Trade War with China

xiabonan said:

In many ways the Chinese share lots of similarities with the traditional American values. Entrepreneurial, down-to-earth, believing in self-made success, values family and community.

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After the Trump administration threatened to slap additional tariffs on goods from U.S. major trading partners, grievances have been aired on its home turf.

Manufacturers in the Rust Belt fear additional tariffs would antagonize their long-standing trade partners, leading to a decrease in exports. Soybean farmers throughout the Midwest are nervously watching how China, which buys a quarter of American soybeans, will respond in kind.

Traditional steel and aluminum manufacturers in the Great Lake states may benefit from the administration's 25-percent tariff on foreign steel, but for those who use the metal, it is an entirely different story. Metal users are paying higher prices. It is no strange that beverage producers fret about the impending price rises of aluminum cans, which will be passed on to consumers.

According to a report from the Peterson Institute for International Economics, the recent tariff list released by the Trump administration raises costs for many U.S. companies sourcing components from overseas. U.S. consumers will likely feel the effects of higher prices down the road.

Never forget the fact that, trade with China allowed American families to save 850 dollars per household in 2015, a study by the U.S. China Business Council shows. This benefits brought by Chinese exports to the U.S. consumers will be gone, and higher import duties will tax American consumers more.

As Brad Setser, a senior fellow at the Council on Foreign Relations, has tweeted, "No way you get there without putting tariffs on a lot of consumer goods imports, be it computers or cell phones and the like. More than 20 percent of the merchandise that the U.S. imported from China last year were cell phones and computers."

Economists also doubt the Trump administration's stubborn thoughts on trade deficit. Stephen Roach, former chairman of Morgan Stanley Asia and senior fellow at Yale University's Jackson Institute for Global Affairs, said with the domestic saving rate at just 1.5 percent of national income in the first quarter of 2018, U.S. multilateral trade deficit with 102 nations is unavoidable.

Roach has warned that trying to cure multilateral deficits with bilateral tariffs such as those being imposed on China can only backfire -- shifting the Chinese piece of the U.S. trade deficit to higher cost producers and thereby taxing American consumers.

"President Trump's trade fix runs counter to his avowed promise to make America great again," he said.

Nevertheless, the Trump administration has doubled down on its unilateralism and protectionism by threatening to slap additional tariffs on 200 billion U.S. dollars worth of Chinese goods.

This came two days after tariffs on 50 billion dollars of Chinese imports were announced, just weeks after Treasury Secretary Steven Mnuchin said his country put a trade war with China on hold.

It should be noted that the storyline of the China-U.S. trade spat could have been less combative, and the Americans do not necessarily have to bear the costs of a trade war.

According to the spokesperson of China's Ministry of Commerce, during their previous rounds of talks, Chinese and American negotiators had once "borne fruit with clear negotiation roadmaps and timetables."

In other words, if the Trump administration didn't re-announce additional tariffs against Chinese products, both sides would have planned further consultations on manufacturing and services, as well as structural problems, after making detailed consultations on agriculture and energy.

To enhance the resilience and competitiveness of the American economy, the U.S. government needs to foster a business and trade environment deemed by its major trading partners as reasonable and predictable. On the contrary, the U.S. government is hectically putting up trade barriers, restricting foreign investment and alienating its major trading partners.

Every act has its consequences. The false passion of the U.S. administration is tarnishing the credibility and international image of the world's biggest economy, which will be another expensive mistake that the Americans have to deal with.

When business environment becomes less predictable, foreign investors will leave, and so will jobs. America's domestic industrial chains will be forced to make a change.

As a country who is lately consistently inconsistent, the United States of America is becoming the Unpredictable States of America. Honestly speaking, who wants uncertainty except speculators?

China is cutting tariffs across the board. Effective on July 1, China's average tariff rate for clothing, shoes and hats, kitchenware, and sports and fitness supplies will be reduced by 50 percent, and that for home appliances will be lowered by two-thirds. Import taxes on vehicles and auto parts will also be slashed on the same day.

