to win a potential, future war with China if everything except our peacetime weapons manufacturing is located in China. There won't be any peacetime non-weapon factories at home to retool into weapons manufacturing. Are we going to pit Facebook, Google, Twitter, Snap and Amazon against the Peoples Liberation Army?
Had US outsourced its manufacturing to Germany in 1938 the way it has today in China, the Allies would have been doomed.
5
We used to say if you lose manufacturing you lose technology When you lose technology you lose the future. It all really started with Clinton and NAFTA so they learned how to move a factory to Mexico. The lower China prices came along and they moved there using the experience they gained doing it first to Mexico. There are only two things keeping the American pyramid vertical; the first selling America with our massive balance of payments deficit and taking the money from unborn Americans with massive deficit spending no one alive will ever pay off............
2
This does not make the tariffs a good idea, but China really is guilty of all the things Trump has said.
IP theft, taxes on our goods sold there, subsidizing industry directly and indirectly through labor and environmental harm. All true.
iPhones cost a lot more there than here. Ditto for clothing by American companies, even though both iPhone and Ralph Lauren are made there. This is why Chinese tourists load up when visiting, bringing goods made in China and bought here back home for a huge discount. Of course Woodbury Commons isn’t complaining, and that’s hardly the only reason the tariffs are economically not a good idea.
But they started it.
1
The TPP was structured to combat those things but in a collaborative way with allies. Trumps approach is not only punitive toward China but it hurts American industry as well. Its the dumb destructive way, Trumps standard operating procedure.
3
This isn't about economics. This is about nationalism.
With Russia a 2nd rate kleptocracy, it's no longer a worthy "rival" (even though Putin is pedaling hard to regain Russia's former glory by sabotaging US elections, aided by Trump). Who will we pick a fight with so we have a defining enemy to feel superior to?
Enter the dragon.
China is ideal for nationalist hate-mongering. To America Chinese might as well be aliens from outer space. Chinese (or all Asians as whites can't tell us apart) are "inscrutable" (like Charlie Chan played by a white actor), sinister and suspicious. What's not to hate?
They're out to steal our technology patents, our family jewels the Chinese eye with lust. No mention that roughly 15% of US tech patents are registered by Chinese and Indian scientists working here; that over 30% of "American" Nobel laureates are foreign born; or over 20% of US research scientists are Chinese or Chinese American.
There's a separate discussion about patents as a corporate monopoly strategy unrelated to innovation or economic strength, which renders the "theft" of "intellectual property" economically moot.
But suffice to say: As China tries to "steal" our patents, we're even busier "stealing" their scientists.
China's overwhelming economic advantage is it's phenomenal savings rate, faith in science, massive R&D and public education investment, which in the US Trump has crippled.
China didn't elect Trump but they're sure glad Putin did.
32
Uh, well because they are guilty of cheating the people of the USA out of trillions! With the collusion of our treasonous Left and conservative political class and Robber Baron corporate elites who enthusiastically destroyed our middle class in exchange for access to 100's of millions of Chinese slave laborers!
1
I'd like to see a 25% tariff on Donald Trump's wealth applied against the loss in Federal Tax revenues, due to his administration decisions
Ditto for the unnecessary increased spending on nuclear weapons.
For some inexplicable reason, he diesn't seem to understand that any significant use of the "most powerful nuclear arsenal on Earth" will result in the total destruction all life in the US along with that of the supposed "enemy".
5
More reckless disregard for the rule of law by the Trump administration — by forgoing WTO review — with the added embarrassment of China playing by the rules nonetheless. This administration is going to cause more damage to the United States than any good it may do and it will likely take a generation or two for US recovery, if ever.
11
Hm, who got a bigger button in this war?
2
It doesn't matter who got a bigger button because we are all dead in an all out nuclear exchange. Someone needs to explain to Trump the MAD (Mutually Assured Destruction) doctrine of military.
1
China doesn’t need the WTO to liquidate their treasury bonds, causing interest rates to spike and sending our economy into a tailspin. That will do much more damage than any retaliatory tarrifs, but tRump and his minions are too stupid to realize that
14
China's response is muted because they want the NY Times to continue to ignore their economic warfare. The Chinese are beligerants, and Trump is the first president not beholden to the bankers since Reagan. Unfortunately, Trump is a loose cannon, but that's better than bowing to the bankers selling out our country and manufacturing capability.
