Trade War with China

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taxiya

Brigadier
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Looks like the Chinese are not going to "fire the first shot" when it comes to the tariffs.
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China denies it will be first to impose tariffs on $34bn of US goods


Both sides made 6 July tariff threat but 12-hour time difference gives Chinese edge

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Wed 4 Jul 2018 07.25 EDTFirst published on Wed 4 Jul 2018 05.37 EDT
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There had been hopes that the US and China might step away from the measures. Photograph: Johannes Eisele/AFP/Getty Images
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has denied it will fire the opening salvo in an escalating trade dispute with the US, insisting that it would not bring in 25% tariffs on $34bn (£26bn) of American goods before a move from Washington.

Both sides have threatened to impose similarly sized tariffs on 6 July, but because of the 12-hour time difference, it was thought the Chinese tariffs on US imports ranging from soybean to stainless steel pipes could take effect earlier.

However, China’s finance ministry issued a statement on Wednesday saying that it would not be the first to levy tariffs.

“The Chinese government’s position has been stated many times. We absolutely will not fire the first shot, and will not implement tariff measures ahead of the United States doing so.”
MSM begin to make "fun" or tinny details now.

China said two things:
  1. Retaliate
  2. July 6th (same as US)
Retaliation means "NOT shoot first". July 6th Beijing time is a time span of 24 hours. The tariff will be official some time during July 6th after the US. Beijing time is 12 hours ahead of DC time, so? Is the MSM going to suggest Trump to push the (effective) time from 00:01 DC 6th (12:01 Beijing 6th) to 12:01 DC 6th (00:01 Beijing 7th)? So MSM could claim China being beaten (not keeping words)?

Or the MSM wants China to follow MSM decided time (00:01 Beijing 6th), so MSM can call China the aggressor?

Either way it is a game of word, a very childish one. MSM need to grow up, and most importantly find real things to report.
 

nugroho

Junior Member
MSM begin to make "fun" or tinny details now.

China said two things:
  1. Retaliate
  2. July 6th (same as US)
Retaliation means "NOT shoot first". July 6th Beijing time is a time span of 24 hours. The tariff will be official some time during July 6th after the US. Beijing time is 12 hours ahead of DC time, so? Is the MSM going to suggest Trump to push the (effective) time from 00:01 DC 6th (12:01 Beijing 6th) to 12:01 DC 6th (00:01 Beijing 7th)? So MSM could claim China being beaten (not keeping words)?

Or the MSM wants China to follow MSM decided time (00:01 Beijing 6th), so MSM can call China the aggressor?

Either way it is a game of word, a very childish one. MSM need to grow up, and most importantly find real things to report.
Agree with you, I can't think why MSM was so childish counting when China to fight back,
It is not a nuclear war , so whether 7 , 8, or 9 July does not matter for China,
 

Franklin

Captain
Finally an article that says what the trade war is really about.

The China-U.S. Power Struggle Is Just Beginning

Xi’s ‘Chinese Dream’ envisions a nation less beholden to West
China economic rivalry destined to strain relations with U.S.

Chinese President Xi Jinping has an ambitious master plan for his country’s transformation into a wealthy, technology-driven global economic power. And U.S. companies need not apply.

That’s why the current trade rumble between the U.S. and China, in which the Trump administration is threatening to slap tariffs on $34 billion of Chinese imports and Beijing promises to respond in kind, is far more than just a spat over market restrictions, intellectual property rights and the epic U.S. deficit.

On a deeper level, the standoff reflects an escalating economic and military rivalry between a status quo power and one of the most remarkable growth miracles in history. It’s a clash between two divergent systems, (one state-directed, the other market-driven) with markedly divergent world views and national aspirations. That strategic tension seems likely to intensify, regardless of how the current brinkmanship over tariffs plays out.

It’s also a battle for global influence. Whereas the U.S. has long sought to spread democracy and free markets to other nations, China’s ruling Communist Party is just starting to pitch its heavy-handed growth model as an alternative for developing nations. And Xi is backing it up with hundreds of billions of dollars in loans for infrastructure projects from Asia to Europe and beyond.

