Maybe China , the source of 98% of the Rare Earth elements that are needed to make computer chips, might decide to trade their Rare Earths for US made computer chips in the near term (3-5 yrs). After that China will make its own advanced chips and the USA will find a new source of Rare Earth elements. The end result will be that China will be free to go on creating 5G and apparently 6G that they are already studying/developing.
The USA can not legislate a road block to China`s growth. At some point the US dollar will lose its primary position & its global banking hegemony. US sanctions on other nations will become meaningless as this century proceeds.
10
The US has the largest Economy in the world: $21.4 Trillion GDP.
Ok....70% is consumption. That’s the good news. The not so good news is the US has a negative Current Account balance of -$449 Billion, $22.2 Trillion National debt representing 104% of GDP, and only $123billion of reserves. In addition, our ability to generate national income is decreasing due to structural changes in manufacturing, Agriculture, and small businesses. This puts pressure on people living in Red States, especially since jobs are scarce and healthcare is becoming either non existent because of hospital closures and rising healthcare insurance premiums. China has problems certainly, but the macroeconomic numbers look pretty good. Throw in HongKong and Macau, and the numbers look even better. China’s Current Account balance is a positive $164 billion, National debt is $5.2 Trillion which is 37% of GDP, and $3.2 Trillion foreign exchange reserves. China’s Economy is evolving into more of a Consumption model. As an old analyst, I like China’s prospects better than our own. Trump has no strategy to deal with this. Obama had the TPP which was a good start.
23
@Peter Z
Yes... also throw in a police state where buying an airline ticket is contingent on your "social credit", wholesale persecution of religious minorities, environmental degradation, a ruling party that is petrified of independent thought and information (hence the Great Firewall) and the Current Account does not look so rosy any more.
It is virtually impossible that the Communist Party can pull of mass censorship and surveillance with citizens who want to join the rest of the planet.
20
@Kai
I agree. Chinese leadership faces the impossible challenge of giving their people access to the middle class (some leisure time, some disposable income) without making them aware of their country’s propaganda.
5
@Peter Z China isn't a country in the western sense of the word. It's a militarised zone controlled by a tiny group of political maniacs who use the military to eliminate anyone who doesn't do as they are told. As such it cannot grow into a consumption economy, because the necessary freedoms can't be allowed.
The thing that makes the west so successful is Christianity which, as Gandhi famously said, prevents soldiers firing on peaceful unarmed civil rights protestors. Conversely, atheistic communist, hard left soldiers have no such compunction.
Which is why the US is fortunate its military is mostly made up of Christians
7
Sounds like China is deep trouble if your assessment is correct. In the meantime, American consumers are going to be taxed due to the Trump tariffs. The amount of the new tax will likely exceed the meager amount of tax cut from the Trump tax cut for the rich. Trump is not able to envision win-win situations so this is likely to be a battle to the end. Many people will suffer because of his actions, and for a very long time. Many people are still adversely affected by the impact of the economic collapse during the Bush Administration. We have gone to the cliff on trade, and it didn't have to be that way. TPP would have given us leverage over China to modify their behavior. We should not expect China to adopt our market ideology if it doesn't fit their culture--and it doesn't.
4
This is a yuge tax increase by another name, cleverly kept out of the Grover Norquist Pledge to never support raising any taxes, since these are yummy yummy regressive and hurting the poor and the middle class disproportionately, yeehaw!
2) It's a way to shake out small businesses that can't absorb the disruptions so the big guys can buy them up for a penny's worth, yahoo and yeehaw again.
3) The Chinese will not cave or cut down on their practice of intellectual property theft, and the U.S. will not bring manufacturing back home, it might at max redirect some outsourcing to other low-wage countries while IP theft will continue, so what will be won to make up for the huge pain the trade war causes?
4) The most important thing we know we must address today is to cooperate to curb global warming and the trade war is not helping but counterproductive instead to the crucial goal of our times. If it moves production, idle capacity that has to be rebuilt elsewhere will ensue indicating inefficiency and more pollution.
5) Why only pretend-address IP theft, not actually address labor exploitation, overt and covert oligo- and monopolistic pricing abuse, and the tax evasion frenzy, which are all American business practice crimes? That's where the actual trillions get stolen from workers and the society at large. Fix these and you got money for every Warren supporter wish list item you can think of, and more.
6) Instead you risk a Financial Crisis on steroids. Don't, just don't.
10
We're all complicit in propping up what was a weak, backward agrarian country run by a brutal communist regime that plays to corporate greed (short term gains for shareholders while selling out sensitive techs to long term Chinese competitors while short changing working class Americans with outsourcing). From the very beginning China corners the markets through currency manipulation, forced transfers of IP via joint ventures, enacted nontariffs barriers such as subsidies and easy loans to domestic SOEs while erecting bureaucratic redtapes to stymied FOEs at every turns, in order to give their less efficient Chinese competitors room to grow into the likes of Alibaba, Tencent, Baidu and yes Huawei from competing against respective American behemoths such as Amazon, Google, Twitter/FB and Cisco/Oracle. The ultra sensitive tech secrets
(1-5 percent) that FOEs still cling to for leverage, China intel acquires them through industrial espinonage, cyber attacks and buyouts and/or mergers. With the exception of few multinationals like GM, Apple and VW with the resource and musle to placate the insatiable corruption of Beijing cronies, the vast majority of FOEs (90+ percent) are essentially locked out of an indeed lucrative market, salivating at the prospects but lacking any leverage I terms of know-how long since traded. Think of it like an ancient Chinese hand trap: you can stick your hand in, but it's hard to get it out without a missing limb (or two).
6
@Sonny If you are giving yourself too much credit: "propping up what was a weak, backward agrarian country"? Typical ugly American mentality. Time to get out under your cave and take an unbiased look at yourself and the other country around the world. If anything, the China became an economic power not because you “prop it up", it is because their own citizens' hard work and tenacity when facing obstacles and challenges thrown at them from people like you.
7
@Sonny Isn't the Federal Reserve the world's biggest currency manipulator？
7
@Sonny
The examples of Chinese malpractice you list and more might all be the case, but in a bilateral trade war you'll never gain enough leverage to stop the practices. You need the vast majority of the other countries of the world at your side to wield the leverage to address the problem. And Trump is the elephant in everyone's China closet, he ain't winning anyone to his side of the negotiation table. With stolen IP China makes a profit in global markets. If the U.S. manage to tax some of that back by being able to outtax them in the trade war, it will only be a small part, so it won't deter them to stop the practice, duh.
3
Not sure why China cares? Long term, the US appears to be going it alone, burning bridges, not particularly democratic or supportive of free nations, providing little reason for our past allies and trading partners to not develop stronger relationships with China and China's many other trading partners. The US economy cannot continue to dominate other economies as we exploit our youth, working and middle classes expecting them to buy buy buy at ever increasing prices while good paying jobs go to AI and robots. Our college grads have been paying the price for a long time as college debt reduces their buying power for houses, cars, healthcare and savings.
10
@Maine Islands America First，America Alone
4
Perhaps the US can find ways to help companies start moving some manufacturing from China to Mexico.
2
@Freonpsandoz
To Mexico，To Vietnam，To India，Just not US,Why?
Jobs are scarce not because of any one country, but because of the greed of capitalists.
2
@Freonpsandoz
To Mexico，To Vietnam，To India，Just not US,Why?
Jobs are scarce not because of any one country, but because of the greed of capitalists.
China has long flourished as what one Congressman called "The world's biggest forced labor camp." As despicable as many of Trump's moves may have been, he has the guts to do what previous American Presidents have fearfully turned away from: fight back against a country that (in concert with Corporate America) has destroyed millions of American jobs and devastated thousands of American towns. On this one, I'll hold my nose and hope Trump wins, and that it's all not too little, too late.
7
@dajoebabe It would be funny if your ignorance and hypocrisy isn't so despicable.
2
Does this mean the capitalists will finally stop selling to China the rope with which to hang them?
5
China has an ancient tradition of humanist, pragmatism the envy of the world...that has gone to hell in a hand basket as a small group of entitled officials ransack the country and attempt to control and consume more and more of the world's resources. people never seem to understand that China is nit the powerhouse people imagine.
China cannot even feed itself without the help of other nations, and virtually any country given a choice would rather align with the United States that China. Internally China's many groups would not support her in an all out campaign. The Muslim groups, the other ethnic minorities would "drop their muskets" so to speak.
China needs a punch in the nose right now. Those countries that make a profit being over there have to accept the bad with the good...they certainly did being raped by Chinese red tape! And the good citizens of China, who I respect and admire to no end, do not benefit, or lose from the accumulation of wealth by the 1%. Think of it this way: If China ever did create an epic middle class similar in percentage to this country? we would run out of most commodities , in a week!
Trump is doing a great job tackling an issue which has to be tackled now. Rather then dropping bombs on Iran he is fighting the good fight.
4
@darrell simon China's population is about 93% Han Chinese, those ethnic minorities may not be large enough to do anything. But I agree with your other comments.
1
Chinese have always blocked everything and everyone nonChinese from entering China unless on terms hugely in favor of China. This goes back hundreds of years. Did you ever meet an American-Chinese — an American allowed to become Chinese? “There has never been even 1” says Chinese author Eric Liu. What is new is US not being a doormat for the first time.
10
Re: ... China’s economic slowdown, which could hinder hat
That was evident a year ago. Reposting my analysis from a year ago, (May 22, 2018)
... the Chinese position is much weaker than realized. Real unemployment is larger than reported officially. Chinese cities are filled with millions of rural migrants from the country side, without a hokuo (a permit required to live in the city that allows access to schools and social services). Largely unskilled, they see there jobs disappearing.
Why ?
Click here, to see for yourself
https://www.francetvinfo.fr/economie/industrie/ethiopie-la-nouvelle-usin...
(Ethiopia , the new factory of China)
Ethiopia is the new place for the factories of China. 741 acres are covered in Hawassa by mostly Chinese factories. Salaries in the Chinese owned textile plant shown are 30 Euros ($ 35) per month , 1/20 of those of China as the Chinese owner explains. That is 1/20 !!
What the proud Chinese owner does NOT explain is that he laid off his textile workers in China when he moving the factory to Ethiopia.
It is a race to the bottom. Stagnant wages by outsourcing production to those willing to work for least, has reached China.
Economists such as Krugman who promoted globalization (In Praise of Cheap Labor) failed to see that political unrest (e.g. Brexit, Trump ) follows.
It does, and that is becoming a headache for the Chinese leadership, who is well aware of it.
7
Exactly, American business was so lustful of business with China that they handed China everything they demanded. If it's finally occurring to them that China is really ripping them off, well 'Too little, too late.' They sold themselves to an abusive panderer, and now their reaping what they sowed.
5
Don't forget that all those Trump supporters and many others who want American jobs and business have been buying "cheapest" from Wal-Mart, knowing their purchases were sending our money and jobs to Japan, then China, then Vietnam and every nation that pays next to nothing for labor. The tariffs do what Americans would not do. But like opioids, the American economy is addicted. We did this to ourselves and there is no good way out. Tariffs are a bad idea. But so is every other option, except for having government and business take their tax revenue and profits and plow them back into education, job training and yes, guaranteed income for displaced workers. Eventually AI and robots will replace all human labor and standard brain power.
2
"As the Trade War Rages, the US Influence Over the Rest of the World Wanes."
There, fixed it for you.
13
Your anecdotal stories sound like the the lonesome tremulous wanderer in the woods whistling to pluck up some courage. Just wait and see and in the meantime dream on about times long gone. China will stay on the fast lane. The USA are not the world, not even together with its shaky vassals.Mister Trump will show it to you the hard way. He will get a lot of money. From you, my Dear! You will have to pay a lot more tariffs than the Chinese. That's because you export less. So bad. Please, applause.
4
How can any liberal defend a country that imprisons Muslims, spies on its citizens, steals IP from American companies and has a 2025 plan to extend their control to the rest of the world?
For once we have a President, not a politician, that is putting America first. I know it's a major shock to the world system and it's a shame that it didn't happen before.
3
@Jon Galt
It is ok if the US does it, just not China. Is that what you are saying?
3
@MLK2
Does the U.S. have concentration camps for over a million Uigurs? Does someone from the government arrest you if you look up "Falun Gong" or "Tianamen" on your phone? Can you send pictures of "Winnie the Pooh" via social media without being investigated? Trump may be horrible, and he is, but in the U.S. he can be voted out of office. And we can comment in the New York Times without worrying that the FBI will come to our house. The U.S. is a country with many problems and shortcomings. China is a totalitarian state.
6
While I appreciate any attempt to enlighten readers as to how we got here in terms of our deep and wide economic relationship with China I am frustrated at what can only be deemed Mr. Bradsher's (unintentional?) sin of omission.
One of the major "selling points" used by business groups,think tanks,and "$wayed" politicians to push for "engagement" with China (as opposed to that scary "duck and cover" containment of the USSR) was that it would "change China from within", "economic freedoms would lead to political freedoms", and "a burgeoning middle class will demand human and civil rights."
