Trade War with China

China just has to do one thing... Stop processing and selling rare earths for the US. It'll hit every important and strategic industry in the US. China can use the national security excuse like the US is doing with steel and aluminum tariffs.

how much damage a trade war can do to China's economy?

one way to look at it is to look at the break down of growth contribution.

we all know that GDP = consumption + investment + (export-import)

in 2017, consumption contributed 58.8%, capital formation contributed 32.1%, net export (goods + services) controbuted 9.1%. China's economy grew 6.9% in 2017, without the contribution from trade, the growth rate will drop to 6.3%.

taxiya said:

before we go too far OT, just suggest to you, the all E Audi etron SUV is based on the Audi Q5 (size and categorization wise), so you may have a future upgrade in sight. Volvo is really moving into the luxury sector since the time when they changed from all numerical serial to alphabet-numeral, in the same way as Audi (100 -> A6 etc.)

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I work in oil and gas, never going all E if I have a choice.

So Trump is concerned with his planned tariffs on China hitting US consumers and is somehow going to attack China in other areas instead. How will China respond? The arrogant high road approach as usual that no one will recognize? How about making sure it does hurt US consumers? Trump is reviewing the impact in April to see if it's not hurting China enough. Hear that? He's seeking to hurt China... He wants to see suffering like a terrorist wants to see suffering and then he knows he's done his job.

It's interesting how Trump was going to let China choose how to reduce the trade deficit but now you hear nothing of it. Why? Because China just has shut off US corporations outsourcing. You know the lie they tell Americans how iPhones are profited by China and not Apple. If China were to choose it most definitely would hurt US corporations and consumers first the most.

Like I said before, shut down all rare earth processing and sales to the US. It impacts all the US's important industries. Who cares if they find other sources. When they have to go out of their way and spend billions more to set up shop in another country or at home, China floods the market making them cheaper like what Saudi Arabia did after Obama bragged about US energy independence and then bankrupting US fracking companies. And if the US goes the furthest it can which is no trade relations between the US and China, time to start selling advanced weaponry to US enemies just like the US does against China now. The only thing that prevents China from doing what the US does is economic ties. The mechanism for punishment violating it was already eliminated by the US started trade war.

Trump is a trade war-mongering dotard. The US is losing most of its friends because of him, an unpredictable leader who has sacked most of his advisors or they have left him, and surround himself with yes-men. The country will further decline with this President.

LesAdieux said:

how much damage a trade war can do to China's economy?

one way to look at it is to look at the break down of growth contribution.

we all know that GDP = consumption + investment + (export-import)

in 2017, consumption contributed 58.8%, capital formation contributed 32.1%, net export (goods + services) controbuted 9.1%. China's economy grew 6.9% in 2017, without the contribution from trade, the growth rate will drop to 6.3%.

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Correction the American share of export is only 15 to 19% of the total export so the Chinese economy is not going to be hurt much but the consumer in US will be hurt everything will cost more

When folks talk about trade measures hurting American consumers, I think they are missing the moral dimension of such measures. American consumers aren't going to care that stuff costs more so long as they have the satisfaction of "sticking it to China" and "making America great again". It is a standard part of Democrat ideology that Republican voters persist in voting against their rational self interest i.e. in favour of policies that further enrich the rich and immiserate the poor and middle classes, which is true. But this overlooks the reasons why they vote the way they do, which reflect cultural and moral judgments. Those values and moral judgments may be primitive, myopic, backwards, or simply wrong, but they nonetheless play a more significant role in how people actually live their lives than the rational pursuit of self-interest that economics assumes. Homo Economicus only predominates so long as the distinctively human realms of culture, values and ideas remains dormant. Under the right circumstances, peoples and whole nations will embrace extraordinary suffering for what they view as a righteous cause or one that is essential to their identity.

TL;DR: don't expect any significant consumer backlash against US tarrifs.

Lethe said:

When folks talk about trade measures hurting American consumers, I think they are missing the moral dimension of such measures. American consumers aren't going to care that stuff costs more so long as they have the satisfaction of "sticking it to China" and "making America great again". It is a standard part of Democrat ideology that Republican voters persist in voting against their rational self interest i.e. in favour of policies that further enrich the rich and immiserate the poor and middle classes, which is true. But this overlooks the reasons why they vote the way they do, which reflect cultural and moral judgments. Those values and moral judgments may be primitive, myopic, backwards, or simply wrong, but they nonetheless play a more significant role in how people actually live their lives than the rational pursuit of self-interest that economics assumes. Homo Economicus only predominates so long as the distinctively human realms of culture, values and ideas remains dormant. Under the right circumstances, peoples and whole nations will embrace extraordinary suffering for what they view as a righteous cause or one that is essential to their identity.

TL;DR: don't expect any significant consumer backlash against US tarrifs.

Click to expand...

That's true; people often willingly suffer materially for spiritual victory. Ironically, Americans can never see this in another culture (they assume that in China, if you lose a little material wealth, you're ready to go zombie-horde on your own government LOL) but they themselves can exhibit it too. Except the main point is not whether the consumers will be angry at the government for making things more expensive but rather that when things get more expensive, financially, you inevitably afford less (regardless of whether or not you're happy to accept that). When people buy less, and companies sell less, that reduces the size of the economy. Secondly, American companies that cannot purchase competitively-priced items from China that they need to run their businesses can lose out internationally to foreign competitors who take full advantage of what China offers. American companies can start to lose out on the international market, further depressing the US economy. Whittling down the GDP causes a decrease in tax generated, leading to less money available for the American military to cause global trouble. And that is what makes it worth China's while to suffer a little too as long as it drains its Uncle Sam more.

OMG! China is evil using dumping as an excuse to slap tariffs on US soybeans.

So 50B$ tariffs.
Elon and Soybeans should be the first to feel the Chinese retaliations.