In the U.S., a bipartisan consensus has begun to emerge that now is the time to stand up to China, even if many oppose President Donald Trump’s tactics. Senate Minority Leader Chuck Schumer, a Democrat, has attacked Trump for not being tougher on China, saying last week that failure to change Beijing’s behavior now could hurt the U.S. economy “for generations to come.”

With a roughly $13 trillion economy and expanding wealth, China is now going head-to-head with the U.S. in advanced manufacturing and digital technologies. It also has the wherewithal to make rapid technological progress in defense, particularly with air-to-air missile systems that pose a strategic challenge in Asia for the U.S. and its allies.

Xi is playing a long game, pursuing what he calls the “Chinese Dream,” or “the great rejuvenation of the Chinese nation.” To get there, he has set targets to double his country’s per capita gross domestic product (from 2010 levels) to $10,000 by 2021 and refashion China into a tech powerhouse, competitive in robotics, new energy-vehicles, chips, software and other bleeding-edge industries under his Made in China 2025 program. A separate development strategy envisions China ruling in artificial intelligence by 2030.

The aim is to produce global champions -- not just national ones -- and Xi’s government is ready to use the commanding heights of its one-party state to steer subsidies and use preferential policies and ambitious local content rules favoring Chinese companies to get there. At stake are industries that make up about 40 percent of China’s value-added industrial manufacturing sector, according to an analysis by the U.S. Chamber of Commerce, citing data by the Rhodium Group, a research firm.

Predatory Economics

China’s push for more self-reliance may reverse the trend toward deeper economic integration with the U.S. that came following China’s accession into the World Trade Organization in 2001. China is the single largest foreign purchaser of U.S.-manufactured goods -- led by transportation, chemical, computer and electronics -- outside of North America, according to the National Association of Manufacturers. Chinese goods have also flooded across American shores, pushing up the U.S. trade deficit with China more than fourfold to $375 billion last year.

The Trump administration views such deficits as alarming and Chinese trade practices as brash mercantilism, even a national security threat. U.S. Defense Secretary Jim Mattis labeled China a “strategic competitor using predatory economics” in January as he unveiled the Pentagon’s National Defense Strategy.

Xi views his economy’s shift into higher-tech manufacturing not only as a crucial part of its development, what with surging labor costs, a rapidly aging population and high corporate debt levels -- but also as a fulfillment of China’s destiny. That process is well underway: China is set to overtake the entire euro area this year, according to data compiled by Bloomberg.

Talks to avoid a trade war have stalled in part over U.S. demands that China reduce state support for high-tech industries. While China has signaled a willingness to buy more American goods to balance out the deficit, it has refused to trade away what it views as an essential part of its economic future.

Tech companies are on the front lines of this contest for global supremacy. Back in 2013, Chinese investigators started making life difficult for American tech “guardian warriors” like Google, Intel Corp., Apple Inc. and Microsoft Corp. after a magazine with ties to the Communist Party sounded the alarm about their dominant role in Chinese networks and business.

The U.S. has been just as inhospitable to Chinese tech concerns, with telecommunication makers like Huawei Technologies Co., ZTE Corp. and China Mobile Ltd. being viewed as national security risks. The Trump administration has also weighed restrictions on Chinese companies and start-ups in sectors ranging from aerospace to robotics.

This week’s tariffs, however, may show which side has the stronger hand. The first batch will take force Friday barring any last-minute deal. Trump has threatened duties on another $200 billion worth of Chinese goods if Beijing imposes countermeasures.

Xi is betting that Trump will back down as price increases in politically sensitive states make him worry about losing the next election in 2020. Xi enjoys something closer to life-time job security, thanks to the repeal of Chinese presidential term limits in February.

The sharp downturn in Chinese stock markets amid rising trade tensions is scarcely a threat to his rule. His party-led government has a big say over strategy and investments plans at giant state-owned enterprises, which control 40 percent of China’s industrial assets and some of the world’s biggest banks.

Still, anti-trade rhetoric underpinned Trump’s election win, and if anything the former New York real estate developer has doubled down on using tariffs in spats with both foes and allies. Although polls suggest Trump faces difficult mid-term elections in November, a fight to replace a U.S. Supreme Court justice may prompt his political base to overlook slightly higher monthly bills.

