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Trump's Trade War

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Brisketexan

Brisketexan 106876

Posted
Posted
Just now, GRHorn said:

Of course I did.

Yes, everyone knows Trump faces re-election before Xi and Xi has control over his media etc.  Thus he can take more pain. Thanks for that groundbreaking input.   But he’s also starting from a worse starting position. 

The question is how much pain is it going to inflict on both countries? 

The stock market is not everything, but is forward looking. Take a look at Chinese vs US equities. Who does it look like the trade war is hurting most?

It's bigger than Xi and re-election.  It's two massively different cultural worldviews and timelines.  Trump is perhaps the most "American" president ever -- instant gratification and results are all that matter.  Not only does that not make for a winning strategy against China....it plays right into their 100-year plans.  And do a little research and understand what a tolerable level of "pain" looks like in each country.  Perhaps we inflict level 5 pain on China, while suffering level 3 pain ourselves.  We win, right?  Nope.  Not if our tolerance for pain maxes out at 2, and China's maxes out at 10.

Know what rules your opponent is playing by before you enter the game.  Trump has not a clue.  He thinks the whole world acts and thinks like he does.  He is very wrong.

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Ted Lange
Ted Lange

Now let’s imagine a world where China decides to dump several hundreds of millions of dollars into a campaign to elect a democrat.  And that Democrat openly screams for Beijing’s support.  And uses in

Mojo Hand
Mojo Hand

Looks like Elkhart County went for Trump 64-32 over Hillary in 2016, so fuck 'em.  Enjoy the tariffs you voted for! 

Chooky
Chooky

Apparently China didn't heed the stark example of what happens to those in a battle of financial wit between Donald Trump and Dennis Rodman. Ask Clint Black or Gene Simmons what happens. Go ahead and

Pig Bellmont

Pig Bellmont 8884

Posted
Posted
1 minute ago, Hugo Stiglitz said:

Years from now it’s going to be hilarious when we realize we got into a global trade war simply because the president didn’t understand how trade deficits and tariffs worked.

“Hilarious” isn’t the right word, but yeah. Coupled with the fact that tariffs without congressional authority are only supposed to be “national security” related and we’ve got just an incredibly stupid implementation of policy with no congressional oversight or corrections 

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YChang

YChang 3567

Posted
Posted
58 minutes ago, GRHorn said:

We should be addressing a country that steals valuable technology and IP from us on a regular basis way before we should be chasing terrorists in the Middle East imo. 

 

Absolutely! I just don't think this administration's tactics solves or comes close to solving for that issue. Instead it's screwing over certain sectors of our economy. Or is your opinion that this is a way to brute force our way into making China concede? 

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happyfunball

happyfunball 481

Posted
Posted
24 minutes ago, Brisketexan said:

It's bigger than Xi and re-election.  It's two massively different cultural worldviews and timelines.  Trump is perhaps the most "American" president ever -- instant gratification and results are all that matter.  Not only does that not make for a winning strategy against China....it plays right into their 100-year plans.  And do a little research and understand what a tolerable level of "pain" looks like in each country.  Perhaps we inflict level 5 pain on China, while suffering level 3 pain ourselves.  We win, right?  Nope.  Not if our tolerance for pain maxes out at 2, and China's maxes out at 10.

Know what rules your opponent is playing by before you enter the game.  Trump has not a clue.  He thinks the whole world acts and thinks like he does.  He is very wrong.

There is a naivety about China's ability to manage towards the long-term.  Robert Lighthizer is leading the negotiations and isn't a neophyte in US China relations. He has taken a hard line with China expecting to re-balance the relationship. Thankfully, Trump has stay out of the way, but it is wrong to assume that China can wait this out. 

China's economy is stalling and is over-leveraged. There is immense pressure on Xi from political rivals to strike a deal and prevent unrest due to the economic slow down. The tariffs and singular approach that Trump has taken actually works, but I'd argue that it was dumb luck on his part vs grand strategy.  

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happyfunball

happyfunball 481

Posted
Posted
4 minutes ago, YChang said:

 

Absolutely! I just don't think this administration's tactics solves or comes close to solving for that issue. Instead it's screwing over certain sectors of our economy. Or is your opinion that this is a way to brute force our way into making China concede? 

