Every nation has its own industrial policy including the US. Think of research grants awarded by the US government to researchers at universities. China's 2025 is a form of research grants. The difference is that the Chinese government explicitly made an announcement about it and government's subsidy would be more targeted. So it's not surprising that China rejected the US' demand to abandon its 2025 policy. Each side is digging in its heel. But the US seems to have won the prize for arrogance.
1
It will be long. Why? China is seeking Russia for farm goods now. Trump objective may have been to make Russia great again...
1
The US trying to tell China what laws to have. Why is there no outrage over this? What if China tells the US what laws to have? Just imagine the tremendous outcry!
3
To me China's position is entirely predictable. While the US has legitimate complaints, remedy to it would: 1) relegate China to being maker of cheap goods, for ever dependent on the US for tech advances, 2) require a fundamental changes to their system if governance.
China's last minute change was NOT the result of last minute delineation, but rather in keeping with their original game plan. The fact that US "thought" they were close to a deal was simply nativite on the Trump admin AND Wall Street.
If there is a deal, it will simply reset US-China trade terms to that of 2016.
2
Part of the problem is that Mr. Trump does not understand negotiation as a process in which both sides win. I'm sure he never read "Getting to Yes," as he was much too involved in pretending that he already knew how to negotiate.
5
“Each side has dug itself into some fairly deep holes such that it will be difficult to emerge from,” said Douglas Rediker.
Who started the digging and who dug a deeper hole?
Trump, the blamer-in-chief, was egged on to start digging by China-hawks like Bannon, Navarro, Lighthizer, Ross, etc. It began with punitive tariffs. Tariff is a tax on the Americans, not China. Rich Americans are not affected to the same extent as the middle-class and the poor. Farmers get the most pain. Trump tries to soothe farmers with billions of farmer aid paid by tax-dollars. Short term relief. Also, rich Americans pay no tax. Farmer's time table is dictated by the seasons. For Trump though, the 2020 election time table turns his ground into quicksand. He should be more desperate to climb out and fast to save face.
For China, there is pain too. Some American orders might vanish, some workers have to be redeployed. The hole is real, but by comparison relatively shallow. China can unload some of their US T-bonds to finance work projects for lay-offed workers, send them to work on BRI projects, etc. China can also unleash the nationalism card: Chinese tourists stop applying for US visa. Chinese students in USA diverted elsewhere. Chinese consumers buy less American imports.
All these on either side were so unnecessary. But people is irrational. On balance though, Trump's hole is a lot deeper, a tight squeeze.
5
@Observ True,but does Trump realize his hole is deeper?
3
The big picture is that globalism has made people in poor countries like china better off at the expense of workers in the USA and Europe, driving them toward fascism. This is a disaster for democracy but great for Wall Street. How hard is it to see where our interests lie?
3
Think a Trump has under estimated the strength of China to handle a trade war like this. From an objective point of view, this trade war is good to China and thanks Trump.
China is moving away from export oriented to internal consumption model gradually already and with this trade war, the pace will accelerate and thanks Trump.
Unlike USA which is a mature economy, China is still growing as not many people have 2-3 TVs at home, or a car, or 30 pairs of shoes or other luxury items. That’s why China can still growing at 5-6%, double or triple the western world. This will go on for quite some time as the 1.2 billion population is really huge and room for their livelihood improvement is unbelievably enormous.
China will need a little adjustment and actually didn’t really care too much what Trump is going to do as $500 billion (how much actually belongs to China as there are many foreign suppliers behind) can easily be consumed by the 1.2 billion population.
Negotiations will go on but expect China is not eager to reach a deal as exhibited by the current scenario. Trump is like a journalist now making news report to the public nonstop.
3
I watched the PBS Frontline episode "Trump's Trade War" last night.
Very illuminating. China changed their strategy after the Great Recession - apparently they trusted that we knew what we were doing with the financial markets.
Fool them once....
1
@ I saw the special too. I'm confused though. If we limit our technology sector to protect it from theft, the farmers are going to have to suffer instead. WE HAVE TO STOP China from these practices- they know it and we know it. If we open up our trade with other countries (remember the TPP everyone hates?) and look for opportunities in sub-Sahara Africa, we could move forward in spite of the 1.3 billion people (read- huge market) in China. This is a tough strategy but the USA (and Europe) have enormous collective potential. Perhaps Putin is getting in the way whenever (what's left of our) state department and our top economists try to put logic ahead of the president's self-interests.
1
There is a report Chinese leadership (primarily Xi) might have been influenced by a think-tank intellectual who argued that China possesses three aces and hence their hand is a lot stronger than what others realize. This could be what made Xi balk at the details of the comprehensive draft agreement both countries were close to signing.
(1) China virtually has a monopoly on rare earth ores. The argument is if they embargo rare earth ores to US, the the entire semiconductor industry would collapse. This argument is false for 2 reasons. Semiconductors require the rare metals that are obtained after processing the rare earth ores. There are other countries that process these ores and sell the rare metals. Even if China stops exports of the ores completely, there are alternate mines worldwide that can go up. At most cost will go up but these are minor costs in the entire cost structure of semiconductors. Alternately US counter-embargo of critical chips will be effective. Their thinking is flawed here.
(2) US treasury bonds. Dumping US Treasury bonds won't be effective. China does not own enough to make a difference. Besides, lower USD will further improve the US export prices and costs of factories in the US.
(3) Using price disparities in both countries as a pretext to force equal pricing of US goods sold in China. If the Chinese govt does dictate prices of US cars in China to takeover US companies and assets, all global investment leaves china.
2
Trump's ego is such he can't just win he has to humiliate whoever he is negotiating against. China on the other hand will do anything to save face. As a consequence the two sides can never come to agreement.
As far as the argument that China will cave because they will have more pain ignores the fact that socially and politically they can stand a lot more.
When Joe Frazier beat Ali he took a lot more pain, he still won.
6
@deepharbor
You're assuming that current Chinese leadership has a benign long term strategy when it comes to it's relationship to neighbours and rivals like the US.
If you can read putonghua, you should spend some time just reading their own discussion forums for Chinese netizens to understand the strain of nationalism that has been rising for more than a decade. This national chauvinism is actively encouraged by their leadership and is a large impediment to peaceful coexistence with a world that wants peace.
Until there is an honest reckoning of what it means to be a member of a peaceful global village, China as a society needs to ask deeply how much they want to focus on old historical wrongs and colonial revisionism they want to continue down in the way foreigners are viewed.
2
@JimG
What can be more chauvinistic than: "We are number one!" or "America First" ?
So US has initiated a number of wars these past 30 years, meanwhile China has initiated zero wars in the same period. Who has been an 'impediment to peace' you were saying?
1
Hey, the Chinese believe in the long view, Trump and the GOP look only to 2020 and their propaganda machinery. The tariff idea is a ploy to aid the brainwashing machine orchestrated by bonkers billionaires, and it will end only if the few “undecided” voters make the correct choice in 2020. It’ll be a close one.
4
@John Brews.
This is true. The Chinese leadership has historically been very good at strategic planning. The main issue you have not really thought about is - what exactly are they planning in their strategy and how do they see their future relationship with old colonial Europe and america.
For the US to correct a course after more than a decade of very effective tactical and strategic execution by the chinese leadership around technology acquisition, wealth accumulation won't be a walk in the park. However, when it comes to the role for america in their future, you can be certain that the long term goals are a lot more malignant than you realize.
1
Why so little discussion about the cost to the American middle-class outsourcing has leveled on so many rust belt families? Drug abuse and alcoholism have destroyed not just one but several generations who at one time relied upon manufacturing jobs to support their families. I sympathize with those who believe that US trade policy has been tilted towards maintaining low US consumer prices at the expense of US manufacturing jobs. There’s a growing body of academic work examining the limited benefits of trade compared to concentrated devasting costs to US manufacturing workers with particular attention paid to consequences of China joining the World Trade Organization in 2001. The Center for Economic Studies found that from 1992 to 2007, import competition from China increased the likelihood of job loss among US manufacturing workers with less than a high school degree, but not among workers with a college degree. How is this being factored into the debate on tariffs, societal costs, and impact on families and the environment? Why has China been given a hall pass on environmental issues when it is the second largest economy in the world?
3
“Saving face” belongs in vanity fairs, not global leadership. The reality is that a vanity of pyramidal government (China) faces a vanity of imperial presidency, which is an implicit claim of entitlement in each theater.
China’s “sovereignty” is about its inability to change laws quickly enough to adapt to future shock in global affairs. They want to be the Big Boys, but can’t maneuver flexibly enough, because their Congress meets irregularly, and their pyramidal regime is maladaptive for domestic markets’ need of entrepreneural autonomy. In short, Chinese government lives in the 19th century, with a 21st century society.
Our imperial president’s narcissism is enforcing an invalid economics that seriously harms long-term U.S. business access to non-Chinese markets, because Trumpist tariffs will send Chinese business into the non-U.S. markets that U.S. business would seek, in place of Chinese markets.
We have a real estate salesman playing with the legacy of international relations, a bull destroying the shop, with Republicans left to handwringing.
“Sovereign” entitlement is, at the national level, like narcissism at the individual level: An individual has a right to self-determination, but no right to dominate others. Rational entitlement is relative to others’ entitlement to fair play.
Imperial entitlement is, at the individual level, like monarchy. The Founders strived to avoid having a king, but they couldn’t anticipate how law might be weaponized by an emperor.
10
@gary e. davis
It's not just about a sportsmanship ethic of striving to compete to be the best. Growth is not just about building better technology and winning more business, culturally, it is also about driving foreign competition out of business by any means necessary. And the real danger here is for some players, the effort are state-supported where the capabilities of the state are deployed to help individual companies drive their competition out of business.
Tools like this are things western companies outside of the defence industry don't have access to.
This is more than just the flaws of egos of individual leadership. The only difference between Xi and previous leadership is the degree and timeline towards this goal and the intensity of the tactics deployed.
With the old leadership, things were happening slowly marching towards their long term goal in a way that would be difficult to make a drastic move against. With the current leadership, the hostile moves were so overt and their timeline so fast that pretty much anyone in DC who understands China can no longer pretend that the size of the Chinese market and desire to sell more goods into this giant market can blind them to what it is that China has been working towards for decades.
1
Why worry. Donald Trump is happy collecting Tariffs "paid for" by China.
2
In this game of chicken, China stands to lose more than us. China's export trade with us is heavily labor intensive and a dip in their exports would deeply hurt the Chinese labor.
1
@Matt
Tell the people in Iowa, Wisconsin, Oklahoma, ....
This isn't some game, where "some" folks in the USA are alleged patriots (stupid word, badly overused) for having their farms foreclosed, because the criminal in chief has some imbecilic ideas and no impulse control.
3
But, it wasn't China who stole our jobs, it was our manufacturing leaders who off-shored them
9
@dlgs..Exactly. China utilizes its government to help certain industries ,control labor and limit the scope of foreign investments. The low wages in China will keep it strong for some time. That's hard to compete against
1
@dlgs
China stole our technology and is still doing so. It wants to trade with us in its own terms. We should not cave in.
3
@Ted..Thank you Ted - So if there are practices which are not fair, why not bring those cases to the WTO? You could go with other nations when there is a likely alignment of claims. The tariff approach appears to be a path of threats and fears. This path seems to go against any intuition I've ever had about how to make good relations.
2
The US should take Xi at his word that China cannot open up it's domestic markets in the way the US wants. Instead the US should focus on currency exchange rate, both in negotiations with China and self honesty about how a higher dollar exacerbates inequity and deprives large numbers of US citizens opportunity for development.
Of a course a complete dollar "crash" would be terrible. However, the dollar was hovering around 6.2 yuan per dollar for much of the time between 2011 and 2015, when US exports were experiencing healthy growth. So there is a sweet spot for the dollar below where is now, in terms of opportunity for growth for a larger number of citizens.
China is experiencing other challenges in that it's trade surplus with other counties in Asia is leveling off. Rather than the US doubling down on trying to pry open China, it should try to be more competitive in the world export free market.
3
One way to get out of this logjam is for the US to demand all Chinese business entities operating in the US to have an American partner of at least 50% and all its intellectual properties to be transferred to the American partner. If you search Ford China and GM China on Google, you see they all have Chinese partner of 50% or more. Just think we let Huawei and Alibaba operate in the US only if they have American partners as majority owners and share their intellectual properties.
8
China never ever accepted WTO rules of international trade. But in 2001, over enthusiastic American Govt, heavily lobbied by big American (and other) companies, either did not realuze true Chinese intension or deliberately ignored it to benefit mostly those private companies. Chinese tactics since then is a very typical in the way such autocratic regimes negotiate almost any geopolitical issue- empty promises that they never intend to keep, besides playing with our open society and its democracy against us.
In a way this trade war is good that USA and other western countries need to reassess its trade policies and make it more accountable to its national interest and interest of its people, not just those companies which make huge profit using massive abuse of human rights and lack of labor laws in most developing countries, more so with a very repressive autocratic rule as in China.
this trade war will also reduce a large part of conspicuous consumption that most consumers in western countries, mainly in the US, are so known for. that's a huge problem for the world and climate change.
10
It is about time the US gets tough with China, they steal our technology, dump products and manipulate their currency.
8
I always thought that Republicans or the GOPs are strong supporters of free trade. Maybe I am just getting older and cant remember well.
3
@Peh Ng
There is a difference between "free trade" and "fair trade". Do not be a free trader at all costs!
2
It is long past the time when we should have started standing up to China and its economic bullying. We never had a leader who would do that because it causes temporary pain in some economic circles. Listening to all the caterwauling about taking the hit now so the future will be better reminds me of the quote attributed to Lenin: "The capitalists will sell us the rope with which we hang them." The rope salesmen are really upset about what is going on. Most of the rest of us think it is worth the price to get this resolved.
7
@terrance savitsky
And in the event of WW III which countries would partner with China? I’d bet North Korea and Russia. Maybe Syria and Iran too? Maybe even there would be Arabs and Jews fighting together against “Communism.” At any rate, no one wants a war with China. Not even the US.
