Trade War with China

AndrewS said:

And here is the rub. You assume that Iran starts it.

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AndrewS said:

A large increase in oil prices causes an economic slowdown/recession for one.
The French President and German Chancellor have publicly said that the US is a threat to Europe, in large part due to its actions over Iran.
Trump just threatened Germany with sanctions for buying gas with Russia.
And remember that Europe has a larger economy than the USA. So theoretically Europe is well placed to break with US sanctions, because almost everyone else in the world will follow.

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Just4Fun said:

Not really a false flag.

Trump is being dragged deeper and deeper into the Iran Trap he made for himself.

Trump now is in a really dilemmatic, really damaging situation. Going into a shooting war with Iran would be a Vietnam war-like defeat. Walking away from the Gulf hot-spot would likely cost his re-election in 2020. Ramping up war rhetoric would only worsen the situation. Begging a talk with the Persian turban-men hasn't worked for a full year. Mobilizing more military assets into the Gulf would only cost more money but generating nothing.

Fight is impossible. Flight is the only answer. The real question for Trump right now is how to fly over the troubles his stupidity and inflated ego have created. He needs someone to go-between to help start a talk with the Iranians. His golf-boy Abe, the PM of Japan, has been rudely pushed away from the door by Iranians. He needs someone that the Persians can trust. Who can be his go-between-man? Xi and Putin certainly can be a lot of help in this matter, but what the price they would ask for?

Oh, Lord, please help. I need get out of the Iran Trap.

Lessen from Trump's failures: Don't brag around in a casino if you don't have money.

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• The White House’s chief economic adviser argues that strong-arm tactics are needed, especially with Beijing

White House chief economic adviser Larry Kudlow on Thursday defended President Donald Trump’s combative approach to trade negotiations, but acknowledged there aren’t any formal plans yet for a meeting with Chinese President Xi Jinping at the G20 leaders summit later this month.

“You know how you get from here to there, Fred? You kick some butt,” Kudlow said during an onstage conversation with Fred Bergsten, the president emeritus of the Peterson Institute for International Economics. “You kick some butt, in my best economic analytical quantitative regression analysis.”

Kudlow’s comments on the Trump administration’s philosophy toward persuading China and other trading countries to lower their barriers were made before an audience of economists that has been sceptical about Trump’s use of tariffs to pressure other countries to change their behaviour. But Kudlow argued the strong-arm tactics were needed, especially with Beijing.

“We didn’t start this,” Kudlow said. “What I will call the China problem has been going on for a long time, several decades. But President Trump is the first guy in these several decades to take strong actions to remedy a very unbalanced trading relationship, where the Chinese have violated international trade law.”

Bergsten pushed back, arguing it was far from clear that the “butt-kicking approach” would work on a country as big as China. In addition, many American companies rely on imports from China to make final goods. Increasing the price of those items makes American companies less competitive with other suppliers and hurts their exports, Bergsten said.

So far, Trump has imposed a 25 per cent tariff on US$250 billion worth of Chinese goods and has initiated action to impose the same duty on almost all remaining Chinese products, worth about another US$300 billion. The next batch includes many consumer goods like cellphones, clothing, footwear, toys, televisions and other electronics.

Trump told reporters on Wednesday that he has no date in mind for when he will decide whether to impose additional tariffs on China.

“No, I have no deadline. My deadline is what’s up here,” Trump said, pointing to his head.

Trade talks between the two countries broke down in May after Trump accused the Chinese of backsliding on some previous commitments. However, both leaders are expected to attend the June 28-29 G20 meeting in Osaka, Japan, raising hopes for a bilateral meeting to get negotiations back on track.

However, with just two weeks until the G20 summit, there are still no “formalised” plans for a Trump-Xi meeting, Kudlow said.

After first saying he did not want to comment of the possibility of the two leaders not meeting, Kudlow darkly hinted Trump could respond negatively to such a snub.

“My president has indicated a strong desire to sit and meet. He’s also indicated if the meeting doesn’t come to pass, there may be consequences,” Kudlow said, apparently referring to Trump’s statement earlier this week that he would impose tariffs on the remaining US$300 billion worth of Chinese goods in that scenario.

China has already imposed retaliatory duties on about US$110 billion worth of American exports, which is about 80 to 90 per cent of what it buys from the United States. If Trump does impose additional duties, Beijing could respond by hitting the remaining US goods or taking other actions against companies doing business in China.

Trump claims that China is bearing the brunt of his tariffs, even though they are actually paid by the companies that import the goods. In that vein, Kudlow argued the impact of the tariffs on US consumer prices is “very, very small” because American companies can buy the same product from other countries, rather than suppliers in China.

Kudlow was asked whether Trump needed a deal with China for his strategy to be a success, or whether the Trump administration would be equally satisfied with indefinitely leaving duties on potentially as much as US$550 billion worth of Chinese goods. He responded by saying he did not understand the question.

On another point, he dismissed recent Chinese calls for “a more balanced agreement” than was on the table earlier this year.

“We can’t have a so-called balanced agreement, because we have such an unbalanced relationship,” Kudlow said. “There’s a long of wrongs that need to be righted from the standpoint of international trading rules.”