But these incentives to foreign companies might have nothing to do with American manufacturers as the U.S. administration is seemingly making all out efforts to have the U.S. left out.

For decades, bilateral trade has been taken as the ballast stone of China-U.S. relations. At this moment, the ballast stone is being recklessly tossed back and forth by the U.S. side.

As the Chinese and American economies have been so mutually dependent, like it or not, they are already in the same boat. How can the U.S. government assure its people a journey ahead safe and sound while stirring up monstrous sea waves for China?

Sadly, it seems that unless the Trump administration feels the pinch of a trade war, the American people will not be freed from the unnecessary costs.

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Exclusive: Facing U.S. blowback, Beijing softens 'Made in China 2025' message

Beijing has begun downplaying Made in China 2025, the state-backed industrial policy that has provoked alarm in the West and is core to Washington’s complaints about the country’s technological ambitions, diplomatic and Chinese state media sources said.

With a full-blown trade war looming amid U.S. President Donald Trump’s threats to impose tariffs on up to $450 billion in Chinese imports, his administration has fixed on Beijing’s signature effort to deploy state support to close a technology gap in 10 key sectors.

Beijing is increasingly mindful that its rollout of the ambitious plan has triggered U.S. backlash.

The Trump administration is considering rules that would bar companies with at least 25 percent Chinese ownership from buying U.S. firms with “industrially significant technology,” a U.S. government official said on Sunday.

A senior western diplomat told Reuters that in meetings Chinese officials have recently begun downplaying Made in China 2025. The officials have stressed that the aspects that have raised the most ire abroad were simply proposals by Chinese academics.

And state news agency Xinhua, which made more than 140 mentions of Made in China 2025 in Chinese language news items in the first five months of the year, has not done so since June 5, a search of a public database found.

The diplomat said some Chinese officials have gone so far as to suggest it was a mistake for the government to have pushed the plan so forcefully and publicly because it had increased pressure on China.

“China is apparently starting to adjust to the blowback caused by the heavy propaganda,” said the diplomat, who declined to be identified because of the sensitivity of the matter.

“They won’t stop doing it,” the diplomat said, referring to Made in China 2025. “The way they talk about it is changing.”

China’s State Council Information Office did not immediately respond to a faxed request for comment.

Three state media journalists told Reuters they had been instructed not to use the term Made in China 2025. Two others said they received no such instructions.

DEVELOPING COUNTRY

As President Xi Jinping’s China has taken a more muscular stance on the global stage, to the discomfort of many in the west, some academics and many netizens have urged a more modest approach.

China’s nationalistic Global Times tabloid struck a reserved tone in an editorial published late on Sunday, saying China had become “overconfident” about its technological advancements.

“Prudence is needed in boosting citizens’ confidence. Otherwise, negative effects may be exerted, be it domestically or abroad,” the paper said.

China still refers to itself as a “developing country” even though it is the world’s second-largest economy, and has long held to former leader Deng Xiaoping’s oft-quoted maxim: “Hide your strength, bide your time.”

CLOSING THE GAP

Under Made in China 2025, unveiled by China’s State Council in 2015, China wants to catch up with rivals in sectors including robotics, aerospace, clean-energy cars and advanced basic materials.

The strategy is at the core of China’s efforts to move up the value chain and achieve Xi’s vision of turning the country into a global superpower by 2050.

But it has provoked the more hawkish members of Trump’s team, including U.S. Trade Representative Robert Lighthizer and trade and manufacturing adviser Peter Navarro, author of the book “Death by China.”

Trump’s initial list of tariffs on $50 billion in Chinese goods, which will begin taking effect on July 6, specifically targets items related to Made in China 2025.

Foreign business groups have criticized the program as large-scale import substitution.

Under the plan, Beijing wants Chinese suppliers to capture 70 percent of market share by 2025 for “basic core components and important basic materials” in strategic industries.

