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

Just want you and anyone else who is following to know that I well understand your line of thought. So there is no need to discuss with you on the matter.

 

Since the New Left paradigm is that "perception is reality", then it could be seconds, minutes, hours, days, weeks, months, years, decades, centuries, or millennium, depending on the drug induced state of mind of the individual kook leftist

 

Close but not quite.

 

From what I can tell, this trade war BS and the BS that is going on currently with Huawei, North Korea and Taiwan should be viewed through the lens of the US trying to contain China and thus establishing and maintaining a unipolar world order. I say this because it is a fact that the US military has stated that its main goal is to contain the rise of China, and because imposing tariffs on Chinese goods while allowing manufacturers to move to other countries in Southeast Asia will not bring back US manufacturing jobs that went to China en masse.

Trump has promised to restore US manufacturing. When you consider that manufacturing jobs used to be 30 percent of the labor force but is now only 8 percent, its very hard to see how imposing huge tariffs on Chinese goods ALONE will change that picture much. This is because companies that manufacture in China will shift production to places like Vietnam, Malaysia, and Indonesia where those huge tariffs don't apply.

https://www.bloomberg.com/news/arti...-tussle-is-creating-winners-in-southeast-asia

The thing is this, not only are US companies doing it, but Chinese companies are shifting their manufacturing elsewhere in Southeast Asia as well to avoid tariffs. So while the tariffs will hurt China, they are not going to bring back US jobs that went to China en masse.

Therefore I conclude that's its not about bringing back manufacturing from China, its more about containing China and trying to establish and maintain a unipolar global order.

 

So don't buy chinese goods, you don't think the market will react. And let me tell you I do not buy 10,000 of chinese goods every year. More like a thousand. What the hell do you spend 10,000 on? You understand that if a guy pays 120,000 for a machine instead of 100,000, he does not sell all the goods that machine produces for 20% more. You understand that when Levis brings a pair of pants made in china to the us, they pay a tax on the manufacturing cost. so they pay a tax on say $10 or $2 more dollars. You don't pay the tax on the $50 retail price. - $10.00.

I swear some of you are chinese "plants" on this board.

 

And I suppose you understand that companies do not stay in business by continuing to absorb increased costs such as those that occur in the form of tariffs.

 

Here's where the numbers come from (from the link in my post):

Via Gary Hufbauer, senior economist at the Peterson Institute for International Economics: “[T]he cost to an American family of three would be about $2,200 if Trump’s full package of 25% tariffs on $500 billion of merchandise imports from China is implemented.

Guess he's a Chinese plant, too.

 

To get an idea of the evolution of the state of US manufacturing, consider this graph



The blue line WHOSE VERTICAL AXIS IS TO THE LEFT shows the number of manufacturing jobs in the thousands, meaning that you need multiply the value shown on the axis by 1000 to get the number of manufacturing job for a particular year. So for example, the graph shows that in the early 1940s, there were around 16,000,000 manufacturing jobs in the US.

The red line, WHOSE VERTICAL AXIS IS TO THE RIGHT shows that the percentage of manufacturing jobs to the total number of jobs at that time was around 37.5%.

Please note that although the graph does not show the recent percentage of manufacturing jobs to the total number of jobs, the number nonetheless remains at around 8 percent.

Imposing tariffs on goods made in China is not going to do much for that low percentage.

It is also worth to note the steep decline in manufacturing jobs that occurred during the presidency of George W Bush.

 

B

 

When China asceded to the WTO, a stipulation was put in giving all member countries a 12 year window in which to limit Chinese imports to allow their domestic industries to adjust.

Neither Bush nor Obama chose to use that option while available and now that window is closed (as of 2013). It's senseless to blame the Chinese for the position we find ourselves in when we actively put ourselves there.

 

Hmmm...

That's interesting. I did not know that. Could you please provide a link or some supporting information?

 

https://www.everycrsreport.com/reports/R40844.html

Section 421 was enacted as part of an October 2000 statute that also permitted the President to grant most-favored-nation (MFN) tariff treatment to Chinese products upon China’s accession to the World Trade Organization (WTO). Section 421 authorizes the President to impose safeguards—that is, temporary measures such as import surcharges or quotas—on Chinese goods if domestic market disruption is found. The statute implements a China-specific safeguard mechanism in China’s WTO Accession Protocol that may be utilized by WTO members through December 2013. The provision is separate from Article XIX of the General Agreement on Tariffs and Trade (GATT) 1994 and the WTO Agreement on Safeguards, which allow WTO members to respond to injurious import surges but on a stricter basis than under the Protocol. A major difference is that the Protocol allows a safeguard to be applied only to Chinese products while the Safeguards Agreement requires that any safeguard be applied to a product regardless of its source.

Also:

https://www.cfr.org/blog/chinas-wto-entry-15-years

The special safeguards provision (section 421) wasn’t used much at all.

In no small part, this is because U.S. and European firms benefited from making use of Chinese production to meet global demand. The interests of U.S. firms and U.S. labor were not always aligned.

