Trade War with China

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cn_habs

Junior Member
By simple mathematics, up till now 25% of tariffs has been applied to about $55 billion goods and that means the total is about $13.7 billion of tariffs. A 10% tariff on $200 billion goods is $20 billion. So not much more than $13.7B despite the total figure being four times as high.

China has already published the list for another $60B goods and if China keeps the rate at 25%, that would be $15B, which is not that much lower than what Trump imposed on Chinese goods.

There is simply no escaping the fact the more goods Trump applies these tariffs on, the greater the domestic resistance will be, as is apparent from the fact that he dropped the percentage from 25% to 10%. The resistance will be even higher if Trump tries to apply tariffs to all of Chinese exports to the US, which includes everything from apparels to toys to machinery to iPhones to industrial raw materials and components. I guess the average living-from-paycheck-to-paycheck American with little to no savings are going to celebrate Trump's decision as he just made their lives from bearable to on the verge of being broke.

This is supposing retailers pass on the costs to consumers. If they don't, they'll have to absorb that cost themselves. Not going to be good for Trump if Corporate America gets upset I guess?

The paradox here is, most American companies, especially those in the manufacturing industry, are in a competition-cooperation relationship with China. They use Chinese parts or materials to reduce costs, and face Chinese competition for finished goods. When they ask tariffs what they mean is tariffs on Chinese finished goods so that their goods can be more competitive. If Trump simply lashes out a wholesale attack on all Chinese imports, then both their costs hence prices and prices of Chinese counterparts are going to increase. So it's back to square one in terms of relative price, and the only difference is that American consumers pay more for the same goods, no matter Chinese or American, AND American companies' exports suffer as a result of Chinese tariffs.

Many Americans that voted for Trump don't understand anything about basics economics. Guess what? It's the same crowd that wears made in China MAGA caps and doesn't have 1k in savings and will rather declare bankruptcy than blaming Trump.

Let them rot.
 

Hendrik_2000

Lieutenant General
I think trump is not going to get his "manage trade" with China So what is he gong to do assuming he survive the mid nov election ?Using Taiwan as a bargaining chip That would be a slippery path down to the abyss. I hope it won't come to that
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US cold war containment strategy against China may not end the Soviet way. Instead, it could explode into armed conflict

Will Saetren says China’s economic strength, coupled with its military might, make the US’ containment strategy much more dangerous this time around


PUBLISHED : Monday, 17 September, 2018, 2:01am
UPDATED : Monday, 17 September, 2018, 2:01am

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67fc1a0c-b7f6-11e8-b64d-19e275708746_1280x720_122609.jpg



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16 Sep 2018
For months, the United States and China have been exchanging blows over trade. What began with the Trump administration imposing tariffs on a
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earlier this year has ballooned into a list that includes thousands of items. In July, Trump announced that he is prepared to impose tariffs on all
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of imports from China.

The showdown between the world’s two economic powerhouses has shaken the global financial system to its core. Over the summer, the World Bank warned that the
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could trigger a drop in global trade of as much as 9 per cent, the type of economic shock the world hasn’t seen since the
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.

But, in recent weeks, China has begun to suspect that the trade war is about more than just economics. Chinese officials and academics have indicated that they see the trade war as a piece of a bigger puzzle, a grand strategy reminiscent of the
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intended to thwart China’s rise.

This is a dangerous development that has profound implications for strategic stability.

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Containment was designed shortly after the second world war as a means of curbing Soviet expansionism. At its core, containment sought to confront the Union of Soviet Socialist Republics (USSR) through back door channels, support for anti-communist forces, and all other means short of direct, armed confrontation.

The driving philosophy behind the policy was that the Soviet system was rotten at its core and would eventually collapse on its own
The driving philosophy behind the policy was that the Soviet system was rotten at its core and would eventually collapse on its own. Sure enough, in 1989, the Berlin Wall came tumbling down and, by 1991, the Soviet Union had fully dissolved.

Although containment worked in this case, it is a policy that entails great risk. An adversary who feels backed into a corner is prone to lash out and take greater risks to achieve limited gains and avoid losing face. This was the case with the Soviet Union, which found itself locked in an ideological struggle with a technologically superior foe.

During the Cuban missile crisis, Nikita Khrushchev tried to rectify this imbalance by stationing nuclear missiles capable of striking the US on Cuba. But Khrushchev overplayed his hand. The US detected the transfer before it was complete and the confrontation nearly escalated into a full-blown nuclear war. Although the cold war ended peacefully, we are lucky to have got out of it alive.

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China, however, is no Soviet Union. Since opening up to the outside world 40 years ago, China has developed into a vibrant economic behemoth. China’s gross domestic product in purchasing power parity terms is much larger than the US’ and it is poised to become the
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.