This aspect of the engagement theory has surely failed miserably.
To pretend it never happened is a disservice to readers and the public in general.
5
"General Electric sold one complete diesel locomotive from Erie, Pa., to China, then taught the Chinese to build their own. .."
Now we know why GE has imploded over the years. It is amazing how delusional do company CEO get in chasing short-term profits.
5
@Kai
Evrybody after Jack Welch was incompetent, so far - ran the company to the ground.
1
Hey China if you are listening! Just start dumping US treasuries and invest in Euro as the currency of choice. You won’t have to do it very long for the dictator to get the hint you hold the cards.
3
All I can say is the Donald is not a mean spirited person. I love our president.
2
When a trade dispute got out of control like this, it becomes cold war betw two nations. However, the one who will lose 1,000 soldiers to kill 500 on the other side may not be the loser of the war.
One thing United States does not realize is that China WANTS to move its old and polluting factories to other countries in SE Asia. China also using American tariffs as a credible excuse to move those factories. In its place China want to build newer, high tech factories to move up the value chain to compete with US, Japan and Germany. Trump just accelerated this transition for China.
A Chinese worker use to make bicycles will now make New Electric Vehicles. A Chinese toy maker will now remote control delivery drones. etc etc.
United States instead of slowing down China have just speed up Chinese transition. How could you not see this from a Chinese industrial planning perspective?
3
Once production has been relocated to China, the expertise is quickly absorbed, and if, as now, multinationals think about relocating their factory to another country, there is little possibility that China will allow them to break the factory down and export the capital equipment. So the factory and expertise stays put, and China wins.
2
I am OK with manufacturing moving out of China to any democratic country including India. Anti-democratic China should not be rewarded financially for disobeying IP laws, following anti-competitive behavior and imposing its will on American companies to build up its huge trade surplus with which they are flexing their military muscle to subdue weaker nations. China must be made to feel the pain!
4
@Indian in US
In the 80s, US trade hawks said the same things about Japan, a democracy, that they’re now saying about China. They even murdered Asian-Americans over it. And in 20 years, when India is set to have a larger economy than the US, you’ll see them beating the war drum against India. You already see it in people’s complaints about customer service outsourcing and H1-B holders. Their attitude is—the US must dominate far more populous countries, even if it means billions stay in poverty. The stuff about China’s human rights is all bad-faith pretext. Our protectionists, not China, are the real opponents of competition and the free market.
4
@Aoy Pointing out that China is a xenophobic, totalitarian country in which corporations are indistinguishable from a one-party state is not bad-faith pretext. There is no "free market" in China and never has been.
3
Those who are joyous at the thought of slapping down China and say it was long overdue might be very surprised, if they think the Chinese are going to roll over dead. They remind me of the Union Soldiers at the start of the Civil War who thought the war was going to be so easy they brought along their wives to the first battle like it was a picnic.
China's first lever will be currency manipulation, and you can bet they will use it. But China's best advantage is it's totalitarian regime: the populace has little choice but to bite the bullet. Can we say the same, that American consumers will put up with the inevitable price increases? I'm not so sure.
5
@dave
Many of us are already boycotting anything from China. I don’t care if the price skyrockets or falls to zero. No sale.
Apple is facing the beginnings of a massive boycott in China. Same with other iconic American brands. Anti-American sentiment can go viral. State sponsored media are already telecasting Korean War movies where the PLA were victorious heroes in vanquishing American G.I.s.
4
@Charlie D.
Fine for you in a highly populated area. Those tens of millions in smaller communities don't have much choice to pick and choose, as in Walmart being the only choice.
1
The huge China market was always a delusion - but one which international corporations, unanswerable to any national interests, or, it seems, even their own, were eager to buy into.
American businesses freely, under no duress (unlike other secrets which were stolen) gave away their strongest asset - manufacturing ability and the accompanying technology - by establishing - building for free - factories in China, to exploit its labor.
Those which initially resisted eventually joined rather than lose the competitive fight.
Now they realize that maybe it wasn’t such a great deal, but can’t back out even they wanted to. You can’t take back factories or undo knowledge transfer.
4
@ml
And I will not buy their products. You see these overpaid CEO’s chose wrong when they put shareholders and exec bonuses ahead of their communities, country, employees and customers and moved manufacturing to China.
4
CEOs have been overpaid and maufacturing jobs bleeding out from the US since the 1980s and everyone sat by watching. Now they're gone and people are just waking up to this fact? How about the steady attacks on union labor over the last 15 years... That's how we've returned to having income inequality resembling USA circa 1910. Time to tax income and capital gains at much higher rates and invest that into infrastructure and next Gen technologies. These old manufacturing jobs will not come back nor should want most of them. Tarriffs simply are a tax on the American middle class...the costs will just get passed to the consumer. Better we had joined the TPP to force China to change.
1
I support local businesses and US products. I only buy from China when I can't buy the product somewhere else.
10
@Jacquie
Cool Jacque. Right on.
1
We've got USA water bottling companies in NZ that pay no tax on the water extraction so it's time our government, whether local or central, to put a tax and tariffs on their water bottling plants.
4
@CK]
OK. Sounds good. Tax them also on the plastic they use which pollutes landfills and our common oceans.
"China’s economic slowdown, which could hinder growth globally"
China's growth rate still leads the world. It is still many times higher than the US rate, and has for been forty years.
China's growth rate may be getting slightly less frantic, since it was about 10x the US rate. But the word "slowdown" does not fit that situation.
Why is it getting less frantic? The US government and press megaphones imply it means China's economy is broken. Broken isn't forty years of growth vastly outpacing ours, still many times ours.
China's growth is shifting. Much infrastructure is built now. Once they have built a bridge, they do not need two more in the same place. A rail line lasts a long time, and maintenance and improvements don't cost as much as putting it through in the first place. An airport once established just build a new terminal or resurfaces or extends the runway, it isn't necessary to built two more complete airports in the same place. Likewise ports. Likewise whole cities.
That shift to the next phase is not broken, it is not a slowdown. It is going pretty well, a lot better than ours has for a very long time.
China has over four times our population. It has land area equal to the entire US, with our Alaskan emptiness offsetting their deserts. They have vast natural resources, and near complete control world supply of some metals for example. And it is still growing much faster than ours.
Impugning it does not make it go away. We have work to do here, to catch up.
10
@Mark Thomason -- On a related story, the US is behind in 5G tech, far behind. The only two companies close to China are not US companies either.
China is not stealing our tech in that market. They are far ahead of our tech.
We can't fix that by banning the better tech. Yet that is the real security interest driving the US complaints. The US has not been able to show anybody, not even fellow members of the Five Eyes like the US, any evidence of China abusing that tech dominance. The US just doesn't like it.
The US has had bad governance for a long time, and has wasted its resources on stupid little wars it is losing anyway. It is more like Imperial Spain than anything the US once was.
We need to fix our own country. We need health care fixed. We need infrastructure. We need employment policies designed to get our people to work, focused on the workers, not on reducing what workers are paid by employers.
We can't blame China for any of that.
8
@Mark Thomason. Adolf Hitler's Third Reich did pretty well economically too, but that's no reason to approve of it. Communism is an atheistic, evolutionary doctrine that affords no value to human life. The individual doesn't exist, in the party's calculations.
How does that sit with the average American?
1
@GJ Philip -- Approve of China? No, that wasn't the point.
By your comparison, then we had FDR. That's my point. We need that America, not the Reagan/Trump neoliberal America.
1
At the heart of Trump's trade policy is the belief that a trade deficit with any other country is a losing position for the US. That the US should make everything it needs. According to Trump this will bring jobs back to the US. For those products where it has a competitive advantage the US should export. For those products where the US doesn't have a competitive advantage import tariffs should be imposed to make American producers competitive so that American consumers buy these products from US producers (for example steel and aluminium tariffs).
As you can see if every country followed this one sided trade policy there would be no trade. Is that what we want?!
4
It was not hard to see the writing on the wall three decades ago when "Made in Japan" was rapidly being replaced by "Made in China" and our US jobs were also rapidly vanishing to support the latter label.
"Think global, act local." Which I have done. I avoid buying Chinese goods unless two conditions are met: 1) I deem them absolutely essential, and 2) The goods, or a functional alternative to them, are not manufactured elsewhere.
It is simple philosophy that, like China's long game philosophy, can be a very effective weapon in this economic war we are waging with them...so long as we Americans, like we've done in the past when threatened by a common enemy, band together and effectively defend ourselves.
7
The issue of unfair Chinese practices is a worthy one to address. I wonder, though, if Trump is the right person to address it. In our recent experience it seems that (like in the case of ZTE) the solution may be found in a major investment of China in a Trump interest, and then the focus of the Trump administration can shift elsewhere.
No doubt China has played us, international corporations selling their souls for entry. The Chinese concerted wall of nationalism and fear of outsiders will not crack.
Just imagine with TPP and Eurosong support plus NAFTA how much more effective it would be from our side.
The manufacturer ing is NOT coming back with jobs, (maybe robots?) But a huge amount has already left China is in Vietnam, Indonesia, Cambodia etc. China is rapidly becoming an assembly hub. In fact apparently only about 10 usd of each iPhone is Chinese, they buy the parts and assemble.
About time we called China’s bluff, but the incoherent tweet planning is self defeating.
7
@HJR
Chinese consumers are beginning to boycott Apple. OK Apple, move to Taiwan. Let the Chinese buy Huawei. Produce your stuff in Taiwan. Highly educated hard working people. Bright. Diligent. Your Apple store in the 101 will be mobbed with new customers.
1
I'm not sure China had much influence in Washington to begin with, as it has been under the spell of the old China hand (Taiwan), which pumps hundreds of millions annually into political ecosystems of Washington. To punishing China with extreme means, we are accelerating the decoupling of the two largest economies, and pushing China to develop its own industries (Think Make in China 2025!). I don't want to speculate what the world economy will look like, but it doesn't bode well. Like most of the reports on China in NYT, this one is more than a little biased. As the US businesses moving manufacture to China and sell those products in China, it is not surprising the import from US has dipped, particularly as a percent of China GDP. In the 80s, the US car manufacturers had over 60% of US market, but now it is less than 25%, so we can entirely blame the Chinese not importing US made cars.
3
@Bill Stones I'm sure Bill, that you've made forty or more business trips to China, that you're fluent in Mandarin and Cantonese too, with endless high level trade contacts all over the Asian scene.
No? You've never been there? Oh....why do you speak so confidently then? Oh, you're interested, are you?
Trump is using the tariffs as a tool to play an expectation game with Wall street, something he was infamous for in New York in his youth. At the same time, he is creating a lot of volatility and the market is in No-Man's-Land for the foreseeable future. Farmers, and his Walmart-customer base, will start suffering when it all kicks in, and if China devalues its currency, the entire country will pay. This "stable genius" is playing god, and the end result is bound to be ineffectual at least, and at worst, catastrophic. Hopefully his voters will notice at some point.
8
@JCam. You're dreaming. Manufacturing will boom again in the USA. Mom and Pop factories will return as citizens begin to invest in making things instead of buying real estate or wall street. The average, unattractive, non-gifted person will get meaningful work in those factories and obtain a dignified lifestyle once more. Donald isn't a genius, he's just sensible.
2
@JCam I doubt it. Too busy shopping at WalMart to have your keen insight.
1
If all countries in the world became Secular Democracies and did free trade agreements what a prosperous global world we would have.
New Zealand could be the poster child.
2
I am not a US citizen, but I totally support trump on this trade war. China has a lot of shady business practices and needs to be taught a lesson. Not only the US but countries throughout the world are facing similar issues when doing business with China. I support you mister trump.
11
@Mark You support Trump? Here's an idea Move to the U.S. and have to live under his administration of hate and bigotry. You may soon change your opinion.
2
I live under this administration and agree with Mark.
This may be first-blush optimism, or maybe even a little spin in favor of Trump's trade mess. In the article, it mentions that certain things have happened over a decade... it's probably been longer than that. And what's happened over a decade is China remained a Communist country, to which was grafted-on capitalist activity, that apparently, using Marxist language, captured the foreign means of production and brought it into China. Unraveling that would take over a decade. The U.S. and the West have not yet felt the impact of what Trump's trade policies. It is interesting though, that years ago in the course of Trade "debate", China said that the United States should get out of the "food" business in the global market. The first casualties of Trump's trade war seems to be Farmers. China is also a Communist country. What that means is that it can crush foreign capitalist activity on its soil, even "nationalize" the private sector using the narrative that it is in response to economic warfare waged by the West, meaning the U.S.
1
I am not sure the US will win their trade battle with China and it will very much hurt the US which will never recover. Unfortunately the current US government does not know how to communicate effectively and collaborated for WIN-WIN solutions. Our loss. DJM
10
China has a population of around 1.3 billion people. However, to suggest that a “cooperative” American company would gain access to a market this size grossly overstates China’s situation. Of the 1.3 billion, the vast majority are, basically, peasants with no ability to spend money on American products.
