Trade War with China

On the other hand, looks like the negotiations have gone a bit "crazier". From the looks of it, the Chinese are giving in.



Exclusive: U.S. demands regular review of China trade reform

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5 MIN READ

BEIJING/WASHINGTON (Reuters) - The United States is pushing for regular reviews of China’s progress on pledged trade reforms as a condition for a trade deal - and could again resort to tariffs if it deems Beijing has violated the agreement, according to sources briefed on negotiations to end the trade war between the two nations.

A continuing threat of tariffs hanging over commerce between the world’s two largest economies would mean a deal would not end the risk of investing in businesses or assets that have been impacted by the trade war.

“The threat of tariffs is not going away, even if there is a deal,” said one of three sources briefed on the talks who spoke with Reuters on condition of anonymity.

Chinese negotiators were not keen on the idea of regular compliance checks, the source said, but the U.S. proposal “didn’t derail negotiations.”

A Chinese source said the United States wants “periodic assessments” but it’s not yet clear how often.

“It looks like humiliation,” the source said. “But perhaps the two sides could find a way to save face for the Chinese government.”

To add more evidence to my observation of the Chinese giving in despite their economic strength. This is like the results of the Opium Wars but without actual war. Looks like the "century of humiliation" is alive and well.



UPDATE 3-China offers to ramp up U.S. imports -Bloomberg

Published 1:15 PM ET Fri, 18 Jan 2019
(Adds detail on previous $1 trillion offer, importance of intellectual property in trade talks)

Jan 18 (Reuters) - China has offered to go on a six-year buying spree to ramp up imports from the United States in order to reconfigure the relation between the two countries, Bloomberg reported on Friday, citing people familiar with the matter.

By raising annual goods imports from the United States by a combined value of more than $1 trillion, China would seek to reduce its trade surplus, which last year stood at $323 billion, to zero by 2024, one of the people told Bloomberg.


It was unclear how the offer differed from what China pledged when U.S. President Donald Trump and Chinese President Xi Jinping met in Buones Aires in December. At that meeting, China offered more than $1.2 trillion in additional commitments on trade, Treasury Secretary Steve Mnuchin said.

@LawLeadsToPeace

It would have more credibility if Xi didn’t “promise” the same thing this time last year and ended the year with the largest trade surplus ever.

Trump is easily fooled by verbal promises. Exactly how would China import these additional goods? It would have to be purchased by the state since there is no way to influence consumers. State purchases tend to be restricted to military/military logistics.

Pretty sure it went like this:

Trump: “buy more American”

CPC Official:

2 weeks (and 3 arrests of Trump related people) later

CPC Official: “Hello is this the US military? I would like to ask about the order status on the 12 Ford class carriers and the 1000 F22s modified for carrier service and PLAAF weapons compatibility, totaling 1 trillion USD?”

US Official: “I’m pretty sure you can’t buy that... it’s our...”

CPC Official: “haha gotcha you don’t actually wanna change the trade imbalance do you?”

“If you aren’t negotiating in good faith, we can’t make a deal with you. Go home and eat your shutdown McNuggets in peace.”

LawLeadsToPeace said:

Exclusive: U.S. demands regular review of China trade reform

... according to sources briefed on negotiations to end the trade war between the two nations... said one of three sources briefed on the talks who spoke with Reuters on condition of anonymity.

Click to expand...

These days, anonymous sources mean nothing.

LawLeadsToPeace said:

To add more evidence to my observation of the Chinese giving in despite their economic strength. This is like the results of the Opium Wars but without actual war. Looks like the "century of humiliation" is alive and well.

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UPDATE 3-China offers to ramp up U.S. imports -Bloomberg

Published 1:15 PM ET Fri, 18 Jan 2019
(Adds detail on previous $1 trillion offer, importance of intellectual property in trade talks)

Jan 18 (Reuters) - China has offered to go on a six-year buying spree to ramp up imports from the United States in order to reconfigure the relation between the two countries, Bloomberg reported on Friday, citing people familiar with the matter.