Other targets endorsed by senior Chinese officials include ensuring 40 percent of smartphone chips are domestically made by 2025.

Xi gave a May 28 speech on innovation that reflected the key ideas of Made in China 2025 without mentioning it by name.

“Practice repeatedly tells us, key core technology cannot be demanded, bought or begged,” he said. “Only by firmly grasping key core technology in our hands can we fundamentally guarantee national economic security, national defense and other security.”

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President Donald Trump plans to bar many Chinese companies from investing in U.S. tech and to block additional technology exports to China,

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on Sunday evening, citing people familiar with the matter.

The two measures are set to be announced by the end of the week, and are intended to counter Beijing's

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— a Chinese initiative to be a global leader in technology.

The

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is drawing up rules to block companies with at least 25 percent Chinese ownership from buying companies involved in "industrially significant technology," the WSJ said.

Reuters confirmed the curbs on Chinese investment into such technology. The ownership threshold may change before the announcement on Friday, Reuters reported, citing a government official briefed on the matter.

The National Security Council and the

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are also putting together plans for tighter export controls that will not allow "industrially significant technology" to be exported to China, the paper added.

Fred Dufour | AFP | Getty Images
Chinese President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017.
U.S. stock futures fell more than 0.5 percent in Asian trade on Monday after the WSJ report.

The White House and the Treasury Department did not immediately respond to a request for comment sent outside of regular office hours.

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between the world's two economies have been escalating in the last few weeks.

Tariffs on an initial list of goods worth some $34 billion are expected to kick in on July 6. China has announced retaliatory measures on U.S. imports.

On June 15, the Trump administration announced that it would impose

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on up to $50 billion of Chinese products. And then, on June 18, Trump said he had requested that the United States Trade Representative identify $200 billion worth of Chinese goods for potential additional tariffs at a rate of 10 percent.

China's Commerce Ministry responded by saying it would take counter measures if the U.S. publishes an additional tariffs list.

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Franklin said:

China seems to be dialing back on the rhetoric on "Made in China 2025". The media is no longer mentioning it. I wonder if the Chinese media stopped covering commissionings of new units and weapons because of the foreign media playing up the "China threat".

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nugroho said:

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Xi Jinping vowed to match Donald Trump blow for blow in any trade war. Now as one gets closer, some in Beijing are starting to openly wonder whether China is ready for the fight -- an unusually direct challenge to the leadership of the world’s second-largest economy.

In recent weeks, prominent academics have begun to question if China’s slowing, trade-dependent economy can withstand a sustained attack from Trump, which is already started to weigh on stock prices. The sentiments are being expressed in carefully worded essays circulated on China’s heavily censored internet and -- according to interviews in recent days with ministry officials and foreign diplomats who asked not to be identified -- repeated in the halls of government offices, too.

The essays have raised concerns that the ruling Communist Party underestimated the depth of anti-China sentiment in Washington and risked a premature showdown with the world’s sole superpower. Such views push the bounds of acceptable public debate in a nation where dissent can lead to censure or even jail time, and are particularly bold given Xi has amassed unrivaled control while leading China to a more assertive role on the world stage.

“It seems like Chinese officials were mentally unprepared for the approaching trade friction or trade war,” Gao Shanwen, chief economist for Beijing-based Essence Securities Co., whose biggest shareholders include large state-owned enterprises, wrote in one widely circulated commentary. “Anti-China views are becoming the consensus among the U.S. public and its ruling party.”

Private Doubts
Gao’s article -- first published May 10 on his WeChat social media account after a trip to Washington -- has amassed millions of hits across multiple platforms. He couldn’t be reached for comment.

The essays have been noticed by key officials. Gao’s piece was circulated last week among bureaucrats at the Commerce Ministry, which has been on the front lines of the trade dispute, said one agency official, who asked not to be named because the discussions were private.