6
That may have been correct 25 years ago but 100 of millions have moved to the middle class in the past few decades.
6
I wonder what would happen if China sold or threatened to sell its $1+ trillion holdings of US national debt obligations.
2
@expat $1.3 trillion, and according to the article it would temporarily raise inflation in the US, while at the same time causing massive losses to China for holding a fire-sale, and leaving China to figure out where to invest that (reduced) sum.
Overall, it would be a huge relief to the US, after some short-term pain.
8
I remember an NPR segment talking about China hacking US companies computer systems to steal trade secrets and IP. Most companies complained to US govt but they refused to come out openly about it so that the govt can prosecute it. Only Google was the exception and openly protested against the China hack. No wonder that company was kicked out of China.
Even though I don’t agree with many trade policies of this govt I’m glad Trump has stood up against nefarious Chinese schemes to gain long term advantage by stealing US companies knowledge crucial to safeguard long term US economic interests.
30
@Observer As a technologist who works for a technology company, I can tell you that the vast majority of all hacking attempts are from China these days. They don't even try to disguise it. Within minutes of exposing a new server to the internet. we get port scans, and brute-force attacks against services like SSH. We whitelist allowed IPs of course, but that only works against these crudest of attacks.
Any good feelings I had towards China burned up long ago and are now lying in a cold ash heap that periodically gets turned over when I hear about yet another attack on one of our networks. I say trust nothing China says, including any agreement it signs, and escalate this trade war to the point that no company that wants to do business in the US would even think about producing in China. I don't care about the pain it will bring us, as long as it brings them more pain I'll be happy as a clam.
24
Great philosophy. Cut off your nose to spite your face. And that makes you happy?
1
@Fed up short term pain for long term gain. For short term business benefits the US business have been silent when attacked by Chinese hackers but now Chinese competitors are emerging who used that stolen IP to build up their foundation. This cannot go on, this is economic suicide, at some point the govt and the business have to take a stand 'enough is enough'. If China launched an organized attack to gain long term economic superiority the US has no choice but to fight back before it is too late which already is in some business sectors. Even if it means we have to pay higher price for some consumer goods, so be it. 25% tariff on $200 billion import translates to $50 billion in an $18-19 trillion economy, that big picture matters. If this tariff war forces some US business to bring back manufacturing to the US or relocate to friendly Asian countries who are also victims of Chinese aggression, I think it is worth it.
1
Interesting that President Trump is playing the long game. The Chinese are finding themselves more and more lost in the short game. A booming U.S. economy versus a deteriorating Chinese economy, The Chinese caught between whether to strengthen the yuan or let it fall. The Chinese have an aging work force and weak demographics, the U.S. has workers eager to enter the economy and Donald still doesn't understand the importance of that. We have energy independence, Chinese don't.
All in all, looks the Japanese situation of twenty years ago or so.
8
Boycotts used to be quite effective. If you oppose a company or a country, do not buy their products. I challenge Americans to not buy any thing made in China.
5
@Kevin G
The only problem is that you would be asking people to walk down the street stark naked. Just about everything is made in China. I'm sure Walmart would love your idea.
1
China’s Sway Over the U.S. may be fading for now, but not until US Fortune 500 companies start to report their quarterly earnings during the second half of this year. It could be a rude awakening on how a jump in Tariffs could severely cut into margin, profits, and business outlook. Just look at John Deere's comments on their earnings today.
Meanwhile there is huge systemic risk and leverage building up in China’s financial system to prop a dwindling economy. If that measure fails, the global economy hits an iceberg with no life jackets by year end.
2
@RV
Caterpillar spent 500 million USD on a Chinese company that did not in fact exist.
Let us put aside our political differences and stand behind the President on this issue for the future of our Country. China has been cheating and manipulating trade for at least 25 years in the words of Benjamin Franklin [ We must, indeed, all hang together or, most assuredly, we shall all hang separately.] God bless America our home sweet home.
20
@Rbryant147
If there is a God he certainly wouldn't bless a country whose chosen leader is an unrepentant miscreant, an irremediable prevaricator, and who governs in his spare time when he is not on twitter or meeting with sycophantic autocrats and despots from third world countries. And as for "hanging together", in the immortal words of Melville's Bartelby, "I would prefer not to".
1
I think blind hatred drives many. No matter what Trump does, even if it is for the good of the country, many will find fault and spew venom because he is Trump. Sadly, still angry about the election.
“We’re looking at their expanding into global markets, and saying, ‘Wait a minute, why can’t we do that here?’” Mr. Gibbs said.
This is nonsense. The corporate method is it increase capital for the benefit of capital at the expense of everything else.
If that is India instead of China so be it.
2
This is an amazing set of leadership from Trump. China has played unfairly for years - look to sell abroad, but restrict others to sell within China.
Now we have a leader who has the bagels to call China for it. KUDOS TO TRUMP!
The positive effects of Trump’s Strategy could be far reaching - economic hardship could not only force China to level the economic playing field, it could also oust duplicitous despots like Xi, and open a case for human rights respect in China, and who knows even pave the way for democracy in China in fifty years from now.
Trump for Nobel Price in Economics, in addition to one for Peace!!
15
@Vsh Saxena
I'm sorry. You lost me at human rights. What does America know about human rights anymore? (See the collective histories of everyone other than protestant straight white males)
We're so quick to call out others for their business, but quick to turn a blind eye to how disgusting Americans can be to others.
3
Thank you Trump. We needed you to start this.
10
If Trump's decades long business history is any indicator, he is congenitally incapable of doing anything right - period.
The only way Trump could do something right, would be by accident.
BTW: Economic power, and it's machinations, do not exist in
a vacuum, as this article suggests. The idea that China is taking a beating, and that there will be no concurrent backlash is pure fantasy.
8
State media reports that China isn't interested in continuing trade talks without evidence the U.S. is sincere. We need to prepare for the long years. Who lost China? Trump, Obama, Bush, Clinton?
4
Mr. Bradsher suggests that American firms may consider moving operations to Taiwan or elsewhere in Asia. Taiwan companies in fact hire large number of Chinese workers to produce their goods because they cannot find enough Taiwan residents to work on these low end jobs, and many of the assembly lines were moved from Taiwan and HK into China to take advantage of the abundant skilled and unskilled cheap labor that are willing and able to work hard. More recently, Chinese businesses have expanded their manufacturing facilities to other Asian countries as labor costs in China went up.
If the tariffs on all categories of Chinese goods do become permanent, one can expect that many US and non-US operations will open have operations elsewhere that will sell and finish their products in other countries that would still have significant Chinese manufacturing content.
In the meantime, US will lose significant revenue in the trade of services ( including education services, tourism), real estate, finance, and other non-tradeable sectors.
8
@Elizabeth...so the US should continue to let China steal its wealth and build its own massive arsenal of high-tech weapons and seaborne invasion forces...because why?
China can just not show up to Trump’s next several treasury auctions if they want to test that Trumpian economic powerless.
The US runs on money the Chinese loan us at these treasury auctions. Trump is poking our bank. The bank my tire of it and cut off his allowance.
4
@Dr. TLS
yeah and then they can park it in a nice reliable resource like...Oh the chinese real estate market.... or South American Oil.
yeah China bought those treasuries because they felt sorry for us... Right. The treasuries market exists because it is the best place to park loads of capital for short periods of time... China would be cutting off its nose to spite its face and they will not do that because it will harm them more than us.
1
I agree with economist Zhu Ning - China should focus on its own much needed reforms. Evidently, it can't. The letter from Huawai's Catherine Chen and the op-ed piece by Yukon Huang, both of which were published in today's NYT and both of which suggest the possibility of propaganda, make clear that China depends on an international order the rules of which it does not respect and the mechanisms of which it seeks to dominate. This is not a question of China versus the United States; it's a question of China versus the international order. To preserve this order, the US and other countries should treat China exactly as it treats them.
15
@AG
A few facts to correct both yours and Zhu Ning's erroneous opinions ;
Fact One ; The the US and the world chose to deal with China on China's terms from the get go due to blatant greed and shortsightedness . Period !
Fact Two ; China internally despite all the wishful thinking emitting from the outside is doing exactly what its people expect it to be doing .. which is why they for all practical purposes have named Xi leader for life
Fact Three ; Propaganda you say ? Oh ... you mean like the propaganda our government has been feeding us since its inception ? .. Like the blatant verging on totalitarian propaganda Trump .. his cohorts and FoxNews have been shoving down our throats ? Like err .. all the economic propaganda we've bene fed by this Potemkin Village economy we've been in since 2001 ? Oh wait .. propaganda like the propaganda and lies Silicon Valley has been inundating us with in their Ayn Randian pursuit of Anarcho Capitalist Greed since the 90's ? ( read Jacques Ellul's book " Propaganda " to get a clearer picture of its meanings and uses )
Fact Four ; Leading to the conclusion that it is a case of the US vs China ( most other countries learned how to deal with China decades ago ) as We the People deal with a problem of our own making born out of our desperate addiction for more and cheaper goods we do not need and the corporate entities quest for higher profits
1
@AG China reforming itself is like a pirate ship reforming itself.....it must cease to be itself in order to do so.
1
Trump is a fool but given enough time, even a fool will do something right. The stance against China is long overdue; shame on our previous Presidents who didn't have the courage to do this on their watch.
China is far weaker than it seems and it always has been. One party rule, endemic corruption, a sea of unsecured loans propping up industries that are badly run and will eventually fail. That's unsustainable and it'll all come home to roost for the Chinese. It would be a shame if a clown like Trump gets the credit but be that as it may, it's time and I"m happy to see it.
48
@ijarvis If Trump is a fool, what does that make the rest of Washington, that has pandered to that genocidal Asian dictatorship for decades?
Over decades, China has sold $trillions of goods in the U.S. Trillions, with a “T”. One half $trillion in 2018 alone. Every year, many manufacturing jobs go from American to Chinese workers. Voters have become fed up with this. Mr. Trump was elected because he, and he alone, said he would stop it. He is doing so. Reducing imports from China is beneficial to American workers. Manufacturing jobs are returning. Employment is up. If Democrats persist in crying "Stop it, tariffs are evil", Trump's reelection is a cinch.
8
I am not surprised. Chineses have always been endlessly greedy in business. They cant stop asking for more until it break. They dont want a deal, they want a rip off. The only thing they respect is force. They will take advantage of every opportunity until trade with US fall appart. Tarif war may be the right tool after all.
15
What are the odds of China pulling a Russia? Start with hacking the RNC and all offices of the Trump Organization. Maybe a handful of Senators who are overly supportive of Trump.
Then start with a dump of Trump's tax returns from his company's files, followed by all embarrassing information from the company files. Trump's uses an un-protected iPhone - hacks and release selected texts, emails and voice mails.
With major hacking China can have embarrassing hits on Trump up to and through t he Convention and then to the Election - if trump gets the nomination.
China can make Trump's life miserable as well as making public information that can lead to indictments and a mountain of lawsuits. Trump should be careful when it comes to China
9
Ironically, we pioneered many of the protectionism mechanisms used today - just look at Hamilton's "infant industries" argument, but first, low-end manufacturing jobs were always on the way out, and will never come back to the US, because of automation. If it's not going to China, then it will go to a cheaper country like Vietnam or Mexico, and if not, it will be automated. China is just a convenient scapegoat. Also, GM's largest market in the world is China. I remember for years American car makers couldn't break into the closed Japanese market, and was always losing money in Europe, but now they're selling lots of Cadillacs and Buicks in China. And Apple second largest market is China - the iPhone is selling like hotcakes in China. We definitely should still be checking China and push back when they engage is corporate espionage, but the argument that we're losing money hand over fist to China and that they're taking advantage of us at every turn is false, and tariffs is not the way to solve the problem.
14
The one thing there seems to be consensus on is both sides loose in a trade war. The winner will be one that has the stamina and ability to absorb those loses. Meanwhile various sectors of each country's economy will be damaged. The people down the food chain will be hurt the most. Then there is the added bonus of potential fallout to the global economy. Too bad we don't have a coalition of like minded nations seeking similar results from China to add to our leverage.
13
The U.S. has crossed the Rubicon on the trade war with China and we must prevail. We can't allow the cowardice towards China by previous administrations to continue. The policy of unconditional surrender still being espoused by some leading Democrats such as Joe Biden who claims "China will eat our lunch" can't be allow to dampen the U.S. resolve. Hopefully all Americans can put aside their political differences and their opinions of Trump and support the current administration in this necessary action
19
@Matt
In the long run a nation of 330 million citizens will have to listen to a nation 1.4 billion citizens with some respect. We both want to prosper without be bullied or cheated. Therefore, it is time for some very serious negotiation.
However, we the citizens of a democracy should always be our guard in dealing with a Chinese dictatorship if we wish to survive as a democracy.
1
@Matt
You mean like George W. Bush, who brought them into the WTO and spent all our energy and money with a totally unnecessary and destructive invasion of Iraq? That offered China a great period of time to eviscerate our economy when the GOP controlled the government
2
I have a concern that, even if the multi nationals relocate their workforce to other countries with cheap labor, the prices for these items will not go down. Once a $10 T-shirt sells for $12.50 for two years and people get used to paying that, why would a manufacturer not continue to sell, at the now expected price that consumers paid before? And if the manufacturers don't take advantage of the price gouging why wouldn't a retailer? When I was a kid, my uncles would give me a quarter to go to the candy store for cigarettes and I was allowed to keep the dime change for myself.
2
@Rick Gage
why would a manufacturer not continue to sell, at the now expected price that consumers paid before?
Because there is no such thing as a free market. It is a myth. If these things were produced and sold in a free market the price would go down. That is the meaning of a free market.
4
Big Business sold their soul and American Workers to Red China for short term profit, as it always does. The Devil always gets his due.
15
Sounds like you sold yours as well.
China wants President Trump to disappear more than AOC & her cadre, the Democratic Party and the NYT.
The USA is just starting to get out of the coma the Bush Family put us in.
15
Don't be fooled. The Chinese communist party and it's rapidly expanding techno social control system are an existential threat to free people everywhere. How long will it be before hacked personal data is used to manipulate politicians, journalists, scientists etc. in this country into pro-China silence? Who will stop it?
13
@Sci guy, Sorry but Russia seems to have that corner of the market covered already.
4
@Sci guy um....the hacked personal data is the reason why there's been a political and journalistic silence about it....where have you been?
Could this tariff/trade war solve our Federal Reserve deflation problem?
2
It's interesting that suddenly the Democrats largely support Trumps tough stance against the USA.
It begs the question: Why didnt Obama do this? The answer is easy. He didnt have the guts.
Thankfully we got a President who's not afraid of the corporate media blowback.
Stand tall against China. They've been cheating for years.
20
@Ari: Trump is definitely a fearful man. Trump is afraid of is looking bad to his base, harming his brand, and losing the next election. As the trade war and its consequences unfold his ability to influence the course of the economy will become less and less. We'll see whether he continues to "stand tall" or caves. He will probably continue to appeal to his base but already that may not be enough to save him.
3
@Ari
Actually, Obama did not get to do this because he beleived in Rule of Law and the GOP would controlled House and Senate would not assist him with ANYTHING during the 2nd term, including the TPP which would have been 100 times more effective than Trump's posturing and Tweets
7
@Ari
The Democrats have not been free traders as a policy. It is the Republicans who espoused free trade, along with the mythological free markets. The Dems siding with Trump on tariffs coincides with the Labor Unions siding with Trump on tariffs. I don't recall Obama being a free trader, but I do assume he didn't want to hurt consumers, which is what Trump will do with tariffs which are taxes on consumers.
Trumps crying about other nations being so unfair to the US is a trick from Hitler's Mein Kampf playbook and is nonsense. The US has won big-time from the globalization of trade and manufacturing. But Trump's crybaby wailing appeals to those not educated enough to thrive in a business environment dependent on people with technical understanding (not with clueless button pushers who can manipulate a cell phone but don't understand how it works (it's a radio)) and to the plutocrats who will do well when those American workers become slave labor in a resurgent work environment that needs no educated workers who can think. The US will simply hire educated workers from other countries to replace the uneducated US masses who are unable to do work that requires understanding and the ability to read, write, and think logically.
1
Hate Trump and tariffs are the wrong weapon, but this is the right fight. A broken clock is right twice a day.
I am for free trade, so as long as China can manufacture products that people want to buy using their own technology and in turn let us sell our products without interference, then let the chips fall where they may.
11
China is unable to currently manufacture the top performing chips. They are, however, capable of making sure that no one else can either for very long.
Two words. Rare Earths.
https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html
4
@john Ah but the rest of the world can mine rare earths if it wants to. It simply has to repeal certain environmental laws......
Hey, didn't Donald do that last week?
Must have been a coincidence..... he couldn't have thought it up by himself, could he?
What China doesn't get right away as a result of above-board negotiations, they'll get through blackmail and coercion.
They're in the same business as Russia when it comes to getting dirt on key people.
Trump and his Republican collaborators are extremely vulnerable to China's efforts to get dirt on them.
Trump is already backing down on auto tariffs. China knows it's only a matter of time before he caves on these trade negotiations. If he tries to hold this line on trade, the Republicans will join the Democrats to impeach and remove Trump from office. Trump WILL back down.
Republicans will not allow Trump to attack Iran. They're trying to put up a brave front, but they're scared to death of the political consequences of a war with Iran.
5
Even gun slaughter of school children fails to unite partisan politicians in USA. At this time the only issue that unites both parties is China bashing.
Professor Mahbubani wrote about the change of tone towards China in Washington DC during the Trump regime in his new book: "How the West is lost". At an Oxford lecture he spoke about the unspoken Yellow Peril paranoid as China is ascending on the world stage. That explains why China should not expect much support from former old allies in USA.
Connect the dots. Trump surrounded himself with people with hawkish xenophobic views like Stephen Miller, Steve Bannon, Peter Navarro, John Bolton, etc. Populism across the globe is built on xenophobia. Fear is a powerful political tool.
The White House on Wednesday announced it would not sign the Christchurch call to action, an informal international pact among France’s and New Zealand’s leaders and social media platforms to combat online extremism.
Racist white supremacist with flaming torches marching openly in Charlottesville, Virginia would never happen during the Bush or Obama regimes. Trump commented that there were “very fine people on both sides” of the violent Charlottesville confrontation. The USA-China trade war, like Brexit, is one of those power struggles as the wave of populism sweeps the changing world. It is not going away any time soon. China would have to take a stand.
7
I keep saying, China does not have a population who see it as a right to speak out. They are Communist and cannot speak out. Who do you think will win this war, us or them? I don't think there is any doubt we will be the losers in the end.
2
Mr. Bradsher seems to be auditioning for a position in Trump’s administration. Keep writing peans to Mr. Trump’s great economic plans and you’d receive your reward sooner than you think.
5
Since it seems Mr. Trump wants to cripple Huawei, I wonder if he might be targeting an important American company like Apple? He could bring a lot of mischief to bear.
3
I'm reminded in the article quote below of Krushchev's admonition that the West would sell the Soviet Union the rope needed to hang themselves. Our Globalists have done this vis-a-vis China - lawyers, bankers, consultants et al - all care not a whit about their fellow citizens, only lining their own pockets. And most of them are dims.
"Businesses then helped make China’s case in Washington. When China wanted to join the World Trade Organization, the global trade club, it enlisted Wall Street’s help. Businesses helped persuade successive American presidents to refrain from punishing China for manipulating its currency, even as Beijing manipulated its currency. They fought efforts to raise tariffs."
4
Has China calculated the PR nightmare which is just beginning for them?
The world, not just Trump, is beginning to get very tired of the Chinese tiger.
If I were Xi I wouldn't be so worried about losing "face" as I would be worried about losing the whole enchilada. Comprende?
9
@P&L What PR nightmare? Do you suppose there will be an internal one for Xi? You may underestimate the extent to which nationalism has been stoked in China. The average citizen may be less like to view this as a failure of leadership as much as an unprovoked economic attack by the United States.
7
You think the people of China will side with Trump the spoiled American dictator?
1
Our current attitude towards China is typical case of Shadenfreude Syndrome gone extreme because other didn’t go down as we wished. As President Xi said the other day that "after 5000 years, there are only two things haven't changed - the seas that are still there and the perseverance of Chinese people".
5
As with everything else in his presidency, Trump’s style and methods get in the way of what could be a successful policy. Yes, we have several legitimate issues with China. No, you shouldn’t simultaneously make enemies of all your allies while playing hardball with the world’s other leading economic power. Even if Trump somehow bumbles his way into getting a partially successful reset in the trade relationship with China, the trail damage his ham-handed presidency leaves in its wake will cause long-term damage that greatly outweighs any benefit.
156
@AndyW
Really? So Trump taking action is worse than decades of no action. Stop hating a person so much that you don’t see the good in this one policy.
Every past president and most of current politians have been taken cash in one form or another from China. That’s why they never acted.
24
@Vik S
Trump has throw out US agreements with the global and domestic communities and replaced them with..........what? Can you name any Trump agreements that have actually made an improvement or has he only issued threats against enemies and allies alike that the next president will have to recover from?
Finally, who put a gun to the heads of US companies to do business with China?
32
@Vik S Explain to me, Vik S, what policy? There is no policy in play here, just (I'm assuming, in the absence of any coherent explanation from the Administration) a vague desire to "bring back those factory jobs we lost."
17
It is interesting, as Mr. Bradsher points out, that several past presidents could have and should have pressed China on its deplorable businesses practices, but opted not to interfere , partially at the behest of businesses.
President Trump may be brash and offensive to many, but he certainly deserves credit for taking on one of, if not the, most important economic issues facing this country.
China correctly sees that international trade is the key to the future and far more effective than war in gaining global power. The time to straighten out the bad practices used by China on trade practices was twenty years ago, and kudos to Mr. Trump for finally acting boldly.
208
@david g sutliff:
Here are the rules for Americans operating in The Peoples Republic of China:
1. American citizens refusing to pay bribes are imprisoned: see Jude Shao
2. Chinese police break in and seize blueprints, customer lists and servers for US companies: see D&B Shanghai Roadway
3. Oh, and lets not forget the 2 Canadian diplomats to be executed in China for being drug dealers.
4. Chinese companies and citizens freely roam our universities, offices, tech parks, copying blueprints and software as they wish.
Why are we not at war with this country?
20
@david g sutliff. It is totally ironic that Trump, whom business seems to adore, is screaming, “Stop!” The unfairness that he resents has been present for years. Clyde Prestowitz, who used to have Lightheiser’s job as our trade representative I believe, wrote a book about ten years ago that warned of the lopsidedness of the deals that our manufacturers were happy to make and of the intellectual theft going on then! It will cost the American consumer, but then, our companies have made out pretty well in profits for quite a while as they followed the imperative of the free market they so believe in.
10
So instead of dealing with American businesses we blame China?
5
I believe the author pointed out two excellent points here which will be crucial to the Chinese deliberations moving forward and press them for some serious concessions to the US (and yes, this is going to be a hugely lopsided deal in favor of the US for reasons pointed out in the article regarding China's red carpet economic rise). First, is that China has depleted its potential firepower by encouraging homegrown industry at such a high level. Like a seesaw, China will level out to a point which it can retaliate at a somewhat equal magnitude (politically or economically) which means concessions in the near term. Second, the longer this lasts the more companies will consider investing and moving supply chains and manufacturing outside China (high end to North America or low end to SE Asia). China has done a magnificent job creating this system within it's borders and it's not easy to move them back once their gone, as many Western cities are keenly aware. All together, this is not a time to delay for China and I see a deal on the horizon.
4
The China market was the place dreams were made of. From the Opium War through the imperialist efforts to carve up China culminating in Japan invading China in 1929. Deng's opening up of China was taken up by the west to off shore manufacturing to a police state ( i.e. labor discipline) that provided cheap labor. Globalization turned China from being an exploited third world country to trade juggernaut. Now China has moved beyond the mythic days of millions of Chinese costumers for western goods to a predatory capitalist country that no longer is under the west's thumb. China has aggressively practiced "dollar diplomacy" in Asia Africa and South America. They want to undermine the USs control of the international banking system. China is a major rival to the US. Trump sees his attacks against Chinese trade as a major political winner.
6
Please tell me who will buy our treasury bills? If China decides to sell our debt, what then?
3
@Mary Travers
There lots of customers for US treasury issues---bond funds, etfs, and individual investors from all over the globe. As low as the current rates are US treasuries offer the best rates for investors looking for treasuries.
3
@Michele
Oops....meant to write investors looking for safety. US treasuries and t-bills offer better rates than any other similar government backed bond.
3
Whether we like it or not, we are headed for a new Cold War with China. We should recruit our NATO allies to help out. If anything, help move supply chains to countries that would help us in war instead of attack us. (Yes, I know Trump has recently harassed and insulted our allies. Nevertheless, NATO will still be here after Trump is gone.)
Another idea would be to help move the supply chains to Latin America. That way we could at least keep them in this hemisphere.
Part of this effort should involve making it clear to business lobbyists that if they interfere with this process for their own personal gain, they will be charged with treason.
7
Sound thinking, well put.
1
The Times seems to be caught up in a 24 hour news cycle which means bash Trump no matter what he has done. Then, in those few cases, such as Chines tariffs, where Trump has done something right, the Times reverts to its former self and gives solid reporting and a balanced analysis. I just wish I didn’t have to wait three days for my favorite news source to regain its equilibrium. It means that in the intervening time I have to look elsewhere to get a balanced perspective. I miss the old days and the old NY Times.
13
You mean before Donald Trump. I guess they have so much to talk about that they did not have before him (Republican or Democrat).
