Trade War with China

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manqiangrexue

manqiangrexue

Brigadier
plawolf said:
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.
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I'm not sure that what you say is true.

Where is is said that the $3 billion is for steel and not for the new announcement for $50-60 billion?

Is the damage from tariffs primarily only due to retaliation? I don't know about that. As I said before, if you put a X% tariff on goods from China that are needed for business, US businesses need to pay extra X% as the cost of business or buy from other countries (in which case, it is still more expensive than the Chinese computer or they wouldn't have bought the Chinese computer in the first place). That extra expense causes all of their tasks performed to be more expensive. For example, if an American firm estimates that a job from a Swiss company costs $4 million in cpu fees, $4 million in human resource fees, and $1 million in profit, they bid $9 million for the contract. If a French rival bids $10 million, the American firm outbids them and wins. Now if Trump imposes a 50% tariff on computers, now the cpu cost is $6 million, and the US company needs to bid $6 mill + $4 mill + $1 mill = $11 million, causing them to be outbid by the French and losing the contract completely. Or maybe they buy Mexico-assembled cpus and that still costs $5.5 million, causing the $10.5 million bid to lose anyway. Also, if things get more expensive in general, companies sell less, and people consume less. This model represents Europe (especially Italy), where there is high protectionism so people are used to buying expensive local goods. This reduction in sales and consumption causes the economy to stagnate and fall into the gear rhythms of an old economy, like in Europe. The reason that the US economy is robust, ironically, is because of irresponsible spending and gluttony. If you take that away, America's economy loses its momentum. These are all examples of self-inflicted damage from tariffs that do not take into account any retaliation. I want to see China retaliate in the areas that there will be truly no backlash to the Chinese economy but I don't want to see China set the aforementioned trends onto itself as well in spite. I think Zhongnanhai is too smart for that.

When hunting, if you inflict lethal wounds onto a boar, it will kick and thrash powerfully, like the US with their sanctions. The wrong thing to do is to grab your hunting knife and try to stab it to death while it's in its violent death throes because that is how you get hurt. Give it time to squeal, flail, kick and bleed out before you put it out of its misery.
 
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vincent

vincent

Grumpy Old Man
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Moderator - World Affairs
manqiangrexue said:
Where is is said that the $3 billion is for steel and not for the new announcement for $50-60 billion?
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Global Times
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Source:Global Times Published: 2018/3/23 9:26:55

The Chinese
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(MOFCOM) announced Friday morning it will impose tariffs on US imports worth $3 billion in a bid to offset its loss incurred by the US' decision to impose tariffs on steel and aluminum imports.

The products include seven categories and cover 128 types of products, according to a statement on the website of the MOFCOM.

The ministry plans to impose 15 percent tariff on 120 types of products, like fruits, nuts, wine and seamless tubes, worth $977 million. A 25 percent tariff will be imposed on products that include pork and recycled aluminum products.

A MOFCOM spokesperson was quoted as saying in the statement that the US is citing the excuse of national security by imposing 25 percent and 10 percent tariffs on its steel and aluminum product imports.

In line with WTO rules, China decided on a list for suspension of concessions.

If China and the US can't reach trade compensation agreements, China will impose tariffs on the first part of the list of products, the spokesperson noted, adding that tariffs will be imposed on the second part after evaluating the US' influence on China.

China reserves its right to adjust the tariff measures in accordance with practical situations and will fulfill necessary produces in line with WTO rules, according to the spokesperson.

MOFCOM also said it will take legal actions under the WTO framework, safeguarding the stability and authority of a multilateral trade system together with other WTO members.

On Friday morning (Beijing time), US President Donald Trump announced the US will impose tariffs on $50 billion of Chinese goods over "intellectual property theft."

The Chinese Embassy in the US said "It is a typical unilateral trade protectionist action. China is strongly disappointed and firmly opposes such an action."

The US persisted in conducting the "301 investigation" and announced relevant trade measures. The US is ignoring rational voices and disregarding the mutually-beneficial nature of China-US trade relations, along with the consensus reached by the two countries of managing differences constructively through consultations, said a statement on its website Friday.

"But China is not afraid of and will not recoil from a trade war. China is confident and capable of facing any challenge. If a trade war were initiated by the US, China would fight to the end to defend its own legitimate interests with all necessary measures," said a statement released by the Chinese Embassy.

Global Times
 
A

antiterror13

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vincent said:
Global Times
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Source:Global Times Published: 2018/3/23 9:26:55

The Chinese
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(MOFCOM) announced Friday morning it will impose tariffs on US imports worth $3 billion in a bid to offset its loss incurred by the US' decision to impose tariffs on steel and aluminum imports.

The products include seven categories and cover 128 types of products, according to a statement on the website of the MOFCOM.

The ministry plans to impose 15 percent tariff on 120 types of products, like fruits, nuts, wine and seamless tubes, worth $977 million. A 25 percent tariff will be imposed on products that include pork and recycled aluminum products.

A MOFCOM spokesperson was quoted as saying in the statement that the US is citing the excuse of national security by imposing 25 percent and 10 percent tariffs on its steel and aluminum product imports.

In line with WTO rules, China decided on a list for suspension of concessions.

If China and the US can't reach trade compensation agreements, China will impose tariffs on the first part of the list of products, the spokesperson noted, adding that tariffs will be imposed on the second part after evaluating the US' influence on China.

China reserves its right to adjust the tariff measures in accordance with practical situations and will fulfill necessary produces in line with WTO rules, according to the spokesperson.

MOFCOM also said it will take legal actions under the WTO framework, safeguarding the stability and authority of a multilateral trade system together with other WTO members.

On Friday morning (Beijing time), US President Donald Trump announced the US will impose tariffs on $50 billion of Chinese goods over "intellectual property theft."