Other officials expressed skepticism about the senior leadership’s strategy in discussions with Bloomberg News last week. One Finance Ministry official said the country had made a “major misjudgment” of the U.S.’s commitment to a long-term confrontation with China.

China’s Finance Ministry and Commerce Ministry didn’t respond to faxed questions about the sentiments expressed in the essays.

Escalation Risk
In official statements, China has remained defiant since Trump’s decision earlier this month to levy tariffs on $50 billion of Chinese imports and push ahead with additional restrictions on foreign investment. China vowed to retaliate immediately and “forcefully,” prompting even more threats from Trump that have brought the world’s two largest economies to the brink of a trade war.

The risk is that the two sides, having misjudged each other’s intentions, find themselves in an escalating series of attacks and counterattacks. Xi, like Trump, is a nationalistic leader who has emphasized his strength and decisiveness and can’t afford to look weak in a confrontation with China’s biggest rival.

Xi on Thursday issued a veiled rebuke of U.S. Secretary of State Mike Pompeo for calling the country’s pledges of economic reform “a joke.” “Those who say it is a joke have not seen the confidence that Chinese people have in opening up and reform,” Xi said while meeting foreign executives in Beijing.

Hide, Bide
Xi has a lot at stake personally. He cast aside former leader Deng Xiaoping’s maxim to “hide” China’s strength and “bide” its time, and last year outlined a vision to complete China’s rise as a global power by 2050. That included building a “world-class” military and boosting clout through his Belt-and-Road Initiative to finance infrastructure from Asia to Europe and beyond. Presidential term limits were also removed, allowing him to rule indefinitely.

Yu Zhi, an economic professor from Shanghai University of Finance and Economics, questioned the wisdom of a more assertive foreign policy in a recent article published in Singapore’s Lianhe Zaobao newspaper. He confirmed the comments when reached by phone.

“Has China completed the task of ‘getting rich’? Has China completed the primary stage of socialism as Deng Xiaoping described? Can you begin to compete directly with the United States and other Western countries?” Yu wrote. “China should rethink its general strategic direction.”

Failed Talks
China’s attempts to settle the dispute by promising to buy tens of billions of dollars of U.S. energy and agriculture products have so far ended in frustration. Xi’s chief economic aide, Liu He, returned from Washington and declared the trade war over last month, only to see Trump escalate tensions again shortly afterward.

To the U.S., the problem is more than just deficits. The White House last week issued a scathing 36-page report accusing China of “economic aggression,” following on from the Pentagon’s decision earlier this year to brand the country a “strategic competitor.”

The U.S. decision to penalize telecommunications equipment-maker ZTE Corp. -- ostensibly for violating Iran nuclear sanctions -- complements a broader Trump administration effort to roll back Xi’s ambitious program to dominate several strategic industries. A bipartisan group of U.S. lawmakers has subsequently advanced legislation to block an agreement to spare the company has fed fears that the fight over the U.S. trade deficit is headed to an all-out struggle for dominance.

‘Geopolitical War’
“If mismanaged and the China-U.S. trade war is fully upgraded, it could expand into a financial war, an economic war, a resource war, and a geopolitical war,” Ren Zeping, chief economist at Founder Securities Co., wrote in one popular commentary published on June 5.

“The U.S. will use its hegemonic system established since World War II from trade, finance, currency, military and et cetera, to stop the rise of China,” said Ren, a high-profile economist who made headlines last year for earning a hefty paycheck.

The dispute threatens Xi’s attempt to guide China into an era of slower growth without a recession that could loosen the Communist Party’s 69-year grip on power. The country’s industrial output, retail sales and investment all fell below forecasts last month and economists predict that the trade conflict could cut as much as half a percentage point from annual economic growth.

Chinese stocks have fallen recently, with the benchmark Shanghai Composite Index down about 20 percent from its peak in January. The slide has fueled warnings about a repeat of the market’s collapse in 2015, the last time China saw such open criticism of economic policymakers.