@ThirdWay
I generally agree, but Keith Bradsher's reporting and writing is consistently top rate.
Fully agree. Ten years ago even as a conservative I could read a news article and feel I was getting the facts. No more. Everything should be posted as Opinion. Very Sad.
1
Keith your lede reads "China usually gets its way." Lazy and false. Stop conflating China with the dictatorship of the Chinese Communist Party (CCP), please. Your lede, more accurately reads like this.
"The CCP usually gets its way." And it’s not just on Wall Street and in DC. It’s in Academia where professors who write and teach Chinese history tread delicately around CCP sensitivities, for fear of having their visas for China revoked. What’s a tenured professor of China studies, who is unable to travel there? Ditto in Hollywood-- go try to find the film Kundun, on Netflix--or any film about China since the CCP starting controlling what Hollywood makes. (Just buy AMC, and do it through market forces!)
In ways small and large the CCP has conflated itself, in the minds of Chinese and US citizens, with China. The CCP is not China. US Foreign Policy, journalists, Wall Street and Hollywood, urgently need to stop kowtowing to the CCP.
What would a US Foreign Policy towards China be, crafted to empower the people of China, and to dis-empower the dictatorship of the Chinese Communist Party? It would be one based on the ideals this country was founded on.
We are worried so much about Russia working to covertly shape the election of one man? What about when the CCP covertly shapes every aspect of how the United States sees, trades with, talks about and relates to China?
2
Trump is not wrong to push China to change its practices towards U.S. trade and development, but simply attacking tariffs alone won't get the results we need. It needs to be a multi-faceted attack, that while discouraging Chinese goods and services that undercut American business and workers, provides incentives for domestic businesses and workers to encourage repatriating these businesses and jobs. Doing it Trump's way hurts Americans instead of helping them.
But flawed as it is, his trade war addresses a major problem left unaddressed by previous administrations, and it gives him great support from those middle and working class voters that voted for him. The Democrats, under the Third Way policies of the Clintons, completely misread the amount of pain and frustration of these voters ever since NAFTA was implemented. While Wall St. boomed, Main St. swooned. The Dems had better get back to their working and middle class roots if they want to regain power.
15
First the graph tells a lot. With increased overall trade why are American imports to the Chinese economy down instead of up, and down 30%? This suggests, documents, increasing barriers and hostility to American products by the CCP.
It also suggests that American products may be over-priced, the reason these manufacturers sought refuge in China in the first place with the Chinese assisting them with heavy currency manipulations. American manufacturers pay big social security and workman's comp taxes, plus health insurance--how about the Chinese? If they don't pay these, we are now collecting them for them with the tariffs, except--big exception--they don't see any of the benefit.
On Google, the hacking was serious. And my take is that the U.S. government is still somewhat dependent on them to find and counter Chinese hacking. It was also Google that fixed the software allowing the rollout of the affordable care act. Correct me if I'm wrong on this. Recall here that China has been very active in cyber warfare against the U.S. and this continues. Did they also help the N. Koreans here as they have done with helping them to acquire nuclear weapons? While policing remedies for over fishing in the S. China Sea in cooperation with the U.S. Navy is called for, this doesn't seem to be their intent (and sadly ours).
We can freely buy stocks in Chinese companies. Can Chinese citizens freely buy U.S. stocks and hold them in dollars? Trade, if it's fair, works both ways.
5
One weak argument in this report
is that multinationals may leave China
for some other country. That would
be a self defeating exercise. China
is a $14Trillion economy( equal to US
in purchasing power) and growing at
6% mean it would be $18Trillion economy in five years and bigger than America's. Why would they abandon such a large market. Which other country matches China's market size?
2
@s.khan
this argument implies that you will have fair access to the market. china has demonstrated that is not the case. it's hard to survive on crumbs from a big pie. maybe it's better to have a bite of a small slice.
1
In the best case, production will move from China to the next least expensive place. American consumers may have to pay a bit more to cover the costs of relocation but in the end, some items that are now marked Made In China will say Made in Cambodia.
There could be some upside if the Chinese decide to meddle in the elections on behalf of the Democrat, thereby offsetting the Russians who, make no mistake, will be working very hard to secure Trump's re-election.
1
So, China cannot hurt us by putting tariffs on Jeeps because Chrysler built massive Jeep plants in two Chinese cities?
A bit of Cold Comfort, there.
Trump’s battle of attrition has as much chance of winning as the one in Vietnam. China and the rest of the world will experience setbacks but will ultimately emerge victorious in a world without us.
4
As this article makes clear, Trump's tariffs aren't going to result in manufacturing coming back to the US. Rather, companies will source products and components from other Asian countries not subject to tariffs. And pass the increased costs onto American consumers.
8
Proof please.
It's about time American companies, financiers, and the US govt started expecting China to play by fair rules in the global marketplace. (Even for those who can't stand Trump, he has taken the initiative here and done the right thing.)
Next, I hope we can restore the Pacific fleet to a competent status (no more crashing into freighters), and resume exercising our rights of free passage through the South China Sea where China lied to us and set up military bases.
20
China will run the USA into the ground in the long run. They have a young economy and will get through this...
9
China can (and will) play off of the 2020 election - with a real possibility of a new administration's policy being more favorable.
3
The USA has had the strongest economy in the world since WW II. We're talking at least 75 years. And that's the time frame during which most of these trade deals came about. So yes, other countries have benefited. But I'm at loss to name another country who's prospered more than America. Regardless of what Trump says.
Trade deficits are not a barometer of who's winning or losing. They're more an indication of one county's buying power over another.
On a different note:
Barr keeps saying he has to investigate the investigators to make sure no one in the government put their finger on the scale. What does he call what he's been doing?
18
@JimmySerious Barr's investigation will ultimately find both Trump AND Barr guilty of conspiracy to obstruct justice! A surprising twist of Fate in favor of our Constitution!
2
@JimmySerious
Yeah, people who think China is taking advantage of the US should move to China. It’s obvious that the US has one of the world’s highest standards of living, showing that the US is the biggest beneficiary of the international system (not surprising given that it was created by the US).
2
trade wars are easy to win! however, this depends on your definition of winning, and the idea that if one side wins, the other must lose. so, trade wars must be just as easy to lose. or else the whole disruptive episode is mainly a show for voters, among whom there will be winners and losers, too., in all, we would probably be better to focus on things that actually need doing and eschew the headline grabbing.
4
The article and many of the comments are tinged with some degree of condescension and vilification of China. I've been involved in China affairs with a US multinational for almost 25 years: Individually, the Chinese generally have a tremendous work ethic, are very bright and engaged and want to move up the learning and prosperity curve asap. Since their government is relatively totalitarian, it is able to move faster and more decisively than ours to address various economic issues facing them. China does what's best for China. Can you blame them? The reason we're at the place we are is because our past leadership has been too weak and irresolute to do the same for the US.
12
@pete, They are hard working but
weak in ethics.
4
@pete - Unfortunately, the U.S. is well known around the world for being arrogant and condescending, and as the biggest power, the biggest bully. We are also a nation of relatively poorly educated, untravelled folks who noisily flaunt their nationalistic pride. It's no wonder so many of them have decided that China is our "new enemy" based on the words and actions of the current president.
10
I have been around a while; worked in the plants when the textile industry started abandoning the US after labor costs and environmental laws became a distraction from profiteering, as an example.
Profiteering by US business has taken the guts out of manufacturing in our country and we moved into a service industry economy.
Now Profiteering has the US bent over a barrel, we consume much more than we could ever have in terms of fair trade with China or any of the Pacific Rim Nations.
As long as the US Government supports and perpetuates profiteering our Nation will suffer. The current situation and mode of business is doomed to eventual failure, simply because of supply and demand, we demand much more than we supply and that is increasing exponentially.
Profiteering leads to massed wealth and disparity.
Human Nature is the adversary not China or Trade deficits; simple avarice condoned as national policy.
The economy is booming? You would not know it in my town, the streets are in third world condition, there is no industry, jobs are scarce and it's paycheck to paycheck, the only except is everyone has a new truck thanks to the 25 billion in sub standard auto loans.
27
@Royevatom. Not human nature . . . The imperative of the marketplace is to produce profits at the greatest efficiency. The allure of China was its cheap labor force and its vast market. Well, we got the labor force but not the market. Furthermore, even the nicest, kindest CEO has to make a profit or his company goes under and he is out of a job, which is why companies continued in China. Now they’ll scramble for other, cheap labor nations and hope, maybe, for an opening into their market.
2
we have also moved beyond the service economy and into an economy largely based on finance, an industry that creates nothing tangible, only debts. we have moved from factories making things to services making intellectual goods to a blue suit casino shifting money and making trouble for everyone who does not have excess money to gamble with. btw, the vigorish finance skims from fhe whole economy both starves everything else and also buys the government finance wants to keep their party boat floating. paging RICO!
9
@Pottree - Correction: the new American economy is based mostly on Health Care and Technology. Professional services in every sector, combined with leadership in scientific research and technology development outstrip finance as the "new gold standard."
1
China only wants the advantages of free trade, and none of the disadvantages. America is the free-est trading country. China broke most of its promises upon entering the WTO, increased its wealth as a result and is now using its wealth to challenge the US militarily and economically.
20
@Not 99pct - Enemies are made by dishonoring, disrespecting, and misunderstanding people; through reckless, irresponsible words and actions. We don't need China as an enemy. Please don't refer to them as such.
4
@dean bush Very poetic but I disagree. This trade war never would have happened if China kept its WTO promises. No one said we want China as an enemy, just deliver on the promises they made but now they refuse. If you think the Chinese are an innocent actor in all of this you are sorely mistaken.
7
@Not 99pct, A broader analysis
will show that USA benefited a lot
from trade and investment in China.
Alan Greenspan, retired chairman of Fed, pointed out that inexpensive
imports from China kept the inflation low. Also, massive infusion
of money flow from China kept
the interest rates low spurring growth.
2
China has long been accustomed to having its own way economically and politically. Their blatant disrespect of Barack Obama and his acquiescence was a clear signal that they expected that to continue. Not so much, now, with Trump. Whatever his other deficiencies, and they are many, on this he’s doing the right thing. As clearly as Xi knew he could disregard Obama he now knows he cannot do the same with Trump. Give us a call when you’re ready to talk, President Xi.
20
What on Earth are you talking about:
"China has long been accustomed to having its own way economically and politically."??!!
China has just recently found economic success after a century and a half of humiliation. Their phoenix-like rise from the economic ashes directly and indirectly imposed upon them by the West has been remarkable but -- considering their illustrious history -- unsurprising.
A much more accurate claim would be:
"The USA, and not China, has long been accustomed to having its own way economically and politically."
Too bad Trump is ensuring an end to that by destroying all our political capital and giving up a thousand roads of trade in the name of "protectionism."
5
Let’s not forget that when American companies outsourced their manufacturing to China, we also outsourced the much of our industrial pollution. To those of us that have been there, it’s obvious China is an environmental disaster. No doubt that in the name of maximum profits the Trump administration won’t regulate enough to stop the march to setting our rivers on fire once more.
7
@MF. Don’t be absurd! Air encircles the planet AND it moves! Whether we produce it or the Chinese produce it or a volcano in the Pacific produces it — the crud goes into that great ocean of air that we breath and live under.
It isn't enough to try to punish China through higher tariffs. We also need a coherent, long-term economic strategy if we hope to revamp our manufacturing, which does not appear to be part of the current plan.
Consider for a moment Germany, which is a high-wage manufacturing powerhouse. Perhaps there are some lessons to be learned from the German economic model. A key element of their success is a strong partnership between business, labor and government. Even more fundamental is an educational system which emphasizes vocational as well as academic programs to prepare young people for a modern economy.
China's cheating and one-sided trade deals need to end, but a mutually destructive trade war alone won't bring manufacturing jobs back to America. We need long term investments in education, infrastructure and scientific research if we hope to maintain our edge and remain the world's leading economy.
41
@Molly Karoo
This is an excellent summary of some of our present trade issues.
If only a few Republicans would read it. If only the President could read it.
Let's give the writer of this summary an A, and let's hope that she contributes more concise remarks.
1
how can you monetize those suggestions in time for my next quarterly bonus? money turns in the blink of an eye, and long term we'll all be dead. as they say in the theater, what's my motivation?
1
Zhongnanhai and Xi Dada's belt and road trade talks hit a rumble strip. Intellectual property and thievery of becomes an issue at the table. Poachers do prosper and this predator has pried enough prey from the forest of innovation.
