I Predict The US/China Trade War Will Last For Months

Why the hell would it a product made in china by a joint ownership company sold in china show up as a import.
Who cares if a us company is making a product in china for the chinese market- are they hiring americans- are those workers paying US taxes, is the real estate helping to pay taxes locally in the US.

The last company I worked for had two plants in China, one in xiamen and one in shenzen. What benefit to the US taxpayer did those two subsidiaries provide- nothing!

 

Remove Hong Kong from that list and it is closer to 70% percent. or almost 1/3rd of what they export they export to the US. The amount sold to the US is equal to countries #3-13 combined.

 

Interesting thoughts. Three months is reasonable - but I don't think that the war can be sustained for too long as the costs will be too high.

1) I think Trump is woefully mistaken. First off - China is not encumbered by political forces the way the US is. Second the effect on China is not as great as is being touted.

The real consequences of this trade war are just beginning - and already there is significant blowback. Heck there was significant blowback prior to this war being started.

Also - this is not just a Trade war with China - Mexico is involved directly and you also have to consider the negative impacts around the globe of Sanctions. US industry is already being hurt by these sanctions - losing contracts and so on. The longer this continues the more negative the world will become - and this negativity is being directed squarely at the US.

In the meantime China, Russia and the rest of the world are going around doing deals.

2) Agreed

In summary the political cost of this trade war - and sanctions - is increasing. Trump - if anything - has a keen sense of the political winds. At some point it will be too much for him to bear - he will sign some deal - and declare a win.

This "Scare em and Save em" tactic is one of Trump's favorites - and to be honest this tactic has served him rather well - at least from the perspective of his base.

 

It wouldn't. That's the point.
Us companies make a ton of money selling those products to the Chinese.
Daffy Donald doesn't want to think about that.

Cheap products that your company makes money on (I hope) to invest in things like new product development and manufacturing in the US.
I always like to think about my Apple IIE that I paid 3K for. There were very few of them around.
What made the market explode? Low cost.
I worked for a large disk drive company. We did R&D and a few thousand for a pilot run and testing. The other 30 million a year were built offshore.

 

And of those exports - how much is stuff that is made in China by US companies such as Apple ? The value add from China on an Iphone works out to be 1-2% of the retail cost of the Iphone - essentially labor, office space rental and so on.

Tariffs on Iphone will then do what ? You are not going to layoff 50% of the workforce because Iphone sales drop by 10%. You may not layoff anyone but for argument sake lets say it is 10%. The effect on China is then 10% of 1-2%.

In terms of dollars - going with the higher figure 0.2% - this works out to 2 dollars per thousand dollars of this supposed "trade deficit" = bugger all.

China not buying soy beans on the other hand has a huge effect on a dollar per dollar basis. If the price of US soy drops by 30% - because the US glut - the farmer realizes a loss of 300 dollars on the same 1000 in trade.

This is 150 times the loss on a dollar per dollar basis.

 

You are correct that products made in China by US companies count as exports from China and contribute to the trade deficit.

China's response with the soybeans definitely had more impact than Trump's tariffs. Not to mention that China has 2 "nuclear" options; rare earth minerals and US securities.

Trump clearly did not think this through.

Here's an opinion piece from The Global Times which, as you know, operates as an official voice of the Chinese government.

So much of this piece should be bolded and/or underlined, but I'll not bother. It is clear, however, that China is throwing down the gauntlet.

http://www.globaltimes.cn/content/1152839.shtml

China's State Council Information Office on Sunday issued a white paper titled China's Position on the China-US Economic and Trade Consultations, providing a comprehensive picture of trade talks with US and revealing how the US threw cold water on attempts at consensus, and went back on its commitments. Backed by solid facts, the white paper holds the US completely responsible for the many setbacks in the talks, and underscores China's principled stand and its resolve to defend the country's core interests.

Washington has swayed public opinion against China in the trade dispute which is of Washington's own making. Taking advantage of its ability to influence international discourse, the US has kept misleading the public with distorted information. The US even used lies to try to shift the blame onto China. The white paper, which contains authentic data, has revealed the truth and ensured a correct understanding of the facts.

It is beyond doubt that the US must take full responsibility for the state of current China-US relations. Over the past year, Washington has demonstrated to the world what it would do to implement its "America first" policy: It has thrown punches at its biggest trade partner, acted ruthlessly against a private enterprise on groundless charges, ignored international ethics and rules, and even schemed against its neighbors and allies. The US is now losing the moral high ground it had painstakingly built up and is stirring up trouble everywhere.