The Chinese Embassy in the US said "It is a typical unilateral trade protectionist action. China is strongly disappointed and firmly opposes such an action."

The US persisted in conducting the "301 investigation" and announced relevant trade measures. The US is ignoring rational voices and disregarding the mutually-beneficial nature of China-US trade relations, along with the consensus reached by the two countries of managing differences constructively through consultations, said a statement on its website Friday.

"But China is not afraid of and will not recoil from a trade war. China is confident and capable of facing any challenge. If a trade war were initiated by the US, China would fight to the end to defend its own legitimate interests with all necessary measures," said a statement released by the Chinese Embassy.

Global Times
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From Trump's book "The Art of the Deal" .... "bluffing" is often used during negotiation by Trump ...... so this is no difference
 
H

hkbc

Junior Member
The 2nd part of Trump's "Trade War" initiative to essentially prevent the Chinese buying up American companies and shutting down company's like Huawei's retail efforts is also going to hurt the US economy more than the Chinese all those investment banking and marketing fees won't need to be spent in the US if the Chinese companies aren't going to be doing business there and that's going to hurt the services sector.

Then there's all the BS flying around about WTO, China joined late and didn't make the rules but they managed to prosper under those rules (perhaps they bothered to read and understand them!) not being able to compete Trump's minions do his own investigation, uses some US laws and declares you a cheat. No one likes the smart asian kid at the front of the class room, messing up the curve, but even in a high school context their success, is not denigrated to accusations of cheating! I suppose China in the 2010s isn't Japan in the 1980s and isn't about to just haul up the white flag.

Trump goes on and on about IP theft but the theft he talks about 'forced joint ventures' well if they didn't like it the American companies didn't have to setup shop in China, don't think the PLA ever put a gun to Steve Jobs head and said build your iPhones here and share all your secrets, they came to make use of the cheap and industrious workforce. Any blind fool could see it won't/can't last forever the Chinese aren't some latter day slave or indentured worker, there to do their master's bidding, the hard work of yesteryear is meant for a brighter future, like or hate the method of governance employed in China, the Chinese leadership understood the deal they were striking and delivered on what they set out to do.

Xi Jin Ping deserves to run the place without term limits if he can continue to steer China towards prosperity in the face of Trump's conceit and doublespeak. Mercifully, they do have term limits in the US, who knows what's coming next, may be he'll go full yellow peril and ban Chinese immigration (they 're all spies you know!) or we can return to the glory years of the US in the fifties, some segregation, a bit of McCarthyism :eek: a blacklist or two, beginning to sound familiar?
 
Jura The idiot

Jura The idiot

General
now I read
Commentary: Chinese economy resilient enough to cope with trade war
Xinhua| 2018-03-24 21:10:54
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History tells that trade wars are a losing game. No one benefits, and everyone ends up a bit bruised.

Despite the risk of triggering a trade war, U.S. President Donald Trump signed an executive memorandum that could result in heavy tariffs on up to60-billion-U.S.-dollar imports from China as well as restrictions on Chinese investments.

The unilateral move is a bullying tactic long played by Washington in the face of trade disputes, which uses its superior economic status to force concessions from its partners.

The strategy isn't a wise one, especially in today's world where the economic and trade interests of all countries are intertwined. If a trade war breaks out, no one escapes unscathed.

Some say China benefits more in its trade with the United States, and therefore China would lose more in a trade war; others argue China stands to lose little given its status as the world's second largest economy.

Both arguments miss the mark for one simple reason: trade ties between the world's two largest economies are fundamentally reciprocal. Statistics from the U.S.-China Business Council show that the bilateral economic relationship supports roughly 2.6 million jobs in the United States across a range of industries, among which about 104,000 jobs were created by Chinese investment.

Today, American consumers enjoy low-priced products made in China, and Chinese businesses realize profits in the United States. The relationship is win-win.

The last thing Beijing wants is a trade war spoiling this positive dynamic. But should it happen, the Chinese economy is resilient enough to manage it.

After years of painful adjustment, the Chinese economy today is less dependent on foreign trade, and as the economy continues to expand while the country's debt growth slows, Beijing has a broader macro-economic policy space.

In the meantime, by deepening domestic reforms, promoting industry restructuring and diversifying its export markets, China is capable of turning a crisis into an opportunity for further economic progress.

For example, in Japan's trade war with the United States in the 1980s, Japanese industries were forced to lower their production costs and promote technological innovation. As a result, the country's exports resumed growth after a short period of stagnation. China could follow Japan's lead should a full-blown trade war occur.

Currently, the global economy is in the midst of a delicate recovery. Any protectionist or unilateral move -- such as the one taken by the Trump administration -- could stifle momentum and threaten a long-awaited return to growth.

Trade isn't a zero-sum game, something Washington ought to realize. If not, all parties will be dragged into the abyss of a conflict where no one emerges a winner.
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Jura The idiot

Jura The idiot

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now noticed the tweet
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China opposes trade protectionism but will fight against any possible trade war, which would hurt everybody, especially "the daily life of the American middle-class people, the American companies and the financial market," Chinese ambassador to US said in interview on Fri

DZB9j7eVAAEu7pc.jpg
 
Air Force Brat

Air Force Brat

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Super Moderator
Jura said:
now I read
Commentary: Chinese economy resilient enough to cope with trade war
Xinhua| 2018-03-24 21:10:54
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Trump is sending a message, nothing wrong with that, I think he's been very clear that what he want's is "fair trade", the previous administrations have "given away the store" so to speak, hence the very poor US economy since the Nixon/Jimmy Carter era....

Trump's is re-setting the table, a good thing for all involved, who wish to trade with the US on a level playing field, bad news for those who haven't played fair!
 
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