Trade War with China

SteelBird said:

Trump warns that any retaliation from China will cause more tariff. If Trump impose more tariff, China will take more retaliation actions, then Trump will impose even more tariff, and China will take even more.... when will this end?

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The Trump administration on Friday unveiled plans to impose additional 25 percent tariffs on Chinese goods worth around 50 billion U.S. dollars, the latest unilateral move to risk provoking a trade war between the world's top two economies that could damage the global economy and trading system.

The move drew immediate opposition from the U.S. business community, farm groups, technology associations and pro-trade lawmakers of Trump's Republican party.

"American companies want solutions, not sanctions. Tariffs will not solve these problems, but will harm American economic interests and jobs," U.S.-China Business Council President John Frisbie said in a statement.

Senate Finance Committee Chairman Orrin Hatch also warned that "tariffs will harm American and Chinese businesses and consumers, and will put economic growth in both countries at risk."

Since early May, China and the United States have conducted three rounds of economic and trade consultations, trying to settle disputes for a win-win result, and have made positive and concrete progress.

However, the chaos and division in the Trump administration have sent mixed messages and demonstrated flip-flops on major trade issues with China.

Hardliners in the Trump administration might want to use tariffs to bully China into unilateral trade concessions, in disregard of the consensus recently reached by the two sides. But trade is not a zero-sum game and China will not negotiate with a gun held to its head.

China, a responsible and reliable major trading nation, hates to be engaged in a trade war with the United States, knowing that it would be a lose-lose game for both.

But this does not mean that Beijing is going to sit quietly in the face of Washington's planned unilateral tariffs. China has to fight back forcefully so as to safeguard the interests of the nation and its people. This is also a clear-cut demonstration of China's firm stance to uphold the rules-based multilateral trading system.

In fact, Beijing has been ready for a volatile Washington. In a statement issued in the wake of their most recent trade negotiations in Beijing earlier this month, China made it clear that all outcomes of the economic and trade talks would not take effect if the U.S. side imposed any trade sanctions including raising tariffs.

China always means what it says. Shortly after Washington's announcement on Friday, China decided to impose additional duties on U.S. products with the same scale and intensity, as the U.S. latest move violates the rules of the World Trade Organization (WTO).

Earlier this year, the Trump administration had unilaterally imposed tariffs on steel and aluminum imports as well as imported solar panels and washing machines, based on outdated U.S. trade laws put in place during the Cold War era.

These measures sparked strong opposition from America's domestic business community and major trading partners. The European Union (EU), Canada, Mexico and several other countries have recently announced retaliatory measures against U.S. steel and aluminum tariffs.

The International Monetary Fund (IMF) has also warned that the new U.S. tariffs against imports could interrupt global supply chains and damage a range of countries as well as the operations of U.S. multinational companies, putting the rules-based global trading system in serious jeopardy.

The "America First" doctrine and unilateralism seem to be the mantra of the Trump administration's trade policy. Unfortunately, with a zero-sum mentality and a fickle approach to policy, it is hard to see how the United States, with an ever evaporating credibility, can negotiate better trade deals with other countries.

For free traders worldwide, it is never an option to accommodate Washington's unilateral and protectionist measures with further concessions as it would only prompt the trade hawks in Washington to demand an even higher price.

Now it is time for China, the EU, Canada and other countries to jointly safeguard the multilateral trading system with WTO at its center and to defend the common interests of the wider international community.

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Tam said:

Why China holds all the aces in a full blown US-China trade war.

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Jura said:

after I had checked your 'Liberal' link
I thought I should read what FoxNews had to say; it's
Next steps in US-China trade negotiations

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The world's two biggest economies are now at war over trade.
China accused the United States of firing the first shot on Friday when the White House said that it would impose

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.

The announcement confirms a threat first made by President Donald Trump in March and follows months of trade talks between the two sides. A truce was announced in May, but it proved short-lived.

"The United States has kept changing its mind and now launched a trade war," China's Commerce Ministry said in a statement.

The Chinese government said it would respond in kind to the US tariffs, which will apply to roughly 1,100 exports and will target China's aerospace, robotics, manufacturing and auto industries.

"China does not want a trade war," it said, adding that it would "fight back vigorously" in defense of its national interests, globalization and the world trade system.

"We will immediately launch tariff measures that will match the scale and intensity of those launched by the United States."

Beijing also said "all economic and trade agreements reached by previous negotiations will be nullified at the same time." That includes a tentative deal to increase Chinese purchases of US energy and agricultural goods.

Like the US tariffs, China's retaliatory tariffs will be rolled out in two waves, the Finance Ministry said. And they will start on the same day.