Economists and trade experts who testified in June before the U.S.-China Economic and Security Review Commission, set up by Congress to track the national security implications of trade with China, say tariffs are likely to inflict a lot of economic damage on both economies and depress global trade.

Great Unwinding

China will also return the favor -- Beijing has announced plans to target U.S. auto, aircraft, plastics and chemicals sectors -- and “the imposition of tariffs will not solve the underlying Chinese distortive behavior,” warned Linda Menghetti Dempsey, vice president of International Economic Affairs at the National Association of Manufacturers.

Instead of using tariffs, the U.S. could’ve sought to join with the European Union and Japan to bring a case against China at the World Trade Organization. But that’s unlikely after Trump slapped tariffs on EU nations and Japan, while also undermining the WTO. His withdrawal from the 11-nation Trans-Pacific Partnership trade deal removed another key device to alter China’s behavior.

Some prominent academics are calling for more drastic measures to undercut China’s practice of trading market access for technology transfers, such as unwinding Asian supply networks in high-end tech sectors.

Harvard Business School Professor Willy C. Shih favors tax incentives, and even setting up import processing zones in the U.S. to repatriate offshore suppliers for the likes of Intel, Apple and Microsoft. “It would strengthen our ability to sustain the most advanced semiconductor fabs in the United Sates,” Shih said.

In the end, the U.S. and China economic rivalry probably won’t be decided by administrative law judges or trade negotiators, but in the global marketplace. Right now, the U.S. still enjoys a lead in many tech and manufacturing sectors, particularly aerospace and biotech.

Yet the days when China could be dismissed as merely a low-wage assembly center for Western manufacturers are long gone. This is a country on what it views as a historic mission to become a 21st century economic power, and the contest is just beginning.

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now I read
Economic Watch: U.S. trade measures will backfire
Xinhua| 2018-07-06 23:14:18
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With additional tariffs on Chinese products worth 34 billion U.S. dollars made effective on Friday, the United States has taken a dangerous step that will take a toll on its own economy.

U.S. exporters stand to lose, as they will miss out on the massive tariff reductions by the Chinese government, which is determined to open its market wider.

Importers of Chinese goods will have a hard time, as they will have to go elsewhere to source products, the prices of which may have already gone up.

A survey on CEOs of 200 large U.S. enterprises showed that 90 percent of the executives were anxious about higher costs brought by trade frictions, and 95 percent of them regarded a potential slump in exports resulting from foreign retaliation a moderate or significant risk.

Recent economic and capital market data showed that the arbitrary decision by the Trump Administration has brought painful results.

China's exports to the United States increased by 5.4 percent in the first half, 13.9 percentage points slower than the same period last year, customs data showed.

The U.S. decision to pursue a trade war has eroded the confidence of importers, and could cause a mess in the global supply chain, said Li Yong from China Association of International Trade.

Wall Street has already expressed its fears. The Dow Jones Industrial Average shed 1,000 points from a high in mid-June, while the S&P 500 has also retreated notably since concerns about a trade war started to loom.

According to estimates by the Organization for Economic Cooperation and Development (OECD), if tariff hikes in the United States lead to countermeasures in other countries, global trade costs will climb by 10 percent while total trade volume will drop by 6 percent, dragging down the global economy by 1.4 percent.

"If the United States starts imposing additional tariffs, it will actually be charging taxes on firms both in China and around the world, as well as American companies," Ministry of Commerce spokesperson Gao Feng said at a press conference Thursday.

Gao pointed out that China is an important supporter and participant in economic globalization and the global industrial chain, and many of its export commodities are products made by foreign enterprises in China.

"Around 59 percent of products worth 34 billion U.S. dollars subject to additional tariffs are made by foreign firms in China, with American firms making up a considerable part," Gao said.

Trade issues aside, the investment environment in the United States has deteriorated recently, leading to fears that foreign investment into the country could decline significantly.

U.S. President Donald Trump said last week that he supports Congress to pass legislation to protect key technologies from acquisition by foreign entities.

The policy shift is causing confusion among Chinese enterprises, which is becoming a source of local employment.

According to a Rhodium Group report, Chinese direct investment in the United States was estimated to be 1.8 billion U.S. dollars in the first five months of 2018, down 92 percent from the same period last year.