1
Eventually T.ump will just declare victory, take his ball, and go home
1
POTUS will likely cave as soon as economic performance in the US more clearly deteriorates, or the Chinese give him a showpiece concession with real jobs for a rust belt industry. Then the democrats will hammer away at his failure/fools errand and eat POTUS lunch at the polls.
3
@On Therideau
No one should cave against BULLY. We should stand up as "American".
2
This situation makes no sense to me. Why are we blowing up the global economy?
I don't get it.
But then I don't understand why we have a nut in the White House, who got a minority of the votes, who was put there by Vladimir Putin no less, and who is doing a number on the USA.
aaaarrrgggghhhhhh
7
The farmers who support trump are the new welfare queens.
10
The tariff war will end right before the 2020 election. That conclusion is based entirely on past performance & empirical facts.
FACT ONE: Trump cares about his own well being more than anything else. His minions will lock children in cages, sell out our democracy, abuse the Emoluments Clause, commit repeated obstruction, and on and on.
FACT TWO: Trump will lie with complete impunity over trivial matters, such as the number of people who attended his inauguration. When he announces the end of the tariff war, he will "spin" the agreement to look like a huge success (for him).
RESULT: His supporters will turn out in droves to reelect the most formidable Grifter in US history.
2
@Joe Trader
How many unemployed workers and bankrupt business owners will there be after 1.5 years of high tarrifs?
Enough to vote out 45, I bet.
We shouldn’t be trading with China in the first place. The Chinese government is the most repressive government on the planet and they have their greedy eyes on Africa. What will they impose on the African continent once they’ve bought it all up with the money they made from our need to buy cheaper sox and t-shirts at Walmart?
5
if China can bring African workers up to the economic level of Chinese workers that will be a huge benefit to them. Instead they have brought American workers down to the economic level of Chinese workers which has been a disaster for us
4
Trade Chief Dumbs Down Contract Term After Donald Trump Doesn’t Get It - Huffington Post
1
The U.S. is already winning.
Manufacturers are already shifting production away from China. This trend will now accelerate.
https://www.nytimes.com/2019/04/05/business/china-trade-trump-jobs-decoupling.html
The U.S. should now slow walk the negotiations. Keep the higher tariffs on China for at least a year or two. Ideally, we should keep the tariffs in place until China decides not to be a rival/adversary to the U.S., which may be never.
5
The Chinese will pay these tariffs about the same time it begins snowing in Hades. How on Earth does this huckster think he can get away with spouting such nonsense? Trump has just imposed a huge additional tax on American consumers. Then he’ll try to prop up the farmers who are being battered— and losing foreign markets that may never come back later — by shunting tax dollars previously budgeted for floods, tornadoes, hurricanes and other climate-driven emergencies, to bankroll farm subsidies. Yet another tax.
It’s like setting a truculent five year old loose in a nuclear plant, with a large wrench in his hand. “I wonder what happens if I pound on this valve over here a bit?...’
7
dt will keep punching the folks who elected him and they will keep on supporting him no matter how illogical, incoherent and incompetent his trade “negotiation” skills
3
It helps when Trump bails out them out with our money, which of course he’s trying to do with the farmers who stupidly voted for him and now entirely predictably are being hurt.
3
Trump is a person who seeks out "targets" to bully so he build up his ego. Our country does have serious trade issues with China. His use of tarrifs is the wrong way to go. A more mature president would not have pulled the trigger & started a no win situation. Obviously there will be areas in which no clear agreement can be reached. Yet there are many areas in which positive results can be accomplished. The for now aborted documented agreement with Iran is a prime example of what be accomplished. This trade war can only cost both parties more than they gain. This is another example of Trump's failure to understand basic business fundamentals
4
Let’s see-
China:
-Plans long term over decades
-Total powers to set its trade policies
- Largest economy in the world
Trump:
-What’s short term politically good for him
-Lies that the US is getting billions, when in fact these cost are nothing more than a VAT tax on average Americans
-undermining international markets for American products and farmers that took decades to build and may never come back
- views everything as a zero sum game
Wonder where this is going?-
down the Trump rat hole with everything else this conman touches
6
I check on Trump's approval ratings twice a day on the 538 site which averages all the polls. It is going to be very, very interesting to see what happens over the next few weeks!!!
Twice a day? You have imprisoned your soul in a VERY dark place indeed. Nothing short of a nuclear exchange has the potential to be that noteworthy in twelve hours. Even our sped-up wired world is more contemplative than that.
"Why the U.S.-China Trade War Could Be Long and Painful: No Off-Ramps"
Trump must defend his disastrous failures.
The Democrats must "forcefully point out that his brand of protectionism has, so far, been disastrous for the country, including for his constituencies." (Washington Post) I understand the frustration those Democrats have, but they should know, as all Americans need to be reminded, that all of Trump's actions, tweets and lies are just providing more issues to raise against Trump and his republican supporters in congress.
"As Catherine Rampell notes, the 2020 candidates have mostly been “muted” and “mealy-mouthed”" (Washington Post) will not cut it. Trump has more negatives than any other person in his position and that is what the Democrats must go after in every state.
Trump is just a swamp covered bully. The way to deal with him is to point to every mess he has created and explain what is wrong. For example: Trump's tariffs are taxing all of us in the Middle Class and Poor. Costs for every day products we need are going up and it's going to get worse. Yesterday a simple loaf of bread at our grocery store was $4.00. How much has the price of a gallon of regular gas cost at your last fill up?
Trump and his republicans are doing their dead level best to turn the Middle Class and Poor into his serfs and we need to stop him and them in their tracks.
3
If half this Country wasn't actually pulling for China to come out ahead in this spat they would be much more willing to signing an agreement than they are today. They just don't understand how dishonest the mainstream media is here and how poorly they reflect the will of the Voters and believe Trump is in a weakened state due to all the derangement. Thanks Hillary supporters for hating me and the rest of the deplorables so much that you have now emboldened China. Not enough to do Putins bidding, now you serve Xi as well.
2
The gist of this trade war lies on the institutionalized hacking theft system set up by the Chinese communist government and its military apparatus along with on going foreign exchange rate manipulation to artificially keep down low the price of already cheap Chinese imports across the board, disrupting the free global market order, especially the IT network equipment market gradually taken by Huawei products with its pre installed back door programs.
Without directly dealing with these issues, China will continue to make a giant sucking sound of hoovering up trillions of dollars from our economy while we are too busy blaming on Trump even for our country having been cheated, and hacked and sacked by Chinese for the past decades even before he was put into the White House.
Hating him for what he is, should not justify attacking blindly him for his effort to correct the wrong that our past administration had neglected cowardly for so long.
5
It will have to be a protracted "war" to see any of the benefits, otherwise it will be the same old stuff.
2
“Why the U.S.-China Trade War Could Be Long and Painful:” - I can explain it in two words: Donald Trump.
With him everything is a battle to be won . There’s no such thing as a solution that benefits both sides.
Better to hurt American farmers as long as you hurt the Chinese worse. the US taxpayers will cover the farmers.
3
Those skeptics say the trade war will be long, but I doubt it. Xi and Trump/GOP are politicians and know there are limitations to their egos. Their electorates need to be employed. Their political base can not afford to lay people off, to eliminate jobs because supply exceed demand, because buyers are buying less, because businesses absorb the cost of tariffs so "net income" decreases. We must at some point be realistic, which is hard for Trump/GOP to comprehend. But it will come. Until then, it is all follly, all media blitz, all news to print. Eventually, reason does kick in. Unfortunately, Trump/GOP has no understanding because he is intellectually deficient. Hey, we must call it as it is. Right.
1
China has way more to lose in a "trade war", on not from selling cheap good into the US market. Tariffs mean less access to intellectual property and access to telecommunications, making it more difficult for them to steal and spy, which are the very foundations of any competitive advantage they may have.
3
Just like NAFTA - Trump agrees to what we had before, gives China one of their wish list items, then proclaims victory, because it's now a Trump agreement. Never mind that it's worse for us.
1
Excuse me Irwin, China's trade war against us has already been painful. But not to the U.S. Corporations that lobbied for trade deals with China et al, shipped their factories overseas as they stacked their profits there as well. All while leaving behind in the manufacturing centers of the U.S., unemployment, despair, drug use, family breakup, communities going broke. Was this pain enough? Apparently not for the egg head economists promoting free but unfair trade.
There is nothing in our constitution that requires us to develop under developed.The real criminals here, every politician that voted for these deals.
So Irwin, leave NYC and try driving the nooks and crannies
of the northeast, southeast and mid west and gaze on the results of ruinous free trade.
Amazing how NYC always gets bailed out by the Fed from a recession they themselves created. Maybe NYC needs a taste of what the country has suffered to increase stock prices.
Corporations hog our treasury today. They think of it as
their money, from subsidies to special interest rule changes. And the average American, forget it.
4
Ironically, the point of this article is that each side has dug in on specific topics that are in conflict with one another, but you haven't been specific about any of those specific points. Details please! What have they dug in on that directly conflicts?
It will be difficult for China, but fairly easy for the US. Most of the developing world is not China. Many are democracies and suitable business partners for The US. China is a rogue nation with a thoroughly corrupt dictatorship at its head. It will chair an alliance of similar rogue pariah states. They pose little threat to modern democracies. India has plentiful labor including highly educated labor. Let’s partner with India from now on. But we should counsel and advise the Chinese people as they quest for freedom and full democracy by 2030. I believe in their potential.
1
No real Conservatives/Republicans who preach to us about the sacredness of the free market should be supporting Trump’s latest gambit, transferring $15B from the American consumers who pay Trump’s tariffs into the bank accounts of farmers who are hurt by Chinese retaliation to Trump’s tariffs. I can’t think of a clearer example of a wealth transfer from one group of Americans to another.
Reagan and Bush pushed hard for free trade, and Republicans sold trade liberalization to their voters with promises of lower prices. Now all of a sudden Republicans stand by mute as Trump launches tariffs.
Trump has illuminated the hollowness of Republican ideals.
The character-matters crowd stood by as Republicans voted in a serial philanderer.
The free-market-is-best crowd stood by as Republicans voted in someone who would make William McKinley proud.
The everything-that-benefits-you-is-Socialism crowd stands by as Trump gives government money to farmers hurt by his own actions.
I’m having a hard time understanding what traditional Republicans see in Trump. He certainly doesn’t represent anything like they’ve seen in their lifetimes.
6
The problem as I see it is Trump cannot understand that everything is not a zero sum game. Both sides can win in a negotiation and the best strategy is for that outcome. Trump seem to lack the intellectual ability to be a success at anything other than the con game.
2
I am really surprised at the ignorance of the comments by NYT readers. The issue being faced is that China does not want to enact legislation that would protect any trade agreement. In Canada's dealing with the USA, both countries ratify any trade agreement through legislation. By doing so, each of our companies gets to rely on the rule of law when they are doing business in the other's country.
China wants to have a trade agreement - without the ratification through their legislative body. They are insisting that their are no laws supporting any trade agreement. This means that if a US company finds that someone has stolen its IP, or if a local company has opened up a competing factory illegally, then there is no local law that the US company can avail itself to. It would require the intervention and pleading of the US Government to work with the Central Government in China.
This process is completely unacceptable -as it gives Chinese companies full access to American laws - while denying American companies access to Chinese laws.
Very disappointed in both the coverage of this issue - and the comments. Both the coverage and the comments are fixated on TRUMP TRUMP TRUMP - and ignore the real issues at hand.
4
For Pres. Trump, this is just public relations. He doesn't know or care about any issues that Mr. Irwin's article brings up.
1
Where is Trump the deal maker? He seems to have no art or even a clue when it comes to any foreign policy, whether he embraces authoritarian leaders such as Hungarian Orban or the Chinese who steal American know how in the name of trade.
Just another degree of degregation from this President.
4
There is nothing like two ego driven males to derail a normal, relationship of trade that benefits both countries. If America would of had a single Payer healthcare system, proposed by President Richard Nixon back in his first term, almost 50 years ago, most businesses wouldn't of needed to cut their bottom line for labor because of the cost of pensions, and healthcare costs, and go abroad. However, the AMA (American Medical Association) held the lobbying power at the time, and that idea was DOA. That fact was a pivotal moment for the long range need to have cheaper labor costs, and here we are in 2019, with China exporting a large percentage of goods to the world. China is America's largest banker, so it has leverage.
3
It's easy to blame China for all US problems, but in reality the majority of trade is intra-firm. Companies shipping parts to their various affiliates throughout the world. Do we really import IPhones from China, or does Apple import IPhones from its own global assembly lines. Too many of our economic ideas are still tried to narrow national concepts in an era of global capitalism. Additionally, we can learn from China's industrial policy, something the US could benefit from by making plans to become a leader in future green technologies. Except that's impossible with a president who doesn't believe in global warming.
3
I have some difficulty understanding why intellectual property rights negotiation need to be done by a country to country basis rather than at the firm level. Multinationals with billions and trillions of assets are in the best position to know what they are willing to give and what they are willing to take. It is impossible to get any detailed language that would cover all industries, and some form of technology transfer are inevitable anytime a business choose to set up a subsidiary overseas.
Remember, if US businesses are so concern about theft of intellectual property, they can always choose to partner with businesses in another country. What is really going on, is these firms want a better deal than they can muster on their own.
14
America's President Trump wrote the Art of the Deal, China's Philosopher Sun Tzu wrote the Art of War and Europe's military theorist Carl Von Clausewitz wrote On War. America confines itself to a quarterly time horizon while China and Europe engage in quarter century to century horizons. What comes to mind is the saying they use in Ireland, "The pup for the puddle and the old dog for the long road.". Tariffs should have been used beginning in the Regan era to mitigate the hollowing out of manufacturing in the USA. If Trump does not resuscitate US manufacturing then his base will embrace another saviour. We are looking at a quarter to half century movement toward America for Americans thinking whether we like it or not.
