antiterror13
Brigadier
Trump has no options but to make the deal. The problem is he could void any deals anytime as he likes ... and China knows it 
Trade War with China
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Trump has no options but to make the deal. The problem is he could void any deals anytime as he likes ... and China knows it
That’s why they are negotiating for an enforcement mechanism.
China’s side of the deal is basically a 1 time payment, while US must continuously remove it’s barriers and interference. There needs to be a way to ensure they don’t just end the treaty after getting enough purchases.
Hendrik_2000
Lieutenant General
Excellent article by David Goldman Why the trade war hurt US more than China. No more bragging about Wall Street performance
If the US wants to maintain a predominant position in the world economy, it will have to fix what’s wrong with the US economy rather than try to sandbag the competition.
Why US-China trade deal is coming, in two charts
The tariff battle has left the US bloodied more so than China, a fact that cannot be lost on Trump
ByDAVID P. GOLDMAN
China’s stock market performance continues without taking a breath, and the next round of trade news should keep the momentum going.
There’s no doubt that President Trump is worried about US economic growth. Otherwise, he wouldn’t have sent my friend and former Bear Stearns colleague, Larry Kudlow, to tell CNBC that the Federal Reserve should drop the short-term lending rate by 50 basis points.
And the president is aware that the trade war with China is hurting US output, especially capital investment, which remains low despite the biggest corporate tax cut in US history. I presume he knows that, because everyone knows it. Union Bank of Switzerland economists warned on March 27 of a “sharp, but temporary slump in real growth,” adding, “The main driver from our perspective is the trade war with China, disrupting supply in manufacturing.”
Other factors are slowing the US economy, but trade war is one of the big ones. Big corporations have postponed capital spending plans until they know the rules of the game for international supply chains. As a result, orders for new nondefense capital goods orders have fallen year-on-year. It should have been obvious that this would happen; I warned repeatedly CapEx would suffer.
There’s no doubt, either, that President Trump is aware that China has bounced back from the trade war’s initial shock. Last year he cited the outperformance of the US stock market as evidence that he had the advantage over China.
Now that China’s main stock market index has risen by 33% during 2019, we don’t hear the president saying that China has the advantage over him. Nonetheless, the chatter among the talking heads on financial television now asks whether China will want to make a deal with the US, now that their economy and stock market have bounced back.
I’ve argued for the past year that the tariff war against China will hurt the United States as much as it hurts China, and it is undeniably the case that US growth has fallen while China’s has not. That is all the more remarkable given the damage to China’s export trade.
China’s exports have fallen by more than 20% year-on-year, in the context of a slump in world trade that has also dragged down the exports of all the major trading nations.
Nonetheless, China’s economy appears to be growing at 6.5% a year, the same rate as last year, while the US economy has slowed sharply. The reason is that China is no longer as dependent on exports as it used to be.
Exports comprised a full 36% of China’s GDP in 2005; since then, the proportion has fallen to below 20%. China made a concerted effort to shift from exports to internal consumption even before the great financial crisis of 2008-2009, and has continued to reduce export dependency over time.
Trump’s trade threats to China are ten years late and a trillion dollars short. Through tax cuts, monetary ease, and infrastructure spending, China has managed to create enough new domestic demand to compensate for the decline in its exports. Other big trading nations like Germany, South Korea and Taiwan haven’t been so lucky; their exports are crashing and their economies are at or close to recession, in both cases representing collateral damage in the trade war. That doesn’t do any good for American influence in the world.
China has succeeded in sustaining economic growth for the time being, but it wants an end to the trade war as much as Trump does. from Beijing last October, President Xi Jinping’s economic advisers believe that China will be the world’s largest economy by 2035, far too big to intimidate—so why pick a fight with the United States now?
China will write a check for anything the US wants to sell it. It wants to open parts of its economy to American and other foreign companies, especially in the financial sector, where Germany’s Allianz Insurance and the Union Bank of Switzerland have already obtained licenses for wholly-owned subsidiaries.
It will agree to some form of monitoring for intellectual property protection. There is no simple way to accomplish this, and whatever mechanism might be agreed to will require years of evaluation to determine whether it is a success or a failure. The only issue is whether Trump is willing to declare victory and go home (as the late Senator George Aiken of Vermont proposed during the Vietnam War).
I think he will. It’s in his personal interest as a 2020 presidential candidate, and it’s in the interest of the United States, which has taken as much pain as it has dished out in the course of the tariff war.
If the US wants to maintain a predominant position in the world economy, it will have to fix what’s wrong with the US economy rather than try to sandbag the competition.
If the US wants to maintain a predominant position in the world economy, it will have to fix what’s wrong with the US economy rather than try to sandbag the competition.
Why US-China trade deal is coming, in two charts
The tariff battle has left the US bloodied more so than China, a fact that cannot be lost on Trump
ByDAVID P. GOLDMAN
China’s stock market performance continues without taking a breath, and the next round of trade news should keep the momentum going.