It is my opinion while not asked of me that brute force will be the only way to make China concede while capitalizing on their current economic weakness. 

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YChang

YChang 3567

Posted
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Just now, happyfunball said:

If the US wants to reset the balance with China, a realistic view of short-term pain to make structure adjustments is required. 

 

My concern is if the stick is the only tactic then it'll just become a never ending whack a mole deal with China. OK US you win, we'll fix some of our practices (wink wink) once you lift those tariffs.

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happyfunball

happyfunball 481

Posted
Posted
1 minute ago, YChang said:

 

My concern is if the stick is the only tactic then it'll just become a never ending whack a mole deal with China. OK US you win, we'll fix some of our practices (wink wink) once you lift those tariffs.

Lighthizer in prior talks was demanding ability to verify implementation of reforms (e.g. Inspections) which China balked at allowing. The US is pushing hard to prevent China from gaming the talks/ negotiations. No longer is the US allowing promises at least in talks to date.

From a lawyer friend who is close to the discussions, "Even the doves are hawks now" in regards to engagement with China. 

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Biff Tannen

Biff Tannen 46158

Posted
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22 minutes ago, Pig Bellmont said:

“Hilarious” isn’t the right word, but yeah. Coupled with the fact that tariffs without congressional authority are only supposed to be “national security” related and we’ve got just an incredibly stupid implementation of policy with no congressional oversight or corrections 

Speaking of, when is the House gonna get on this bullshit?  I know the Senate will do nothing, like the sorry sacks of traitors they are, but House should at least call it out and try to get rid of the tariffs.

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Asithappens

Asithappens 978

Posted
Posted
14 hours ago, GRHorn said:

A couple things. 

1)The trade war with China is about more than just one company’s business.

2) It just took me scanning it to see that their sales have dropped 8 straight quarters.

Trade war is being used as convenient excuse and makes nice headline.

Yeah, it's about a lot of companys' business.

Farmers, too. 

The trade war is hardly a "convenient excuse", bro. 

You seem to be analyzing this outside of the context that our current President is a massive ignoramus and a huge piece of human shit.

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elfenix

elfenix 34746

Posted
Posted
38 minutes ago, YChang said:

 

My concern is if the stick is the only tactic then it'll just become a never ending whack a mole deal with China. OK US you win, we'll fix some of our practices (wink wink) once you lift those tariffs.

it wouldn't shock me to find that most of trump's business dealings have been whack-a-mole.  nothing is ever closed and agreed upon. 

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swraith

swraith 348

Posted
Posted

It’s clear that China’s trade volumes with the US are shrinking. China’s GDP growth rate is falling and equity valuations are falling.

 

However the article clearly states the US is suffering as well. US exports to China have fallen more than imports so the net value has worsened. It appears US GDP growth rate is also slowing and equity valuations have flat lined.

 

Maybe China does roll over and implements trade reforms to protect US Intellectual property and China also engages in mandatory purchases of US exports to balance the trade deficit (something that we don’t even need). And then maybe we return to GDP growth rates we were producing prior to the trade war.

 

I would posit a more likely outcome is a continued stalemate and escalation of the trade war. This likely would lead to even further economic slowing or even contraction. And maybe China will continue to suffer greater economic loss relative to the US, but that doesn’t mean the US is “winning”.

 

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GRHorn

GRHorn 105

Posted
Posted
2 hours ago, happyfunball said:

Lighthizer in prior talks was demanding ability to verify implementation of reforms (e.g. Inspections) which China balked at allowing. The US is pushing hard to prevent China from gaming the talks/ negotiations. No longer is the US allowing promises at least in talks to date.

From a lawyer friend who is close to the discussions, "Even the doves are hawks now" in regards to engagement with China. 

Thanks for sharing. 

Do you have any insight on what specifically caused the flip from doves to hawks for a lot of these people in the government?

2 hours ago, Asithappens said:

Yeah, it's about a lot of companys' business.

Farmers, too. 

The trade war is hardly a "convenient excuse", bro. 

