Trade War with China

advill said:

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.

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Agree with you but even it's bad or not for every interest , it's time for US to introspect , to deal with it's internal problems , solutions , future and stop this meaningless geopolitical hustling . The funny thing is that the hardcore supporters of neoliberalism are turning to state protectionism threatened by a communist country which now support open trade . This is f* a joke . Karl Marx would LoL

taxiya said:

Few month ago, there was reports about China's pig farming being over productive. So the first beneficiary would be Chinese farmers.

I think Brazilians would be certainly a winner in this spat. Their share of Chinese market is surpassing US just recently during 2017.

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Despite a consolidation of it's pork farming industry to increase efficiency China is still a massive importer of pork, most of it from the EU, but because the market is so big loss of that market to US producers will hurt.

The Vietnamese comment was a quip but the logic goes something like this China imports soya partly as animal feed, not importing soya from the US will mean price pressure (if I was a Brazilian soya farmer I'll have what ever the tariff imposed on US soya as potential extra margin to play with because my other markets will be awash with excess US soya) for the livestock farmer not importing pork from the US will alleviate that pricing pressure, these can negate each other but the consumer price is likely to go up a bit and supply down a bit which will be good for any nearby supplier of pork products unaffected by big geopolitical stand offs.

Today soya meal prices on the Dalian Commodity Exchange climb 4.3% before closing 1.5% up and a second day of 'corrections' on the US stock markets, I guess the games have begun

hkbc said:

Despite a consolidation of it's pork farming industry to increase efficiency China is still a massive importer of pork, most of it from the EU, but because the market is so big loss of that market to US producers will hurt.

The Vietnamese comment was a quip but the logic goes something like this China imports soya partly as animal feed, not importing soya from the US will mean price pressure (if I was a Brazilian soya farmer I'll have what ever the tariff imposed on US soya as potential extra margin to play with because my other markets will be awash with excess US soya) for the livestock farmer not importing pork from the US will alleviate that pricing pressure, these can negate each other but the consumer price is likely to go up a bit and supply down a bit which will be good for any nearby supplier of pork products unaffected by big geopolitical stand offs.

Today soya meal prices on the Dalian Commodity Exchange climb 4.3% before closing 1.5% up and a second day of 'corrections' on the US stock markets, I guess the games have begun

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This is something I was trying to talk about although not the one I initially referred about the over supply.

I agree that China still import lots of pork, however due to the growing domestic supply which will come online around 2019, there is less and less space in the market for imports. All pig farmers outside of China will be hurt before the Chinese farmer of course. Trump just gave China a good argument to do it now.

taxiya said:

A good chance to lower iPhone's market share in China just like Galaxy last year.

As of Boeing, it depends on how the contract is worded. Contract for immediate delivery may carry penalties for cancellations, it is possible to walk away from the contract without penalty for letter of intention. Some of the $37 billion orders could be just that. Handing over these orders to AB would make EU happier, maybe serving as a sweetener for the negotiation of China-EU FTA.

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iPhone is way over rated and way way over priced anyway

taxiya said:

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This is something I was trying to talk about although not the one I initially referred about the over supply.

I agree that China still import lots of pork, however due to the growing domestic supply which will come online around 2019, there is less and less space in the market for imports. All pig farmers outside of China will be hurt before the Chinese farmer of course. Trump just gave China a good argument to do it now.

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Well here's more detailed information regarding who exports pork to China, a lot of pork offal as well as pork meat is imported by China since there's little market for it in Europe. The Common Agricultural Policy in the EU will shelter their farmers so it won't hurt them that much (just the tax payers!!) different case in 'Free Market' USA


The main issue wrt to increasing pork production in China is the reliance on imported feed, the Chinese government's food security policies means the available arable land is largely devoted to cereals, which means less for crops like soya beans, which ironically is indigenous to East Asia.

hkbc said:

Well here's more detailed information regarding who exports pork to China, a lot of pork offal as well as pork meat is imported by China since there's little market for it in Europe. The Common Agricultural Policy in the EU will shelter their farmers so it won't hurt them that much (just the tax payers!!) different case in 'Free Market' USA

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The main issue wrt to increasing pork production in China is the reliance on imported feed, the Chinese government's food security policies means the available arable land is largely devoted to cereals, which means less for crops like soya beans, which ironically is indigenous to East Asia.

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That is indeed an absolute must have.

I wish Trump would stop. I lost all of my stock market/401K gains since last February.

siegecrossbow said:

I wish Trump would stop. I lost all of my stock market/401K gains since last February.

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Now we just need a few dozen million more of you before Trump realises his folly, not that it matters to China, though. After all, when your opponent is making a stupid mistake, never interrupt him.

jobjed said:

Now we just need a few dozen million more of you before Trump realises his folly, not that it matters to China, though. After all, when your opponent is making a stupid mistake, never interrupt him.

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I am getting my voter's registration ready asap. I missed the midterm elections but no way in hell am I going to miss the one two years from now.

manqiangrexue said:

Check out this article for analysis of China's strategy:

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Done by David Fickling, it says Beijing is basically allowing the US to injure itself with its own tariffs because as history has it, the initiators of tariffs usually end up causing self-harm. China's tariffs are very small and calculated, targeting things that will not impact the Chinese consumer or the competitiveness of Chinese businesses (for example, if US pork is hit by tariffs, Chinese restaurants can buy New Zealand pork or buy chicken, beef, fish, veggies, etc... but if the US taxes Chinese computers, that makes the cost of business go up significantly for US businesses relying on those computers and it puts them at a disadvantage against foreign firms in international bids when those foreign firms can get those computers at normal price). So what's happening is that the US is like a raging heavyweight boxer swinging haymakers left and right and it looks like he'll be mostly hitting the walls and smashing his own hands and China's strategy is to move and hit him with precise jabs.

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I would be very weary of such western analysis.

Not only did the guy get his basic facts completely wrong (that 3bn is for the previously announced steel and aluminium tarrif and has nothing to do with this latest announcement!), but if you strip away all the fake flattery, what you get is exactly what benefits the West best - for China to just take the hit and not retaliate.

But he is also getting his economics basics completely wrong.

A primary part of the whole reason that tarrifs have historically been counter productive is precisely because of the inevitable retaliation from trade partners.

If China just takes the tarrifs and doesn’t retaliate, then it’s pure profit and benefits for corporate America without the drawbacks of tarrifs (retaliation!).

The risk of loss of long term competitive argument is wholley unconvincing - wouldn’t the same logic be applicable to Chinese firms that get government export support? So why don’t America just sit back and wait for Chinese firms to get complacent and loose their competitive edge instead of bothering with tarrifs in the first place?

The moral hazard for western, especially American, analysists to argue China’s interests are best served by doing nothing is both obvious and overwhelming.