"On one hand, the United States hopes to attract foreign investment, which brings jobs. On the other hand, it is expanding restrictions on investments. Such inconsistent information will leave many investors confused," said Zhu Hong, minister-counsellor for economic and commercial affairs at China's embassy in the United States.
 
now I skimmed over
Opinion: The US should look at itself in the mirror to understand economic aggression
2018-07-07 17:18 GMT+8
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On June 19, the White House released a report entitled "How China's Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World". The report says that while China has experienced rapid economic growth to become the world's second largest economy, much of that growth has been achieved through aggressive acts and government policies, and is therefore guilty of economic aggression.

Even though there's no definition whatsoever of economic aggression in international law, the US government outrageously defined another country's economic behavior as "aggression", an act rarely seen in post-World War II history. This article discusses the definition of economic aggression in light of the White House report and basic knowledge of international law. The writer seeks to argue that China is in fact acting as a contributor to the global economy rather than as an aggressor. The US, on the other hand, by initiating a trade war in an attempt to contain China's economic development, is the one actually carrying out economic aggression.

The White House report has given no clear definition of ‘economic aggression.’

The White House report begins by describing four categories of China's economic aggression: (1) protect China's home market from imports and competition; (2) expand China's share of global markets; (3) secure and control core natural resources globally; and (4) dominate traditional manufacturing industries. It says concrete measures include the physical and cyber-enabled theft of technologies and intellectual properties; the evasion of US export control laws by counterfeiting, piracy and reverse engineering; systematically harvesting public information and technical achievements; and deploying Chinese students and visiting scholars as technology spies.

I was born in Jilin Province, which was under Japanese control during the “Manchukoku” period. The aggression, as I understand it, was mainly military occupation related to sovereignty. If you extend it to the economic sphere, Japanese aggression started with a colonial economic system including industry and agriculture. The purpose was to serve the needs of Japan’s domestic economic growth. The main measures of aggression included overt robbery, smuggling and low-cost acquisitions. Japan caused Northeast China to lose its economic sovereignty and become Japan's resource supplier. The people of Northeast China suffered deeply.

When World War II ended in 1945, the International Military Tribunal interrogated the aggressors including Japan. At that time, US prosecutor Robert H. Jackson said, "To initiate a war of aggression is not only an international crime; it is the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole." Put simply, aggression is the trampling on sovereignty, the sin of all sins, and erosion of peace, and the damage is supreme.

From the perspective of international law, the United Nations has discussed and stipulated aggression. In December 1974, the UN General Assembly adopted Resolution 3314, which offered the definition of aggression, but did not refer to economic aggression. In history, some countries did however request that the UN define the nature of economic aggression. For example, in the 1960s, Cuba believed the US economic blockade against it should be defined as such. However, no clear definition of economic aggression has been enshrined so far in international law (UN, WTO regulations).

The White House, while releasing the first ever report containing the term economic aggression in its title, has also failed to define economic aggression, let alone explain which article of international law it references to support the idea.

I would like here to have a discussion with the White House about the nature of so-called economic aggression.

The four categories and the concrete activities listed in the White House report cannot support the notion of aggression by China.

Firstly, if China's protection of its home market constitutes aggression, then what about the US President's declaration of an "America First" policy, and the high protective tariffs the US levies on many countries including China? Can’t these also be described as acts of aggression? Isn't “America First”, which forces the interests of other countries to be subordinated to those of the US, an invasive economic declaration?

Secondly, the US also describes the expansion of China’s global market share as aggression. If so, then what about the US practice of standing at the top of the global value chain and maintaining advantages in goods and service trade? Isn’t that economic aggression? In fact, global expansion is nothing but the rightful pursuit of international trade. With American capital at work in virtually every corner of the world, hasn’t it ever occurred to the US that this might be regarded as aggression?

Thirdly, if control of natural resources constitutes aggression, then it’s important to define the word “control”. There is a clear distinction between regular business transactions and control. If purchasing resources via regular trade activities is aggression, then how should we regard the initiation by the US of regime change in order to take control of oil production in the Middle East? That’s what many might perhaps call economic aggression.