4
@MickeyHickey. And yet the Chinese geniuses are refusing to accept the checks that ensure that they do not steal American IP. Seems their 100 year plan to overtake the US is by stealing both the government and privately funded American R&D, and building upon it.
Maybe they should have a 100 year plan for honesty.
1
@True Norwegian
I am aware of one Canadian-German company that negotiated away know how and patent rights to seal multi billion deals. Their thinking was that China was so backward it would be 25 to 30 years before they would become competitive in a high tech field. Surprise, surprise the Chinese caught up and surpassed them in less than 5 years. China stole nothing,highly paid MBAs in the USA, Canada and the EU seriously misjudged the Chinese for short term gains. They are now paying the price. The last six multi billion dollar public transit contracts in the US were won by one Chinese company.
Cooperation and doing together. I hear more of this tone from China. Is not The WTO the place to bring complaints? Chances are, you could make a coalition of affected nations to face, artificial domestic currency inflation, etc..
"Why the U.S.-China Trade War Could Be Long and Painful"
No, it will not be. Sooner than later, Mr. Trump will blink.
Remember; he has an election to win. And he does not think that a "long, painful" US-China trade war will get him votes.
Come November 2020, he wants to have a strong US economy. To him, that means a strong stock market. And he has been told that the prerequisite for a strong stock market is a China-US trade agreement.
5
@Eddie B. Trump will not blink until his socialistic payments to farmers no longer have any effect and his corporate buddies and the Wall Street croupiers begin to feel the pain and pressure the grifter.
But, that is also no guarantee either.
1
@Eddie B. - Also a high dollar which makes imports cheap - even if it kills exports.
There was only ever one "off-ramp" for how this will end: China will approve an Ivanka business license or Trump Tower Shanghai and Trump will decide that the deal they're offering is a good one after all.
31
We now import ALL of our antibiotics from China as well as many other drugs. One can debate whether we should have let this situation develop, but it's reality. Now tariffs on these imports. What if China decides to institute an export ban? There are no winners in trade wars.
15
@sandy dembski
"What if China decides to institute an export ban?"
Their economy will collapse within 1-2 years, and their current government shortly thereafter.
@sandy dembski
There are no winners in anything Trump touches. Trade wars, fiscal policy, international agreements, immigration policy, nothing. I never believed that I would see the day when there was a politician in office I truly believed was incapable of doing ANYTHING decent or right and was only capable of doing harm and serving their petty personal interests. Little did I know.
2
"The United States is demanding that China codify rules into law to protect American companies (and their technology) that do business in China"
China will in no way agree with this requirement. What will the U.S. react if another country demands that U.S modifies the law to protect their interest in U.S.?
5
Protecting capital, not labor. They want the power to bust unions through labor arbitrage.
@Fiona Exactly. Sadly Trump and his band of fools only see things in one dimension and they are not known for critical thinking skills.
1
@Fiona
Why should the US let china demand that our companies hand over their intellectual property in order to do business in china? That is madness.
1
I just saw the president on television answering questions. He suggested that Americans will just look to buy things from other countries. ????????
This cluelessness about shopping is right up there with the time I saw Bill Gates on Ellen's show playing some dumb shopping game and Bill stated that he had not been to a grocery store in over 4 years. He had no idea what anything cost.
11
@tom Harrison
The real target are the supply chains in China. For example, Foxconn, Wistron, Pegatrom makes iPhones for Apple. Foxconn has plants throughout china that does this, but it also has one in Chennai India that makes iPhone X family.
The lever is to make Foxconn make more iPhones in Chennai to ship to US - for this to happen, a large amount of supply chain (other suppliers) will expand in Chennai and shrink in Shenzhen.
After this, a large number of factory workers and engineers in Shenzhen will have to find something else to do or lose their jobs.
As youth unemployment in China is about 3x that of the overall average, this is a large social pressure that the Chinese government must solve.
In china, the government has always had a compact with their citizens where the citizens give up basic liberties in exchange for the government performing well. This is the performance legitimacy of the Chinese communist party - the Chinese citizens really do expect their government to perform well whereas most Americans just want the government to get out of their way.
In this scenario, the pressure within china will build up exponentially - their pain will be many times more severe. However their tolerance for pain is also much higher as they have abilities to quell dissent that america can't.
Before such drastic steps are taken within their society though, you have to consider if the CCP will stay unified or will they see Xi as a liability?
2
Regardless of the near-term outcome of the trade war, I try not to purchase items made in China due to the Uyghur concentration camps in Xinjiang province.
5
Trump is pathologically insecure and the hallmark of his Presidency is painting America as a hapless victim. Aside from this not being true, Trump’s reactionary, vindictive foreign policy has and will continue to damage this country. Trump is incapable of crafting policy to make our economy more competitive and our citizens more prosperous. He is a complete and utter failure. And we continue to put up with him and his enablers.
20
@Doug Lowenthal
On Trade with Japan and then Korea and now china, Trump has been consistent in that he sees an unfair trade deal.
Most economists view Chinese tariffs on their own imports as hurting China in the long run, so they don't view it as a negative or a reason to impose tariffs on the goods sold to the US to try to remove them.
The argument is the tariffs hurts their own citizens.
However, Trump sees this imbalance as fundamentally unfair. Some economists are starting to agree there's some validity in at least asking to have china remove all their tariffs on US goods if the US is to have tariff free trade from China. The immediate impact is on workers who produce the items with tariffs.
Because China sells close to 600billion in goods to the US and the US sells 120billion to China, tariffs will be much more painful to China.
But to make it even more painful, the real issue is China is heavily reliant on contract manufacturing and the way to create real chaos in China is if the Supply Chains of various electronics and high value goods are threatened and have to move to India or Vietnam,.
That would practically throw large numbers of factories and workers out of their jobs and create chaos not seen since their cultural revolution.
3
Totally awesome to have an instant solution available at the G20, which also sounds very convenient. It is a lot like an old black and white silent cowboy movie.
2
If USA want to feel like it's in charge than start a REAL trade war and form your own Belt and Road Initiative like China has, instead of sending all your troops overseas to fight everyone elses wars and building their infrastructure for free without conditions attached.
USA needs to wake up and smell the roses and realise with the government deficit you have you aren't in a position to bail out any big corps to protect citizens retirement pensions and health care money, if you don't get your nations debt down. Everyone loves people who give stuff away for free until you stop giving it away.
Time to get some guts as a superpower and re-classify China as a developed nation and all those other nations where the rich get richer because their governments rely on hand outs from the developed nations to build their infrastructure and provide welfare for their poor.
Do what China does - give nothing away free - form free trade deals with nations that will improve your trade deficit. Think getting the deficit down.
If the USA hadn't given the internet away to the world and had put a franchise or patent on it, you wouldn't have a deficit now. People only like you while you give stuff away but it doesn't pay the bills.
8
@CK
Belt and Road is too much malinvestments in infrastructure. It is also a debt trap diplomacy as many leaders can't do math and don't realize they may not generate enough revenue or tax revenue to ever pay off the loans.
If the leaders of these countries can't even pay the interest portion of the loans, they have to give up assets or resources - things like airports, sea ports, oil, mines, minerals now have to be used as payment. It's like the international global version of the creative mortgages that mortgage agents in the US used to trap too many marginal borrowers into house payments they can't pay off.
Of course, if the leaders are smarter, they will know not to borrow beyond their means. Unfortunately, we've seen that as a rule, most leaders of most countries don't actually realize they are as smart as they think and they mess up badly on traps like this.
@CK
If CERN in Switzerland had not conceived and developed the Internet the US would still be using Morse Code.
1
Trump is already promising to supply American farmers $15 billion in aid to buffer the body blows the agriculture sector will suffer when China looks elsewhere for it's farm products. This is obviously a way to insure his voters in rural areas will not suffer much in the short term. But there is no guarantee how long this aid will last if things get worse. Meanwhile the rest of us will have to pay more for our products. But this is par for the course with Trump. His leadership style is chaotic and we will never have anything close to stability as long as he is president.
8
@Ferniez
Paradoxically, this type of support is actually one of the things the Chinese do a lot to support their own state owned companies that allows them to sell cheap steel, and yet here we are, doing this trick that the Chinese are not supposed to do in the draft deal.
LoL.
Got to love socialism from the anti-socialism party.
1
Or perhaps this is a phony trade war, contrived by Trump and Xi to look strong to their bases, but timed to self-destruct during the 2020 campaign. Trump will boast that he won the war. All those Trump supporters harmed by the tariffs will treat him like a savior and vote for his reelection because he made America great again. Conned again, just as they were in 2016, but Trump needn't worry about their unhappiness in the interim because it won't be voting season.
4
@Robbbb - It wouldn't surprise me if that's how his tiny mind works but if so, he's underestimating the damage he's doing and the impact it will have on voters.
2
But if China decides to dump its treasury holdings it will hurt them, too. However it would cause massive damage in the U. S. stock market.
In the end they probably won’t do that. But what they could do is play the long game and let the trade war hurt Trump’s supporters, who are sticking with him out of allegiance and trust, all the way up to the 2020 election. China’s bet would be that Trump’s economy numbers would start to hemorrhage and he would end the trade war, fearing the Democrats could nail him on that.
China has the winning hand.
9
If China called in its treasury holdings, the value of the dollar would plummet and they would be holding cheap paper.
@Oliver
You seem to believe that 'Trump supporters' are some kind of cancerous growth on the body of the American Politic that can be cut away without killing the host. Hurt Trump supporters you hurt all Americans. You're inability to see that is why China insists on extending this conflict.
If a deal isn't made soon and a business consensus is made that the tariffs won't be lowered short term, supply chains will shift to other countries..China has too much production capacity now, once supply chains shift, they will lose GDP, employment, and foreign dollars. Chinese will invest elsewhere too, as it's likely the currency will fall as a result. Money will flow out quickly.....They will make a deal...Good time to strike...Let's just hope Trump ignores the fearmonging media and holds out for a good deal...
3
@Lindsey E. Reese
The media is irrelevant to Mr. Trump and do not in any way factor into his decisions. Doesn't mean that China isn't paying attention to the media bias though and it is certain that without that media bias China would have already made the concessions we are seeking.
NYT reporting on the trade conflict is so frustratingly biased. The issue isn't whether Trump views a "zero-sum prism" or whether China views American demands as "disrespectful". Even more, an outcome that reflects "constructive ambiguity" would continue the increasingly dangerous drift by confirming President Xi's apparent belief that China may win at the expense of other nations. President Xi is moving China more strongly towards a state-directed economy that relies on intellectual property theft as means to "win" in the marketplace at the expense of other nations, as contrasted with the USA model that relies on rule-of-law predictability and transparency to promote entrepreneurial business formation. Indeed as the article points out, this conflict is between two very different systems and goes beyond trade. China's rapacious behavior of using loans to tinpot dictators as a means of taking control other countries' economic assets and it's flagrant claims of territorial sovereignty over the entire East and South China seas reflects that win/lose mentality. If China does not find a new approach to lead in a way that may benefit others, the world will be at a high risk for another world war.
5
@terrance savitsky You stated this publication is biased on the story, yet, throughout your thesis you failed to convey what that bias was aside from telling us the difference between two systems of governance.
1
@terrance savitsky A very good post, thank you.
@Dan The comments in quotes were intended to reflect the reporting bias, which implies in every article that the Trump administration ought not be so demanding of China nor should it deploy tariffs to encourage China to see benefit in compromise. The constant aversion to Trump distracts from the big picture and hugely important strategic importance of accomplishment a shift in the direction of the US relationship with China.
I think a trade war with China is one we must have - and which we'll win hands down. China, unchecked economically will continue to become increasingly aggressive militarily. Why are they investing in supersonic missiles designed to thwart our ABM systems?
We can weaponize our enormous consumer market to peacefully induce China (and her PLA ) to abide by WTO laws as well as any trade deals signed with the USA. The alternative is almost certain military conflict just a few years from now. Sorry Walmart shoppers - prices may go up - but in the long run East and West can live peacefully and prosper...and prices will go back down.
2
Tensions with China is good for Trump's political position.
Deal with it.
I think only a bad American would hope for the failure of the current president.
He's doing things that matter. Get a grip!
This trade issue is ok for most Americans. Let's hold a referendum!
3
So American companies go to China to union bust and generate short term profits. They drive down wages and sell the exact same product back to the US consumer. Massive profits for capital from labor arbitrage and yields greater authority of control over labor in the US.
So why are we blaming China? You actually think Trump is pro union? Almost all of this talk is protection for intellectual monopoly of ideas. How about you give me a patent for my labor such that employers can only hire me. Funny how free markets are only free market for labor but do everything possible to protect capital.
4
"The question for the weeks and months ahead is how much damage each side will tolerate before rethinking some of those basic assumptions and deciding that they don’t want to dig in quite so hard, after all."
Trump will probably cave as soon as the markets start to drop significantly, and the Chinese know that.
7
If the spineless heads of previous administrations had not sold out America’s long term interests for easy political relief, Donald Trump wouldn’t have such a mess to deal with. At least Trump understands what’s at stake...and he’s fighting for the measurable metrics prior presidents didn’t have the courage to hold out for. Go President Trump!
2
"But given where things stand, it may take that kind of surprising reset between two top leaders, built on personal relationships..."
Don't tell this to our negotiators, but China has seen plenty of examples of what happens with Trump's relationships –– they mostly all end badly.
6
This follows an established pattern with the Trump administration. And I think it is deliberate in order to control the daily news cycles to Trumps liking.
The pattern is:
1) "Going to be the best deal for the US ever"
2) "we are making good progress and should have a deal shortly"
3) "The other party backed out of their promises, so we have to hit them hard"
4) "we got them back to the table and now we will run the table with them"
5) "I'm going to punish them because they are clearly bad actors"
6) rinse and repeat 1-5 serveral times.
7) reach agreement on a modestly different deal, with little or not benefit than the day talks first began.
