The China-U.S. trade war thread.

a reply to: nwtrucker
China is an economic force, which the US is not prepared to deal with. China has manipulated its currency time and time again, either to increase or decrease its value. And it does such at the expense of the US and its economy. By doing a tariff on Chinese goods, China will not only do a tariff on US goods, but also do a slight devaluing of the US dollar, thus devaluing its own currency to make their goods cheaper thus offsetting tariffs put on by the US. They did it before, they will do it again.

It is that control over their currency that has managed to keep them afloat to weather out recessions far easier than western countries, if not just be unaffected by it.
There are variables I do not believe that the US has considered in the decision to start a trade war with the USA, nor do I think anyone has.
If China decides not to lend the USA any more money, that is going to affect the economy, cause then the USA will have to start to raise taxes, that will have a direct effect on the economy. It could tell its citizens to start to sell off assets it has in the USA. Think about it, if a Chinese investors have say millions in a company, what would happen to that company if they decided to dump their stock and sell it off? That company would tank for a bit, and then have to stabilize and then recover.

There is one wild card that no one is sure of and that is gold. No one is sure how much gold China has. It did make a report, however, the experts all agree on one thing, it was understated deliberately, to keep the value of its currency lower than the dollar. China and Russia has been buying gold in large quantities for years.

The other small detail here that is also something to keep in mind is this: The US debt is one of the economic vulnerabilities, that can cause a lot of problems.

So if China were to say acquire enough gold, to back the yuan, then say cause a flux in the US market, that it can easily weather, it would be bad on the USA.

a reply to: RadioRobert

That is the thing, China controls its currency and economy very carefully. It does not let it grow and keeps it going slow and steady.

I think that this is going to back and forth, the cooler heads will prevail, and thing will eventually normalize again.

However, with the selling of the US debt, it has increased the value of the yuan.

a reply to: sdcigarpig

It could tell its citizens to start to sell off assets it has in the USA. Think about it, if a Chinese investors have say millions in a company, what would happen to that company if they decided to dump their stock and sell it off? That company would tank for a bit, and then have to stabilize and then recover. 

They'll inevitably sell anyway. This is just like the Japanese boom of buying up property, buildings, and companies in the 80's. People were worried about the Japanese invasion, but are you old enough to remember what really happened? They all lost their shirts, because their buying binge artificially inflated the prices.
So what would happen if China decided sold off all it's US holdings? They'd be bought up by US companies for actual (depressed) market value. Nothing else.
Also, devaluing the dollar would be idiotic of them. They hold our debt in dollars remember? It makes all that debt worth less and our exports more attractive to compete with Chinese products globally-- which is actually the opposite of hurting us.
You're playing at understanding something you have a shallow understanding of, or you're being deliberately misleading.

originally posted by: sdcigarpig
a reply to: RadioRobert

That is the thing, China controls its currency and economy very carefully. It does not let it grow and keeps it going slow and steady.

The huge national debtis raising at a rate 4x that of the GDP. 20 some industries are admittedly overcapacity.

Sounds like the command economy and politburo could use some work...

Do you believe the stuff you're saying or just pushing an angle?

originally posted by: makemap
a reply to: ufoorbhunter

You can keep blaming China for everything, but those drugs have been boycotted many times by the caused of FDA non-stop drug war. Majority of the alcohol is your own country fault. I don't see that many Rice wine in US compare to other Western alcohol. It is also called celebrating too early. I'm not sure if college/High school still do that allow kids party with alcohol. Who the heck works drunk in a factory anyways?

The Chinese do not play it fair. Pure and simple they don't play fair. Communities across the world have been destroyed by Chinese imports that artificially cheap because they don't play it by our rules. It was a better world before China was brought into the economic system for the average man in the street. Sorry if you are from China but that's how it is from our perspective in the UK.

originally posted by: ufoorbhunter

originally posted by: makemap
a reply to: ufoorbhunter

You can keep blaming China for everything, but those drugs have been boycotted many times by the caused of FDA non-stop drug war. Majority of the alcohol is your own country fault. I don't see that many Rice wine in US compare to other Western alcohol. It is also called celebrating too early. I'm not sure if college/High school still do that allow kids party with alcohol. Who the heck works drunk in a factory anyways?

The Chinese do not play it fair. Pure and simple they don't play fair. Communities across the world have been destroyed by Chinese imports that artificially cheap because they don't play it by our rules. It was a better world before China was brought into the economic system for the average man in the street. Sorry if you are from China but that's how it is from our perspective in the UK.

Who does 'play fair'? We don't either. I'd prefer fair. If that doesn't fly then winning will suffice...

a reply to: RadioRobert

Funny thing is the Japs do not move like Chinese do. Japs are a failure at everything except going to war. Thy tend to want to stick with their Asian counterparts. That is why Chinese are the best Asians out of all Asians. Indians comes 2nd when it comes to cultural differences. Chinatown there. China everywhere. While Jap town don't really exist at all.

For those complaining China cheats. US cheats too. Either from bribery or forced Regime change. US got to where it is through all those including its own currency manipulation which crippled Canadian Industry up north. The stock market is digital. It isn't papers like the 1930's. I don't really expect any crash unless the whole server shutdown. It is all a joke.