“People are going to look back at this year as the pivot point when Xi Jinping overreached and sparked an international backlash against the party and China’s development model on multiple fronts,” said Jude Blanchette, China practice lead at Crumpton Group in Arlington, Virginia, and a former Conference Board researcher in Beijing. “There can’t be a domestic backlash because most of what they spend their time doing is thinking about how to stop that.”

— With assistance by Peter Martin, Keith Zhai, Dandan Li, and Miao Han

Whether the premise is real or not, It is real that China stock market ( Hong
Kong, Shanghai Shenzen) has been hit hardly . If money in stock market is drained ( stock down ) then will be hard for a company to get money from there.

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Harley-Davidson to shift some bike production outside US

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Harley-Davidson plans to shift some motorcycle production away from the US to avoid the "substantial" burden of European Union tariffs.

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, including bourbon, orange juice and motorcycles.

The measures are a response to new US tariffs on steel and aluminium.

Wisconsin-based Harley-Davidson said the increased cost from the tariffs threaten its international sales, which it has been trying to expand.

The company has assembly plants in Australia, Brazil, India and Thailand.

It said it would raise investment in its international plants, though it did not say which ones.

"To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden," the company said.

Harley-Davidson said it expected the ramp-up in production to take nine to 18 months.

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The company's decision is one of the most visible consequences of the trade disputes triggered by US President Donald Trump's decision to levy tariffs on steel and aluminium imports.

Mr Trump says the tariffs are necessary to protect the US steel and aluminium industries, which are vital to national security.

They have drawn retaliation from the EU, Canada, Mexico, India and others, while driving up the cost of metals for manufacturers in the US.

US companies that range from boat-builders to nail manufacturers have warned about the consequences of escalating trade tensions.

However, the tariffs have also helped to spur investment in US steel plants.

For example, British-owned GFG Alliance, has said it plans to invest $5bn over several years to reopen a shuttered steel plant in South Carolina. The firm says the move will put about 125 people back to work "immediately".

'Only sustainable option'
Harley-Davidson said the EU's retaliatory tariffs would add, on average, $2,200 (£1,660) to each bike exported to the EU from the US as the import tax increases from 6% to 31%.

Harley, which sold nearly 40,000 motorcycles in Europe last year, said it planned to absorb those costs which are expected to add between $30m and $45m to its expenses this year.

The company said that passing the costs onto customers "would have an immediate and lasting detrimental impact to its business in the region".

It said the tariffs make shifting production "the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe".

Harley-Davidson, which has been focused on expanding its overseas sales, said it remained committed to US manufacturing....

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plawolf said:

So, another self-serving western article trying to ‘interpret’ official Chinese statements as something other that what was said. I will call BS on this.

This is actually a typical example of the critical flaw in most western reporting on China - they use their own propaganda information warfare fake news as support for even more fake news.

The western press always harp on endlessly about how China tightly controls the internet, as if President Xi personally vets every word that is posted on the Internet by everybody in China.

But when presented with factual evidence that directly contradicts that narrative. Rather than re-assessing their original ridiculous position, they instead compound the error by coming up with an even more ridiculous and far fetched conspiracy theory.

The West always blame their inability to ‘read’ Chinese intentions on semi-racist reasons like how the Chinese are ‘mysterious’; deliberately deceitful or ‘just don’t think like us’; when in fact, in the overwhelming cases, the Chinese government does exactly what it says, and all the ‘confusion’ is created by western so-called ‘experts’ simply refusing to believe what the Chinese government says and instead insist on reading their own tea leaves, as the able article illustrates perfectly.

What the article cites as ‘evidence’ of this conspiracy is just perfectly logical thought exercises on possible worst case scanerios. Frankly, it only would be alarming if the Chinese did not also game out such possible loosing scenarios and instead only focused on the favourable possibilities.

One can easily find as many such articles as one cares to that looks at how the US might not be as prepared as one might think for the trade war.

The people who find it surprising that China would do likewise only betray how unqualified they are to be talking about China in the first place.

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