This is Trump governance in action.. it's all about the drama.... over and over and over again. And sadly the Press and the people keep falling for this nonsense.
18
@Chuck
Bingo. And don't forget - we have to go to war and kill thousands of people to make sure we divert attention away from the whole Mueller mess. Iran, Venezuela, who else?
It could be long and painful for Trump personally if China decides to do to him what Russia did to Hillary.
China, are you listening?
The best dirt would be in the form of video recordings, audio recordings, photos, texts, emails, snail mail, documents, cancelled checks, illicit contracts, tax returns, financial records, evidence of criminal activity almost anything and everything you can get your hands on to publish on the internet.
I think China will do this.
7
China didn't steal USA technology and you gave it away when USA citizens moved their businesses offshore for bigger profits. You didn't have the quality assurance in place to protect your IT information.
Same can be said for giving away IT when foreign students come into the nation to study or USA scientists etc go and work in China and they take all that IT information with them when they go there to work.
USA needs to be honest about how it got itself in this predicament and it doesn't mean you're not patriotic if you can be constructively critical of your government and big businesss.
12
@CK So true, US moves work to country with cheapest labor. Look at clothing jobs, left US South, went to Jamaica then Philippians then China now Vietnam..
We want biggest profit for companies, and cheapest goods for our people.
In the US Walmart is a major player, they sell to US but Buy from China, if they had to buy from US they would go out of business and Kansas would have nothing to buy
1
@CK Perhaps the solution is not tariffs but a total embargo on all trade, cutting off all Chinese visas and students and all Chinese ownership of US businesses similar to the US's policy towards the USSR. The Chinese are an existential threat to the US and if sacrifices need to be made they should be made asap. In a few years, supply chains will adjust so that instead of buying from China we will be buying from countries more in line with US policies. We won't avoid all price increases but they will not be the full amount of the tariffs. Moreover we will not be subject to all the Chinese spying on our US companies. The Chinese don't seem to excel in innovation but they do excel in copying US designs. Until the US is assured that China will stop stealing our IP we should completely cut off all interaction.
1
Listen.
ALL Donald Trump has to do is TELL us that he made a great deal, even if nothing has changed.
his base will buy any fairy tale he spews out.
The rest of us will have no way of knowing what was done, because any report or accounting will be hidden, redacted, or deemed too long and boring to read.
Or, as a report is issued, Trump will do something bombastic to draw people's attention away, or, bray that it is fake news, just like he did today at lunch time in regard to studying troop deployment. He said, on camera, that the story was in the NY Times, so it's "Fake news".
That is ALL FOX will report on that subject.
6
Reuters is reporting that Trump has toned down his rhetoric, now calling the tariffs escalation with China a "little squabble."
https://www.reuters.com/article/us-usa-trade-china/trump-no-collapse-in-china-trade-talks-tariff-war-a-little-squabble-idUSKCN1SK0A7
Cue the walk it back music, for Trump's 2020 prospects are nothing if Wall Street loses faith.
1
I suspect once Ivanka tells him how his poll numbers are lowering going into an election, our failure in chief will let China off the hook and claim victory over China. The Magas will eat it up.
4
Authoritarians look for quick answers to thorny problems
This is also true for authoritarian wanna be’s.
Looks like the stable genius is having crow for dinner for a long long time
5
They should make an agreement that goes into effect when Trump is out of office. That way they can claim credit for reaching a deal without doing any real change. Nobody will care about this a few years from now. The original deal can be renegotiated for better terms under a TPP by a different name.
The Trump office has obviously mistaken the cost of the trade war, and also misjudged the target. Apparently, the U.S. has miscalculated at least on two fronts: The resilience of the Chinese economy and China's resolve to defend its core interests.
8
A rebalancing of each economy is needed. China needs to invest more for domestic consumption and less for export while the U.S. will need to adjust for less agricultural and fossil fuel exports.
4
An implicit assumption of Trump’s trade policy is that by enacting tariffs, the costs of imports will go up, resulting in more domestic manufacturing. The only way this can happen is if US corporations invest large amounts of money new plants and equipment. To move production back to the US will require large investments in new plants, equipment, machine tools, etc. and training more scientists, engineers and production workers to be competitive with China. Since passage of NAFTA (1993) US corporations have been outsourcing production to Mexico, China and other low-wage platforms to reduce labor costs and maximize profits. Since the 2008, Large corporations have curtailed business spending (i.e., investing in new plants and equipment) and spent circa $5 trillion of ultra-cheap money supplied by the US FED, for share buybacks, which increases share price in days to weeks. This has continued with the bulk of Trumps 2017 tax cuts (circa $1 trillion) being used for more share buybacks. What corporate CEO is going to invest in new manufacturing facilities, with a financial whose financial return is dubious when they can spend this money on stock buybacks to rapidly increase share price and their personal compensation (based on share price)?
Notes
1. China, Saudi Arabia and the US: Shake Up and Shake Down. By Prof. James Petras Global Research, Dec 04, 2017; Link: www.globalresearch.ca/china-saudi-arabia-and-the-us-shake-up-and-shake-down/5621487
33
In a bilateral trade agreement there is no stopping a withdrawal in the event of a dispute. Thus tariffs hang over the agreement forever. The WTO and other multilateral agreements avoid this obvious defect.
5
Re: Long and Painful
Long : 2 years max Painful : For China, not US
Econ 101
In a global economy, when products from a country become more expensive, production will shift to countries not exposed to said import taxes, and doubly so if wages are lower
(Consumer Electronics is the #1 PRC import to the US)
Example Iphone
The Iphone is designed in Cupertino, but is c-u-r-r-e-n-tl-y manufactured by Foxconn (a Taiwanese company) in Zhengzhou, China
Should the Iphone be taxed 25% what would Foxcon do ?
Read Reuter‘s BUSINESS NEWS DECEMBER 4, 2018
"Apple assembler Foxconn considering iPhone factory in Vietnam -state media”
https://www.reuters.com/article/us-foxconn-iphone-vietnam/apple-assembler-foxconn-considering-iphone-factory-in-vietnam-state-media-idUSKBN1O3128
Note that this was in 2018.
In a global economy, manufacturing will move to where it costs the least - and tariffs on products from one country will simply shift production to another
The Iphone price will stay unchanged, as the US has no plans to tax imports from Vietnam
3
@Woof
Switching iPhone production to Vietnam will take years, not weeks... if it agreed to at all.
You are conveniently forgetting that tariffs are actually a tax on US consumers... because tariff costs are passed on to distributors and ultimately consumers. This will be particularly painful for Apple as it will drive phone owners to the sidelines and they will hold their phones for longer periods of time in hopes of waiting out the impact of tariffs. OR.. phone owners will simply buy from other Asian nations cell phone manufacturers ...which will be exceedingly bad from Apple. Apple is clever though and I suspect they will find simple loopholes around this... by producing most of the phone in China and then doing a couple of simple final assembly touches and packaging in some other country.... and China wins again as do US consumers.
8
@Woof
This thinking is way too simplistic...maybe Econ 101 but certainly not Econ 402. This assumes that manufacturing around the world is perfectly fungible (it is not). While the U.S. is a huge market, it is not the only market. For example, the U.S. is only ~12% of global smart phone shipments. Given the size and efficiency of many of China's industries, it will not cause a drastic shift of production out of China.
Furthermore, if the U.S. tariffs continues for a prolonged period of time, you can bet that Vietnam will also be heavily scrutinized. Vietnam runs a large trade surplus with us in comparison to overall trade and is right next door to China. There has already been scrutiny in the past of Chinese goods passing through Vietnam and suddenly becoming Vietnamese.
Finally the industries that will be impacted in China are mostly ones that are labor driven and low value add.The economic benefit of manufacturing an iPhone in China is minimal compared to the value of an iPhone.
tldr: It is not a one way street and both the U.S. and China will hurt.
6
Love this
Too bad it is wishful thinking
No one benefits
Given the undeniable fact that Trumps is a MASSIVELY FLAWED NARCISSIST who cares not about anything or anyone but himself and his perceived image, this insane trade war, only one of many that he has started, cannot end well, for anyone.
We cannot expect any stability in world markets even if it ends because Trump lives and acts in the moment, at any time his Twitter rage can surface and change everything.
The ONLY thing he has done that is predictable is unpredictability - and that is catastrophic for a nation that demands clear thought, foresight and intelligent action. For those who think that the Trump Circus is amusing (you ignorant base), try running ANY business like that and se how far out gets you. That is why Trump has failed at everything he has done except lying and stealing.
27
Xi knows that Trump is an ignorant blowhard who lost over a billion dollars in biz and thinks China is paying the tariffs . China has 100 yr plans USA like corp America has 3 month plans. Trump is going into an election battle in 2020 and Prez Xi is president for life with no opposition party to contend with. Trump cannot go into 2020 with a down market and unhappy farmers so Xi has the better position . Trump will fold and spin it as a historical win as reality does not exist for him its a Trump world where even when he loses a billion he's a winner.
16
Trump is right! Biggest tariffs ever and keep them forever. I say raise the prices on the Chinese, and raise them good when they land on our shores. They think they can just shove all their stuff into America, we're gonna make them pay for the privilege. A tariff on everything they put into America at 100% or 200% -- even better. I want to see Chinese stuff cost so much we just put them out of business, and I have a right to say that, that is my opinion and I'm sorry if it hurts some people to hear it. Make the Chinese pay to make America great!
5
@Jorden The great part of free speech is it allows someone to make a complete fool of themselves for the enjoyment of others. Thanks for the laugh!
5
@Jorden
Did the republicans turn out the mentally ill again, as they did in the 80s?
5
@Jorden The great part of free speech is it allows people to make complete fools of themselves for the enjoyment of others. Thanks for the laugh!
The President serves-up one heck of an imagination about this Tariff Rainbow. He's the leprechaun who brags about finding pots of gold -- the entire way to the rainbow's end.
Leprechauns rely on gullibility. Ensconsing yourself in MAGA gear is not the same thing as having a seat at the table. The trade deal is about protecting the intellectual property of U.S. companies WHO MANUFACTURE IN CHINA.
There will be no primary challenger. Republicans are stuck with defending Trump's words & tweets. Every Republican is a Trump Republican waiting on a pot of fool's gold. It's a shriveling base.
11
Donald Trump has a rich record of bankruptcy brinkmanship that has bankrupted his casinos, his airline, his 'university', and quite a few of his real estate ventures.
What Trump is good at is bankruptcy and blowing other people's money....money from banks, customers, vendors, taxpayers....as long as the money is not his own.
https://www.businessinsider.com/donald-trump-businesses-failures-successes-2016-10#16-projects-the-times-concluded-had-problems-2
Expect the worst...and for Trump to claim 'incredible victory'.
Hail to our Failure-In-Chief and his deluded fan-voter-base !
So much winning !
38
Trump continues to extend his idiotic notion that globalization vacuumed out all the manufacturing jobs and they landed in China, and if you reverse the flow, the jobs will magically reappear in the swing stated that voted for him. It won’t happen. If he would have stuck with protection for intellectual property plus inroads into the Chinese economy, there was a chance he could be successful. Instead, we have chaos. That’s the Trump way.
10
Trump is the worst deal-maker ever. But through his ignorance we just might move into a recession in time to assure his failure in November 2020.
16
One has to admire Xi's China First policy. Cheat as long as allowed.
5
The time to confront China is now. It’s going to be hard as many are more concerned about their 401Ks than standing up to the Chinese fascist dictatorship. Apparently, lying, cheating, stealing and ethnic cleansing is OK as long your stocks are doing well.
3
@True Norwegian
Sorry.. I cannot take this comment seriously.
China is a left wing socialist nation. A fascist dictatorship is actually on the opposite spectrum of political extremism (ie: right wing extremism).
Not to mention... your rhetoric of "Apparently, lying, cheating, stealing and ethnic cleansing is OK as long your stocks are doing well" sounds an awful lot like our current right wing administrations lying, cheating, and separating families and throwing children in cages.
6
@Chuck
Chuck. One point of clarification. For at least 100 years the U.S. jand practically all other nations justice systems separate families when they incarcerate fathers and mothers.
Question for NYT reporters. At what point in this conflict would China need to sell some of their US Treasury bonds.
Is that an option for China? What would it do?
3
Trump's "Art of the Deal" is more like what Naomi Klein identifies as "Shock Doctrine" - creating drama for the sake of complete disorientation and exploitation of the other. Contrary to those who are taken in, his "bull in the China shop" approach (pun intended) is backfiring. And this is just with China. He is also simultaneously at work deconstructing relationships with Iran. We need an intervention. We will find ourselves deep in chaos by 2020.
4
The farmers of America benefit from the security created by the technologies of war and peace. China wants those technologies on their terms, which threaten the whole value system of America. If appears they have played unfair, and like most devoices, one partner will lose much more than other. China needs trade with us more than we need theirs. I like my freedom, and Life in China appears much less free.
3
Because it is not painful to whatever Trump Organization profitable advantage that Donald Trump is hiding from the American people in his income tax returns and business records arising from his occupation of the Oval Office of the White House from collusion, collaboration, conspiracy, cooperation and coordination with China, Israel, Russia and Saudi Arabia.
Donald Trump made a solemn sworn oath to preserve, protect and defend his money and profits from all enemies domestic and foreign.
7
And China will STILL PAY and the American consumer will WIN, right???
My pessimistic side is saying very loudly that what happened yesterday was the sound of our beautiful economic bubble bursting. And it's surprised that it took this long for Trump to finally stick his finger in it. I'm afraid we're in for another recession soon.
12
As soon as AMERICANS are back making policy for the United States we can bring this debacle to an end.
As for now, Republicans are in charge and thus doing the bidding of their financiers, Saudi Arabia and Russia
8
The president thinks that being a winner requires the other guy to be a loser. That's not a position his opponents can accept, as they have their own political survival to consider. "Win-lose" negotiations don't work in this context. A winning negotiator leaves his opponent with some self-respect, but Trump leaves only scorched earth behind.