6
The problem with Trump’s policy toward China is he hasn’t thought out the endgame.So what if manufacturers of “cheap” goods move to surrounding countries like Vietnam and Sri Lanka.What does that do for the displaced American worker?If we try and manufacture those goods here,the prices will skyrocket.Guess who is hurt the most by the resulting inflation.It isn’t readers of the NYT.Without realizing it,China has pushed the US workforce into the future.Making doormats for Walmart is not that future.A.I.,software,alternative energy,robotics,..this is our future.Trump embraces the coal industry.Is cutting US manufacturers out of the huge, emerging Asian consumer market a good thing? China already sells more to the EU than to the US while Trump pushes the EU away.None of this is to say that China didn’t need to make big changes in its trade policies.This was coming.The TPP would have been a good starting point.I know..Trump’s dramatic policies excite many of the NYT commentators right now.They feel a sense of righteous power.In the US we have a 6 month memory.Remember when Trump had solved the problem with North Korea?Most of his policies are short term ,feel good policies rather than well thought out plans .If our industries are to survive into the future,we have to compete with China....not erect trade walls.Remember the glorious “free market”economy?Trump isn’t losing his daddy’s money in the NY real estate market any more.He’d better realize it.He’s in the real world.
10
If we move away from China to other low wage suppliers, we’ll be facing the same basic problem. Regarding unfairness, we could have dealt with it through the TPP.
3
@Doug Lowenthal They won't be the same problems. There is a difference between dealing with one large, neo-mercantilist entity - one that is still politically a communist dictatorship that also pushes a strong nationalist agenda - versus dealing with a set of different, smaller countries, with a variety of economic-political systems.
12
@Michael Dunne As I said, problems related to scale are dealt with as a member of a large trade bloc, i.e.,TPP.
2
@Doug Lowenthal Large trading blocs are not necessarily a panacea. Depends on how they are organized. But the proposition that that the problem would be the same, between a continental size, nationalist,authoritarian, neo-mercantilist developmental state, and dealings with a range of other polities/economies does not sound valid. Even if those other polities/economies include smaller, neo-mercantilist, developmental states ...
“When you ain’t got nothing, you got nothing to lose.”
- Bob Dylan
While the United States has benefited from trade with China, it is China that has really benefited. I don’t agree with Trump on many issues but he is correct on taking a stand with the tariffs. China cannot continue to steal intellectual property and put up barriers to other nations products. It’s now or never on this issue.
15
Greed led business to go to China. The goal was profits and nothing else. They placed their money into a country that now dominates the production of so much. However it is a country without civil or human rights. It lacks a free press and free elections. The financial leverage that they have over the world persists because we let it happen. I would rather pay more for goods if it leads to better working and living conditions in China or elsewhere.
10
@Randy Harris Randy With all due respect why won’t people pay more for products made in America or Canada, it’s great that we brought millions of Chinese out of poverty, but let’s change the narrative a bit, how about the millions of Americans that lost their middle class status and now are near or at poverty levels themselves; not to mention Vancouver residents priced out of their homes by newly rich Chinese, magnanimity towards China was terrific but at this point I’m much more concerned with Americans and our Canadian and European allies and friends, not China: if you discount the fact that they accepted Jews during WWII when no one else would, that favor has been well rewarded in recent decades.
4
The premise of this story is specious. China is in the driver's seat in this trade war. They are selling no less product to the United States and the tariffs are being paid by us. Xi isn't the slightest bit concerned about influence. China is winning - which by the way isn't bad for America, unless the president is Donald Trump.
6
Unfortunately a trade war with rising authoritarian China was inevitable once Trump scrapped TPP, was that the wise move? I’ll let smarter people than me to sort that out.
If we don’t push back on China today, when our economy is arguably the strongest it’s been in a long time, when will we do so? Trade wars, like any wars, usually only have losers and bigger losers, but sometimes a war is just and in this scenario I think it is for the greater good.
To allow China to have an unfair advantage will only diminish our prosperity in the future and that could lead to something infinitely more ugly than a trade war. The authoritarian system they employ doesn’t permit dissent in its ranks, so the moderates in their system many never be heard.
6
@Ron bilateral trades should have 3 wins - the third win should be for the society as a whole or the world when the two largest economies are involved.
1
@Ron bilateral trades should have 3 wins - the third win should be for the society as a whole or the world when the two largest economies are involved. That would be the key negotiating skill of a top national leader.
2
I would not count on Trump’s shambolic negotiation skills or diplomacy to get much done, but he could do a public service by making this topic a point of national discussion and get this country united to clamp down on the practices that industry, Congress and their lobbyists have condoned for short term reward at the expense of a long term American future.
We as a nation have to pull together, regardless of who is in office for a few years, as our futures continue beyond an election
2
If you speak to people running factories, they will tell you that the US still has ultimate pricing power over them. This is due to US being the default buyer of everything (unlimited supply vs limited demand), and the US currency (everything is priced in USD). Adam Smith and monetary theory teach us that the US is in a much more favorable position than China, who are forced to make their operations more lean rather than pass on all the tariffs to the buyer. In a demand-side globalized economy, I would not be surprised if the effect on US CPI is limited despite the tariffs.
2
@Wes Smith - yes, and then they will be even more competitive in the future. They educate hard skilled engineers in the bunches.
1
@marian Agreed-- I was not saying it is a bad thing for them or the world. What the US wants is a level playing field, and for China to abide by the commitments and spirit of the commitments they made 20 years ago.
So they should invest outside the US and make deals with other countries.
China is an integral part of many supply chains and in some cases pretty much has a monopoly. As the article says, from an economics point of view China is unlikely to use that as leverage, as it would likely end up hurting their own economy. But in other circumstances China would have no hesitation in using that leverage. Companies' reliance on Chinese manufacturing is a national security risk. Greed is good ... until it isn't.
10
The issue is not whether we have significant problems with China’s trade policies that need to be addressed. The essential point is, why is the implementation of tariffs the best way to solve this? Why is a trade war between the two most powerful economies in the world, better than what the T.P.P. offered? Why are we in this battle alone, rather than with an alliance of other nations? Is there any other strategy to confront China than this current test of wills? Trump excels at responding to problems with ham fisted tactics. The government shutdown being a prime case in point.
11
2 thumbs up! Precision approach with allied support could have produced desired outcome without brutal toll to US economy. Now the rest of the world will benefit while we absorb all the pain. Do not agree with tariff's on Japan, Europe, Canada and Mexico. Long term this is going to hurt our business interest, as we will be considered an unreliable business partener.
4
Trump is picking winners and losers by delaying tariffs on agriculture and auto manufacturing. Didn't we not like it when Obama did this? I certainly don't want American businesses to suffer, but I'm also pretty sure neither Trump nor anyone else in his administration is thoroughly competent in economics.
14
@Mark Duhe The Republicans and Trump hated everything Obama's administration did - and they still do.
1
Mark Duhe wins the understatement of the year award!
Trump - not satisfied with holding the record as the worst businessman in the history of the United States - wants to be the owner of the title - worst president in the history of the United States.
And what better way to do that than bankrupt us since when it comes right down to it - that's what he's actually proven to be any good at.
Bankruptcy.
7
I genuinely hope the big cheese succeeds at this.
And with that, now would be the time to transition towards a future that emphasizes sustainability. Of course that is a big goal to suggest, even for a great country such as ours. Are our leaders up to that? Do we have any devoted wannabes on the horizon who could make that a realization in spite of the obstacles? If so, I suggest you consider them
Thank you for considering my point of view, for your children's sake. As for me, I had been neutered long ago and have no real stake in the future that awaits.
3
Even a stopped clock is right twice a day. Taking on China is right.
21
@Misha Havtikess
Not in the era of digital clocks.
8
For most of the past 2200 years China has been a socioeconomic, diplomatic, military, educational, scientific technological superpower.
But for the decision of it's Emperors to turn their nation from the barbarians surrounding the Central/ Middle Kingdom about 500 years that truth would be known. And the Mandate of Heaven would still be with the ethnic Han Chinese who are 20% of the human race.
But I digress. There are more Chinese living outside of China than there are Americans. The 300 million Chinese who moved into the middle class over the last 25 years was the greatest socoeconomic miracle of the last 500 years.
Deng Xiaoping's term limited collective leadership model plus socialism with Chinese characteristics aka capitalism was the root beneath this epoch.
' It does not matter if a cat is black or white as long as it catches mice. ' To become rich is glorious' Deng Xiaoping
Xi Jinping has abandoned this successful model. Becoming the 1st Chinese leader whose thoughts are deemed worthy of study by members of the Chinese Communist Party since Mao Zedong. Xi is the 1st designated ' core leader' since Deng. By eliminating the collective term limited governing political model Xi has decided to assume the Mandate of Heaven to rule like an Emperor until his death.
Xi is not bothered by the inconvenience of living in a divided limited different power constitutional republic of united states where the people are the ultimate sovereign.
6
@Blackmamba
That’s not a digression. Our Emperors are now turning our backs on foreign “barbarians” too. The people insisting we don’t need Chinese goods today are like the Chinese elites telling Macartney that China didn’t need British goods then. That didn’t work out so well for China. China has learned from its history that economic isolationism is the road to ruin, but have we?
4
@Purity of
Neither the Mongols nor the Manchus nor the Japanese were from white 'southern Siberia.'
Nor were they 'nomadic tribes'.
2
There will be in layoffs in South Carolina when China targets the US automotive sector ( with South Carolina specifically in mid) so we'll get to see Lindsay Graham soil himself with his defense of a tariffs war.
15
Hamilton began tariff wars. Can Trump dance and sing at the same time?
1
What comes after trade war is war war. It seems inconceivable today, but we'll look back with dismay that we couldn't see it coming earlier. There's no other way.
9
@Bernard
My reflection is that we ARE doing war war, and adding trade war, with the potential for increasing the former in more locations. Instead of global trade we can have global hot battle sites.
2
China has many options for retaliating against the United States and is likely to implement sanctions that go beyond tariffs on trade in goods. China still has abundant tools in its armory and has already prepared a contingency plan to deal with the escalation of the trade war, not the least of which would be sanctions on US planes and vehicles making it more difficult for these products to enter the Chinese market.China could move beyond the goods trade and target services, particularly in the finance, tourism and cultural sectors. China holds a lot of cards. It can use its substantial financial firepower and the government’s control over crucial economic levers to endure a protracted trade conflict, while state-run media outlets help stem discontent at home.Chinese officials and experts say the country can stand firm against Western pressure. Even some advocates of more market-oriented policies say Beijing should just make its own decisions now instead of tying them to a trade pact with Washington. Boeing is particularly vulnerable should a protracted trade was flourish over many years as China is a huge profit source. Boeing has projected the value of the passenger jet market over the next two decades in China to be $ 1 trillion. Airbus is a tad more conservative with a figure of $840 billion. Champagne corks will be popping at Airbus in Toulouse, France, if Xi Jinping ups the ante in due with a total prohibition on the import of Boeing products.
7
@Terry Willson China needs us A LOT MORE than we need them. They can retaliate all they want, but they are not dealing from a position of strength. The US trade policy cannot be constructed around one sector or one company. Boeing is not going to go out of business even if China does not buy its planes. IT HAS TO BE ABOUT THE OVERALL GREATER GOOD. And that is what President Trump's strategy is about.
11
We'll see. China has been connecting and increasing trade throughout the world, investing in growing economies and buying ports of trade.
Trump, on the other hand, has burned down about every bridge that Hillary painstakingly rebuilt after the last GOP presidential fiasco.
The only relationships President Horrible seems intent on building are with Putin and the rest of the Evil League of Evil.
Oddly, Trump has publicly championed the potential of the economy of North Korea (top export: coal; GDP smaller than Vermont's) more than that of any other nation.
3
@samuel there are a buying power of around 600 million in Europe not to forget.
2
China's economy has grown too big to sustain its growth by making and exporting things. If they want a GDP per person that is similar to developed/western country tries they have to switch to become a consumer economy. They could become 4 times bigger than US if they had the same GDP/person. However, the switch from export to consumer economy is painful. Now they can blame the pain on US and make it a patriotic act for its citizens to suffer. Don't think for a second that this trade war is something they don't want - they desperately need it.
12
@Ivan: So a consumer economy is better than making things? Isn't that part of the reason the US is in the position it is with regard to income inequality? People work low wage jobs and borrow to buy stuff they can't afford and don't really need.
6
@Albert D'Alligator
Consumption (of things, services, entertainment, paper with $ signs, etc.) IS the economy. China has been growing their economy by making a lot more things than they consume (in return they get pieces of paper with dollar signs on them). As Japan found out 3 decades ago, that gig is up after your economy reaches a certain size. Eventually either your currency goes up (and shut down your exports) or asset prices in your country explode (imploding the actual value of your accumulated surplus – even as its paper value remains huge). Ultimately a stable economy require that a country consume as much as it produces - our currency exchange system and fiat (paper) money will eventually punish any large country that tries to produce more than it consumes.
Income inequality has little to do with whether a country produce things or services or entertainment, or just print money. In our country it’s about policies that have given absurd amounts of power to capital owners. This has ensured that they can harvest almost all the benefits from increased productivity. So even as the total GDP (value of all things, services, entertainment, paper with $ signs, etc produced) has doubled, the majority of people have seen little or no increase in their living conditions. All of that increased income and wealth has been shuffled to the top 10%.