And fourthly, the US holds China guilty of economic aggression because it controls the traditional manufacturing sector. Note the difference here between possession and control. It’s true, China does possess a lot of traditional manufacturing businesses. In comparison, the US not only boasts of but also lays strict control over its high-end technological sector. By the same US logic, can’t that be regarded as an act of aggression?

Last but not least, the business activities the report refers to are far from being acts of aggression. Such activities and related international norms are clearly specified in the legal provisions of the World Trade Organization. There is no reason to call such activities economic aggression. Nor has the WTO offered any definition for such a term. The US has at times arbitrarily extended the application of WTO rules and has now discarded these, unilaterally laying charges of economic aggression.

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How should we then define economic aggression?

International law and especially WTO rules are based on solid logic and approaches. For example, in order to define dumping, the subject, the activities of the subject, and the consequences of those activities (the level of harm they cause to others,) must all be taken into consideration. Let’s try to define economic aggression using these criteria:

Firstly, the subject of the activity must be defined. In the White House report, multiple subjects including the Chinese government, businesses, and even scholars and students, are all sweepingly targeted and charged as guilty. In contrast, according to international academic discussions, the subject of an act of aggression is usually a nation state.

Secondly, there must be aggressive acts involved. The most common cases of aggression seen at international martial tribunals or in the UN Charter involve the trampling of a nation’s sovereignty. Politically speaking, sovereign rights are the most sacred of any country and represent its highest interests. As an important element, economic sovereignty empowers a country to exercise the highest and independent jurisdiction of its economic activities. The critical criterion to determine whether there is economic aggression is to examine whether another country’s economic sovereignty has been compromised.

Thirdly, those acts should be political in nature. International economic laws including the WTO rules clearly define such activities as tariffs, embargoes, boycotts, dumping and asset freezing etc. The basic activities in global trade as well as their characteristics, consequences and regulatory measures are all covered by existing laws. Therefore, all activities in the trade friction between China and the US can arguably be solved by following existing international law. For example, the UN defines a blockade, i.e. preventing the transportation of goods by force, as invasion.

I would argue that aggression is a politically motivated activity in nature. If it must be extended to the economic realm, it only applies to extreme activities which bear significant political purposes such as a blockade.

Fourthly, the actions are aggressive in nature, and cause injury in the highest degree.

The laws of the WTO have never used the term “aggression” to define the consequences of trade policies. The WTO generally uses the term “injury” to define the results of such actions.

Take the “Anti-dumping Agreement” as an example. In paragraph one of Article 3, it says: A determination of injury for purposes of Article VI of GATT 1994 shall be based on positive evidence and involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products.

As we can see, the WTO here gives its rules on how to define injury from trade policies. WTO rules are recognized by the world’s multilateral systems as good laws. So how does one determine the extent of injuries from economic aggression? Robert H. Jackson said that a war of aggression is an international crime and the most severe of all international crimes. To apply this opinion in determining the impact of economic aggression, one should say the injuries should also be in the highest degree, as this type of aggression will destroy a country’s economic capabilities and even demolish its whole economic system.

Fifthly, to define whether a nation’s actions are of an aggressive nature, one must determine whether such actions violate international law. This prerequisite is out of respect for international law; it is also vitally important for all members of the international community who wish to defend their rights and interests in line with international law.

For example, does it violate international law to expand one’s market share globally through commerce? If yes, then other countries should never attempt to use the same methods in retaliation. If the US deems China guilty of economic aggression because it wants to protect its domestic market and expand its market share worldwide, the US shouldn’t resort to such actions themselves.

From the above analysis, it could be said that economic aggression occurs when: first, the subject of the behavior is a nation. It is the action of one nation against another; second, the action has been committed and caused injury in the highest degree, constituting a full-scale attack on another country’s economic capabilities, with the aim of demolishing that nation’s economic sovereignty; third, the actions exhibit marked political motives; and finally, international laws are being referenced. No nation should be allowed to use this term in an arbitrary and irresponsible way.

Based on the above characteristics, I would like to define economic aggression as follows: it is an act of aggression that violates international law, and is committed mainly by political means to infringe on the economic sovereignty of another nation and consequently causes serious injury to that nation’s economy.