8
Just as Bush Jr squandered all the good will virtually the entire planet felt towards the US after 911, trump is squandering decades if not centuries of the US being trusted to adhere to treaties and trade agreements. This country has become a southerner, all smiles and spouting Christianity while stabbing you in the back. Trump is the opposite of a New Yorker, besides the fact he grew up there. A New Yorker will plainly tell you what their opinion of you is, no holding back, no fake “hospitality”, no fake smiles and no constantly proclaiming they’re a winner regardless of the facts.
7
Trump's position is tenuous at best. China has "given in" considerably from the start of this ridiculous trade war, and yet Trump/GOP rather than accept the humiliation provided Xi, rather go for he jugular vein and then as them to wipe up the blood. Pitiful, our president. What Trump/GOP lacks understanding is tariffs don't last for ever, certainly not for years. Today corporations have received tons of $billion in exceptions from the recent tax laws change. They loan basically free money from the Fed, enjoy tremendous profits, and these tariffs are soon to really take big bites out of their bottom lines. Trump/GOP is playing a time game. And the Dems are not doing a thing, not taking advantage of embarrassing him for his foolish actions. Time will past sooner than wants.
I wonder if the Chinese leadership is confused by Trump or if they possibly understand his type of personality much better than we do?
3
President Trump is just doing EXACTLY what he promised the voters ~ he’s running the country just like he ran his businesses. Into bankruptcy.
If you vote the hatred and bigotry in your heart, you get exactly what you deserve. And when you have to put items back on the shelf at WalMart in front of your kids because everything is more expensive.
8
China seems to be the rational actor, as I'm witnessing this thing play out. Trump appears to be a madman.
3
I wonder on a recurring basis how an individual as unqualified, unfit and uninformed could possibly be occupying the WH. And I wonder even more why the Rs in Congress continue to allow this travesty to rage on unimpeded.
8
As much as I abhor President Trump, some good might actually come out of a prolong trade war. We just might consume less and buy less, save more and lose some of out over the top consumerism. Does everyone need 3 50" TV screens in their homes. Do we all need 30 pair of pants, 50 shirts, a dozen or so shoes and 5 pairs of sneakers. Do we have to throw out everything that is broken because it is cheaper to buy a new one then the time and effort to repair the old one
I do not know if we are ready to be a less consumer society. Many businesses will fail, our "standard if living" based on what we own will go down but just maybe our quality of life will go up. We might actually exercise more, talk more, socialize more, and take care of one another more.
1
@David
Good luck with all that, David. It might happen to a few Americans, but it won't be a sea change.
2
"Just two weeks ago, the United States and China seemed to be gliding toward a trade deal meant to resolve tensions between the world’s two largest economies."
It only "seemed" that way if you listened to what Trump and his administration were saying. That's always a mistake.
3
If this needed to be done, it should have been years ago before the US shifted its factories to China. Now it is like closing the barn door after the cows have already left.
3
Constructive negotiation is based on finding ways for both parties to "win" - but that's not the Trump way. He appears pathologically set on forcing a "loss" on the other party. In other words, he's willing to accept billions in losses, bankruptcies, lawsuits and other consequences, just as long as the other guy comes out worse off than he did.
That's a workable strategy as long as you're using other people's money to play - which is another hallmark of the Trump strategy. It's not his economy, his farm, his paycheck that will be hurt by backing China into a corner.
His base thinks he's winning, and that's all that matters.
2
People who think this is a good idea have no idea how trade, markets, supply chains or manufacturing work.
2
If all those "people who study international economic diplomacy" had been paying attention for the past 25 years Trump would not be President.
They're part of the problem, and as a result they have no credibility, whatsoever, so it's rather surreal to see them quoted, as if anybody cares what they or any "mainstream economists" think.
About anything.
2
Whatever the merits, this is not a fight that the US should have entered into alone,
China's population (and potential market) is five times the size of the US.
If China is playing fast and loose with other nation's intellectual property, then we need to confront them collectively - not individually.
But Trump is clearly incapable of thinking collectively, forging broad alliances, taking the longer view - or, in other words, fulfilling the proper role of an American President in the 21st century.
Honestly, if Fred Trump hadn't left Donnie upwards of $350-$400 million dollars (in both inheritance and direct gifts while he was alive), our President would have been lucky to get a job selling luxury automobiles on Long Island...
2
@Matthew Carnicelli Unfortunately money talks and no country is going to upset the apple cart by taking on China, except Trump. The politicians, worldwide, has sold their souls to the corporate interests and could care less about their own citizens. If nothing is done within10 years China will not only control the world's economy but will have contributed to the enslavement of the world's citizens through their security scheme.
There is absolutely no possible benefit to the United States or China in a trade war. It's also clear that Trump is highly suggestible (and has a long record, of making the exact wrong choices--further revealed by his tax records.) So who wants this trade war? Who thinks he can benefit from shrinking world trade? And who holds Trump's strings?
1
The constructive ambiguity can be
achieved if Mr. Trump change his
attitude of compelling China to back
down and make all the concessions.
He wants to brag to his base that he did what no president could before him.It is not 1842. China is not weak and chaotic
now. In any negotiations compromise
is the key. US has to soften its demand
for Chinese government to back off
from supporting the businesses. US
government itself support private
companies through Pentagon, NASA,
NIH and bailout of big banks and
companies like AIG,GM, Chrysler,etc.
US regulators are lax in enforcing the
rules. FDA on generic drugs imported,
Minerals and Metals management
in BP fiasco, FAA letting Boeing to certify its own planes, SEC ignoring Bernie Madoff's shenanigans and of course FED and state bank regulators ignoring banking scandal in 2008. Chinese know all this and unlikely to double down on their companies. Both have to be realistic about what is achievable.
1
Trump's line to China is the same as his line to Hispanics: Get out of my country club and back in the fields/factories. The dependence of entire sectors of the US economy on illegal labor is the 21st century's slavery – and even that only applies to agriculture, construction, and domestic help, i.e., jobs that can be outsourced to low-wage countries.
What Trump doesn't realize is that China doesn't actually need the US, any more than slaves need their oppressors. Their growth remains double ours, and without Trump's one-off stimulus measures – tax cuts, higher military spending, massive deficits – the US economy would already be in a recession.
2
This is ridiculous. Who will replace the American market? The BRI countries can’t increase demand by $520 billion by snapping their fingers.
@Hoobert Herver, I can't tell if this objection is meant to be serious. $500B is less than 2.5% of the Chinese economy. They don't stand or fall with the American economy. It's the reverse.
As a previous Times article reported, Xi is facing pressure from hardliners in his party. They are committed to the rise of China by any means. Solid intentions of "Making China Great Again". Trump will not admit he is wrong in his approach. He only knows a hammer and every issue/situation is a nail: witness his approach to NATO, Iran, immigration & the wall, and even North Korea. Even if the Democrats are voted into the White House and a majority in the House and Senate, the will have an enormous mess to clean up.
How many of the absurd comments here are from Russian trolls? For example, the claim that, "many businesses will close." I don't think Trump could possibly close as many businesses as were closed by the manufacturing that moved from the US to China from the mid 1990s to the 2016.
China has stolen our intellectual property. I have a client that built a factory in China only to find out that at the same time their factory was being built, a clone factory was being built not far away--a second factory in which the US industrial company owned no share--meant to compete with the joint venture in which the US company owned an interest. China engages in state espionage for industrial purposes.
They have engaged in price fixing. They engage in currency manipulation. They violate international norms on environmental protection in order to gain a leg up competitively. They don't protect employee's safety--to save money and beat us competitively. They have protectionist laws that prevent US companies from actively competing in the China marketplace.
Basically, they are our enemy and we are enabling their attack on us. Time to stop enabling the attacker, even if there is a lot of pain in it. There was economic pain in the two World Wars, and we should expect no less economic pain in this process.
4
@Hooey - Trump products are made in China and if Republicans had their way they would do away with as many worker protections as they could possibly get away with.
I'm not saying that there's nothing wrong but if you're expecting Trump to fix it, you're kidding yourself.
3
@Hooey
Agree with you not to enable a lawless, increasingly arrogant State. And if American consumer need for cheap goods and American capitalist need for cheap labor are insatiable, at least outsource more to Mexico and Brazil, which do not threaten American security and intellectual property and which might take some of the immigrant flow from elsewhere in Central and South America.
Beijing, the Kingdom of Serial Backsliders
The Chinese rulers in Beijing continuously promised the Tibetans and Uyghers self-determination and autonomy since 1922. Beijing reneged on that promise. Beijing made the same promise to the British and Hong Kong’s citizens (one country, two systems) but has reneged on that promise. Beijing promises Taiwan autonomy, if it accepts Beijing’s governance. Polls show more than 95 percent of Taiwan (23.5 million) reject Beijing. No ambiguity. Most Taiwanese think of themselves as Taiwanese, not Chinese.
The reality is that China’s Communist Party is equally skilled at making promises and breaking them. So it is no surprise that Beijing has reneged on almost all of its promises and assurances about fair and equal trade and that it has stolen proprietary intellectual assets it fancies. Lawless. It is ‘covertly, coercively and corruptly’ sabotaging democracies everywhere.
We cannot, must not, trust the Communist Party as a government or as an American company. There are no rules except those which Beijing asserts then breaks. We cannot trust the other side to honor its commitments, so we have to disengage completely from commerce with and in China and join the TPP.
Beijing’s progressive deception is cultural. Hence ‘Death by a thousand cuts’, a 1,000 mile march begins with one step, salami slicing in the South China Sea’.
Until the non-Han and Han Chinese kick out the communists, we must isolate them. Damage control.
4
The problem with starting out with bullying and bluster is where do you go when the other side calls your bluff? Unfortunately that's the only tactic DJT seems to know. Worked for him when he was in real estate "big footing" small family contractors...probably won't turn out so well in this arena.
2
Trump will keep doing this, or things like it, until he puts the world economy in a state from which it can't recover.
All for the sake of his ego.
1
At this point, the only thing we can be sure of is this prolonged U.S.-China trade standoff is going to hit American consumers where they can afford it least -- in the pocket.
3
The Chinese government has taken advantage of our naivete and benefit of the doubt for decades.
Walk around Shanghai for a day and you'll realize that "intellectual property rights" are a joke in China, and that's just one example of how our industries are undermined by China's refusal to enforce international rules and regulations within its own border.
I'm not fan of Trump (in case that wasn't fairly obvious from the fact that I read the Times) but even a broken clock is right twice a day. If this trade war is long and painful, so be it. The Chinese government has much more to lose than we do.
3
As with all of Trump's decisions, I am appalled that one person is allowed to make a mess of it for the entire nation. One thing that should be considered in the long term is whether it is appropriate for one person to amalgamate enough power to take us out of well though out agreements, destroy our relationship with NATO and the EU, and institute tariffs which will probably end up in some world wide depression. Its 2008 all over again folks. And I am sick of hearing about how we have to subsidize the farmers, again, because of his bad decisions. You voted for him, take your knocks folks. No more Chinese market for your soybeans.
2
I disagree with 90% of Trump's actions. But this fight is not one. China's coercion and outright theft of intellectual property is a real, legitimate problem. And our "creative ambiguity" has allowed us to deceive ourselves that we're serving a greater good while we abet this theft.
This is a fight I hope he wins.
4
This is a fight we win. WE win if you refuse to buy anything made in China. Buy American, Canadian, Taiwanese or Japanese.
The problem is that it is not good enough that Trump can claim a "win", he must also claim that the other participant(s) lost. This is part of punishment mentality that goes along it isn't enough to win the other side must be punished. What can any of our partners (or even opponents) hope to take away as a win for their side if Trump insists that he wins, they lose, they are to be punished?
1
" ... Mr. Trump’s tendency to view every negotiation through a zero-sum prism ... " Not to mention everything else. Mr. Trump has to "win", even if it requires a blatant lie. Popular vote, largest inaugural crowd, successful businessman, China will pay the tariffs, Mexico will pay for the wall, etc., etc. Truly a "sad, embarrassing wreck of a man". (George Will)
3
I don't think it's a matter of China becoming the strongest economy in the, which is inevitable, it is the way they do business. Stealing intellectual property, spying, and currency manipulation is not playing by the rules. We are at fault for allowing this to happen. Yes, it will be painfully, remember they have a president for life and do not allow foriegn lobbyists to promote completion interests.
1
The biggest subsidy/corporate welfare program the US has is the Defence budget - that trillion dollars is the ultimate pork barrel/gravy train/subsidy to industry program. Ten thousand dollar hammers and 200 million dollar planes that can't fly are the uItimate in corporate welfare. We have tens of thousands of tanks we will never use under tarp rusting in Arizona (Then again we'll probably end up giving them to our local police - yay!) and some geniuses with Trump want to build more. It's a joke. However, all this military spending has had enormous impacts on tech development despite its enormous waste and likely a little because of the waste. Problem is we are innovating in how to blow things up and destroy things better and/or how to kill more people more efficiently. Humanitrian spin offs have been by accident. The Chinese (boo!) are trying to do it intentionally.
Defense, oh for God sake it's "War" spending is also our regional disparity program we put the military bases and "war" materials contractors in impoverished areas to "subsidize" them. Then their representatives reliably vote for more "war'. We can only hope the Chinese go after our major "subsidy" program.
2
Tariffs can be a good, be it blunt, tool in international trade skirmishes. The idea being you take some lumps early on, but allow your domestic industries to shift production and focus, thriving in the long run. The Photo-voltaic industry is a good case example for this.
My main issue is if our next president, be it Red or Blue, has a different view on economics, all of this can be undone. And we would have just taken lumps for nothing ...
@Jack - Well I certainly hope the damage Trump is doing can be undone.
Trump is a tool all right but not in the way you meant it.
1
I don't mind paying more or not purchase items from China if they are too expensive b/c of tariffs.
China has a long habit of ignoring international norms, stealing IP, etc. It's not in the best interest of democracies if authoritarian regimes get away with lousy acting. The only diplomacy that works is a diplomacy of strength, even with economic diplomacy.