But 421 safeguards also were not used because the remedy is a function of discretionary decisions made by the executive branch, and the Bush 43 administration made it clear it wasn’t going to hand out safeguards easily. Robert Lighthizer, back in 2010:

“Between 2002 and 2005, the U.S. International Trade Commission ("ITC") heard four cases in which it determined that the requirements for a China-specific safeguard had been met. In every case, however, the Bush Administration exercised its discretion to deny relief – effectively rendering Section 421 a dead letter. Indeed, after 2005 U.S. companies stopped even applying for safeguard measures from the Bush Administration. Thus, for much of the time that Section 421 was supposed to be available to U.S. companies, the U.S. government refused to provide any relief”

 

That was very interesting and informative. Just to emphasize, from your first link

But as you posted:

And that's the crux of the matter. Because shareholders in these large firms perceived that was an advantage to leveraging cheap Chinese labor, no one gave a damn about the damage done to workers in US manufacturing. And to this day, Trump and other people with power still don't give a damn about it. As I said earlier, if it was really about jobs, then Trump would place huge tariffs on the goods made in places like Vietnam, Malaysia, and Indonesia, where firms that manufacture products in China are moving to in order to avoid Trump's tariffs. Rather, this is designed specifically to hurt China, to contain the rise of China. It is not to benefit US workers, as Trump would have people believe..

Thanks for posting that.

 

I've always found that info very telling.

IMO, had we truly wanted to ensure fair play as we entered modern globalism, the WTO could have established international business standards covering wages (based on ppp), worker safety, child labor, and environmental impact levels as these emerging economies became part of the global supply chain. Instead, what we see is exploitation on a massive scale to the enrichment of a few at the expense of workers worldwide and the environment. Hell, we allow shrimp to be imported that is harvested and prepared by slave labor! Who can compete with that? And everyone knows that US pollution levels have fallen due to exporting our industries. There isn't less pollution, there is in fact more due to lax standards in the developing world.

Geez, you would think common sense had been made illegal. It hasn't, btw, greed has just over-ridden it.

 

Yep, you hit the nail on the head. Good old fashioned greed. Although modern man may pride himself with his technological achievements, some things, like human greed have not changed one bit. Combine that with lust, anger, and the concomitants envy, malice, and arrogance, and nothing but destruction will result. Now men have a new toy in the form of nuclear weapons. What a combustible mix!

 

Well, I have got to go and try to peddle some goods that were manufactured in China!

But since I'm in a good mood, I was thinking about Lester Young yesterday and the huge impact that he had on Charlie Parker. Parker would sneak into clubs in Kansas City when he was 12 years old to see Lester Young play. Indeed Mary Lou Williams said of Lester Young that Coleman Hawkins was king until he met the tenor players of Kansas City, of whom Lester Young was chief. Billie Holiday famously dubbed Lester Young as President of the Saxophone. Hence he was known as "Prez."

http://www.modernwarriorlive.org/lester-young-with-count-basie-19361941

Here's a nice rendition of a Lester Young's tune "Lester Leaps In" that he made famous in a recording with Count Basie way back in 1939, eighty years ago. This is Sonny Stitt in 1963



Here's the 1939 version with Lester Young himself



And finally, here's Lester Young playing the jazz standard "Just You, Just Me" back in 1952



Enjoy!!!

 

Yep. With greed comes wealth, with wealth comes power. Then you have nations creating policy based on greed that benefits a select few and damn the consequences.

 

See, it's true, he's not a capitalist, he's a statist. Fair trade? By what standard? And who gets to decide what is fair and what is not? Trump could be an Ayn Rand hero if he truly was a capitalist. But he's no Midas Mulligan; he's an Orren Boyle who became a Mr. Thomas, i.e., a pull peddler seeking government favors who lucked into becoming the favor pusher.

 

Uh oh. Another Kool-Aid drinking Trumpite.

The real GDP is growing about as fast as it did in 2014 under Obama.



Real wages have gone up 1% in the last two years.



Trump bought a little extra growth by adding $500b to the budget deficit.

Trump said he wouldn't cut taxes for rich people when he was running for President, but 85% of his tax cuts went to people making $400,000 per year. If he had kept his promise, tax cuts for people making less than $400,000 could have been more than five times as much.

Trump said he would fix health care fast. He broke that promise, too.

 

Uh huh. Just 18% of China's exports go to this country. Think again.

 

If a company's revenue drops 18% in a year, they usually go bankrupt shortly after.

1/5 of anything is a lot.

So... nah.

 

Geez, get a clue. China exports less than 20% of its GDP and less than 20% of its exports go to the United States. You do the math ... 20% of 20%. If the didn't sell anything to this country, they still have 96% of their economy left.

 

Exports to us are less than 5% of their economy. The only way we're going to get their attention is with the cooperation of our allies--you know, the people Trump regularly badmouths.

 

And, if they didn't sell anything to the US, for sure we wouldn't be selling anything to China.

Here's just one example of the impact of that scenario:

General Motors Co. (NYSE: GM) reported sales of 4.04 million vehicles in China in 2017, a third more than the 3.002 million the company sold in the United States. Included in the total for China are sales of Buick, Cadillac and Chevrolet brands, as well as sales made by the company’s joint ventures with China-based automakers Wuling and Baojun.

2017 marks the sixth consecutive year that China has been GM’s top market. Sales of the Cadillac, Buick and Baojun brands set new domestic sales records.

 

Considering their economy is as slow now as it's been since 1970...

I'd say losing 5% is going to hurt quite a bit.