6
Oh please. Trump is not beholden to the bankers? He sure is - to the Russian bankers, who were the only ones left who would lend him money.
15
@John
China's response isn't "muted." It's proportional and loudly proclaimed by the Chinese. Also, very odd for "beligerants" (I assume you mean belligerent but defer to you as English is my second language) to lend the nation you say they're attacking over $1 trillion, currently the biggest lender to the US, helping finance our deficit, but also our increased defense spending. It makes total sense for China to attack its single largest trade partner, right?
What do the Chinese say about lighting a candle instead of cursing the darkness?
5
Why? Because $350 billion or so of China's economic growth depends on the US market maybe? China would not come out on top. But then again none of us would. A trade war will shock and ripple through every economy of the world and cause a great deal of upset, but in a lot of ways it's unfortunately necessary. China has been undermining America for a long time and its economic growth has come at America's expense. This growth has also come at the expense of Chinese citizens wellbeing as well as vast environmental destruction. Americans and most other western cultures may be at fault for rampant and frivolous consumerism and materialism, but now the Chinese are also contributing to this modern calamity of excess. The problem is it's not sustainable, humans are causing the next mass extinction and if you believe scientists over wealthy corporations with something at stake, then we're also on the verge of disasterously affecting the climate.
At some point we need to realize that the economy is not all there is to life. If money stopped existing tomorrow, there would still be fruit on the trees and pigs on the ground. But would we be stupid enough to starve to death? Well we currently are that stupid, there literally are people who are starving as food goes to waste right in front of them. The measuring of currencies against one another and endlessly escalating debts is obviously a broken system that needs to end.
3
When imposing tariffs I would think you would aim to get the best bang for your yuan. Look for Chinese tariffs about one month before the midterms.
The most recent Chinese response to US tarriffs was a response to the tarriffs on steel and aluminum -- we have yet to learn what their response will be to the tarriffs imposed today by Cadet Bone Spurs.
1
Just how much more the cost of the widget I buy today compared to yesterday's widget is all I ever think about because I care a great deal about widgets. Who doesn't?
1
Why can't Congress stop Trump from potentially inflicting damage to American economy, reducing purchasing power of working Americans, and destroying the international orders and institutions (WTO) that the US spent blood and treasure to build for the last 70 years?
2
"JINA" isn't over-reacting because they know by now that Trump will change his mind in the next few weeks, OR , when he realizes that tariffs will affect HIS businesses that IMPORT products to the USA from Jina.
Funny how all that MAGA talk doesn't apply to HIS businesses that operate in Asia because it's CHEAPER.
2
There are only losers and plenty of collateral damages in a trade war. And in this US - China trade war, both sides lose, but one single big difference is the Chinese can adapt to pain and adjust to poverty much easier that its counter the part the American.
3
Excellent! Lets put the idiot steel workers and hog farmers who voted for Trump out of work. How do you like them apples!
6
My first thought too, but vengeance heals nothing and ultimately creates more damage. We need a politician with Abraham Lincoln’s magnanimous view: “With malice towards none, with charity towards all...”
2
Kat -- I appreciate your openness, do you think the good people at Fox News will feel the same way about such a politician, if she is a Democrat?
They don't have to say a word. Everybody, with a brain, knows how this is going to turn out!
4
Trump is a no-nothing, garrulous, an apparent alpha male with delusions of grandeur, supercilious, empty-headed, emperor without clothes. But he does'nt and does care to know that he is dealing with President Xi, who appears as an affable, smiling, acquiescing beta male. And he is anything but all that. He has recently, ruthlessly grabbed absolute power becoming the life President of China and the Chinese politburo. He is a stealthy, cunning, smart predator, extremely intelligent, confident of his and country's power expending strength only for the kill. Trump with his idiotic tariffs and deluded strength has unleashed a trade war, a war that Xi will reply in kind. At this point in time, Xi with trade surpluses, massive US Bonds and better political connections with bought mineral rights all over the world is in a state of strength that has evaded us in spite of our trillion dollar wars all over the world. Just as Putin has manipulated our elections to get an extremely compromised Republican President, the Chinese will reverse that by hitting red states exports with tariffs. And they would'nt need to interfere in our elections but they will be. Unfortunately, we have stung the wrong predator besides our prey like Europe who is threatening us with the same tactics.
7
The Chinese put a tariff on Sutter Home wine sold in China?