There’s no doubt that President Trump is worried about US economic growth. Otherwise, he wouldn’t have sent my friend and former Bear Stearns colleague, Larry Kudlow, to tell CNBC that the Federal Reserve should drop the short-term lending rate by 50 basis points.
And the president is aware that the trade war with China is hurting US output, especially capital investment, which remains low despite the biggest corporate tax cut in US history. I presume he knows that, because everyone knows it. Union Bank of Switzerland economists warned on March 27 of a “sharp, but temporary slump in real growth,” adding, “The main driver from our perspective is the trade war with China, disrupting supply in manufacturing.”
Other factors are slowing the US economy, but trade war is one of the big ones. Big corporations have postponed capital spending plans until they know the rules of the game for international supply chains. As a result, orders for new nondefense capital goods orders have fallen year-on-year. It should have been obvious that this would happen; I warned repeatedly CapEx would suffer.
There’s no doubt, either, that President Trump is aware that China has bounced back from the trade war’s initial shock. Last year he cited the outperformance of the US stock market as evidence that he had the advantage over China.
Now that China’s main stock market index has risen by 33% during 2019, we don’t hear the president saying that China has the advantage over him. Nonetheless, the chatter among the talking heads on financial television now asks whether China will want to make a deal with the US, now that their economy and stock market have bounced back.
I’ve argued for the past year that the tariff war against China will hurt the United States as much as it hurts China, and it is undeniably the case that US growth has fallen while China’s has not. That is all the more remarkable given the damage to China’s export trade.
China’s exports have fallen by more than 20% year-on-year, in the context of a slump in world trade that has also dragged down the exports of all the major trading nations.
Nonetheless, China’s economy appears to be growing at 6.5% a year, the same rate as last year, while the US economy has slowed sharply. The reason is that China is no longer as dependent on exports as it used to be.
Exports comprised a full 36% of China’s GDP in 2005; since then, the proportion has fallen to below 20%. China made a concerted effort to shift from exports to internal consumption even before the great financial crisis of 2008-2009, and has continued to reduce export dependency over time.
Trump’s trade threats to China are ten years late and a trillion dollars short. Through tax cuts, monetary ease, and infrastructure spending, China has managed to create enough new domestic demand to compensate for the decline in its exports. Other big trading nations like Germany, South Korea and Taiwan haven’t been so lucky; their exports are crashing and their economies are at or close to recession, in both cases representing collateral damage in the trade war. That doesn’t do any good for American influence in the world.
China has succeeded in sustaining economic growth for the time being, but it wants an end to the trade war as much as Trump does. from Beijing last October, President Xi Jinping’s economic advisers believe that China will be the world’s largest economy by 2035, far too big to intimidate—so why pick a fight with the United States now?
China will write a check for anything the US wants to sell it. It wants to open parts of its economy to American and other foreign companies, especially in the financial sector, where Germany’s Allianz Insurance and the Union Bank of Switzerland have already obtained licenses for wholly-owned subsidiaries.
It will agree to some form of monitoring for intellectual property protection. There is no simple way to accomplish this, and whatever mechanism might be agreed to will require years of evaluation to determine whether it is a success or a failure. The only issue is whether Trump is willing to declare victory and go home (as the late Senator George Aiken of Vermont proposed during the Vietnam War).
I think he will. It’s in his personal interest as a 2020 presidential candidate, and it’s in the interest of the United States, which has taken as much pain as it has dished out in the course of the tariff war.
If the US wants to maintain a predominant position in the world economy, it will have to fix what’s wrong with the US economy rather than try to sandbag the competition.
Jura The idiot
General
Jura The idiot
General
Given historical trade-imbalance between Qing China and British empire that lead to the Opium Wars (British got tired of paying silver taels so they paid with Indian Opium instead) to correct the silver-trade deficit, leading to the Century of Humiliation and loss of Hong Kong and semi-colonization.
Given historical Western powers imposing "Unequal Treaty" and forced "Open Door policy" to open China up to trade. The CCP cannot afford to look like it was bullied into an unequal treaty on trade or give up too much concessions.
China is no North Korea, economic sanctions/tariffs will not work (they don't really work on NK either).
Given historical Western powers imposing "Unequal Treaty" and forced "Open Door policy" to open China up to trade. The CCP cannot afford to look like it was bullied into an unequal treaty on trade or give up too much concessions.
China is no North Korea, economic sanctions/tariffs will not work (they don't really work on NK either).
manqiangrexue
Brigadier
While it is important to remember and learn from the past, it is even more important not to be chained by it. The Chinese people should give the CCP an advantage that Americans would never give their current administration, which is trust and the ability to focus on the problem. While Trump's group are troubled with making a deal that looks good, sounds tough, and can maximize election chances, Xi's team should have the advantage to negotiate with only one purpose, which is to better China's economic position. If Chinese people don't force Xi's team to get terms that sound tough, they can use it as leverage, allowing the US to get tough-sounding news headlines while China keeps the substance to grow stronger silently. If Chinese citizens scream about unequal treaties and historical humiliation, heaping such pressure onto China's negotiators, then they are disallowing Xi's team to use a softer approach for real results, and they will have taken that advantage away. This is how to keep China chained by its past. Negotiations will be tougher and likely not as favorable to China in substance if China's team has to divert its focus to getting superficial, tough-sounding terms. The important thing now is to allow the US team to retreat while saving face knowing that their actions so far have caused far more damage to the US economy than China's. In business, victories are never won by being tougher, only by being smarter and (seeming) nicer.