No administration (nor the EU) in the past had the gumption to stand up to China's "economic malpractices," and I'm glad our country is now standing up to it. If you think China's economic malfeasance is a separate issue, think again. They are masters are interconnecting strategies that will lead to Chinese hegemony - military, economic, and social policies are all interconnected with that one goal in mind. And now they have a dictator for life to drive this agenda.
It cracks me up when analysts state that "this will hurt the American consumer" as many argue. What's more important? Not to be able to buy what you want at a price you wish to in the short term, or long-term protection of American jobs, sovereignty, and long-term stability? Businesses will find other ways to compete without needing China, and you will find what you need at a price you can afford. I'm willing to "suffer" through this short-term pain. Are you?
2
Actually, it might be joyful for the your US fellow workers in Lordstown and Wayne that just saw the factories close, with the Cruze production and the Focus production moved to China
Maybe, after all, they could get their jobs back ?
I am amazed on how many NY Times readers believe higher tariffs will necessarily lead to higher prices
Or the reverse
Did you see the price of the Ford Focus fall when production shifted from Wayne to China ?
Did you see the prize of the Chevy Cruze fall , when GM closed the factory in Lordstown ?
No, and no
There is only a tenuous connection between what US consumers are charged and what it cost the company
Most of the gain of outsourcing (the wage differential between US wages and Chinese wages) winds up as corporate profits - not in form of lower consumer prizes
How did Apple acquire #$ 237.1 billion cash at hand ?
By NOT transmitting the wage differential to the US consumer, but by charging what the market will bear
That is by what Samsung charges for the Galaxy
Apple has plenty of room to swallow the tarrifs should Iphones be taxed.
2
@Woof
Certainly I will grant that the car companies saved money on production cost. That they didn't pass the savings on their customers doesn't surprise me at all. They were able to increase their profits just as they planned to do. No surprise.
In your example you provided lower costs while not lowering prices where they could have. With tariffs costs to customers are being artificially increased by 25% as an added outside cost that no company will completely absorb and not pass on.
In fact the same greed for profits will come into play when (if) the tariffs are eliminated the companies that were affected by them will increase their prices to closely match what the prices with the tariffs cost. Since, they will reason, that consumers have become accustomed to the higher prices there is no reason to lower them. Thus they will be able to increase their profits not lower prices. Charging what the market will newly bear.
Higher tariffs will lead to higher prices. The greed you spoke of will guarantee it.
Today, the WH eZine linked to an article by Stephen Moore (past economic adviser to the trump campaign, The Hill) "Why free traders and all Americans should back trump on China policy." An infomercial: terrible China-wonderful trump.
Moore: “This is the moment to shut down China’s abusive trade practices forever.” “The average tariff [imposed] on China when Trump [took office] was about 4%. China’s about 10%,” “There is not one demand Trump is making of President Xi that is unreasonable.”
Moore doesn’t mention that TPP – covered 40% of total global trade – had the U.S. at the table: “For its supporters, [the TPP: Canada, Mexico, Peru, Chile, Japan, Vietnam, Brunei, Malaysia, Singapore, Australia, New Zealand] would have expanded U.S. trade and investment abroad, spurred economic growth, lowered consumer prices, and created new jobs, while also advancing U.S. strategic interests in the Asia-Pacific region…” (Council/Foreign Relations).
trump is purposefully killing incentives for burgeoning sectors, China is actively pursuing artificial intelligence, solar and hybrid and electric vehicle expansion. China will lead the globe and the U.S. will be standing alone, holding a bag of coal.
Tariffs will permanently erode U.S. manufacturing global supply chain partnerships and enable China to buildout its global supply chain; to the exclusion of the U.S.
There is no incentive for any nation to sign individual agreements with the U.S., an untrustworthy trade and deal partner.
2
I loathe Trump but acknowledge that it is high time to stop China from profiting at the expense of others through subterfuge and extortion. They are a Neo-mercantilist state intent on advancing their economy through intellectual property theft and industrial espionage. We should never have backed away from the Trans-Pacific Partnership that promised a multinational check on China's illegal practices.
Trump doesn't actually need a real win, he can just lie and claim it's the best deal since sliced bread and his base will eat it up.
2
The Trump administration is already setting the table to distract you from the inevitable Trump backpedal/cave. Take note of the announcement of the possibility of moving large numbers of troops to the Middle East to counter the Iran threat. The lessons in Iraq have already been forgotten or ignored.
3
@Adam
Oh ye of little faith!
:)
China won't back down easily under Xi Jinping for some basic key reasons of party leadership:
A. He's put himself forward as the face of the Communist party
B. The Belt and Road Initiative (economic and military expansionism greatly tied to Chinese nationalistic pride)
C. He's secured himself the leadership with ruthlessness Trump has yet to understand (leader for life, millions illegally jailed, creation of artificial islands for staging military strikes against all of its neighbors)
D. All of the above are part of the "ending" of China's "great shame" for how it has been treated by the West for the last century.
Xi cannot back down because it is precisely this showdown his party backers and ultra-nationalists are supporting. The economy is not #1 here.
Trump cannot back down because:
A. his ego demands a win
B. He needs his base support, and getting tough on China helps him in the polls more than it hurts him
C. China and all foreign nations are essentially "enemies" and nothing unites opposition within the ranks like a common enemy.
D. China's track record on dealing with weaker countries makes them a ripe, easy target during his campaigning/rallies for stirring up the media machine backing him which in turn distracts from domestic legal trouble.
Trump cannot back down because it is precisely this showdown his party backers and ultra-nationalists are supporting. The economy is not #1 here.
We can only hope that China doesn't realize that Trump has a lot more to lose than Xi, who doesn't have to worry about elections or economic suffering. Xi is clever, shrewd and intelligent, unlike Trump, and he surely realizes that Trump and the Republicans can't afford to go into the next election with a trade war with China hanging over their heads. Trump will cave within the next year, and he will declare a great victory, even though nothing of significance will be gained. The hazards of electing a buffoon with an over-inflated ego to run the greatest economy in the world.
Funny how an invisible line in the sand can change one's perspective especially when the line is a border.
My perspective allows me to say a decades long trade war may save Canada, and the other World's liberal democracies from the cynicism that is our only real enemy.
Our children and grandchildren know the world has more than enough of everything and the economics present problems whose solutions are far more important than who wins the game.
Our economy is unsustainable and collateral damage such as climate change and environmental destruction are far more important than wealth and power.
I know the Book of Revelations does not belong in the bible. The bible is human truth, it is allegorical not what some call historical. It is truth that is as real today as it was when written.
Unlike Mike Pompeo faith is not something I must believe even if it is nonsense. There are no Horsemen there will be no Greek or Roman Messiah. If there is a Messiah he will again be Jewish and he will not stand above the crowd, he will be a human and invisible as almost all of us are and he will whisper not shout and will be heard only by those willing to struggle to hear and listen.
Anything that diminishes both the USA and China can't possibly be bad for a world that needs a break from the shouting, screaming and stomping of two drunken titans too engaged in struggles to notice the destruction they inflict that threatens their survival even more than their combat.
2
TPP, for its flaws, was a much smarter way to address China’s trade practices. China would not only be losing US business, they would lose business from all partner states. The US would also have a lot more alternative trade partners who would be obliged to follow common labor standards, currency practices, and IP laws. People screeched about how foreign companies can sue the US...well, duh! How do you expect to enforce treaty terms? US companies would have been able to sue foreign countries for violating treaty terms.
Instead of addressing TPP’s problems and fixing it, both left and right simply howled about “horrible TPP” and insisted it should be “burned to the ground.” Now here we are, letting ignorance guide us, punching China’s fist with our face. Good job, everyone, keep on winning.
2
USA won't ever win any trade wars until they form free trade deals but you've missed the boat on that one as that was what Obama was trying to do with TPP and Trump withdrew from it. China has done what the USA has done and formed free trade deals with many global nations. The Belt and Road Initiative that is Chinas idea should have been a USA idea but you're too stuck in the past with tariffs that most of the world don't want - like the plastic problem and NATO agreement that most nations signed except for the USA.
USA has a trade deficit because they haven't moved with the times and abolished tariffs and formed free trade deals internationally. That's the guts of it - forget all the fancy words and eloquence.
1
Sanders and even Clinton said they were not going to sign on either. It wasn't going to happen. Not a great deal anyway. Mostly just protected big corps.
With zero trust in Trump and company, I spend another day shaking my head at what his party will put up with.
But, he’s really making every fevered segment of his party rejoice: from St. Pence who mourns for persecuted Christians to the Senator Cotton club, waiting to pounce on Iran ever since they sent the warning-shot letter to the Iranian president, undercutting President Obama; to Bolton, who’ll pounce anywhere; to the Rapturists coddling Israel; to market short sellers making a quick buck on tweets; to coal and oil polluters; to the social network cutters; to five judges ready to upend Roe and marriage rights.
Am I leaving anyone out of this one-sided party? Yes, the rest of us. Like the 17 million Americans who in 2003 protested the invasion of Iraq, only to be dismissed as a “focus group” by the then untrustworthy Republican president. They did make a huge mess before, and they’ll do it again unless Americans in huge numbers make them stop.
4
It's pretty funny to see all these people on here act so outraged that the prices of a toaster-oven or pair of socks at Wal-Mart will go up a dollar. Oh, the horrors. How many people here even shop at Wal-Mart, like ever??? The fact is, these people aren't worried about Wal-Mart shoppers and their ilk. They are worried about the well-being of China and the global economy. The fact that they pretend to care about the price of underwear a K-Mart shows how two-faced they really are. And yes, despite some of the comments here, it's very possible that tariffs could help encourage American companies to move some production back home. When I see how bad some people hate Trump voters, I think that deep-down, they don't want a strong blue-collar workforce. They prefer the service economy workforce, beholden to upper-middle class professionals. Cheap stuff from China is better for them for all sorts of reasons, both practical and philosophical. They just won't come out and say it in some many words.
1
So if China uses its cyber and propaganda capacity to tip the election to the Democrats, it's ok, right? I mean, that's how we do it now: find foreign governments to sponsor our candidacy, right?
Trump's trade war is a gift to the Democrats. He simply cannot see beyond his erroneous beliefs in tariffs, and who pays for them.
Attention Democrats: you should be out there in the states with the farmers telling their stories re how much money they are losing due to the Trump/GOP tariffs. Republicans must hate farmers!
1
@Cyclist
Dems should also be letting all farmers know that they would be more than willing to lend a hand financially, but that to do so would be supporting "Socialism" with a capital "S." As we know these farmers certainly don't want to live in a country like Venezuela, they're just going to have to suffer through this.
Something needs to get through to these people who Trump desperately needs. If the Dems can help turn them away from Trump, just maybe (big if here), some of the Republicans in Congress can break free of his trance.
1
Elections have consequences. The farmers that voted for and support Trump should have to deal with the consequences of their choices.
Republicans love to rant against socialism but that is exactly what this is.
I guess they think it's ok when it serves their purpose.
4
@HG Wells
unfortunately we all suffer, not just the farmers
1
It's good of the Trump administration to help bail out farmers who are losing money because of the tariffs. Having all taxpayers help a subset of the taxpayers because of their issues is a great way to bring a community together, in times of need.
This is also a perfect example of how socialism works.
4
The issue with China, is that they want all the respect of a super power, but none of the responsibilities....they are still taking advantage of being a developing nation rules and treatment. People have suggested that China is really doing is building an Empire (look at the China Silk Rd, that's for importing stuff to China, so they can export out higher priced technologies and finished products), and at the same time develop military foot holds in the countries.
3
@Al Morgan
"...they are still taking advantage of being a developing nation rules and treatment."
A very good and important point to remember. Simply re-classifying them as a developed country within the WTO would help.
1
Still don't understand the entire premise of Trump's view of China. The 2018 US Trade Deficit with China was $ 323 billion. This is because nearly EVERYTHING US consumers buy is made in China. By contrast, there is very little that the Chinese want to buy from the US, excepting our debt, waste, & movies. It is the CEO's of US corporations deciding to maximize their profits by exploiting cheap Chinese labor, not a result of anything sinister on China's part. If anything, it is the insatiable greed of the US CEO's that is to blame for laying off American workers & the closing US factories, without regard for the devastation that such decisions would have on American society. And, in return for such behavior, US Corps enjoyed the largest tax cut in US history. Also, not sure how anyone can expect China to successfully manufacture something as sophisticated as an iPhone without transferring sensitive specs & engineering info for all of the iPhone's thousands of components. As a result, Americans can buy a 50" TV for $350, on credit, financed by the Chinese who buy $ trillions of US debt. From my perspective, the US have far out-benefited from this arrangement, with the endless variety of affordable goods, with money borrowed from the Chinese, & without having to pollute their own environment, without having to violate US labor laws. US CEO's sell the iPhone for $1000 when it costs $20 to make in China. Now, the only ones that will be punished for Trump's tariffs are US consumers.
15
@newsfront China wants buy high tech from the US, but we prefer they buy from other countries or do not buy at all.
@newsfront Well, they always did like our soybeans, pork and chicken. They'll miss them too -- but not as much as Trump's farming supporters are missing the Chinese market.
1
@newsfront
"Still don't understand the entire premise of Trump's view of China."
Neither does he. It's a knee-jerk reaction every few seconds.
3
I don't get the reference to personal relationships in the article and previously bantied about regarding the Trump/Kim dynamic. It is reported Kim speaks no English and Xi knows very little of that language. Trump only speaks English. That one could assert a personal relationship can develop between these parties who are unable to converse with each other defies logic. Aside from that, frequent not intermittent contact is required for a personal relationship to blossom.
9
@uga muga
You'd have to ask DT about the specifics. It was he, not the media, who declared that "They fell in love."