We should put a tariff here in the US on that swill.
5
Trump thinks he has opened "negotiations," and maybe, in his bull in the china shop approach, he has done as so. (Sorry about the pun). But, Chinese leadership, just like Putin and Russian leadership, are very adept at playing a simple blustery man like Trump, and have to be licking their chops at this.
As long as you let Trump make a splash and be the "headliner," you'll almost certainly get your way if you are subtle and patient. The Chinese are masters at playing a much longer game than even patient Americans play, never mind, a personality like the current POTUS.
4
China is not a democracy, but, unlike the US, it has strategic, thoughtful leaders. It's planning for the future, while Trump is trying to recreate the past with coal. Putin loves seeing his protege Trump consistently degrading US standing in the world.
12
China might stop purchasing US bonds, then what? The depth of Drumpf's ignorance is appalling. The price for products will increase for Americans and markets for farmers are in flux.
9
China and the US. have neither the similar political and ideological mindset, nor the mutual trust. The ballast stone for the two lies only on the bound in trade and purchase. We know as a fact that nobody in the states are forced to buy goods made in China, and the Chinese are not putting their knifes on our throat for importing. I hope both party just calm down so that the status quo do not escalate into a nuclear distinction of our species.
Like stop purchasing our debt. Or at least $60 billion less every year. They end up with a push and we end up with inflation. Let me know when we're great again.
3
Personally, I'm tired of this kind of winning.
1
Yes, China has weapons in its arsenal. It has spent and will continue to spend hundreds of billions to build infrastructure and on research and development of new energy and manufacturing technologies, which it will implement in China and export around the globe, much as America did after World War II.
China's weaponry is its resolve to lead through real strength, not by beating its chest and squandering its resources on military hardware that, one hopes at least, will never be put to use; and on endless, destructive and pointless military adventures.
Sadly, China also has increasingly become a high tech human rights nightmare - an authoritarian 'surveillance state' where every citizen's every move is subject to intrusive, manipulative control. Hobbled as it is economically and politically by its own tinpot dictatorial Presidency, the United States has ceded the high ground and lacks the moral authority, the will or the economic ability to stem the authoritarian tide.
We are hunkering down behind walls - physical and intangible - a hobbled, atrophying, impotent paper tiger, formerly 'leader of the free world,' now the leader of a race to the bottom.
13
China is the largest purchaser of US Government Bonds. This income is used by the US to cover the US debit. What happens if China slows or stops purchases of these bonds? Interest rate on the bonds will need to increase to attract other buyers, increasing the cost of servicing the debit, taking money out of the stock market into buying bonds instead, and increasing inflation. Is that correct? If so, even suggesting it can be used is a powerful weapon as markets will react.
5
I think the leadership in Beijing understand that Trump is fickle, rarely follows through, and has a tendency toward more show than substance. Why back Trump into a corner when Trump may do an about-face two weeks from now? Why not just let his attention fade and move onto something else? Trump was supposed to "fix healthcare" within his first 100 days. Then, after declaring "nobody knew healthcare was so complicated" abandoned that project. Trump imposed a rather pointless steel and aluminum tariff that got the US into a row with allies, but is now backing off by exempting said allies. Yet, since those allies provide the majority of American steel imports, what was the point of the tariffs in the first place?
I think Xi Jin Ping's people get Trump better than many Americans. Being the successors to Mao Tse Tung, they understand demagogy. Trump needs to put on a show for his supporters, maybe get a little boost for his party in the mid-terms. So why not wait and see? By December, with Republican donors breathing down his neck, Trump may quietly (or not so quietly) reverse course on his own.
11
Fickle? How about unstable. Last night the man bragged about being unpredictable. His instability does not offer reassurance that his term as POTUS will end well for the inhabitants of the USA.
3
China has the largest man power on the planet and its effective utilisation has been steadily improving for decades. Can US realistically win a trade war?
7
We can't win a trade war as a nation, but a select group of billionaires can win.
1
What portion of our debt do the Chinese own and why must they buy it?
The Fed is concerned about inflation and employment and indicate that those are two of the main factors when considering interest rate hikes, but if the Chinese no longer want to buy our debt wouldn't that require interest rates to rise to become more attractive? In the 70s and 80s the huge increases in the price of oil caused an equivalent increase in inflation and hence interest rates. The price of oil was beyond our control and therefore so was inflation, so the increase in interest rates to curb inflation was gratuitous , painful, and itself a major cause of an increased inflation in the cost of money, as anyone who had to borrow money during that time remembers very well. It feels like we are travelling down that same road but this time it's a crisis completely of our own making. It does not have to be if we can return to being thoughtful and considerate Citizens in a Community of Nations.
4
The companies that went to China and handed over all their trade secrets knew exactly what they were doing. The American administrations that allowed this, including Bush senior, Clinton, Bush Junior and Obama, did not care enough to stop it. Its a bit disingenuous to now put all the blame on China. We were the ones dumb enough to put our factories their and teach the Chinese how to compete with us. Trump may be mentally impaired, but something like this should have been done long ago. However tariffs alone are not the answer. We need something which the United States has never had, which is a coherent manufacturing strategy. We need to create an environment where it is beneficial for companies to set up operations in the US, and this does not mean lowering corporate taxes. Overseas profits should be taxed just like profits in the US, and corporations need to see that there is a tangible price to pay to displace American workers.
29
You severely underestimate the creativity and initiative of American entrepreneurs, comprising overwhelmingly of immigrants. Remember Japan,Inc.! They were going to devour us. Instead. we diverted our brain power and went to work to create the smart phone. After we created the internet and gave it to the world, "they" didn't do anything with it (except the nefarious Russians) but we did. We created search engines and social platforms. And our brilliant minds also created a new way to shop, which will unfortunately displace the dinosaur businesses. These creations are revolutionary and is changing the world. Dare I say it- American Exceptionalism. But more importantly, did anyone back in the 1990's ever foresee this revolution. For what it's worth, the Chinese will be displaced by the Koreans, Indians, Vietnamese, Malaysians, Bangladeshi, Indonesians, all of whom will catch up in capabilities and less expensively. What we need is more investment in our own population via education, proper health care for all, housing, and security.
These are the areas on which to focus and encourage to grow. supporting businesses. Our challenge is to employ our displaced workers in these industries. I say, let China depend on us for their well being. We will create new industries and sell it back to the world.
1
The Republicans hate unions more than they hate China. They were ecstatic to use overseas labor to break the unions in the US. The aren’t fond of environmental laws either. The US would be better served by imposing tariffs on all goods made in countries will impediments to labor organization and poor environmental laws. I won’t hold my breath on this, as proposing such legislation would highlight the US record in these areas.
Trump's possible tariffs on Chinese manufactured products and investment in technology companies are interesting.
They are interesting because Trump is not advocating restrictions on Chinese investments in real estate, as Australia, New Zealand and parts of Canada have already.
For example,largely nonresident Chinese own about 1/3 of the real estate in Vancouver, British Columbia. Take a look, on-line, at the real estate advertisements for Vancouver and you will see examples of 800 square foot condominiums for sale for $ 3 million dollars. These are being sold at the very time average per-capita income of Vancouver residents is declining.
Those Chinese Fentanyl manufacturers really need some place too launder their money. Kill people in West Virginia and you can get a condo in Vancouver for you and yours. Just like the Russian mobsters who buy condos in Trump Tower in NYC. Trump really doesn't want to upset those guys.
5
As a former federal prosecutor in California who had visibility into a lot more than is publicly reorted, it would trouble me to no end to see how rampant Chinese industrial espionage was in the US. The reality is China's IP theft has leap-frogged at least 30 years of its own technological development. It has literally stolen trillions of dollars of value from our schools and businesses, rightly referred to as one of the greatest thefts in all mankind. I may loathe Trump, but this action was long, long overdue. Maybe the Chinese are a bit muted because it is so patently impossible for them to credibly argue that this is undeserved.
24
Unfortunately, past theft of trade secrets can’t be remedied with a trade war. If Trump was proposing a giant uniform tariff bill, with all the proceeds going to improving US education, making college affordable again, and promotingR&D spending and investment at US companies, I’d be in favor, but he’s not. Much of what is wrong with the US economy is due to squandering money on disasterous military adventurism and to lining the pockets of various rent seekers with favorable tax treatments. Nothing that the administration has proposed reduces these trends. China is no angel, so to speak, but if you want to see the source of many US economic problems, look in the mirror.
3
China will put 30% tariff on American cars. Stand bye for a Depression They have been buying Billion thousand of SUV's, Flight testing their new single isle air plane and will be building The most Electric cars in the world.