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Under extreme pressure from the US, China has not slowed nor faltered in its development of 5G wireless technology, and this makes some US elites uneasy.

Less than a week after China issued 5G licenses for the full commercial deployment of 5G networks, Chairman Carolyn Bartholomew of the US-China Economic and Security Review Commission, affiliated to the US Congress, couldn't help but accuse China of posing a threat.

She claimed Wednesday that if China gets participating countries of the

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Initiative (BRI) to accept Chinese technical standards, this "will create long-term reliance on Chinese intellectual property and technology, while disadvantaging US and other foreign companies."

Bartholomew said that the "BRI can create new barriers to US exports and investment." This is absurd. It is not the BRI or China but the US that sets barriers. Countries along the BRI have the right to independently choose Chinese technology to build 5G networks, which meets their national interests. It is a natural choice determined by market economy rules, which the US advocates.

Huawei has won 46 5G commercial contracts in 30 countries all over the world as of June 6. Nokia - which is also not a US company - has gotten 42 contracts, the second most. The reason those countries picked Huawei is because Chinese technology is reliable and affordable. The most important reason is that Huawei has many proprietary and irreplaceable technologies.

According to an April report from patent data firm IPlytics, Huawei is the top 5G standard essential patents (SEPs) owner as to the number of patent families. The Chinese company has 1,554 SEPs, followed by Nokia, which has 1,427. Qualcomm is the largest US company holding 5G SEPs, with a number almost half that of Huawei. Four Chinese companies (Huawei, ZTE, China Academy of Telecommunications Technology and Oppo) own about 36 percent of world's total 5G SEPs.

Such being the case, if BRI countries relying on China's world-leading 5G technology are subject to risks, will it be better to create reliance on backward US technology?

We can understand that the US is accustomed to being the world's No.1 and it is hard to accept the reality that others have caught up with it.

Regrettably, the US not only cracks down on Chinese high-tech companies but also forbids other countries from using Chinese technology to help them.

In addition to employing state power to target a private Chinese company on trumped-up charges, the US wants to unite allies for a boycott. Washington is acting like a rogue.

The paranoid US smears China for raising "serious concerns about both information security and the expansion of the surveillance state" in countries alongside the BRI, as Bartholomew noted. The US is gauging others by its own narrow-minded thinking.

China upholds mutually beneficial cooperation along the BRI. Under this framework, China is willing to use its advanced 5G technology to help other countries develop their wireless networks, fulfilling its promise to promote common prosperity of the world.

If the US is not capable of setting global standards for 5G technology and not willing to help other countries build next-generation networks, the best choice for Washington is to take a step back and take care of its own business.

The US should stop throwing its weight around.

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Trump’s Trade Threats are really Cold War 2.0

President Trump has threatened China’s President Xi that if they don’t meet and talk at the upcoming G20 meetings in Japan, June 29-30, the United States will not soften its tariff war and economic sanctions against Chinese exports and technology.

Some meeting between Chinese and U.S. leaders will indeed take place, but it cannot be anything like a real negotiation. Such meetings normally are planned in advance, by specialized officials working together to prepare an agreement to be announced by their heads of state. No such preparation has taken place, or can take place. Mr. Trump doesn’t delegate authority.

He opens negotiations with a threat. That costs nothing, and you never know (or at least, he never knows) whether he can get a freebee. His threat is that the U.S. can hurt its adversary unless that country agrees to abide by America’s wish-list. But in this case the list is so unrealistic that the media are embarrassed to talk about it. The US is making impossible demands for economic surrender – that no country could accept. What appears on the surface to be only a trade war is really a full-fledged Cold War 2.0.

America’s wish list: other countries’ neoliberal subservience

At stake is whether China will agree to do what Russia did in the 1990s: put a Yeltsin-like puppet of neoliberal planners in place to shift control of its economy from its government to the U.S. financial sector and its planners. So the fight really is over what kind of planning China and the rest of the world should have: by governments to raise prosperity, or by the financial sector to extract revenue and impose austerity.

U.S. diplomacy aims to

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, its oil (or oil in countries that U.S. majors and allies control), information and military technology. This trade dependency will enable U.S. strategists to impose sanctions that would deprive economies of basic food, energy, communications and replacement parts if they resist U.S. demands.

The objective is to gain financial control of global resources and make trade “partners” pay interest, licensing fees and high prices for products in which the United States enjoys monopoly pricing “rights” for intellectual property. A trade war thus aims to make other countries dependent on U.S.-controlled food, oil, banking and finance, or high-technology goods whose disruption will cause austerity and suffering until the trade “partner” surrenders.

China’s willingness to give Trump a “win”

Threats are cheap, but Mr. Trump can’t really follow through without turning farmers, Wall Street and the stock market, Walmart and much of the IT sector against him at election time if his tariffs on China increase the cost of living and doing business. His diplomatic threat is really that the US will cut its own economic throat, imposing sanctions on its own importers and investors if China does not acquiesce.