You seem to be analyzing this outside of the context that our current President is a massive ignoramus and a huge piece of human shit.

Your analysis is obviously clouded by your personal hatred for the President.

It seems there are many people more closely involved, including those that likely loathe the President otherwise (Silicon Valley), that support the Trade war and our current tactics. Open your mind up a little bit.

Free your mind... and your ass will follow. 

38 minutes ago, swraith said:

 

I would posit a more likely outcome is a continued stalemate and escalation of the trade war. This likely would lead to even further economic slowing or even contraction. And maybe China will continue to suffer greater economic loss relative to the US, but that doesn’t mean the US is “winning”.

 

This is definitely a risk with pursuing our current course.  I guess the powers that be have determined that the bigger risk is maintaining the status quo. 

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happyfunball

happyfunball 481

Posted
Posted
30 minutes ago, GRHorn said:

Thanks for sharing. 

Do you have any insight on what specifically caused the flip from doves to hawks for a lot of these people in the government?

 

The doves always argued that engagement would lead to reform. With Xi, there has been a significant reversal in China opening up. I don't believe it was one event but really hard to argue that engagement will lead to further reform in China when the country has become more hostile and brazen in their behavior since Xi has been in power. 

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GRHorn

GRHorn 105

Posted
Posted (edited)
3 minutes ago, happyfunball said:

The doves always argued that engagement would lead to reform. With Xi, there has been a significant reversal in China opening up. I don't believe it was one event but really hard to argue that engagement will lead to further reform in China when the country has become more hostile and brazen in their behavior since Xi has been in power. 

So, little brother has gotten too big for their britches.

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happyfunball

happyfunball 481

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Posted

Boeing gave China a big gift in the negotiations. China signed a big Airbus deal today.

China is already back tracking on their promises in the negotiations.

I expect many years from now historians will cite this as the start of the decoupling of US and China economies.

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F250

F250 29199

Posted
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1 hour ago, happyfunball said:

 

"Mr. Trump’s victory in this department is not unalloyed. Despite his promises to bring jobs back to the United States, most of the work is shifting to other countries with lower costs. Reshaping global supply chains also takes time, and China will remain a vital manufacturing hub for decades to come."

I expected this to be mentioned in the article. Manufacturing has been moving away from China for a years now since Chinese wages have increased to the point it's not as cheap to outsource to China as it used to be. I remember reading about Vietnam picking up the cheap manufacturing slack about 6 years ago when Barry was still President. This is not a Trump victory.

 

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Brisketexan

Brisketexan 106876

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Posted
"Mr. Trump’s victory in this department is not unalloyed. Despite his promises to bring jobs back to the United States, most of the work is shifting to other countries with lower costs. Reshaping global supply chains also takes time, and China will remain a vital manufacturing hub for decades to come."
I expected this to be mentioned in the article. Manufacturing has been moving away from China for a years now since Chinese wages have increased to the point it's not as cheap to outsource to China as it used to be. I remember reading about Vietnam picking up the cheap manufacturing slack about 6 years ago when Barry was still President. This is not a Trump victory.
 

If the point was to bring manufacturing jobs to America....which is how it was sold...of course it isn’t, and it wasn’t ever gonna be.

If the point is to “hurt” China, then he’s scored some points. And being that that is the only metric that matters to him and his people...that is a win for them.

But it’s not even a good one, because as you noted, it was already happening. I’m old enough to remember cheap plastic toys being made in Japan...then Korea....then Taiwan...then China...and now, someplace else will come along. It’s what happens when an economy matures enough to price out low cost manufacturing.
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happyfunball

happyfunball 481

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Posted

China believes economic growth is a zero sum game. Making China feel the pain is the right strategy although you can disagree with Trump on tactics.

I’m am not naive to believe that the jobs were coming back to the US but making China hurt economically is the only approach that will change their behavior

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TwiceHorn

TwiceHorn 32073

Posted
Posted
12 minutes ago, happyfunball said:

China believes economic growth is a zero sum game. Making China feel the pain is the right strategy although you can disagree with Trump on tactics.