By raising annual goods imports from the United States by a combined value of more than $1 trillion, China would seek to reduce its trade surplus, which last year stood at $323 billion, to zero by 2024, one of the people told Bloomberg.

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It was unclear how the offer differed from what China pledged when U.S. President Donald Trump and Chinese President Xi Jinping met in Buones Aires in December. At that meeting, China offered more than $1.2 trillion in additional commitments on trade, Treasury Secretary Steve Mnuchin said.

Click to expand...

You can't keep winning if the other side threatens to quit and go home, can you? China has always been playing the game by US/EU rules and it always finds a way to beat them, so now, the US is really unhappy about losing so much so they decide they need to change the rules. China can say no, then the US quits, and it's game over; trade deficit 0. But China can let the US move and squirm, convince themselves they now have a chance, but then keep them losing all the same. It's been China's game for the past few decades. Like I said before, in Brazilian Jujitsu, you don't necessarily win by immobilizing your opponent; you just have to adapt yourself to make sure that whatever new position he gets himself into is equally bad or worse for him than the last.

When I was a kid, I used to play basketball for Pokemon cards. When I beat someone and take his cards, he's ready to go home. But I tell him, "Let's play again for some more cards." He says, "Hell no! I'm not stupid." So I say, "OK, this time game to 21 but you start at 10 and I start at 0." Then he's back in the game and in 15 minutes, I got some more of his cards. Then I say, "Let's play again! This time, I'm not allowed to do lay-ups!" Then I take some more of his cards. I'm willing to make all the "concessions" I need to get him to play again. Last thing I'd do is tell him, "Fair game as always; I don't budge one inch on the rules! If you don't like it, go home!"

I must sound like a real pushover to you, getting humiliated into concessions all the time, huh?

From what I saw I am more concerned that the Chinese will simply break away from any discussion on the matter. The footage I saw of the Chinese delegate looked, to me, of someone who was given the opportunity to discuss with the USA, but with no power to actually make decisions. So I think the Chinese are basically just paying lip service right now.

They know that until the US government handles its own internal situation any promises done this time will have little chance of sticking. So they are just going through the motions.

Supposedly Xi offered this $1 trillion six year spending spree on US goods early on but Trump rejected it. Trump entertaining it now shows his trade war isn't turning out like he expected. I read another article where American pundits are upset because this new deal doesn't tackle Made in China 2025. Maybe because bending the knee to white supremacy or signing your soul away to the devil is not an option hence why China spending $1 trillion is back on the table? Jim Cramer said he talked to American CEOs in private and they told him they support Trump actions against China. Is that some sort of surprise? I'm sure they would love to go back to the good ole days of East India Company. Not surprising either that they were for TPP also since it gave them ultimate authority over a country's own sovereignty and laws. Maybe Cramer was harkening back to a time when US social media companies were given this false reputation of having a conscience hence all US CEOs have a conscience. Now all of the sudden these internet giants are being attacked by Americans for abusing their private data. Remember the study that said US CEOs have the same sociopathic tendencies of serial murderers so it's not surprising that CEOs support Trump.

I have been meaning to write this for a few days, but had been too busy.

The western MSM is in spinning overdrive about China’s December trading figures.



Note the headline and focus of the article is on how China’s economy is slowing down.

However, if you dig into the details, we can see that the picture is more nuanced.

Chinese exports are down sharply, but that is more a reflection of the state of the global economy rather than China’s.

The German economy is in contraction.


US official figures are unavailable due to the continuing government shut down.

But as ‘eye-catching’ as the fall in Chinese exports may be, the fall in Chinese imports from the US is even far more stark.

While the lack of data does pose a hindrance, there are a number of conclusions and projections that could be made even with the limited data so far.

- the main achievement of the Trump trade war thus far has been to reduce the overall global economic ‘pie’, meaning there is less growth and wealth all round. That has long been a predicted outcome of the trade war.