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"In a tit-for-tat trade battle with the United States, China’s response has so far been restrained."
It's it exactly proportional, as the article itself points out well down the page? China is imposing tariffs on $3 billion worth of goods, exactly commensurate with the amount of steel and aluminum it sold to the U.S. last year. When the new tariffs on $60 billion of Chinese goods go into effect - rather than being announced, because with Trump one is never sure whether what is pronounced will actually be implemented - China will presumably respond with tariffs on $60 billion of American goods, or something equivalent.
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"For now, the proposed Chinese penalties appear to be a carefully calibrated response to the American steel and aluminum tariffs..."
The Chinese are adopting the carefully calibrated approach while our testosterone-fueled President foams at the mouth and spews nonsense on Twitter.
Sad.
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China has been one of the main purchasers of United States treasury notes over the past decades. The Chinese will hurt Trump's foolish behavior where it strikes him the deepest: in the financial stability of the United States.
And to all Republicans and Trump supporters, that massive December tax give-away legislation jammed down the throats of American tax payers to reward top economic class (who favor capital gains and financial charades over labor and the middle class) will create massive ballooning deficits. And who will pay for those shortfalls? China is a nation whose economy is rising, and they can be selective as to whether they want to own US Treasury debt.
If the US is no longer viewed as a stable trading partner,
if US policies make US products more expensive via trade retaliation,
If the value of US currency drops because of poor economic policy choices,
If political leadership steers towards more chaos,
The US will no longer be viewed as a primary "safe haven" for investment. Our interest rates will rise - reflecting higher risk. Inflation returns and jb growth stagnates. Congratulations! Trump's personal financial style of multiple bankruptcies have steered the US towards the same.
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currency swap is the preferred method of payment amongst trading partners nowadays. why would any country wants to buy dollars to subsidize their own demise?
btw do you really think we can or have the ability to pay off 20+ trillions? it's never about north korea. it's all about Russia and china.
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As the U.S. purchases Chinese goods with our dollars, China needs to buy US treasuries with those excess dollars to maintain their favorable exchange rate.
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@Peter Vander Arend
Good point, with the deficit from the tax cuts and now a spending bill that exceeds the loss from the tax cut, the money will have to come from borrowing. The treasury will have to sell a $trillion or more in bonds for the money to pay for all the spending. China is one of the main buyers of these bonds, if it back off, the bonds will have to sell for less, raising the yield, costing even more to borrow.
The interest on the debt is $474.5 billion for 2017, I have not seen a prediction for 2018. The interest on the debt is the 5th biggest expense now.
As we have seen, the GOP proposals to help pay for this are to reduce SS, Medicare, things like meals on wheels, nothing that affects the wealthy. It will affect those trumpanistas the most, serves them right. Problem is many of them are people already ling on the edge of poverty.
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The interesting thing to watch is what China does with their purchases of US government bonds. The US must sell over $1Trillion/year in bonds/bills to finance the current level of deficit spending. China has been one of the major buyers.
What will happen to US interest rates if China doesn’t show up at the next auction? Or worse, if China decides to start selling their hoard of bonds in competition with the US?
This seems to be the way that China could have a very big negative impact on the US economy, while staying completely within WTO trade rules.
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Don't worry, no less than Paul Krugman himself, NYT's Conscience of a Liberal, has assured us repeatedly that the Chinese and Japanese have NO CHOICE but to reinvest their profits in our T-bonds. This, of course, was when the Obama administration was issuing our paper. NOW we shall see.
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I don't know the best way for China to handle is holding of US government bonds. But to carelessly punish the US by devaluing its huge holding in US government bonds tantamounts to a murder-suicide act.
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China does not have to sell their vast holding of our bonds. Indeed, to do so would merely lower the value of all their holdings. All they have to do is put an offer in the market, just above the current selling price, and keep it there. The market will never trend higher, realizing that they want to sell just above that price. Then, every week or so they can lower their selling price by a pip or two, thus forcing the price lower still. All without selling a single bond
If this is an economic war, then NATO countries cannot fill the void left by United States. For example, Airbus cannot fill the void left by Boeing. If they do, then we need to punish Airbus. This is beginning of third world war. China's 'cautious anger' is also known as 'paper tiger'.
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So what you are saying is that our allies are not really allies but serfs, who have to do what we tell them. It would be easier to agree with you if President Trump had consulted with those countries before making a decision, but he did not.