It is regretful and worrisome to see how the US has changed. As a superpower for years, the US should have had a global view. However, selfishness and parochialism have lashed American society, chipping away at reason and wisdom. With such disposition, the US would be a potently destructive power for the whole world. Hence, it is extremely urgent and vital to calm it down and sober it up.

The white paper points out that the US-provoked trade friction has also hurt its own interests. By threatening, intimidating, coercion and deceiving, Washington has gained some petty advantages in the short term. But compared to its total loss, such short-term gain is meaningless.

What China is safeguarding and defending are not only China's actual interests and development rights, but more importantly, the global industrial chain, as well as international morality, principles and order. The US is transforming from a founder into a saboteur of global morality, principles and order. Being the most powerful country cannot justify and legitimize its irresponsibility. China's resistance to US trade bullying has a worldwide and historical significance. The defensive line built by China can in fact shield many other countries.

This is a great contest between isolation and opening-up, between unilateralism and multilateralism, between free trade and protection, between fraud and integrity, and between parochialism and a broad outlook. This unprecedented game in human history is equally soul-stirring even if without guns. It is reshaping China-US ties and both sides' recognition of themselves and each other. It is even reshaping the international system, directly affecting the future of mankind.

Not much wisdom or complicated research is needed to judge such contest. The only things it needs are courage and integrity. Few countries have echoed Washington since the China-US trade disputes began. This very fact speaks for itself. Certain countries did stay silent probably out of selfishness, snobbery or fear, but silence does not amount to agreement. An increasing number of nations are now bluntly criticizing the US.

The hegemonic power has been trying to refute facts that are for all to see in the international community. But facts speak for themselves and can never be changed by anyone.

We would advise the decision-makers in Washington to read up the white book carefully and ponder the meanings and attitudes it conveys.

 

Your statistics may be true, but rather deceiving.

 

I'm not sure when, but Trump will wimp out - as when his tantrump over Americans refusing to pay for his "big, beautiful wall" that he assured everyone that Mexico would pay for made him so hysterical that he shut down the government. No matter how ignoble the consequences of his irrational instability, he must bray, "I WIN!" of course.

His multi-billion dollar entitlement program under which he has consigned America's farmers to his welfare roles (and even further bloated his national debt) will endure for some time, however, because he has savaged their markets.

In an uncharacteristic fit of largesse, he may offer some Trump U® scholarships so that they can retrain.

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What's deceiving?

 

I don't see the trade war as being for the national good. How are we supposed to be globally competitive without taking advantage of emerging countries comparative advantages? Are we not going to export anymore? How do you think that will work out?

 

I don't care if us companies make money in china. How does that help the US.

No, Our US company is now closed and all we have is the China branches.

 

I hope the trade Wars with Mexico and China get worse and the market keeps going down down down because I am making money!!!!

 

Well, I don't know what went wrong with your company, but my disk drive company employed about 6,000 Engineers and Technicians designing our products. I think that helped the US. I know it really helped me.

 

I did shorts against the box when I was younger, but I'm more conservative in my old age.
But there may be a couple of really good ones coming up with the China/Mexico tariffs.

 

if I was really crazy I would be shorting with leveraged funds but I'm not that crazy.

 

Interesting article. Folks think we can just go around the world with this "do as we say - not as we do" attitude - arm and support extremist Islamist terrorists in other sovereign nations such as Syria - an action which led to the death of 500,000, the refugee crisis, rise of the modern incarnation of ISIS - and folks don't notice. They may not say anything - but they notice. You think Europe who ended up taking most of the refugees does not know what happened and why ? In the US the MSM keeps the people insulated from such inconvenient truths .. not so much the rest of the world. I was recently in Portugal .. RT news is a regular channel.

 

Look at the US dollar amounts.

 

Pretty numbers.
What are you talking about?

 

As more and more of our base- telecoms moved their manufacturing to China, they wanted local support. not just local manufacturing for JIT, but local engineers and sales managers.

 

We ARE China's largest trading partner. 21% of their total output.

 

It is not only via tariffs that Trump is taking a dump on free trade and destroying American enterprise (whilst creating entitlements such as the billions of taxpayer dollars he is allocating to his welfare program for American farmers hurt by his self-inflicted derangement.)

His big government intrusion into the private sector also crushes entrepreneurial endeavors: