Trade War with China

localizer said:

I’ve always been perplexed about this idea of becoming less dependent on exports. Germany uses the Euro and is competitive and the export income allows them to fund their high quality of life. A drop in exports can indicate many things but it shouldn’t be something that a country aims for. The only reason your exports are dropping should be a loss in technological competitveness and saturation of market. Never do it just so you can develop a consumption based economy.

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What is the difference between export-dependent and export-addicted economies? In the past, China’s economy was largely addicted to exports, meaning that their economy would have collapsed without those exports. China wants to diversify their portfolio so that they wouldn’t be hurt by a downturn of a single element. That means they would need to decrease the proportion exports to a healthy level.

Earlier in their development, their own people were too poor to afford any goods. Thus, they needed the exports to support their economy. Now, as the Chinese people become more wealthy, they begin to support a healthy domestic economy. And you begin to see domestic spending go up, which would naturally decrease the proportion of exports even if they export the same amount of goods abroad. This is actually very normal.

As their labor becomes more expensive, their traditional manufacturing goods become less competitive in the global market. This would lead to less exports too.

Also, China in the past had been mainly exporting low end manufacturing goods. I believe China wants to become an exporter of high tech goods. As of now, they are in a transition phase. That’s why you see a huge decrease in net exports. Once they pick up the high tech aspect, you will see their exports go up again. Huawei would be major step forward.

localizer said:

I’ve always been perplexed about this idea of becoming less dependent on exports. Germany uses the Euro and is competitive and the export income allows them to fund their high quality of life. A drop in exports can indicate many things but it shouldn’t be something that a country aims for. The only reason your exports are dropping should be a loss in technological competitveness and saturation of market. Never do it just so you can develop a consumption based economy.

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That is because exports are not really supposed to decrease in absolute terms, only as a percentage of total GDP.

The idea is not to reduce exports, but rather to develop other parts of the economy to become additional sources of growth so your economy grows faster and is not overly dependent on exports.

You gotta wonder what wohld an ideal export as % of GDP. You can see how hard Germany tries to keep the EU together.

Well I think it's pretty clear the notion why Americans want to be less dependent on exports. You just have to look at why Trump likes to believe the US needs no one while everyone else needs the US. The idea is utopian meaning not realistic. Tim Ryan is the latest contender for the Democratic Party nominee for President. One of the first things he said was he wanted the US to dominate in electric vehicles mentioning how China dominates now and he wanted all the parts made in the US. First of all China is the largest market for electric vehicles. The US lags behind meaning US parts will automatically be more expensive since there are already other establish sources for parts plus American labor is more expensive. So who's going to buy from the US when the US isn't the largest electric car market in the world? They'll go bankrupt or they'll start buying cheaper parts from overseas in order for them to compete.

AssassinsMace said:

Well I think it's pretty clear the notion why Americans want to be less dependent on exports. You just have to look at why Trump likes to believe the US needs no one while everyone else needs the US. The idea is utopian meaning not realistic. Tim Ryan is the latest contender for the Democratic Party nominee for President. One of the first things he said was he wanted the US to dominate in electric vehicles mentioning how China dominates now and he wanted all the parts made in the US. First of all China is the largest market for electric vehicles. The US lags behind meaning US parts will automatically be more expensive since there are already other establish sources for parts plus American labor is more expensive. So who's going to buy from the US when the US isn't the largest electric car market in the world? They'll go bankrupt or they'll start buying cheaper parts from overseas in order for them to compete.

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It's called delusional. A word which accurately describes most of those people.

After a dramatic reduction in China's imports of soybeans from the United States due to the trade frictions, Russia – with its vast, arable fields – quickly stepped in, offering Chinese buyers more value for money. CGTN visited the Amur Region in Russia, which is quickly becoming a major soybean exporter.
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Excellent. Hopefully Russia can ramp up supplies until they are a total replacement.

Hendrik_2000 said:

After a dramatic reduction in China's imports of soybeans from the United States due to the trade frictions, Russia – with its vast, arable fields – quickly stepped in, offering Chinese buyers more value for money. CGTN visited the Amur Region in Russia, which is quickly becoming a major soybean exporter.
Привет друг давай заниматься бизнесом
Jura please check my translation thanks

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Trump's team wanted the ability to tariff Chinese goods with no retaliation if they determined that China broke the agreements. Instead, they settle for "trade enforcement offices" on both sides LOL Whatever that means

Mnuchin: China to establish ‘enforcement office’ as part of any U.S. deal



The two countries have “pretty much agreed on an enforcement mechanism,” Mnuchin said in an interview on CNBC earlier the same day. “We’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters. This is something both sides are taking very seriously.”

manqiangrexue said:

Trump's team wanted the ability to tariff Chinese goods with no retaliation if they determined that China broke the agreements. Instead, they settle for "trade enforcement offices" on both sides LOL Whatever that means

Mnuchin: China to establish ‘enforcement office’ as part of any U.S. deal

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The two countries have “pretty much agreed on an enforcement mechanism,” Mnuchin said in an interview on CNBC earlier the same day. “We’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters. This is something both sides are taking very seriously.”

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This simply sounds likes like a step back for the US. From unilateral imposition of enforcement to bilateral "enforcement offices" which by its nature of being bilateral means US power to singlehandedly impose future enforcement is reduced.

According to Bloomberg, "The U.S. and China have agreed to open “enforcement offices” as a way to make sure each side lives up to the terms of a trade deal still under negotiation, Treasury Secretary Steve Mnuchin said Wednesday."

So basically it changed from "if you don't do as agreed I will punish you and you can't retaliate" to "we'll set up something to watch each other"

I think Mnuchin and Lighthizer knew this is where it will land in the end. It's just impossible for China to agree to that kind of an agreement. Or maybe they honestly believed they could somehow force China to agree to that kind of terms, in which cases they are just dumbass fools themselves.