Trump Threatens Tariffs on Another $200 Billion of Chinese Goods

[Lexicus]

China got into the World Trade Organisation on false premises. Theirs is not at all a free, regulated market with a rule of law, and the CCP is using their powers to take unfair advantage of the rest of us.

I believe the World Trade Organization was itself constructed under false pretenses, though. The idea that countries like the United States or the United Kingdom have a "free, regulated market with a rule of law" is just laughable.

They can freely sell their stuff to us, establish companies or buy our companies and securing the know-how and technologies they have. We can only do the same if we agree to give them control of any Chinese operations, and all know-how and technology necessary for it.

This creates an uneven playing field, costing us lost profits and lost jobs. Even more, since our opponent is the CCP: It's costing us our technological edge, our security and safety.

How very....Trumpish. What's the solution? Kick China out of the WTO and erect protectionist barriers to prevent the leakage of Western technology to Chinese hands?

 

[Broken_Erika]

How very....Trumpish. What's the solution? Kick China out of the WTO and erect protectionist barriers to prevent the leakage of Western technology to Chinese hands?

It's Simple. No Trade with Anyone! That's how you win!

 

[Perfection]

Part of why trade barriers opened up was because the idea that Chinese prosperity would lead to an emerging middle class that would demand democratic reforms. This has not happened and now we're stuck being economically dependant on China as its dictator consolidates power.

Since I'm a champion of human freedom and a globalist, I believe that we should have a policy to pivot more towards democratic allies, India in particular, and away from repressive regimes.

We also need to work on building a highly functional civil society so that America can serve as a showcase for democratic ideals. That starts with not electing malevolent idiots.

 

[Lexicus]

Part of why trade barriers opened up was because the idea that Chinese prosperity would lead to an emerging middle class that would demand democratic reforms.

Instead it turned out that China is the future of the West. Fun stuff!

 

[stinkubus]

I understand that the tariff on that extra 200 billion trade is going to be 10%
So Trump is making with that 25% tariff on steel, alu and that 50 billion trade with China, a distinction with what he considers strategic goods, and normal goods.

If Trump would use that 10% tariff also on all other trade the first estimations (ECB) are that that will decrease global trade volume with around 3%.
With the rule of thumb that GDP changes with 1% for each 3% trade, global GDP growth goes down with 1%.
I guess that that 3% down of trade is too optimistic because of the duration of the discontinuities, the time needed for the shuffle we get with trade streams, the time needed to build up local production under pressure of the fear to invest.

The thing I see is, that whereas Trumps plan is simple: lower corporate tax in the US, decrease import to the country with tarifs, pay the lower corporate tax with those tariffs, "force" foreigners and US corporate to invest in the US for more US production.
Reality will be less simple because as long as investing in the US is seen too much as a risk, also because nobody knows if this strategy will stay long enough in place to justify massive investments, that could become idle.
If the 2018 elections would give a massive support for this Trump move, making it likely to continue as a strategy for 6 years, I see investments happening.

It all depends on who gets feeble knees first, and I think in how far other countries are going to sit out the turmoil until the elections or not.

Foreigners need dollars to invest in the US and they earn those dollars by selling us exports. Tariffs won't increase FDI in the US, they'll do the opposite.

 

[stinkubus]

Instead it turned out that China is the future of the West. Fun stuff!

This was inevitable unless the US had the willingness to go to war with them every other generation or so.

 

[Lexicus]

This was inevitable unless the US had the willingness to go to war with them every other generation or so.

This isn't really what I meant. The reason the US is becoming more like China isn't China, it's the Republican Party.

 

[stinkubus]

Sorry I guess I misunderstood the context.

 

[civvver]

It seems like a self-inflicted wound, though. Why should I have to care about that?

So?

I don't understand why this isn't obviously bad to you guys. It allows these companies to easily export engineering if their chinese divisions have all the r&d american engineers came up with. Or even worse, the chinese company goes solo and the american company folds altogether. Since america can't compete on labor, IP and services are our economy's assets, we shouldn't just fork them over to gain entry to a marketplace. But do you think ceos really care? Cus they'll be set for life either way.

 

[stinkubus]

Well unless you are ok with China's 1.4 billion or so people continuing to live in dire poverty some equalization of living standards is going to occur.

 

[Lexicus]

I think European countries (we know which ones) and the United States ought to pay reparations to China for imposing unequal treaties, the Opium War, brutally suppressing the Boxer rebellion, intervening on the side of fascists in the civil war, etc, etc.

That's the starting point of any discussion about the Chinese taking "unfair advantage" of the trade policies that were anyway set up so that elites in the West and China could benefit at the expense of working people in the West and China.

Sorry I guess I misunderstood the context.

It's all right, it wasn't that clear. What I mean is basically that the whole End of History narrative was correct, it's just that the system of the future wasn't free-market capitalism and liberal democracy, it was hereditary oligarchy expressed in the unfettered and nakedly violent rule of capital and underpinned by a vast technological edifice of surveillance and control.

 

[El_Machinae]

I don't understand why this isn't obviously bad to you guys. It allows these companies to easily export engineering if their chinese divisions have all the r&d american engineers came up with. Or even worse, the chinese company goes solo and the american company folds altogether. Since america can't compete on labor, IP and services are our economy's assets, we shouldn't just fork them over to gain entry to a marketplace. But do you think ceos really care? Cus they'll be set for life either way.

I'm not doubting that China is a competitor, and that they have unfair trade practices.
I'm just curious as to why we care that private Western citizens are going up to China and saying "here, take my IP". It's a decision between them. Now, there are other areas where I can see that there are problems. IP theft is a big issue if the IP's product is then sold back into original nation, absolutely.

