AuthorTopic: 🚛 Trade Warz  (Read 9182 times)

Offline RE

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🚛 Trade Warz - Lobster shortage in Beijing!
« Reply #45 on: May 13, 2019, 04:43:36 PM »
Blowback is a bitch.  Trumpovetsky is getting creamed on this one.

<a href="http://www.youtube.com/v/jCEYV3-yaN8" target="_blank" class="new_win">http://www.youtube.com/v/jCEYV3-yaN8</a>

RE
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🚛 Why China’s new tariffs could make the US trade war even worse
« Reply #46 on: May 14, 2019, 12:56:59 AM »
BTFD on the stock market today, or got more downslope to go?

RE

https://www.vox.com/2019/5/13/18617818/china-usa-trade-war-trump-tariff

Why China’s new tariffs could make the US trade war even worse
A crumbling global economy, job losses, and a spooked market — just to start.
By Alex Ward@AlexWardVoxalex.ward@vox.com May 13, 2019, 1:50pm EDT


A container ship unloads its cargo at the main port terminal in Long Beach, California, on May 10, 2019. Mark Ralston/AFP/Getty Images

China is clearly unhappy about President Donald Trump’s escalating trade war — and it just retaliated in a way that could hurt global markets and further damage ties between the world’s two biggest economies.

On Friday, Trump raised tariffs from 10 percent to 25 percent on $200 billion of Chinese goods after Washington and Beijing failed to reach a long-sought trade deal despite days of intense talks.

China vowed to fight back, and officially did so Monday, announcing it would increase its own tariffs on $60 billion of American products. Around 5,000 items will now have duties increased up to 25 percent; those penalties will go into effect on June 1, according to China’s finance ministry.

“China’s tariff move is in response to the US unilateralism and trade protectionism,” the ministry said in a Monday statement. “China hopes that the US will return to the right track of bilateral trade talks, work together with China and meet each other halfway, to reach a win-win and mutually beneficial agreement on the basis of mutual respect.”

And there are signs that things could soon get even worse: The Trump administration is considering upping tariffs on all of China’s remaining imports — about $300 billion worth of products.

These latest moves make two things perfectly clear. First, the two countries aren’t close to striking an accord that would see China modify some of its trade laws in exchange for tariff relief from the US. Second, Washington and Beijing could soon have little to no free trade between them — stunting the global economy and increasing prices for consumers and importers in the US.

That last point isn’t just the view of multiple experts; it’s also the view from some inside the Trump administration. “Both sides will pay in these things,” Larry Kudlow, one of Trump’s top economic advisers, told Fox News on Sunday.
Why Trump wants to escalate the trade war

The Trump administration’s long-term strategic goal is to tank the Chinese economy for the benefit of the US. By placing ever-increasing tariffs on China, the hope is that fewer Americans buy its products and that foreign companies leave that market and set up shop in other countries.

That aim has been implicit for months, but the administration has recently made it extremely obvious.

In the Sunday Fox News interview, Kudlow noted the desired effect of the newly imposed tariffs: “The Chinese will suffer GDP losses and so forth with respect to a diminishing export market.”

And Trump himself tweeted that the tariffs may force corporations to find a new home. “Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia,” the president tweeted on Monday morning.

    ....completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!...
    — Donald J. Trump (@realDonaldTrump) May 13, 2019

There’s a bipartisan consensus that China has taken advantage of the US economy for years, mainly by stealing intellectual property and displacing millions of American jobs. That’s led to calls for the US government to curb Beijing’s unfair trade practices and ensure the US remains competitive in the global economy.

But trying to destroy China’s entire economy is a pretty extreme way to go about doing that, many experts say.

Trump’s misguided views about how tariffs work are also likely playing a big role in the administration’s hardline approach. Trump insists that tariffs force China to pay money to the US Treasury — which just isn’t true. When a tariff is placed on a Chinese good, it is the company importing that product or a consumer buying it who pays a higher price — not China. In other words, these tariffs are effectively a tax on Americans.

But for whatever reason, Trump continues to proclaim that tariffs are “paid to the United States by China” and that they result in “billions” of dollars pouring into the US Treasury.