1
Tariffs put a tax on importers who either absorb the cost or pass it on to consumers. The people who are effected the most are low income consumers and small businesses that import parts from China. Buying behavior may change for low income consumers. Will higher income consumers decrease spending because the cost of shoes increased by 25%? Maybe not. This trade war is a made up issue. Manufacturing is not coming back. The IP issue is mostly copyright issues that Chinese courts are dealing with more and more. One of the problems in China is that there is less control of business behavior then here. Capitalism is relatively new there and in some ways it’s the Wild West. People can start factories making anything with little money, cheap labor and handshake agreements. The “Red Envelope” mentality makes it more difficult to regulate laws that exist but ignored. China will find a way to adjust. On the other hand, the US Economy is structurally unsound in the heartland, and solutions will take a long time.
6
I wish we could still practice strategic patience, but it turns out that we don't have the attention span for that anymore.
14
@DMH
Problem is blue collar america will not wait another 50 years
With regard to China, trade is also about funding a military challenger that has challened our freedom of Navigation missions as well apparently shing lasers into the eyes of our pilots. It is perhaps funding a country trading with N. Korea in spite of santions.
I personally do not feel good about buying "made in China" for the above and other reasons
I do not view tarrifs targetted at China as being protectionist. There are other foreign countries with low cost manufacturing such as India, and Trumps China tarrifs do not target trade with them. Just a single player that apparently wants special treatment.
Also, if China denies our companies free access to there markets, we should restrict access to ours. Requiring technology transfer to buy market access is not free access.
8
@John This notion that India could almost overnight replace the manufacturing capacity and skills of China is pure magical thinking. Have you ever visited India ?
What we are seeing is the Trans Pacific Partnership (TPP) without the label. US manufacturers will shift final assembly of products to low-wage, stable countries in South Asia. (Now is a good time to invest in Vietnam, Cambodia, Thailand, etc.) Various components will still be made in China, which has developed an incredibly deep manufacturing infrastructure and extensive know-how. But final assembly will shift. This will have short term costs, but in the long run will not be that different from the pre trade war status quo. What will be different is Chinese investment in the US. It has been low-key, but some serious money has flowed from Chinese private equity and investment funds into the US. This has benefitted the midwest states in particular; Chinese investment in the Detroit-Troy-Ann Arbor region, as well as parts of Ohio and other states, has been significant in recent years. Just as the US will shift manufacturing to other countries, Chinese investment will shift to Africa, friendly destinations in Asia, and parts of Europe. The only wild card is geopolitical: will reduced economic ties between China and the US lead to more strategic and military conflict? If so, not good. Work for prosperity, pray for peace.
14
Trump feels he is playing with better cards:
1) US has more to gain and less to lose than China because trade balance heavily in China's favor
2) US economy incredibly strong and may even need a 'brake'. If Trump doesn't do this with tariffs maybe Fed more aggressive
3) This is Trump following through on promises of getting tough with China. Appeals to his base and to rust belt states he needs
4) Has bipartisan support to tough. Schumer has endorsed his approach and told him to hang tough!
5) Encouraging companies to shift manufacturing resources from China to other countries helps create more competition for China which is better for US purchasers
Trump is therefore in no rush to concede. China won't cave quickly so this may take a while to resolve....
9
Actually, it won’t be long or painful for the U.S.
Over the next couple of years, U.S. importers and manufacturers with Chinese facilities will simply shift their supply chains away from China. Most of the shift will be to other low-wage countries like Vietnam, Malaysia, India, Philippines, Mexico, and perhaps Central America. A small amount of higher value imports may shift back to the U.S.
The U.S. will not incur a “tariff tax” and may even find lower prices than in China, which has seen rising labor costs for some time.
The U.S. must make this shift for geopolitical reasons. China has chosen to become a diplomatic and military rival/adversary to the U.S., so we must reduce the trade deficits that are funding their ambitions. Instead, we can further strengthen our alliances with a number of countries. (TPP was ever needed to do this.)
Smart companies began shifting their supply chains outside of China over the past several years. All the rest will be working overtime to do so now.
11
It’s already been happening for quite some time. China has already reaped its benefits, as have US companies that made it possible via their short sighted strategies. As for the future, while I don’t agree with Trump on much, I do support finally getting tough with China. Disrespectful to ask that they abide by long accepted principles of intellectual property? Only if you know your are cheating and plan to continue, which is one accepted business model in this China. Let US prices rise to realistic levels. In the long run that is better for the US. Lost US jobs and cheap products is NOT a good deal for the average American.
1
@John
I simply do not agree. It will painful for us Americans.
@John
Your view is very much US-centric. If you shift your focus westward, there are over a billion consumers that we'd like to capture. Multinationals may diversify their supply chains, but some of it will have to stay in China.
I had to google "zero-sum negotiations" because although I've heard it referred to as Trump's negotiating style, I didn't know exactly what it meant.
Sounds like it's a strategy that works pretty well with car dealers -- but not at all for nations. For example, the treaty between Iran and the US/European allies gave Iran some dignity. But the US withdrew and now tensions have escalated.
Trump thinks that keeping the other side on tender hooks and reversing positions at the last minute is the way to deal with the other side. It may work with building developers in New York City, but it doesn't work with sovereign nations.
How long does this have to continue before this country realizes it’s our own president who is selling us out?
74
@ReadingLips
Move away from Trump and think about policy. This has bi-partisan appeal b/c China's assent has been aggressive. Those militarized islands didn't build themselves.
1
@ReadingLips
It does not even work as a negotiating strategy with contractors et al. Everyone was on to his style in the early 1980s, which is why he turned first t the New York mafia then to Russians and Saudis to keep from being homeless
6
The president is saying that these tariffs that China is putting on US goods will only cause pain until we get a big win in the negotiations, after which everything will be great. Of course US consumers will also suffer from higher priced goods, whether as a result of the US tariffs or from higher cost manufacturers, but the president does not mention that. This "suffer for a little while until we get our big win" position reminds me of the government shutdown, and I fear the trade war will follow the same path: Americans suffer for nothing.
37
@John Harrison
Think long-term. The supply chain will shift to somewhere else and in 5 years someone somewhere else will be soldering your iphone.
"The question for the weeks and months ahead is how much damage each side will tolerate before rethinking some of those basic assumptions and deciding that they don’t want to dig in quite so hard, after all."
Like the recent government shut down, Trump is operating under the assumption that his bullying will give him a "win," no matter how many Americans will suffer. China knows they just have to wait him out. When the outcry here gets loud enough, Trump will just cave. Then he'll look for another, more devious, way to get what he wants. I'm betting on China to outsmart him.
176
The trade negotiations with China are just one example of Trump’s looming failures. The negotiations with North Korea, the attempt to overthrow Maduro are other obvious failures. The scariest one is the looming war with Iran. In all of these cases Trump based his tactics on intimidating opponents and them assuming they would be forced to make a deal with him. In each case he is trying to push his opponent into concessions that they can’t make without realizing it because he is simply incapable of understanding someone else’s perspective. It is what happens when you elect a narcissistic sociopath to the presidency.
36
@Eero China can hardly afford to wait Trump out. Their economy has become a paper tiger propped up by extraordinary government spending and risky loans. It is the USA who will just wait China out.
@Eero Why do we Blue taxpayers have to bail out Trump's "Farmer Patriots"? That is garbage. Trump is Pres of his 38% ; the rest of us have no representation in Govt. Vote out GOP. Ray Sipe
4
With Trump’s “business skills” we are going to suffer, many businesses will close.
15
China’s foreign exchange reserves at US $3.1 TRILLION in April are the world’s largest. China has a significant war-chest to endure any difficulty, even a trade war with the US owing to Trump’s tariffs.
China Foreign Exchange Reserves
https://tradingeconomics.com/china/foreign-exchange-reserves
The self-appointed Deal-Maker in Chief has learned nothing from his business failures. He lost one billion in business losses over ten years to 1994 and went bankrupt four times.
The self-appointed Negotiator in Chief is a fundamentally lazy performer who is long on threats but short on delivery.
His lack of intelligence on the trade file, or any file, is breathtaking !!!
But none of the comments of revulsion and horror expressed by concerned citizens, responsible media or in the NYT register with the Twitter in Chief. He takes advice from no one, believes that he is above reproach and is always right on anything and everything.
What do you do with someone who is digging a hole to drag everyone down to doom? You take away the shovel.
93
@Gerry O'Brien
What do foreign reserves have to do with this? If China is losing money due to import duties, whether they have $1 million of foreign reserves, or $1 Trillion, they are still losing money. Foreign reserves are not a "war chest" for a rainy day that you never touch otherwise. They need, and use that money all the time for other things...particularly for purchasing commodities abroad. What are they going to do? Pay the import duties for the manufacturers from reserves...what are you kidding?
@Al Morgan
Your understanding of tariffs matches Trump’s. China does not pay import duties it is the importers and US consumers that pay the tariffs. And until the balance of payments becomes negative between the US and China, still hugely unlikely, their reserves will continue to grow.
Oh and reserves are indeed a war chest, practically their definition.
3
It's not that complicated. When push comes to shove, if it's hurting his reelection campaign (stock market or other), Trump will cave.
44
@James D. Salehi
Stock market goes belly up, it will be another reason he cites for not paying taxes. Loser!
1
Short covering today. Don't be fooled. Trump only knows how to destroy things. Witness: TPP, Paris accord, NAFTA, etc. He rips things down and has no plan or ability to construct replacements.
79
Don’t forget his great health care plan that doesn’t exist.
8
Absolutely correct, sir. Mr. Trump is a disruptor to his core. He disrupts, but lacks the attention span and intellectual inquisitiveness to build something in place of the policy and/or program which he has disrupted. He is uncapable of doing otherwise. Infrastructure plan ? that requires attention to detail and hearing and listening to expert engineers, public planners and yes- all of the state governments ! Not simply those states whom he won in 2016. A real problem - hopefully - the American voter is getting wise .
1
The US House of Representatives should act to stop Trumps's trade war against China and to block his attack on Iran.
28
@Kevin Cahill As long as Speaker Pelosi runs the House of Representatives, there will be no effective Congressional check on the president's power. She is a Neville Chamberlain for our time.
1
Anyone who's read the news since 2016 knows that dealing with DJ Trump is a losing proposition for anyone, not just China. He's unreasonable, a liar, and can't be trusted to keep his word, oral or written. There's absolutely nothing to be gained by dealing with the US until after he's out of office.
132
@mja He does not know how to make deals with counterparties who expect to be treated as equals. Most of his experience is in bullying weaker parties.
3
@mja: Yup, that's pretty much it in a nutshell. Xi can wait a very long time, even if China's economy takes a temporary beating; for one thing there are other markets besides the United States. For another, he is essentially president for life and has no electorate to worry about; Trump, thank God, does not have that luxury.
1
Do you guys want cheap toys or jobs for your kids? Because that's what you have to decide. All I read on these comments are digs at Trump but on free-and-fair trade with China he is 100% on the right side of history. What is your plan Democrats? Just be nice to everyone like Obama was and then hope and pray that they play nice as well? How has that worked out? Seriously, let's hear your master plan because of the 20+ candidates I see running for the Democratic nomination all I heard about is free this and free that and "green new deal" blah blah blah and zero ideas on trade. Zero!
14
@Jerome Well, factories are not coming back to America. If they are not located in China, they will be moved to countries like Vietnam, Thailand, Philippines, where workers are only paid a fraction of the salaries of Chinese workers, having worse working conditions, more pollution, and less quality control on the products (albeit cheaper). The trade war is meant to stop China’s trend of surpassing the U.S. economically in a few decades, just as how U.S. crashed the surging Japanese economy 30 years ago. We might succeed in doing so, and maintain our dominance in the world, but the manufacturing jobs are not coming back, period.
31
Actually, Obama’s Trans-Pacific trade agreement was intended to create a collective approach to the problem, in which multiple countries would be involved in enforcing fair trade practices by China. But Trump and the Republicans - who seem to get the vapors at the very mention of the word “collective” - decided going off on our own was the only way to go. So now what? China can get what agricultural products it needs from other countries while US farmers lose a huge customer.
The fact is we live in an interconnected, interdependent world. Going it alone in such a world is a fool’s errand. While Trump is hopelessly clueless, all the leaders of US international companies understand this. Too bad they can’t get that fact through to Republican politicians. Then again, some of those politicians may already understand that, but they’re afraid of Trump and his supporters, who are desperately clinging to the 1950s. For all their flaws, at least the Democrats understand which century we’re in.
7
@Jerome
The best line of this entire argument 'do you want cheap toys or jobs for your kids'. Very well articulated.
Unfortunately the folks commenting here are the guys making money from trading insights on companies via stock exchange ' not the folks building communities, farms, making products, etc.
2
This chaos will continue until Trump is (rightfully) thrown out of office, which apparently will not be until January 2020. Perhaps wild fluctuations in the stock market, loss of value for retiree's 401(k)s, the inflation in prices at Walmart for cheap Chinese-made goods, and plummeting commodity prices that hurt farmers and affiliated businesses in the midwest will teach the moneyed class and the working-class people who voted for this mess that their choices have serious consequences: for them and for the next generation(s).
As a pediatrician, I am resigned to the fact that some children simply cannot be told or taught to not touch the hot pot on the stove. They simply have to burn themselves to know never to make such a foolish mistake again.
36
@DrSam
Plunging commodity prices will correct the farmers to produce the right amount to the market price...it will eventually stabilize out..its painful, but so are most things that need correcting after letting them go on for too long. And as far as touching something hot...its about time that someone tried..We've been hands off an obvious problem for too long, and been taken advantage of.
@Al Morgan - It's not Trump's tiny hands that will get burned.
3
@DrSam Farmers are getting hammered by the market prices resulting from this trade war with China. They've lost their market share and their stored crops are rotting in their flooded fields (not that the climate has changed should you ask). And still they say they support Trump. And union and other working class voters have supported the GOP to their detriment for years.
They not only have touched the hot pot, they continue to grab at it every time they walk by. I don't know that they'll ever learn.