It's the framing that's the issue. "They force our countries to give up IP", the politicians say. And I think "How can they possibly for you to give up IP? You'd have to travel there and hand it over to them?"

 

[innonimatu]

Well unless you are ok with China's 1.4 billion or so people continuing to live in dire poverty some equalization of living standards is going to occur.

This old, tired canard here...

I don't see how failing to import stuff from China somehow must keep the chinese poor. What would be stopping them from consuming what they produce?

I'm just curious as to why we care that private Western citizens are going up to China and saying "here, take my IP". It's a decision between them. Now, there are other areas where I can see that there are problems. IP theft is a big issue if the IP's product is then sold back into original nation, absolutely.

"IP" shouldn't even exist. It is a legal fiction, there is no technical necessity of it, and only delays the progress of humanity. As each country makes its own laws, each is obviously free to ignore "intellectual property" and use whatever knowledge its people acquire to improve their lives. Treaties limiting this benefit only the very few people who claim legal monopolies through "IP".

 

[GoodSarmatian]

Part of why trade barriers opened up was because the idea that Chinese prosperity would lead to an emerging middle class that would demand democratic reforms. This has not happened...

It has happened almost 20 years ago in Tiananmen Square.



Will it happen again ?
Almost certainly !
Will the government be able to surpress it ?
Probably.
Will it happen again ?
Almost certainly !
Will the government be able to surpress it ?
Maybe.
Will it happen again ?

It's just a matter of time. until "China" becomes "democratic".
I'm using "scare quotes" because Japan is a "poster child" of East Asian "democracy" and it's also been a de-facto one party state for most of post-WW2 history.

 

[Perfection]

I'm not doubting that China is a competitor, and that they have unfair trade practices.
I'm just curious as to why we care that private Western citizens are going up to China and saying "here, take my IP". It's a decision between them. Now, there are other areas where I can see that there are problems. IP theft is a big issue if the IP's product is then sold back into original nation, absolutely.

It's the framing that's the issue. "They force our countries to give up IP", the politicians say. And I think "How can they possibly for you to give up IP? You'd have to travel there and hand it over to them?"

I worry about the Chinese government outstripping democratic nations in technological proficiency. I want the people firmly committed to human rights to be the first to get their hands on emerging revolutionary technologies.

It has happened almost 20 years ago in Tiananmen Square.



Will it happen again ?
Almost certainly !
Will the government be able to surpress it ?
Probably.
Will it happen again ?
Almost certainly !
Will the government be able to surpress it ?
Maybe.
Will it happen again ?

It's just a matter of time. until "China" becomes "democratic".
I'm using "scare quotes" because Japan is a "poster child" of East Asian "democracy" and it's also been a de-facto one party state for most of post-WW2 history.

Tiananmen Square wasn't 20 years ago, it was 30 and it got played up because it fit in the fall of communism narrative that was happening all over Europe. It didn't lead to democracy (or "democracy") and I see no reason to believe that there is going to be significant liberalizing anytime soon.

 

[Hrothbern]

Foreigners need dollars to invest in the US and they earn those dollars by selling us exports. Tariffs won't increase FDI in the US, they'll do the opposite.

yes
That effect will go in the total equation as well.
Just as the increased US home production of fossil energy will lower dollars streaming to the international market.

But profits from foreign companies, from their FDI in the US, will be in USD. The hurdle higher indeed.

 

[FriendlyFire]

Isnt the US debt going to go above 77% which is when the debt becomes a drag on the economy ?
I suspect that their will be unforseen circumstances for both sides, right now Trump inital 50 Bil Tariffs hurting mostly US companies in Gyna and Chinese Tariffs targeting Republican States

'The US is on track to lose this trade war,' economist Stephen Roach says

"Trade wars are not easy to win. They're easy to lose, and the U.S. is on track to lose this trade war," Roach, a senior fellow at Yale University and former Morgan Stanley Asia chair
"The U.S. is hugely dependent on China as a source for low-cost goods to make ends meet for American consumers. We’re hugely dependent on China to buy our Treasurys to fund our budget deficits, which as you know, are getting larger," Roach explained.

Certainly, there are prominent economists who disagree with Roach.
Mohamed El-Erian, chief economic advisor at Allianz, told CNBC that the United States is in a stronger position than China is.
"In relative terms, we are winning and we will win the trade war," El-Erian said Monday on "Fast Money." El-Erian is considered one of the most influential financial market thinkers in the world.

https://www.cnbc.com/2018/07/12/the...-trade-war-with-china-yales-stephen-roac.html

 

[GoodSarmatian]

The USA could win a trade war with China if it included subsidies and a (re)development plan for domestic industries and the tariffs were better targeted.
Winning against Mexico and/or Canada should be easier. Their economies aren't on the same level.
A trade war with the EU is a different matter. We're a much bigger market for US goods and have more leverage, but I guess it could be done if your smart about it.

If you're not smart about it and start crap on every front at once you're definitely going to lose, but some people still live in this fantasy universe where the USA is a Hyperpower that rules the world.

 

[Hrothbern]

I don't see how failing to import stuff from China somehow must keep the chinese poor. What would be stopping them from consuming what they produce?

As such true

Economy is supply and demand.

I see, think, China goes asymetrical.
China wants to develop high level supply at a high rate and domestic demand in a slow way
Wants to build up high level supply at the fastest possible rate possible in a trading global economy, and to control citizens desire and indulgence in the typical plan economy way.

 

[Lexicus]

I worry about the Chinese government outstripping democratic nations in technological proficiency. I want the people firmly committed to human rights to be the first to get their hands on emerging revolutionary technologies.

Which people are firmly committed to human rights?