Here’s a final question in reply:

Statistics show China has contributed an average 30% of world economic growth since it joined the WTO. During the global financial crisis, China did its best to prevent the depreciation of its currency, the Renminbi, and served as the main stabilizer driving global economic growth. It is surely fair to say that China is by no means an aggressor but a contributor to global economic growth.

If the White House labels China an economic aggressor, how will it explain President Donald Trump’s “America First” slogan? How will it justify US transnational companies reaping the biggest profits in the global value chain while employing cheap labor around the world? What will it call America’s control of the global financial system and crude oil market? It is high time the White House came to terms with the true definition of “economic aggression”; or the term will boomerang and become a portrait of itself.

One final rhetorical question here: by initiating a trade war and believing it essential to contain the rise of the second largest economy in the world, isn’t the US already guilty of economic aggression? It is nothing but economic invasion to attempt to contain the all-round growth of another nation’s economy and infringe on its economic sovereignty. The trade war launched by the US surely constitutes a true act of economic aggression.
 
now I read (a tough one: Hitla inside)
It's more of a media war than a trade war for Trump
Updated 2018-07-07 22:37 GMT+8
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I have been on CGTN during three exciting times: on December 4, 2010 during the fights at the Asian Games, I was with Tony Jacklyn discussing China’s Golf Development – a less desirable topic then – and twice recently on the trade war during the World Cup games.

As a Canadian citizen I could be seen as a neutral choice to comment on the trade disputes between the US and China.

At first, many think tankers agreed that it’s just Trump’s media war for Republicans winning the midterm elections – less serious with all the wine and dine. But, Trump has seemed to win suddenly on both the media war and trade war. During his campaign talk yesterday, Trump was very confident, saying, “We are in a great position… We have all the cards…”

Yes, it is true that Trump’s approval rating is up. The president, chief commander of war, cares mostly about his staying power and winning re-elections.

Trump has a bestseller book "The Art of the Deal" in which he tells his business advice-seeking readers to "know your market" and "get the word out." And that's what's he is doing now and perhaps he should consider produce any book called "The Art of a Media War." Trump clearly knows his way around diverting attention and promoting his public image.

The friendship he bragged about with Chinese President Xi Jinping last year and his "Nobel prize claiming" meeting with Kim Jong Un are all his cards that he played nicely to win leverage against the competition with the Democrats. A trade war with China can be a perfect diversion to his domestic political crisis – Trump hit China with tariffs on 50 billion US dollars' worth of Chinese goods the second day the former Playboy model Karen McDougal confirmed with CNN that she had an affair with Trump before he became the president.

However, Trump’s trade war is hurting the whole world including Americans – consumers as well as manufacturers. Many Chinese exports to China are actually from foreign companies or joint ventures running in China. So Trump might miss the real target and punish US multinational companies.

In 1964, then US President Lyndon Johnson imposed 25 percent tariffs on light trucks, in response to France and West Germany's tariffs on US chickens, which still remain in effect today. The "Chicken Tax" did in some way protected America's domestic car market, but it also seriously impeded the competition of light truck industry and raised prices.

History will ask, how did the Americans let Trump do this – just like how did the Germans allow Hitler to do what he did. There are only a few rednecks on the Rust Belt, how can the good Americans support Trump on this?

I sincerely hope the American Tankers, like Rick Dunham and other experts, can wake up those short-sighted Republicans and stop Trump’s campaign madness. Politicians, good or bad, come and go. The American people originally came from all parts of the globe and can enjoy the peace and prosperity of globalization. Competition can be healthy with WTO rules, like the war on soccer or volley fields.
 

Equation

Lieutenant General
now I read (a tough one: Hitla inside)
It's more of a media war than a trade war for Trump
Updated 2018-07-07 22:37 GMT+8
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History will ask, how did the Americans let Trump do this – just like how did the Germans allow Hitler to do what he did. There are only a few rednecks on the Rust Belt, how can the good Americans support Trump on this?

Easy...the conservative media likes to use the blame game to instill fear to those un inform white Americans that their livelihood or way of life are threaten. Trump is a like a savior to the much hated Obama administration. Deep down it's about race superiority if one want's to delve into the reason why. No I am not trying to stir up about racial fights or debates but pointing out to the obvious desire to the many Trump supporters out there.
 
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