Beijing will impose tariffs on 545 US items worth $34 billion — including agricultural products, automobiles and seafood — starting on July 6.

Tariffs on the remaining 114 items, including chemicals, medical equipment and energy products, will start later.

The United States is targeting 800 Chinese exports, worth about $34 billion, starting July 6, and another 280 or so after a public comment period.

Trump has long complained about China's huge trade surplus with the United States. In a statement Friday, he said trade with China "has been very unfair, for a very long time."

The US president said the new tariffs were designed to punish China for the theft of American intellectual property and technology.

And he warned that any retaliation by Beijing would trigger another round of tariffs on Chinese goods.

That raises the specter of an intensifying trade war, which would hurt consumers, companies and the global economy.

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on Friday after the tariffs were announced.

Growth forecasts for major economies are already being slashed due to the rise of protectionism. Germany's central bank cut its forecast for Europe's biggest economy on Friday.

"An escalating global trade dispute or widespread rises in import tariffs would have a marked negative impact on Germany's export oriented economy," it said.

The United States has already imposed tariffs on steel and aluminum from Canada, Mexico and the European Union. All have promised to hit back.

The 28 members of the EU agreed Thursday that

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would go into effect in the coming days.

"In this day and age, launching a trade war is not in the interest of the world," China's Commerce Ministry said. "We call on all countries to act together to firmly stop such an outdated and backward move, and to firmly safeguard the common interest of all mankind."

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Hendrik_2000 said:

Depending on foreigner was never a good policy what they give they can take it back. It is probably true in 80's and 90's When large masses of Chinese student think that all the road in New York or Silicon valley is paved with the gold

That is not true any more now more and more Chinese student are returning home because of the lure of entrepreneurship and all the subsidy they can get. Plus H1 visa is getting harder and harder to get as the present administration is cracking down on foreign student with proposal to limit residency training for only 1 year non renewable

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China is the world's largest source of students pursuing education overseas, but the number of Chinese students who opt to return to the homeland to launch their career and contribute to the development of the country has been steadily increasing in recent years.

According to

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from the Ministry of Human Resources and Social Security of China, 2016 saw a record high of 432,500 ‘returnees’. The outbound-to-return ratio has increased by about 10 percent in the past four years: from 72.38 percent in 2012 to 82.23 percent in 2016.

The soaring trend becomes even more striking when put in a more extended timeframe: in 2006, only about a third of all Chinese students

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after finishing their education abroad.

Here is the latest statistic as of may this year roughly 80% are returning

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SteelBird said:

Trump warns that any retaliation from China will cause more tariff. If Trump impose more tariff, China will take more retaliation actions, then Trump will impose even more tariff, and China will take even more.... when will this end?

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taxiya said:

Did you reply to the wrong post? Mine was about Qualcomm acquisition approval.[/Q]

Yes Sorry I'l be more careful next time around I meant reply to Silent observer

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Ultra said:

When will this end?
Simple, when both countries stop trading with each other.

That's best case scenerio.

The other scenerio is Trump seeing China not backing down economically and China with $3 TRILLION foreign reserve and holding almost $1 TRILLION in US debt (which gives China $35 billion interest a year) while US is $20 TRILLION in debt, at the same time harping threats at allies and foes alike, soon he will realize this fight is lost cause in this arena.

As Trump is a sore-loser type, he will go for the miliary option next. This is the reason why SCS is getting hotter by the day. Next you will see 5 CVBG/CSG patrolling close to China's coast (maybe even Taiwan strait) and B-52s skirting the edge of Chinese coast. He will be provoking China to go into an actual war for he lost a economic one he will try to win it back militarily. NOW this scenerio is highly likely - I would even say it has the chance of happening 8.5 out of 10 knowing Trump does not listen to ANYONE except himself.

The other scenerio is Trump will press all the buttons that hurts China because he will use ANYTHING that gives him leverage in a trade negotiation/war. I think Taiwan is one big red button he will press over and over and over in an infinite variations he can do there. He can start selling or even giving away weapons to Taiwan for example - M1A2s, F-35As & Bs, Arleigh Burkes... or he can ask Taiwan to allow US forces to have bases there, and lastly start recognizing Taiwan as a country and entry into UN. All these are buttons Trump can press with progressively bigger repercussions but it will all end with China losing Taiwan.

The reality is China is far from a push over but is still not able to win a war against US, let along when Trump provoked China to attack Taiwan, it will be Gulf-War 1 style alliances with everyone rallied around US to fight China. It is a fight China will lose and China knows that and will avoid that path no matter what, so one way or another when Trump start pressing those Taiwan buttons you will see China start folding.

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