And experts worry that his misguided strategic and personal views on tariffs may end up seriously damaging the world economy. “Trump is dragging a dangerous misconception into a critical moment in his standoff with the Chinese,” Chad Bown, a trade expert at the Peterson Institute for International Economics in Washington, said last week. “And American businesses and consumers stand to pay the price.”
The first reactions to the growing trade standoff aren’t good

The world has visibly started to panic about the latest US-China spat as global stocks tumbled on Monday. Here’s just a taste:

    Japan’s Nikkei Index is down 0.7 percent.
    European stock indexes fell by more than 1 percent.
    The Dow, a barometer for how well the US stock market is doing, lost nearly 700 points.

It’s of course possible that the markets will rebound over time, but these initial numbers are certainly a sign of growing worldwide worry that the US-China trade war will hurt the global economy. An April report from the International Monetary Fund, a world body that helps keep the global economy stable, backs that sentiment by noting the spat will lead to job losses in both countries.

Which means that unless the trade war ends soon — an unlikely prospect — the world economy will be held hostage by China’s malfeasance and Trump’s misguided views.
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🚛 Trump pushes for new bailouts for farmers hurt by his trade war
« Reply #47 on: May 15, 2019, 08:38:39 AM »
Socialism! lol.

RE

https://www.vox.com/policy-and-politics/2019/5/14/18622956/trump-trade-war-china-bailout-farmers-socialism

Trump pushes for new bailouts for farmers hurt by his trade war

Trump seeks government help for “great Patriot farmers” who are being hit by China’s retaliatory tariffs.

By Aaron Rupar@atrupar May 14, 2019, 1:40pm EDT


Donald Trump and Viktor Orban in the White House on Monday. Mark Wilson/Getty Images

President Donald Trump is opposed to the government interfering in the market to pick winners and losers — at least when doing so doesn’t directly benefit voters crucial to his reelection prospects.

In recent months, Trump has made his opposition to socialism — a system of government in which the government plays a leading role in distributing goods and services — a regular feature of his speeches.

During his most recent State of the Union address, Trump alluded to rhetoric by Democrats and said, “Here, in the United States, we are alarmed by new calls to adopt socialism in our country.” At a rally in Wisconsin last month, Trump vowed that America “will never be a socialist country.” He framed the crisis in Venezuela as a failure of socialism and suggested Democrats wanted to use the Mueller investigation to force him out of office and “institute Socialism.”

Life, however, comes at you fast — especially when you launch a trade war with a country that represents the second-largest export market for American agriculture.

During an Oval Office event with Hungary’s far-right leader Viktor Orbán on Monday, Trump outlined a plan to redistribute money from American importers to farmers hurt by his escalating trade war with China that might fall short of socialism, but is certainly a far cry from the values of free markets and free trade traditionally embraced by Republicans.

“Out of the billions of dollars that we’re taking in [from tariffs], a small portion of that will be going to our farmers,” Trump said. “We’re going to take the highest year — the biggest purchase that China has ever made with our farmers, which is about $15 billion — and do something reciprocal to our farmers.”

Because he doesn’t understand how tariffs actually work, Trump seems to believe this plan represents a redistribution from China to American farmers. But China does not in fact pay for the 25 percent on $200 billion of Chinese goods in tariffs Trump reimposed on Chinese goods after months of negotiations failed to bring the two countries into agreement. Those tariffs are paid by American importers, who often pass the cost along to consumers.

So Trump’s plan, as vague as it is, seems to represent a selective protection from the costs of tariffs: All Americans — from those who pay for his tariffs in the checkout line to farmers hurt by the retaliatory tariffs China has placed on their goods — are being asked to absorb some short-term pain for the good of the country. But the federal government is subsidizing that cost for only a select group.

On Tuesday morning, Trump reiterated his plan on Twitter, and referred to farmers are “Our great Patriot Farmers” — a label acknowledging the hardship the trade war is causing.