I’m am not naive to believe that the jobs were coming back to the US but making China hurt economically is the only approach that will change their behavior

I fear that this is correct.  Our little diplomatic threats and sanctions haven't really hit them where it hurts and they've been robbing us, and the rest of the West, blind.

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Foosters

Foosters 18269

Posted
Posted
On 4/24/2019 at 10:31 PM, Bruh Man said:

MAGA!

 

So what? This is a free market after all. Just take your business to the company that didn't jack up the prices? What's that you say? There are no companies like that? Well what's stopping you from creating your own washing machine company? Its a free market, after all.

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Nice Guy Eddie

Nice Guy Eddie 13725

Posted
Posted (edited)

News to me that the Chinese suppliers are picking up the tab of the tariffs.  I guess they’re not passing the cost onto their buyers.  How nice of them.  

Of course in the trump 4d chess world, the real benefit is that American manufacturers can now charge more to the American consumers all while American consumers are cheering on trump. Or 40% of them at least. 

Edited by Nice Guy Eddie
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berlinerbaer

berlinerbaer 692

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Posted

Hey, I also want Trump to be tough on China. That's mostly because economic pain is the only way Trump's approval rating floor will go down, but there is also a little acknowledgement on my part that it's probably working to some extent and the Chinese need to be dealt with.

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Nice Guy Eddie

Nice Guy Eddie 13725

Posted
Posted

I think it's easy to say that I'm not a fan of Trump but I think it's the correct path to be firm on economic matters with China. If you can't do it when the economy is relatively strong, when can you do it?

There was a time that we could be lax with China because they were a developing country. At the aggregate level, they're no where near developing any more.  To me the most important aspect is that we need them to agree to open markets, protect trademarks and stop the flow of counterfeit goods.

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Parliament

Parliament 14593

Posted
Posted
As a non-farmer (and I didn't read the article, so apologies if covered in there) but what attributed to the 2016 losses? Was that a big drought year?  


Agriculture experienced a classic commodity bubble that peaked in 2012. The popping of that bubble was accelerated buy tariffs on soybean imports (put on by the Chinese) and pork exports (put on by President Trump.). Farming would be tough today without the trade fight, but the fight has made it tougher.

That said, many folks in ag are glad for the fight. They’re upset with China’s past of welching on signed grain purchases and doing other things to manipulate the market. General patriotism is a factor as well.
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SquishMitten

SquishMitten 10496

Posted
Posted
12 hours ago, berlinerbaer said:

Hey, I also want Trump to be tough on China. That's mostly because economic pain is the only way Trump's approval rating floor will go down, but there is also a little acknowledgement on my part that it's probably working to some extent and the Chinese need to be dealt with.

I think it's the "working to some extent" part that we just can't quantify. As consumers, we are now paying more. Farmers are allegedly making less. Are American companies actually making more money or are their revenues just higher because they're passing on more costs? We also don't know how/if it's really hurting China. Many of these lines were already trending down for them prior to the tariffs so it's hard to say how much impact tariffs are having.

In the short term, we can absolutely say the tariffs are having a negative impact on Americans, and it's too early to know how much they are hurting China. Only time will tell whether it was worth it, but as of right now the answer is definitely "no"

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Nice Guy Eddie

Nice Guy Eddie 13725

Posted
Posted

I don't see how the tariffs aren't impacting China. And most likely there isn't a way to impact them without Americans (or American firms) taking part of the economic hit.  

The US govt has no actual method to add tariffs to Chinese goods and simultaneously freeze the sale price of American (and every other countries) goods. If we add $50 to every Chinese-made widget, the US manufacturers of a similar widget will also raise their prices $50 or close to it.  If the American company only raise their price $40, it should create fewer Chinese widgets being sold. in theory.   But also in theory the Chinese could still sell-out of all inventory if demand is high enough or other factors like quality.

 

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berlinerbaer

berlinerbaer 692

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Posted
10 hours ago, happyfunball said:

 

 


Estimates is that the tariffs fully implemented has a negative drag on China’s economy of 1.3% while the US is only 0.1%
 

 

If tariffs stay at 10%, then maybe. If they go up to 25%, the US consumer will for sure share the pain.

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