It is easy to see what China’s answer will be. It will stand aside and

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. Its negotiators are quite happy to “offer” whatever China has planned to do anyway, and let Trump brag that this is a “concession” he has won.

China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama got. And doesn’t he deserve it more? After all, he is helping to bring Eurasia together, driving China and Russia into an alliance with neighboring counties, reaching out to Europe.

Trump may be too narcissistic to realize the irony here. Catalyzing Asian and European trade independence, financial independence, food independence and IT independence from the threat of U.S. sanctions will leave the U.S. isolated in the emerging multilateralism.

America’s wish for a neoliberal Chinese Yeltsin (and another Russian Yeltsin for that matter)

A good diplomat does not make demands to which the only answer can be “No.” There is no way that China will dismantle its mixed economy and turn it over to U.S. and other global investors. It is no secret that the United States achieved world industrial supremacy in the late 19th and early 20th century by heavy public-sector subsidy of education, roads, communication and other basic infrastructure. Today’s privatized, financialized and “Thatcherized” economies are high-cost and inefficient.

Yet U.S. officials persist in their dream of promoting some neoliberal Chinese leader or “free market” party to wreak the damage that Yeltsin and his American advisors wrought on Russia. The U.S. idea of a “win-win” agreement is one in which China will be “permitted” to grow as long as it agrees to become a U.S. financial and trade satellite, not an independent competitor.

Trump’s trade tantrum is that other countries are simply following the same economic strategy that once made America great, but which neoliberals have destroyed here and in much of Europe. U.S. negotiators are unwilling to acknowledge that the United States has lost its competitive industrial advantage and become a high-cost rentier economy. Its GDP is “empty,” consisting mainly of the Finance, Insurance and Real Estate (FIRE) rents, profits and capital gains while the nation’s infrastructure decays and its labor is reduced to a prat-time “gig” economy. Under these conditions the effect of trade threats can only be to speed up the drive by other countries to become economically self-reliant.

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plawolf said:

Iran is not really much of a military threat for the US. America has been preparing for an attack on Iran for decades, ever since the Iranian revolution.

The Iranians had neither the money or technology to pose a serious military threat, and the primary factor that has stayed America’s hand is geography, and Iran’s ability to disrupt oil shipments in the ME.

America has largely weaned itself off ME oil with fracking and shale, so at this point, and Iranian attacks on oil tankers would be far far more damaging for China than America.

Speaking of China, it really doesn’t have any special relationship with Iran; frankly, China most likely values its relations with Saudi Arabia and Israel more than Iran, and both of whom would not be pleased if China backed Iran in any significant way.

Not that China has the means or will to get involved in any case. While China can present a serious challenge to the US militarily in its own sphere of influence, the ME is far too far away from China for China to be able to mount any major military operation against even a weaker foe, never mind the US military. The same is true of Russia. It lacks the means to support Iran as it did Vietnam because it geography.

Vietnam was only Vietnam for the US because it had the steadfast support of both the USSR and China.

Iran has no such backers, so would be no match for the US militarily, which is probably why Trump is now sniffing around.

As history has shown, nothing distracts and unites a country like shooting war.

Trump has bitten off more than he can chew with his trade war with China, a hot War with Iran would be just the thing he needs to distract the American people from the economic pain to come; and a win would whip up nationalism and all but assure his re-election in 2020.

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plawolf said:

America has largely weaned itself off ME oil with fracking and shale, so at this point, and Iranian attacks on oil tankers would be far far more damaging for China than America.

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plawolf said:

Speaking of China, it really doesn’t have any special relationship with Iran; frankly, China most likely values its relations with Saudi Arabia and Israel more than Iran, and both of whom would not be pleased if China backed Iran in any significant way.

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plawolf said:

Not that China has the means or will to get involved in any case. While China can present a serious challenge to the US militarily in its own sphere of influence, the ME is far too far away from China for China to be able to mount any major military operation against even a weaker foe, never mind the US military. The same is true of Russia. It lacks the means to support Iran as it did Vietnam because it geography.

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plawolf said:

Iran has no such backers, so would be no match for the US militarily, which is probably why Trump is now sniffing around.

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plawolf said:

Trump has bitten off more than he can chew with his trade war with China, a hot War with Iran would be just the thing he needs to distract the American people from the economic pain to come; and a win would whip up nationalism and all but assure his re-election in 2020.

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• President Donald Trump appears to downplay expectations about a possible meeting with Xi Jinping at the G-20 summit later this month, saying “it doesn’t matter” if the Chinese president shows up or not.
• “If he shows up, good, if he doesn’t – in the meantime, we’re taking in billions of dollars a month [in tariffs] from China,” Trump tells “Fox & Friends.”
• The remarks seem to clash with comments he made just a few days earlier on CNBC, when Trump vowed to immediately slap an additional $300 billion in tariffs on Chinese imports if Xi didn’t attend the G-20 summit.

Just4Fun said:

“So our people are not paying – you know there’s this big thing about tariffs, ‘Oh, our people pay’ -- it’s a lot of nonsense. You know what happens, really? Companies move back,” Trump told Fox on Friday.

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solarz said:

The sad part is that a lot Americans will actually believe this nonsense.

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