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no. they're vassal states.
why we have military bases in Germany? japan? south korea? we poked the bear to justify nato and our bases up to the Russian border. we instigated japan and proxies to provoke china in south china sea. if we had offered peace treaty instead of armistice to north korea. do we have any reason to stay in south korea.
"Beijing’s restrictions would affect $2.97 billion worth of American steel, aluminum and pork. That is roughly equivalent to the $2.79 billion worth of steel and aluminum that China exported to the United States last year, according to Commerce Department data."
As long as the response is measured, we should appreciate.
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China is making their own commercial airliners and they should enter service in less than three years. So much for Airbus and Boeing as China will eventually eat away at their global market share in commercial aviation.
How will tariffs on pork impact China owned Smithfield Foods, one of the largest providers of pork products?
Why no tariffs on Chinese made apparel items like baseball caps and ladies shoes or did I miss that?
It is far too late. China has won the economic war and will continue to do so with the best weapon in their arsenal. The label that reads Made in China.
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This is so easy to understand, they are building electric car after steeling all the best engineering and will be the biggest producer in the world at the lowest cost.
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I disagree with Trump on many issues, ESPECIALLY on the environment. But on this, he is 100% correct. Global trade HAS benefited the world, but China has benefited from "free" trade much more than has the U.S. The last thing President XI needs right now, with his economy over-extended credit wise, is a slowdown. When things are going well for you, you can afford to be generous. The Chinese will cave.
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Why?Do you think there will be a popular uprising? If push comes to shove the Chinese can stand an economic downturn far longer than America will !
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@Connecticut Yankee
The Chinese will cave? Because it's "over-extended credit-wise"?
China's economic growth, which is 6.8% in the first quarter of 2018, has averaged 9.5% since 1979. The US has struggled to maintain 2.5% average annual growth over the same period.
In 1999, The IMF certified China as the 2nd largest economy in the world. This year, based on one measure -- PPP or purchasing power by GDP denominated in dollars (roughly how much the same basket of goods costs in yuan converted into USD) China became the world's largest economy. Based on projected growth, by 2029, China will be the largest economy in the world by every economic measure, including GDP.
China has between 1.4 to 1.6 billion people. It's the world's largest single market. If China exported nothing to the US, it would still attain its average annual growth rate by developing its internal market.
Also, in addition to its internal market, China has foreign currency reserves of $3.16 TRILLION as of January 2018, of which $1.18 TRILLION is invested in US Treasury notes.
But if the US lost access to China's market, valued last year at $1.4 TRILLION in US exports, we have no alternatives that could replace China, as both Mexico and Canada, our 2 largest trade markets, couldn't make up the difference. Hardest hit would be farmers in red states.
China's economy may slow depending on global conditions but there's nothing the US can do economically to cause China to "cave."
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If the Chinese leadership were being honest with themselves, they’d realize that they’ve gotten away with unprecedented trade and intellectual property abuses for years. Far from being angry now and escalating the situation, they might actually reflect on it and come to the conclusion that they just need to tone down their practices a notch to placate most people.
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Under the WTO China has been treated as a developing nation and have been given it by International agreement.Mainly because the rest of the world sees China as a future massive consumer of their exports.Nothing altruistic here,pure greed ! Maybe they have stretched the rules but they haven't broken them !
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"If the Chinese leadership were being honest..." Xi honest? Trump honest? I think you can stop right there.
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Produce and wine companies in California can't be happy. But when has Trump cared about the California economy?
Funny how the deepest red in California has its roots in agricultural. Let's see how pleased they are now with Trump and his Congressional buddies like Nunes and McCarthy.
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It would have been better all around to pressure China by entering into favorable trade agreements with countries that play nice. Obama and, until 2016, the Republicans wanted to do this with the TPP. Now we'll have to go through some unnecessary pain for a while.
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TPP had its problems, not the least of which was transparency. But yes, it was a more promising solution than a trade war. Contrary to Trump's tweet, no trade war has ever been "good and easy to win." They tend to be mutually destructive and bad for everyone, as past experiences going back to Smoot-Hawley tariffs show. Trump could have tried to address the problematic aspects of TPP instead just killing US participation in it. But fixing the watch with a sledgehammer has always been the Trump administration's specialty.
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TPP was 100% about bankers getting rich by selling out the working class.
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