3
@Albert D'Alligator Well said.
I think the article misses China holding and buying hundreds of billions in us debt. what is trump going to do about that - declare bankruptcy?
8
@dk The article doesn't "miss" U.S. debt held by China. Read again, notice the $1.3 trillion the author cites, the analysis of that debt.
17
@ dk... the article specifically addresses this point and says selling off some of the $1.3 trillion of US Treasury bonds could cause a spike in US interest rates. But the authors view seems to be that it's not a major card to play based on several factors, most notably, where else does China invest that money?
6
The United States is a developed country, and should start acting like one. We have the best real estate on the planet. Iowa alone produces more food than most countries. We have the best research institutes. Americans embrace innovation.
We also have the highest rate of unwanted pregnancies among developed countries, which is a reflection of our mediocre health care system.
Globalization lowered costs in the U.S. and lifted millions out of poverty in China. It also decimated our Heartland. The captains of American industry are largely responsible for that.
The next 30 years must be transformative for the U.S. specifically, the world in general. To survive, the future must be low carbon.
There is no other country capable of leading this transformation. But going it alone spells failure. A U.S.-China zero carbon partnership is essential.
43
@Gimme Shelter
So, do you support the President's efforts? No other has ever had the guts to address the issue of unfair tariffs that other countries impose on our goods, not just China. We have been subsidizing the world economy for decades. Let's give the man some credit when it's due.
11
@Raz
So it's China that was using unjust tariffs on our goods? I thought they were stealing our tech and subsidizing their own companies so prices were cheaper (keep in mind, we subsidize our agriculture sector very heavily, as well as automobiles).
Trump thought he could strong arm a better deal with the Chinese by imposing OUR tariffs and get a lot of concessions from them. Turns out he can't, and it's causing a lot of pain around America. There is no credit to give. China is not a contractor for the US - they are a sovereign country that holds a lot of our debt.
6
@Raz
Trump has done some amazingly bad things, and is certainly not addressing the environmental issue, but I do support the effort to balance things out with the Chinese. This is something I have wanted to see and the timing right now is good.
I also think that industry has finally woken up to the fact, that after two decades, it has been getting played in many ways by the Chinese who require them to keep one arm tied behind their backs.
10
The article missed stating that the US had no coherent policy here and left it to individual US enterprises to allocate capital as it saw fit. US enterprises thought it OK to deal with communist regimes for access to markets.
Venture capital soon followed as the intellectual capital of China grew leaps and bounds: why, the most recent tech IPOs was due to Chinese engineers innovating with help from US managers.
Bashing the Chinese, just like bashing immigrants, wins elections and little else. We need a coherent US policy that represents the interests of US workers.
19
@Linus: How’s that “ access to markets” thing working out, it seems to me that as soon as the Chinese can figure out how to reverse engineer or produce something in China the billion people market these “US entrepreneurs” that sent the jobs to China were envisioning disappear, that as you noted has seen many Chinese IPOs, China’s “2025” proclamation should by itself be a wake up call, China doesn’t want to do business with America, China wants to own the business, the only ones who made out were the, garment makers, VCs and tech titans in your neck of the woods, middle class Americans took it on the chin. America’s lack of a coherent policy was opening the door to China and forcing America and European workers to compete with a billion folks willing to work on the cheap, thereby offering up bigger temporary profits to our vulture capitalists.
2
So is this officially the first positive piece written in the NYT about Mr. Trump? You hide it well but I think this was actually positive about something our president is doing. Wow.
56
@Thor
I would have liked to have seen some of that coverage regarding Obama's efforts to rein in China via TPP, but alas...
12
As a long time reader but never commenter, I have noticed quite a stance to some comments that are quite slanted. I can’t help but wonder if there is some serious astroturfing going on by China.
15
@John It's the usual 50 Cent writers, skewing the blog views towards China's version of events and news.
I am no fan of Trump but do feel that China has taken advantage of intellectual property rights and lacks a moral business compass. Our corporate leaders' greed sold many Americans out to the Chinese. Both sides have their blame. Personally, I plan to buy less. Buy what you need, not what you want. Save the Earth.
China talks tough but can't back it up. The United States under Trump is becoming the big dog on the world stage. And the dog is barking.
5
@Lonnie
"The United States under Trump is becoming the big dog..."
The United States under Trump is becoming a not particularly funny joke.
The "big dog" is just a big mouth. Like most big mouths, it's also a coward. Behold how the big dog cowers before Putin.
China is not so bellicose nor so obsequious. China has a clear understanding of its interests and has a long-game plan to achieve them. The "big dog" barks and snarls at every passing car with nothing more in mind than what will be in the dinner dish tonight.
The damage that Trump has done and continues to do to our nation may never be undone. He will leave us with courts packed with knuckle dragging troglodytes and burgeoning public debt. Most importantly, he will leave us a much diminished power that is no longer seen as a reliable partner and certainly not a beacon of freedom. In pulling out of the TPP he has ceded much of the Pacific to China.
11
@Lonnie The Chinese are savvy, patient, and skilled at the long game.
Do you really think that President Twitter has the better of them? Yeah, you're right that he barks a lot, but that doesn't make him Big Dog.
5
@Lonnie What's the old saying...."His bark is worse than his bite"?
3
Thank you Donald Trump for being tough on China. It is about time!
15
Ye shall reap what ye has sown. China is finally hitting a wall because it has blackmailed international companies for decades and used its massive communist government to grossly subsidize its own industries to falsely compete outside its borders too long. Non-Chinese industry got woke and abandoned China as a viable market. So let’s see what they do- wake up and act in a fair manner with their world neighbors or pick up all their toys and go home, content with the size they have achieved. Take out your buttered popcorn and watch the show.
14
"Mr. Trump’s tariffs last year gave many businesses a final reason to look elsewhere.
Call it the ABC supply chain, as in “anywhere but China.”
How about Central America? That might help solve two problems at once.
13
Trump can be repulsive at times but he is right on 3 issues. Immigration, China and refocusing our war efforts. It's about time a president had the guts to take on China.
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@Hellen It's so much easier to "take on China" when you have been handed a solid economy by your predecessor. Think we'll hear thanks from Trump to Obama?
3
@Hellen
It certainly helps when business is more on board versus racing to do the Chinese governments bidding.
1
China has more levers today that the western media are willing to concede, just as it had much less cards to play in the past 10-20 years than the western media were willing to report. China is, and always has been, pursuing its own agenda regardless what the west wishes. And that is the real threat to the west that the Trump administration fear most. The western media only reported what it wanted to in order to gain circulation.
5
Obviously China's connections to the US are flagging.
What's at stake in this trade war, however, now that Trump has chosen to make China an enemy instead of a partner, is trade with the rest of the world.
And since China has been strategically building inroads to the rest of the world for years while Trump has capriciously, unilaterally burned bridges to our strongest allies, whatever short-term gains the US arguably gets by Trump battering China's economy more than our own economy is not going to pay off for America in the long run.
It might pay off for Trump -- because the long-term effects won't be so noticeable until after 2020 which is his cut off period to con his base that he is strong and winning -- BUT Trump's global polarization is cancerous and will be difficult for the USA to come back from.
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Yep
1
Why in the world would any company agree to joint ventures with Chinese companies? The answer is greed. It’s about time that the US wakes up and realizes that China is an enemy and not a friend. China would love nothing more than to see the US relegated to the 2nd economy behind China. They’ve stolen numerous proprietary secrets. China will do anything to be one the dominate super power in the world. Imagine that - a communist country with a bigger economy than the US. That’ll raise some eyebrows.
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@Mike L
Of course it's greed: which is better tempered with some sort of social awareness. Here it was not.
All of the companies who have had manufacturing done there took advantage of their hope for something for (almost) nothing -- that something being labor. In exchange for an able work force desperate for jobs, with no government protections, they accepted the fact that they were dealing with a government which offered them no legal protections, either. Many made fortunes on that premise, but are now facing the loss of their uniqueness and the economic moats which allowed them to dominate the market. The adage might be sauce for the goose is sauce for the gander, I guess. they opted for the Wild West ( east) and they got it. Returning to the US would mean accepting more civilized rules of behavior on their side, as well as looking fo enforcement to protect their rights.
They'll move to Vietnam.
2
Does any of this matter when we owe them 1.12 TRILLION dollars of our national debt?
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@Dr. TLS China bought bonds that were for sale, the US makes its payments on those bonds, no problem. They can't call them due and they can't raise the interest payments. Lots of nations buy US Treasuries because they're such a safe investment.
4
We depend on them to continue loaning us that money at every treasury auction. What happens I they stop buying the next several auctions?
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It is about time that China start playing by the same rules as the other countries are playing by. The bullying by China is over!
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Maybe we should do the same.
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Yes even lower cost countries will supplant China as a source of consumer products that’s how the law of comparative costs works.
The problem is the Republican President is accelerating this with a typical Socialist tactic, tariffs. So much for Free Enterprise.
Trump is following the Bannon / Bolton doctrine , destroy China so it cannot compete with us as a World Power and it doesn’t matter if this harms the USA .
Not so fast I would not write off China so fast. They have opportunities, stimulate their own consumer demand which is a fraction of ours , increase trading with other countries via the Silk Road, focus on high value products , aviation, Autos , Robots etc.
They will have a strong compeititor to Boeing in the near future.
Replace imports mainly energy with renewable energy.
Develop their Military Industrial capacity as we do .
Yes they have high debt but as a percentage of GDP lower than ours , they have invested in their infrastructure ( see new airport in Beijing) , ours is crumbling.
They have two other things we do not have , Patience and a Plan.
Trump has made massive mistakes , getting out of TPP which would build our trade with countries in the Pacific supplanting China now it is possible China will replace us in this agreement.
We are creating a very formidable foe , no room for complancy and do not underestimate Chinese pride
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China is an adversary on many fronts and should be treated as such. Past presidents were naive in their treatment of China. Obama’s TPP was a recognition of that fact and gathered allies to isolate China. Perhaps it was too soft in areas of technology transfer, environmental concerns and human rights? Trumps go it alone blunt force tactic is not yielding hoped for results and long term could prove quite harmful.
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Regarding the diversification of supply sources, and markets away from China, in order to curb their domination, isn’t that exactly what the Trans Pacific Partnership was intended to do.
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This is a very good article on China Trade war and covered most of the relevant points. I like to add few other aspects of this Trade war. Most of the supply chain factories in China were build during let nineties and early two thousands and most of them were aged about 10 years. Modern products and assembly lines changes much faster and new technology and process are introduced by the companies to remain competitive. This will create the opportunities for the international companies like Apple, GE, Cisco to relocate their supply chain hubs to neighboring countries. The devastation of American North East states can be replayed in China’s costal states. This shift from growing manufacturing base to declining manufacturing base will have serious political consequence - the labor and intellectual unrest in such a hugely
Populated costal provinces may have destabilizing effect on communist party hold - the tipping point for regime change.
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@Kalyan Basu. That is some of what the Chinese Party has always feared — social unrest among their billions.
@Kalyan Basu
Be careful what you wish for. The “regime change” the US got from deindustrialization was Trump. The last thing the world needs is a Chinese Trump.
2
The problem to me is that the goal of all this has not been well articulated. First the goal was to bring manufacturing jobs back home, but even as companies look at possibly leaving China, IO don't see America being their first choice. Rising labor costs in the US are going to make them move to some other Asian low wage country. Now the goal, based on Trump's rhetoric, seems simply to be to punish China and thwart their rise on the global stage.
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All of Trumps targets are based on hate. Republicans have many axes to grind it seems.
1
Chins'a labor cost used to be 50 dollars a month. now it's 50 dollars a day.
That happened years ago.
China itself has a lot of stuff made in low wage countries like Vietnam and Bangladesh for example.
3
I see a lot of merchandise for sale that is made in India, Guatemala, Honduras, Vietnam, and other countries than China. Maybe there has been a shift in production going on for several years. Why is that bad?
2
I think both President Trump and Xi are poor negotiators. The relationship is important for both sides and seeking a win-win agreement should be the goal here. The political rhetoric on both sides need to shift.
3
How is it a negotiation?
China didn't ask for a trade war. China tried hard to avoid a trade war.
Trump, however, decided to go straight to a trade war instead of -- since he campaigned as the greatest deal maker in the history of humankind -- taking the lead in negotiations and getting it done.
All he's done is destroy things since taking office. What has he achieved but getting rid of things he doesn't like for no rational long-term plan?
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@D.A.Oh. Thanks. Good point. I think it is now a negotiation.
1
From the day Kissinger met Zhou in 1971, American's have been outsmarted by a foe fighting a war we mostly didn't perceive and therefore weren't fighting back in. I say "mostly" because there were always those who saw what was happening, including all presidents from Clinton on, and chose to let Wall Street outweigh both common sense and very legitimate concerns about human rights.