China is likely to dethrone the US as the world’s largest economy as measured by GDP. In short, it is highly unlikely that the Chinese system will fade into obscurity
China’s economy is growing at twice the rate of the global economy, and by 2028, is likely to dethrone the US as the world’s largest economy as measured by GDP. In short, it is highly unlikely that the Chinese system will fade into obscurity.

Yet this is the path the Trump administration has chosen. In January, the US labelled China a strategic competitor in its
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. Recent US moves to
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to Taiwan have only made matters worse.

Just last month, the Trump administration
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making it harder for Chinese companies to acquire high-end technology. Shi Yinhong, a foreign affairs adviser to China’s State Council, called the move “hi-tech containment”. People’s Daily accused the US of seeking global hegemony, and proclaimed that China should be determined to fight.

Watch: Are Chinese consumers less willing to buy American goods?
And fight they might. China has developed a powerful regional military that is likely to win any fight it picks in its own backyard, particularly in the
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. Chinese and US military forces already spar regularly in the region as the US asserts its
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rights in waters claimed by China.

By implementing a policy of containment towards China and labelling it as a de facto enemy, the Trump administration is pouring fuel on the fire, increasing tensions, and with it, the likelihood that one of these confrontations could escalate out of control.

Consider the following hypothetical scenario: a US destroyer is harassed by Chinese coastguard vessels during a freedom of navigation patrol. Unable to change course, the US warship rams one of the Chinese vessels, killing dozens of sailors. To China, this an act of aggression in its territorial waters, and they call for reinforcements to apprehend the destroyer’s crew. From a US perspective, this was an accident that took place in international waters.

The crew refuses to surrender. With tensions soaring the chain of command breaks down. Someone panics and shoots. The ensuing fight escalates into a full-blown naval battle with multiple Chinese ships sunk as well as a US$3 billion US destroyer with all hands. Through a series of unfortunate events, two nuclear armed superpowers find themselves in an armed conflict that nobody wants.

War between the US and China would be an unmitigated disaster for both parties. Both countries depend on each other to thrive, but that doesn’t mean that war couldn’t happen. History has taught us that when national pride is involved and one party (or both) feels trapped in a corner, simmering tensions can erupt into a roaring blaze. We can only hope that someone in the Trump administration was paying attention during that lesson.

Will Saetren is a research associate at the Institute for China-America Studies, where he specialises in nuclear weapons policy
 

Tam

Brigadier
Registered Member
Many Americans that voted for Trump don't understand anything about basics economics. Guess what? It's the same crowd that wears made in China MAGA caps and doesn't have 1k in savings and will rather declare bankruptcy than blaming Trump.

Let them rot.


Less than 1K in savings? The loss of "Made in China" could hit consumers with the loss of $850 of savings per year, per person due to increased costs. That is not going to help people save on their meager savings.
 

AndrewS

Brigadier
Registered Member
Less than 1K in savings? The loss of "Made in China" could hit consumers with the loss of $850 of savings per year, per person due to increased costs. That is not going to help people save on their meager savings.

Remember that retailer typically operate with a profit margin of 20%-30% on imported goods. Otherwise they end up going bankrupt.

So at the low end, a 10% tariff increase on imports typically means a price increase of 12% to the end consumer.

And a 25% tariff increase means a 30% increase in the price to the end consumer.
 

Anlsvrthng

Captain
Registered Member
Less than 1K in savings? The loss of "Made in China" could hit consumers with the loss of $850 of savings per year, per person due to increased costs. That is not going to help people save on their meager savings.
Trump want to redistribute the big corporate profit to the low wages workers / small businesses.

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Trump want to redistribute the big corporate profit to the low wages workers / small businesses.

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??
the tweet you linked is, quote,

“A lot of small & medium size enterprises are registering very good profit, sometimes record profits-there stocks are doing very well, low income workers are getting big raises. There are an awful lot of good things going on that weren’t during Pres. Obama’s Watch.” Peter Morici

unquote


I guess relevant to
Trade War with China
is
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Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”
 

Anlsvrthng

Captain
Registered Member
??

Tariffs have put the U.S. in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country - and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”
Yeah,his target is not that to save money with cheap tshirts, , but to increase salaries.
 
now I read
China restates desire to solve trade tensions through talks
2018-09-17 19:36 GMT+8
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China holds a consistent position on trade tensions with the US and believes dialogue and negotiations based on equality and mutual respect are the only solutions, China's Ministry of Foreign Affairs (MOFA) said on Monday.

"If the US announces new tariffs on Chinese goods, China will have to take necessary countermeasures to defend its interests," Geng Shuang, spokesperson of the MOFA said at a media briefing when asked about a possible further tariff increase from the US.
 
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