- worse from the US POV, while Chinese exports to the US did fall, Chinese imports from the Us fell far more, resulting in a new record trade surplus with the US.

Since the US trade deficit was the primary reason cited for the trade war, the fact that it has risen to new heights can only be seen as a sign that the US is loosing the trade war in the most direct way possible.

Previous western claims that they are winning because they are imposing more tarrifs was always intellectually challenged as it was akin of arguing you are winning a war because you are shooting more bullets.

The reason for this is actually far more to do with America’s own recent actions rather than Chinese retaliatory tarrifs - specifically, repeated recent US weaponisation of trade.

With the ZTE, Fujian Jinhua and other recent scandals, the US shot itself badly in the foot as it made every Chinese high tech company desperate to become independent of US made parts and components least they also have their operations crippled by American trade bans.

That is a huge reason for why American exports fall so sharply, as Chinese companies scrambled to find alternative suppliers. And the worse is yet to come, since this import substitution is only going to accelerate and increase over time.

Right now the western MSM is focused on the impact of the trade war on America’s farmers. They should be far more worried about the future prospects of American high tech companies in China.

Agreed.

But what many in the USA assume is that China has no choice but to go for US technology.
In the short run, that is correct.

But China has a larger consumer retail economy that the USA, which will support development of domestic technology alternatives.
Plus China also spends more on technology R&D than the USA.

So in the long run, China should be able to replace any and all US technology.

The Chinese will this year take the title of the world's biggest consumers

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Click to expand...

National Science Board Statement on Global Research and Development (R&D) Investments NSB-2018-9
If current trends continue, the National Science Board expects China to pass the United States in R&D investments by the end of this year.

Read more

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plawolf said:

I have been meaning to write this for a few days, but had been too busy.

The western MSM is in spinning overdrive about China’s December trading figures.

Please, Log in or Register to view URLs content!

Note the headline and focus of the article is on how China’s economy is slowing down.

However, if you dig into the details, we can see that the picture is more nuanced.

Chinese exports are down sharply, but that is more a reflection of the state of the global economy rather than China’s.

The German economy is in contraction.

Please, Log in or Register to view URLs content!

US official figures are unavailable due to the continuing government shut down.

But as ‘eye-catching’ as the fall in Chinese exports may be, the fall in Chinese imports from the US is even far more stark.

While the lack of data does pose a hindrance, there are a number of conclusions and projections that could be made even with the limited data so far.

- the main achievement of the Trump trade war thus far has been to reduce the overall global economic ‘pie’, meaning there is less growth and wealth all round. That has long been a predicted outcome of the trade war.

- worse from the US POV, while Chinese exports to the US did fall, Chinese imports from the Us fell far more, resulting in a new record trade surplus with the US.

Since the US trade deficit was the primary reason cited for the trade war, the fact that it has risen to new heights can only be seen as a sign that the US is loosing the trade war in the most direct way possible.

Previous western claims that they are winning because they are imposing more tarrifs was always intellectually challenged as it was akin of arguing you are winning a war because you are shooting more bullets.

The reason for this is actually far more to do with America’s own recent actions rather than Chinese retaliatory tarrifs - specifically, repeated recent US weaponisation of trade.

With the ZTE, Fujian Jinhua and other recent scandals, the US shot itself badly in the foot as it made every Chinese high tech company desperate to become independent of US made parts and components least they also have their operations crippled by American trade bans.

That is a huge reason for why American exports fall so sharply, as Chinese companies scrambled to find alternative suppliers. And the worse is yet to come, since this import substitution is only going to accelerate and increase over time.

Right now the western MSM is focused on the impact of the trade war on America’s farmers. They should be far more worried about the future prospects of American high tech companies in China.

Click to expand...

US strategists assume China economy will suffer while US side more or less stable in a trade war. China will lose more

Worst case comes with China in recession then China should do everything possible to drag US also into recession, make sure US won't escape unharmed.

If both in recession or world in recession, it wouldn't be that bad. At least it's even.