Beijing's utter failure to rein in intellectual property thieves was clear and well known since at least 1992, the date of the first agreement to protect IP and give market access -- both always promised but not delivered. Time after time they made and broke promises and time after time we "named and shamed" or took some other feckless remedy that showed Wall Street and big business was not going to let little things like that get in the way of continued business as usual.
So, here we are, dealing with a determined foe who has done a great deal of damage to our society without firing a shot. We've got a president who seems quite imperfect in many ways but has really done a wonderful thing by highlighting this problem not just to the US but to all capitalist democracies.
Americans better follow their leaders' bi-partisan agreement on this issue and set aside our differences. Weaning our economy from dependence on China needs a cohesive effort by all.
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@West Coaster
I agree. I'm usually not one to praise Trump, but his tougher stance on China is welcome and long over due. What I would like to see are some incentives for bring supply chains back to the US, rather than relocating from China to other low wage countries. I know we have much higher labor costs, but isn't much of todays manufacturing automated?
20
Let's face it. China has 3-4 times as many people as we do. If this was a competition to see who can out-sell who ultimately they win.
However, what we need to be content with is our Fair Share. That's reasonable.
6
The US has shipped its manufacturing overseas to gain the profits of cheap, exploited labor.
The result is towns all across the US with ghost manufacturing plants falling to the ground. With the exodus of manufacturing, these towns lose their pride and economic engine. The result leaves dispirited citizens with no work, deteriorating infrastructure , youth with no future and only a damnable drug culture to fill the void.
Manufacturing is the only real source of true wealth. Furthermore, our national security is at risk when we are reliant on our potential enemies for our critical goods.
Tariffs are, in the short run, a necessary, but painful means to recapture our manufacturing base and revitalize our towns.
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@Rufus Temple We have to see if the jobs will come back. I doubt they will.
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@Rufus Temple Good points. We should also note that, back in the 90's, US multinationals moved manufacturing to China where the corporate tax rate was in single digits while the US rate was 35%. While the cheaper labor point garnered the headlines, the tax differential was a much more compelling financial driver.
Now, the US rate( thanks to the 2017 tax act) is 21% while China's is now 25%. Along with that plus the tariffs, increasing labor costs in China, transportation costs, political risks, etc, I'm sure many US multinationals are "running the number" re: moving manufacturing back to the US.
2
@pete make it clear,US is not only nation that produce consumption.China now have the same level consumption volume now.Under the trade war pressure of the US, a part of factorys move it to the third country for US consumer,the one in the CHINA still here.Tarde war doesn't do US any good!
1
This article sheds light on the reversal of a trend that has reshaped the world over the past four decades.
5
I abhor Trump, both personally and for everything that he represents. But did he get this one right? I would truly welcome politically unbiased opinions from readers with more understanding of global economic issues than mine. I will in no way change my views about Trump and his Republican enablers, as they are based on simple definitions of what decency is and on the obvious lack of these qualities in the aforementioned. But I also have a very dim view of what China stands for, and just wish to understand this one.
59
They say, even a broken clock is right twice a day....
The trick is knowing when!
4
@Ajax If you want to learn more about China's malfeasance, I recommend taking a look at Bret Stephen's article over in the Opinion section, titled "What's Our China Endgame?". He has several links to articles laying out ways in which China has profited by violating WTO standards and other international trade norms.
I can give you a personal anecdote of sorts though. I used to for work a major global company that is primarily in the business of handling IP. Our IT department had to create a separate set of access restrictions for our China wing, after multiple incidents of IP theft occurred in that office (that had never happened anywhere else in the world). And there were so many incidents where Chinese firms attempted to bribe our staff into committing or cooperating with fraud, that the company wouldn't allow relatively junior employees to work there anymore. Only the most trustworthy people, who'd been with the company for many years, and were considered capable enough to stand up to the corrupt behavior.
4
Let's be honest.
Only a few companies were attracted to China for the revenue opportunity, which was largely a mirage.
Most companies were attracted by the opportunity to reduce costs by offshoring production to a low-wage, low-regulation country.
These companies can find many other low-wage, low-regulation countries that have not decided to become rivals/adversaries to the U.S.
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@John
Yes, companies wanted low wage workers, but they were also salivating at the prospect of 1 billion (insert evil laugh here) new consumers to buy their products.
6
@CAM
I would say "some", but not "most".
Actually selling into country like China requires a level of effort, patience, and cultural expertise that most American companies simply lack.
It also requires overcoming the many obstacles established by the Chinese government.
I think it was just much easier for companies to set up a factory in an economic zone and shift production there.
7
@John
They knew that the revenue opportunity was short term and largely a mirage. But it was a good sell to potential stock buyers, who value growth at the cost of all else, so.....
1
It's bad enough that Clinton and Gore advocated for China but many are too young to remember that. I just know it would be suicidal for any democratic candidate to go against Trump in favor of China. His going after China is popular across political parties.
116
Republicans are hopeful that Democrats will stay the course and support free trade with China.
4
@Hellen Don’t forget that it was the Republican Nixon who opened the door to China.
7
@felixfelix But I remember that era, and our political and business leaders thought we were going to sell the poor, pitiful Chinese all of the stuff that WE made in the USA.
Then it became the other way around, very fast, and the hunter was captured by the game.
12
The US is a large and important trading partner, but it is not the only one. Not to mention the rising China's rising middle class that is also a large consumer base.
In the short term, the US has forgotten how to manufacture many items, particularly items with high labor content. China will inflict more pain on us than we will on them. Blame unrestricted US capitalism and the drive for profits and wealth for shareholders for moving jobs out of the US, not China. If manufacturing moves back to higher cost US, automation will make sure that huge numbers of low skill jobs will not appear by Trump magic.
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@Boston Barry
1. Most manufacturing will not move back to the U.S. It will move to other low-wage countries.
2. China has other important trading partners, and most of them have the same concerns as the U.S.
3. The opportunity to sell to China's rising middle class has been mirage for all but a few industries.
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On point 1 - you are correct, but the factories producing in Vietnam, Cambodia & Myanmar will be Chinese-owned. The trade war is pushing China to do what it's been looking at for years as labour costs have risen at home.
7
Boston Barry, without USA purchase power, NONE of the China factories can survive. I’ve been trading with China for 25 years.
6
20% of all real estate sold in Florida is to Chinese National buyers; it's that and more in other states like California, New York, Ohio. They are eager to get their money out of China in anticipation a heavily debt laden economy and worsening relationship with the U.S. After working in China many years ago for a US Manufacturer, I admire the Chinese people for their work ethic, family values, and intellect. They took the jobs that Americans didn't want and became a manufacturing powerhouse. If we add in the investments that their citizens make in this country - including attending our universities, purchasing real estate - the imbalance is not worth a trade war for either country.
13
@Patricia
Americans didn't want those manufacturing jobs??
Please don't tell that to the people living in devastated communities across the Rust Belt.
20
@Patricia
Don't forget those were jobs Americans did want and need (with benefits.)
13
@betty durso
It’s crazy what you are saying about Americans not wanting those jobs. They would love to have them but those were taken away, mostly so that firms could move work to a cheaper location but also as China promised them business and paid the politicians.
11
China - for what it is worth - should draw one lesson - from this hyped up trade war - it needs a true market based economy to compete with America.
Americans since WW II - thru our Marshall Plan and other aspects of foreign policy - taught the world that their open economies are in interests of America and themselves.
Our European allies followed our bidding and rose from the ashes of that war to a preeminence that even China can envy.
As long as we remain the best market - not just for purchasing power, but our laws of "equal justice under the law" where foreigners are for the most part treated equally.
We have shown the world that when it comes to markets - ours is the best "safe harbor."
China is also increasingly hurt by its citizens who are demonstrating that once they become Yuan rich - they flee the "communist utopia."
And the global leaders are seeing it as an evidence of lack of support for communist dictators in Beijing.
And all this is coming to head because our economy is gathering steam and far outpacing China or anybody.
So, China is facing its worst enemy - its them, who should be looking in the mirror.
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@Neil
I really hope China becomes more free market; it would be great for them and the rest of the world. Unfortunately, if the US “wins” the trade war, the logical conclusion for China to draw will be that Trump’s state capitalist policies are more successful than the more free market policies we had before. They will see that there was really no cost to having the government harness the economic power of the private economy by aggressive use of sanctions against foreign rivals, and will be emboldened to try the same strategy.
4
@Aoy
China cannot become a free market without political reform. There is no chance for that happening in the present climate there.
The party is, effectively, an oligarchic creation. It helps or hinder businesses they chose. It literally owns businesses, too.
My son was involved in negotiations to do jet engine maintenance and overhaul work for a large Chinese airline. The work initially was to be in American shops. Then it became known the Chinese airline wanted the work to be done in Chinese shops, along with the technology needed to run those shops. They became more and more insistent on such an arrangement.
In the end, my son's team walked. They knew that to do what the Chinese were asking would mean the eventual loss of the work not only in China but to all their other customers around the world, too. The Chinese were actually pretty hamfisted in trying to get that business.
6
@Bob Burns
China has already made many free market reforms. In the 80s, it privatized most of its collective farms and was thus finally able to feed itself. China’s agricultural output today is 4x America’s, and is an under-appreciated reason for China’s development. In the 90s and 2000s, China privatized many state-owned enterprises so now China’s government accounts for a smaller percentage of Chinese GDP than many European nations. This set the stage for China’s manufacturing growth too. China still has a long way to go (and still has a long way to catch up to our living standards), but it has made significant progress towards a free market system.
In some ways, China’s authoritarian system helps its free-market reforms. It is hard to imagine a democracy laying off tens of millions of workers like China’s state-owned enterprises did in the 90s and 2000s. Many of the Tiananmen Square protestors wanted to roll back the free market economic reforms that had been made in the 80s because the abolition of price controls had temporarily resulted in inflation; a less authoritarian government might have caved. Many countries that have become successful capitalist democracies today like Spain, Chile, South Korea, and Taiwan put those capitalist systems in place under authoritarian leaders. China is on the same path.
2
I think it is totally opposite of what the author says. China is an established economic super power and the USA is no longer on top but among many other countries.
China may go thru economic ups and downs just like the USA did in its history but it is building trade relations with the rest of the world.
The USA under Trump is destroying them.
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@Paul
Sorry but that is false. China has been built on shoddy and inferior goods that aren't selling. Certain industries, such as apparel, have been hurt bad. Consumers are demanding better and China's model can't deliver that.
14
@Hellen
You're living in the past. Yes, China was once a cheap manufacturer of cheap junk just as in the 1950s and 60s Japan was a cheap manufacturer of cheap goods. China now produces world class products in a number of areas. Think Huawei as an example. Moreover, China is now pumping out high quality engineers and scientists from institutions such as the Harbin Technical University.
27
@Hellen
If Chinese goods aren't selling, how can they be hurting other industries?
20
How I wish that I had real knowledge of the economics of China but I don't. I do hope that its aggression in the S China Sea is called to an end but I don't see that happening. I strongly disagree with @Tom below, what China is doing to fisheries around Africa and PI, Indonesia and Vietnam is horrid for the people of those areas. They are strip fishing which takes even the smallest fish so the waters can't recover in 5-10 years.
I also hate the oppression of the Muslim Uighurs that is bordering on genocide. The world can only hope that oppression of its citizens is not a lasting thing.The strident protectionist strategies of Mr Trump may make it seem that the US is winning but history says that is a losing strategy for all parties.
In this time of great global climate problems, we need more unity and cooperation to control global pollution, not protectionist trade wars.
18
The businesses like Boeing had no "business' operating out of China and were in for the fast buck. No sympathy.
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This article is a propaganda delusion from beginning to end. China never had illuminati-like control of US companies as the opening paragraph insinutates, outside the fevered imagination of anti-Sinoist ravings. The movement of investments to other countries is not a sign of Chinese decline, but a consequenceo of its modernization and raising of labor wages. The fact that American companies are staying on the sidelines in this fight is certainly NOT a sign that China's influence has been dented. Indeed, the fact that they do not openly support their own government's policies is nothing short of a stunning rebuke to Trump. Meanwhile, China's corporations are behind their government 100%.
And the rest of the world, from South America to Europe to Africa, have seen upfront how dangerous it is to rely upon American goods for their economy, and are taking steps to immunize themselves from tariff extortion. American soft power has vanished into thin air, and now China is the guarantor of the world's free markets.
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@Tom "china is the guarantor of free markets". really? having lived and worked in china for 6 years I found the article to be accurate.
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@Earl Clampett
China didn't expect it any more than you did. But it fell into their lap unannounced and they've made the most of it.
A lot of sudden changes have been happening around the world since January 2017.
18
@Tom
Then why were there so many "smart" people insisting we would lose a trade war with them and/or it would destroy our economy when they account for less than 1% of our GDP in terms of exports and we import about 3% of GDP from them (and a lot of those imports could be manufactured anywhere). Any cursory analysis of the data would have revealed the opposite yet past administrations and pundits have for decades let them get away with cheating us on a variety of fronts for fear of something???
26