Trust the power of China's negotiators, give them silent strength and support with real actions by buying Chinese and staying away from American options whenever Chinese or even European companies can offer an alternative. Let Team China fight this war with focus by keeping a stable and supportive base. As the Chinese proverb says, "No general can fight well the battle in his front lawn if he must also tend to the fires in his backyard."
Jura The idiot
General
Excellent article by David Goldman Why the trade war hurt US more than China. No more bragging about Wall Street performance
If the US wants to maintain a predominant position in the world economy, it will have to fix what’s wrong with the US economy rather than try to sandbag the competition.
Why US-China trade deal is coming, in two charts
The tariff battle has left the US bloodied more so than China, a fact that cannot be lost on Trump
ByDAVID P. GOLDMAN
China’s stock market performance continues without taking a breath, and the next round of trade news should keep the momentum going.
There’s no doubt that President Trump is worried about US economic growth. Otherwise, he wouldn’t have sent my friend and former Bear Stearns colleague, Larry Kudlow, to tell CNBC that the Federal Reserve should drop the short-term lending rate by 50 basis points.
And the president is aware that the trade war with China is hurting US output, especially capital investment, which remains low despite the biggest corporate tax cut in US history. I presume he knows that, because everyone knows it. Union Bank of Switzerland economists warned on March 27 of a “sharp, but temporary slump in real growth,” adding, “The main driver from our perspective is the trade war with China, disrupting supply in manufacturing.”
Other factors are slowing the US economy, but trade war is one of the big ones. Big corporations have postponed capital spending plans until they know the rules of the game for international supply chains. As a result, orders for new nondefense capital goods orders have fallen year-on-year. It should have been obvious that this would happen; I warned repeatedly CapEx would suffer.
There’s no doubt, either, that President Trump is aware that China has bounced back from the trade war’s initial shock. Last year he cited the outperformance of the US stock market as evidence that he had the advantage over China.
Now that China’s main stock market index has risen by 33% during 2019, we don’t hear the president saying that China has the advantage over him. Nonetheless, the chatter among the talking heads on financial television now asks whether China will want to make a deal with the US, now that their economy and stock market have bounced back.
I’ve argued for the past year that the tariff war against China will hurt the United States as much as it hurts China, and it is undeniably the case that US growth has fallen while China’s has not. That is all the more remarkable given the damage to China’s export trade.
China’s exports have fallen by more than 20% year-on-year, in the context of a slump in world trade that has also dragged down the exports of all the major trading nations.
Nonetheless, China’s economy appears to be growing at 6.5% a year, the same rate as last year, while the US economy has slowed sharply. The reason is that China is no longer as dependent on exports as it used to be.
Exports comprised a full 36% of China’s GDP in 2005; since then, the proportion has fallen to below 20%. China made a concerted effort to shift from exports to internal consumption even before the great financial crisis of 2008-2009, and has continued to reduce export dependency over time.
Trump’s trade threats to China are ten years late and a trillion dollars short. Through tax cuts, monetary ease, and infrastructure spending, China has managed to create enough new domestic demand to compensate for the decline in its exports. Other big trading nations like Germany, South Korea and Taiwan haven’t been so lucky; their exports are crashing and their economies are at or close to recession, in both cases representing collateral damage in the trade war. That doesn’t do any good for American influence in the world.
China has succeeded in sustaining economic growth for the time being, but it wants an end to the trade war as much as Trump does. from Beijing last October, President Xi Jinping’s economic advisers believe that China will be the world’s largest economy by 2035, far too big to intimidate—so why pick a fight with the United States now?
China will write a check for anything the US wants to sell it. It wants to open parts of its economy to American and other foreign companies, especially in the financial sector, where Germany’s Allianz Insurance and the Union Bank of Switzerland have already obtained licenses for wholly-owned subsidiaries.
It will agree to some form of monitoring for intellectual property protection. There is no simple way to accomplish this, and whatever mechanism might be agreed to will require years of evaluation to determine whether it is a success or a failure. The only issue is whether Trump is willing to declare victory and go home (as the late Senator George Aiken of Vermont proposed during the Vietnam War).
I think he will. It’s in his personal interest as a 2020 presidential candidate, and it’s in the interest of the United States, which has taken as much pain as it has dished out in the course of the tariff war.
If the US wants to maintain a predominant position in the world economy, it will have to fix what’s wrong with the US economy rather than try to sandbag the competition.
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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