4
There are fundamental problems with China's ways of subsidizing and protecting its industries and utilizing predatory pricing that have devastated manufacturing sectors worldwide. In addition China's requirement to transfer foreign technology to native industry is tantamount to royalty free transfer of technology know-how. In the US alone more than 3 million manufacturing jobs were lost in the manufacturing sector after China was inducted into WTO.
With the pursuit of asymmetric trade policies while China has boomed and risen to become the nation with world's highest GDP (based on purchasing power parity), parts of the US have become industrial wastelands. Yes, no one forced the US corporations to transfer their know-how, but in order to make a quick buck, the myopic chieftains of the US corporations have sold out the economic interests of our country. The US is paying for the sins of greed by the vast majority of the CEOs of the private sector. The US CEOs have in effect hollowed out our value chains and made China the most powerful job depleting competitor on this planet.
12
When Trump didn't get what he wanted as a private real estate developer he simply walked away which was a fine tactic when the negative consequences only affected him and his family; but now his simple tactics hurt us all. Unfortunately Trump knows no other way. He has no creative ideas. He has no finesse. His understanding of trade is one-dimensional. And he and his nationalists in the White House have no understanding or appreciation for the way that trade among countries keeps the peace, a side benefit that is invaluable. Watch as trading prospects (with Iran, China, Venezuela ...) are going down, war-mongering is going up.
27
Trump expects to "fix" the balance of trade and trade policies by rolling over the existing policies with a bulldozer and get it done in a year or so.
Yet, in both China and the US, the whole structure of economies has evolved over 20 - 30 years based on the idea that low cost manufacturing will take place in Asia because of the low wages there.
American companies whole business posture revolves around that principle. There are few factories, trained manpower, nor management structure in the US to support US manufacturing. Moreover, US manufactured items would be exceptionally expensive. And we're not talking low tech either, e.g., there are no large scale integrated circuit foundries in the US; they are all in Asia!
Trump's style is to bulldoze existing procedures and provide nothing in return. It is virtually identical to his willingness to destroy the ACA and provide no medical care in its place. The US dropped out of the Paris accords because Trump believes climate change is a hoax -- and he has silenced government sources that disagree.
America will wake up only when the destruction is bad enough to make life bad enough. Trump can't plan; Americans can't see the destruction that is evolving from that lack of plans.
Unfortunately we can only hope for a severe recession before Nov. 2020 to get rid of Trump. Otherwise too many people think he is doing a good job.
11
There is really only one issue here that the US needs China to address. That is the pervasive state sponsored theft of intellectual property by Chinese State Owned Enterprises. Wholesale commercial and military espionage is the root cause of the mutual mistrust. If our stance with China changes this one behavior, everyone will benefit.
38
This is not the way to change this behavior. It’s a elementary school tactic that will only increase risk of military confrontation.
20
@Jeffrey Schantz
Theft of intellectual property is only part of the problem, but it's a big one. Other problems include: Currency manipulation. Unfair trade practices (pricing collusion among Chinese companies, protectionism). Lack of environmental laws (substantive laws and enforcement). Lack of laws to protect employee rights (e.g., safety).
1
@Steveb. What exactly is the way to change China's unfair and illegal trade practices? Confronting them in this manner seems like a sensible alternative to saber rattling and much more likely to get peaceful results. I loathe Trump but acknowledge that it is high time to stop China from profiting at the expense of others through subterfuge and extortion. We should never have backed away from the Trans-Pacific Partnership that promised a multinational check on China's illegal practices.
6
Trump doesn’t understand the basics of economics. He thinks that tariffs are paid by the Chinese (they’re paid by American consumers, as higher prices), and he thinks that raising tariffs will restore manufacturing jobs in the heartland (they actually lead to job cuts due to higher prices for manufacturers). He lives in a fantasy world in which he is a savvy businessman (despite the growing evidence of past incompetence), and the king of deal makers. Yet the only substantial thing that he has accomplished is a massive give-away of tax revenue to the wealthy. No doubt he will soon claim that whatever mangled agreement comes out of this trade war is a huge win also!
11
@Grover
His China tarris do not prevent US manufacturers from buying from every other country.
Regarding taxes, tarrifs collect taxes and help lower the ddficit.
A company that has higher cost due to R & D can not compete as well as a company that makes knock off products with R & D funded by another company. So if a U. S. Manufacturer is not undercut by Chinese company with much lower R & D costs, that can help with R & D jobs and manufacturing jobs.
Aren't the farmer's fields "shovel-ready?" It seems like we could easily print our way to a win-win-win on this one. The printed cost would be considerably less than previous shovel-ready endeavors or cargo plane Benjamin shipment follies.
2
More evidence that the US has left its version of democracy for populist authoritarianism. This policy regard for economic costs, it's a vanity project akin to Erdogan's handling of the Turkish economy.
Trump knows that the Republican Party will back anything he does, no matter how irresponsible, and he's relying on other nations to prop up the US if things go totally off the rails. One hopes, in such case, that the EU shows some spine.
5
The howls of protest out of Beijing tell me that we're finally on to the root causes of this mess we've gotten ourselves into.
4
@Chris
What about the howls coming from our soy and dairy farmers?
3
Buckle up buckaroos.
When several current and former administration officials were asked if Trump actually believes that China pays the tariffs — rather than the reality that U.S. importers and consumers do. The consensus was a consistent yes.
That's what he actually believes. One official added, there’s little point trying to persuade Trump otherwise, because his belief in tariffs is "like theology."
You can find dozens of videos from the eighties and nineties of this weak minded man regurgitating the same tired line saying tariffs were needed against Japan, South Korea, and Mexico (post NAFTA).
Our dysfunctional Congress needs to take back the executive power ever president since Nixon has assumed was granted to them by the Constitution itself.
16
@Really
"That's (China pays the tariffs, not the American consumer) what he actually believes."
I don't think he believes this at all. His attention span jumps around like a pogo stick. "Off ramps" aren't even in his advisors' vocabularies, much less his. I think everything is focused on re-election.
The Chinese will wait it out the way the Democrats did on the government shut-down. They too will prevail -- and yet Trump will proclaim it a victory for the U.S.
What I don't understand is why so much that this man does (i.e., trying to undo health care -- again, with no end game) actually hurts his supposed 40% base and yet they seem not to care.
When are they going to wake up to the fact that he's selling them out?
1
This man has no clue. Americans, not the Chinese, are going to pay for these. And even if it hurts them too, so what? We’re going to hold our breath until they turn blue?
Republicans have never supported protectionism. Stop him.
4
I'm glad that China is going to be paying the tariffs, otherwise it might end up like Mexico paying for the wall.
Oh, wait a minute, that's exactly what it's like.
67
"Trade wars are good and easy to win".
If you can't trust the financial advise of a self-proclaimed "genius" who was the single biggest financial loser in the Unites States for a decade straight, who can you trust?
How about a five year-old with a lemonade stand? There isn't a single kid who ran a lemonade stand last year that isn't better qualified to negotiate a trade deal with China than Donald Trump.
6
Well when you have an electorate so economically naïve that someone must explain to them "who pays the tariff", it is unlikely that they can grasp the concept of an off-ramp. The Chinese have been taking advantage of the American pain-avoidance policy for a long time. They are not going to back off their advantage without some pain. That said, I just hope we don't go through the pain of a trade war without a well thought out set of goals. We don't need for this confrontation to end up as an economic Iraq. I don't see much gain from a war that just moves manufacturing from China to India or Viet Nam. Where is the American job growth from that shell game?
5
I for one would like to see a 25% tariff on all Chinese goods for the foreseeable future, like for the next ten years. This is the only way the American consumer can be weaned out of buying three of everything when only one is needed. If you count inflation as the cost of a pair of shoes before and after the tariff, yes, we will see higher inflation but buying only one pair instead of three will definitely bring down the overall inflation. Also the imposition of a 25% tariff on all Chinese goods will give American manufacturers and importers the time to adjust to a new world order where manufacturing is more distributed around the world.
Constructive ambiguity - an oxymoron if you think about it - is not what we need. There is one more reason for a long term tariff on Chinese products, one we should not forget. The US fought a cold war for seventy years to thwart communism but has since given up this notion when it comes to China, in effect saying Chinese communism is acceptable as they provide us with low cost shoes (and iPhones). Time to take up the mantle at the cost of fewer pairs of shoes and a higher priced iPhone.
5
Transpacific Trade Agreement was created to prevent this kind of thing from happening - something that Trump discarded because his more capable predecessor had enacted it.
Now we've seen a significant market lurch and will soon see price impacts for the average consumer - Walmart receives something along the lines of 75%+ of it's merchandise from China my understanding is.
Will Trump's base recognize the source of their price woes, or will they beat the drum and somehow inexplicably shout "Hilary" to the wind in response?
Time will tell - but I don't have high hopes for large swaths of America.
Vote Democrat in 2020 if you care about the future of your 401K, retirement savings, and purchasing power as a global citizen.
56
@Nick
I agree with you. I live in California and could care less if it costs me more for sneakers, shirts, cell phones, or washer and dryers. Actually, four states make up 36% of GDP. CA,TX,NY, & FL. Ten states make up 56%. So, in most of the RED states, the contribution to the economy is small. But, that’s where the real problems are: 1.Consolidation of Agriculture. These tariffs are reducing family farm profits and causing economic burdens for not only the owners, but the workers. No wonder Farmers hire cheap foreign labor. 2. Walmart and Amazon effect. Communities are losing small businesses to these giants. 3. Diminished manufacturing due to globalization and Robotics and AI. The tariffs pile on the pain and the Trump supporters love it. Obama tried to mitigate these trends with the TPP and ACA. Hospital closures are rising in Trump country because they can’t make a profit. People either don’t have healthcare or the rising premiums are not affordable. Meanwhile, the rich are benefiting from the tax cuts, big Agricultural Companies are buying up more farmland, and Americans living in the middle of the US are buying into a con that is ripping them apart! This is the real tragic story!
11
@Nick
143 Democrats voted AGAINST TPP in 2015. Sorry...
1
@Nick
This could be characterized as the back door into TPP. If the China tariffs are continued longer term, U.S. importers will turn to the nations in the TPP like Vietnam, Mexico and Peru for lower cost imports. It will be quite disruptive of current supply chains but could end up with more multi-lateral trade. Low cost manufacturing in textiles, furniture etc. is not going to return to the U.S.
The only thing Trump has every successfully negotiated was bankruptcy. Which he is on course to do again, with both our democracy and our economy.
9
TPP was intended to provide additional leverage in the region, putting economic pressure on China to bring them to the negotiating table. The leverage it provided was discarded out of spite and resentment (held by DJT and R's) toward 44.
100
The article makes it sound as if both sides are at fault in creating this impasse. This is not the case. The US is asking for concessions that China can't, and shouldn't, make. We are apparently demanding that China end the subsidies it provides to encourage certain business sectors (like tech). Yet, the US has a long tradition of subsidizing agriculture... and of bailing out banks, insurance companies, and the automotive industry. Why should China end its subsidies when the US continues to provide them?
158
@ShenBowen the difference is that when the US provided subsidies and bailouts it went equally to companies in the affected industry as long as they operated in the US and with the purpose of bolstering the whole sector. When China subsidizes their industry, it is solely to Chinese (often state-owned) enterprises with the view of driving out foreign competition. That's why.
5
@SBR: Can you name a foreign company that the US has subsidized? The US subsidizes American companies; China subsidizes Chinese companies. US government support for agriculture has generally been aimed at providing an advantage for American agribusiness, making it impossible for poorer countries to sell their agricultural products in the US. This is, US farm subsidies have driven foreign competition out of a number of US agricultural markets. China is growing because the government is encouraging innovation. And what is America's plan for growth? Tariffs.
25
@ShenBowen
We want them to stop subsidizing the manufacturing of goods so they can be dumped on the market at below cost and drive international competitors out of business and then corner the market. Our agriculture subsidies are the only similar thing we have and they aren't really that big and aren't intended to drive competitors out of business.
Also, it would be nice if they would stop stealing IP from us. No one objects to them spending money to develop their own though.
2
Mr Irwin muses that it’s possible that only a personal interaction between Trump and Xi may be the way to avoid a prolonged trade war. This sets a dangerous precedent- it would encourage authoritarianism, and we’d be going back to the time when things were settled in “smoky back rooms”.
23
The concept of "mutually beneficial" have no meaning to Trump. It's "either you win or I win; and if you win I lose" to him. Zero sum, yet again.This will not end until he is no longer president. That begs the big question: How long will that be? And the second big question: How much damage is he going to do until then? The US's credibility has been broken for the foreseeable future. How can any country ever trust us again, when at any election we could just as easily vote another one like him into the presidency.
140
@John - exactly, and that's why China doesn't trust the US much. We renege on many occasions because we expect the rest of the world to acknowledge that we are the "king of the world"!
5
@John
Donald Trump's idea of "winning" is this - I sold more to you than you sold to me. He has no understanding that "trade" does not mean "how much do we sell."
That explains his misunderstanding of the trade deficit as well his misunderstanding of tariffs. He thinks China's trade surplus means we lose and they win.
In order for Trump to back down and get an agreement with China -including dropping demands on government subsidies, intellectual property - all China has to do is promise to buy more from America.
If China promised to buy enough every year to turn their surplus into a deficit, Donald Trump would conclude he's "winning" and sign up.
3
Trump is going to fold as soon as the evidence of the tariffs damage to average Americans takes effect. The bailout for the farmers is not the solution either. The ag business does not want to be the symbol of the free lunch. And as all of the cheap goods become more expensive, the average American will feel the pain. Trump will see his electoral hopes fading and his potential prison sentence looming and fold. Look for no systemic changes to technology or at least no system to enforce technology theft.
53
@CA Dreamer
I wouldn't be your retirement on it.
1
@CA Dreamer Correct
5
@CA Dreamer
By and large business has been saved by tariffs - otherwise there would be no corn grown for ethanol and tomatoes grown in Florida
Occasional hick ups not withstanding - as the ruckus on how Canada, with tariffs, protects its dairy industry from American competition