Forget printing BS. Gov can just input $20 mil into your account instant out of nowhere. Cashless society is becoming the norm. The only reason why we still have cash is because not everyone have banks accounts and it is still used a alternative to digital market. All paper money are actually toilet paper. They are only there to allow others to purchase food who are not in production of food. #FarmerlivesMatter.

It looks like China's just retaliated by issuing tariffs against 128 US products.

China begins new tariffs on 128 US products

China announced to impose new tariffs on 128 imports from the United States starting Monday in response to the new US tariffs on steel and aluminum that took effect a week ago.

The Customs Tariff Commission of the State Council decided to impose a tariff of 15 percent on 120 items of products including fruits from the US and a tariff of 25 percent on eight items, including pork, from the US, according to a statement posted on Sunday on the Ministry of Finance website.

And here's a 2nd Chinese site reporting the same thing:
China imposes tariff on 128 items of U.S. imports

And here it is from the AP's website:
China imposing new tariffs on US meat, fruit, other products

originally posted by: enlightenedservant
It looks like China's just retaliated by issuing tariffs against 128 US products.

China begins new tariffs on 128 US products

China announced to impose new tariffs on 128 imports from the United States starting Monday in response to the new US tariffs on steel and aluminum that took effect a week ago.

The Customs Tariff Commission of the State Council decided to impose a tariff of 15 percent on 120 items of products including fruits from the US and a tariff of 25 percent on eight items, including pork, from the US, according to a statement posted on Sunday on the Ministry of Finance website.

And here's a 2nd Chinese site reporting the same thing:
China imposes tariff on 128 items of U.S. imports

And here it is from the AP's website:
China imposing new tariffs on US meat, fruit, other products

They think Trump will back down? We shall see.

a reply to: enlightenedservant

Interesting in that also will cause inflation in China. Now that Xi has secured his position as the Leader of China, he doesn't have elections to worry about if his popularity drops internally.

Federal subsidies for the affected industries by Trump perhaps?

originally posted by: nwtrucker
Federal subsidies for the affected industries by Trump perhaps?

Absolutely not. We should get rid of all subsidies. The government shouldn't be in the business of picking winners and losers with taxpayer money.

originally posted by: AugustusMasonicus

originally posted by: nwtrucker
Federal subsidies for the affected industries by Trump perhaps?

Absolutely not. We should get rid of all subsidies. The government shouldn't be in the business of picking winners and losers with taxpayer money.

I can see where your coming from on this and in normal circumstances, I'd agree.

Here's my reservations on that blanket statement. First, if other countries subsidize and we arbitrarily do not, who does it hurt? Our people and industries. Not their's. That, by itself, moves it into a grey area for me. Then there's the probable fact we are in an economic war with China. I would be satisfied with a leveler playing field but apparently China desires to maintain it's advantage and is willing to slug it out. In a 'war', one does what it takes to win. Period.

Finally, one 'can' use the revenues from our tariffs for that subsidy rather than 'taxpayer money'. It may or may not cover it all, but would certainly mitigate it.

JMO, though.

a reply to: nwtrucker


A lot of that can be accomplished via other methods than taking taxpayer money and handing it to someone who cannot run their business profitably.

originally posted by: AugustusMasonicus
a reply to: nwtrucker


A lot of that can be accomplished via other methods than taking taxpayer money and handing it to someone who cannot run their business profitably.

If there are other methods, what are they?

originally posted by: nwtrucker
If there are other methods, what are they?

The first thing would be to push them to stop undervaluing the Yuan. Another would be to halt the practice of turning over technology to the Chinese when you manufacture there.

originally posted by: AugustusMasonicus

originally posted by: nwtrucker
If there are other methods, what are they?

The first thing would be to push them to stop undervaluing the Yuan. Another would be to halt the practice of turning over technology to the Chinese when you manufacture there.

Apparently, China is unwilling to do so. On the second point there's your businesses operating for profit. They own their technology, in many cases.

We 'could' increase the rate of our tariffs and/or increase the number of products that we place tariffs on to generate the funds to subsidize. Other than that, China has made it fairly clear with this counter-move to not only match but far exceed the levels initiated by the U.S., that they're not backing down.

Subsidies would also calm down the stock market and the revenues it's generating for gov't guaranteed pension funds and the like.

If at this juncture China isn't going to play ball, I see no other viable alternative. Be it inflation, direct taxpayer subsidy, lost revenue from the stock market and income tax from those that could lose their jobs, we are going to pay for it one way or another.

a reply to: nwtrucker


Subsidies aren't the answer, I'm not interested in paying for someone's inability to be profitable if we haven't explored other options first.

China is supporting their state owned aircraft industry massively. C919 is just coming out. It's not like China will continue to import American planes far into the future. At some point, China will stop buying American planes, tariffs or no tariffs, simply because they prefer their own planes over imports. Just look at Europe. None of them ever buy a single American plane.

a reply to: sunShines


They have a trillion dollar order with Boeing that goes into the 2030's due to the Chinese inability to produce competing aircraft.

originally posted by: AugustusMasonicus
a reply to: sunShines


They have a trillion dollar order with Boeing that goes into the 2030's due to the Chinese inability to produce competing aircraft.

Okay. Up to 2030 but after that no more contract because Chinese planes, which don't even use American engines.

www.bloomberg.com...

en.wikipedia.org...

EDIT: Chinese airliners are expect to enter service by 2021. There will still be some more contract with Boeing after that.