Trump’s tariffs subsidy plan — which comes on the heels of a $12 billion program that was available to farmers hurt by retaliatory tariffs last year — represents a sop to his base. More than 75 percent of voters in the Farm Belt voted for him in 2016, yet these same people are being hurt by a self-inflicted trade war as Trump turns his sights to 2020.

“The President of the United States owes farmers like myself some type of plan of action,” John Wesley Boyd Jr., a soybean farmer in Baskerville, Virginia, told CNN on Monday. “Farmers were his base. They helped elect this president ... and now he’s turning his back on America’s farmers when we need him the most.”

Trump’s long-term goal is to force China to agree to a trade deal favorable to the US by inflicting pain upon its economy. But in the meantime, his trade war is causing pain to farmers and the financial markets. And if China follows through on its plan to increase tariffs on $60 billion of American products on June 1, consumers likely will feel the hurt too.

“Americans’ entire shopping cart will get more expensive,” Hun Quach, vice president of international trade at the Retail Industry Leaders Association, told the New York Times.

You don’t have to take Quach’s word for it — during a Fox News interview on Sunday, White House economic adviser Larry Kudlow admitted that “both sides will suffer” because of Trump’s trade war with China. Kudlow also acknowledged that Trump’s understanding of how tariffs work is flawed. But Axois’s Jonathan Swan, citing a former White House aide, reported on Tuesday that Trump’s false belief about tariffs is “like theology.”
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Offline RE

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🚛 Death by paperwork: Tariffs aren’t China’s only trade weapon
« Reply #48 on: May 16, 2019, 01:04:59 AM »

Chinese President Xi Jinping could be weighing options for how to hit back against a decision by the U.S. to increase existing tariffs and impose new penalties on all remaining Chinese imports. | Jason Lee/AFP/Getty Images

Death by paperwork: Tariffs aren’t China’s only trade weapon

Here’s how China could cause pain to American businesses without resorting to tariffs.

By ADAM BEHSUDI

05/15/2019 07:05 PM EDT

Tariffs may cause sticker shock and send stock markets swooning, but the Chinese have an even bigger arsenal of economic weapons to hurt the U.S. businesses as the trade wars escalate.

Beijing could take a death by regulation approach making it nearly impossible for American businesses to operate in one of the world’s valuable consumer markets. Actions include tighter customs procedures, new paperwork requirements and extra scrutiny on business licenses. The government could also scrutinize visas, making it harder for U.S. business travelers to enter the country.

Another way Beijing could hurt the U.S. is by appealing to Chinese patriotism by pushing its population to boycott U.S. products and prominent brands like Apple.

These aren’t just speculative ideas. Both Chinese state media and social media outlets reveal a population ready to fight alongside its leaders in the economic war against President Donald Trump and the United States.

“Any cursory reading of social media and public commentary in China at present clearly shows that a nationalistic pressure by civil society in China is building rapidly,” said Craig Allen, president of the U.S.-China Business Council.
Huawei building

cybersecurity
Trump signs order setting stage to ban Huawei from U.S.

By ERIC GELLER

Allen, whose group represents major U.S. companies doing business in China, said the Chinese government has tried to reassure American investors that their interests should be protected and there have been no obvious cases of retaliation.

“Let’s hope it stays that way,” he said. “We should all be extremely cautious about stirring up anti-American sentiment in the second largest market in the world.”
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But if the trade fight proliferates, China could quickly deploy many of these non-tariff actions in a bid to exert leverage. China has far fewer U.S. imports to hit with duties compared to the amount of goods that China exports to the U.S.

Harsher rhetoric from Chinese officials in recent days has hinted that Beijing could be weighing its options for how to hit back against a decision by the U.S. to increase existing tariffs and impose new penalties on all remaining Chinese imports.

Chinese President Xi Jinping warned in a speech on Wednesday that one civilization forcing itself on another would be “stupid” and “disastrous.”

A Chinese foreign ministry spokesperson said that China would “fight to the end.”
poster="http://v.politico.com/images/1155968404/201905/308/1155968404_6036719092001_6036699186001-vs.jpg?pubId=1155968404"
true

“That’s always been their secret weapon, so called non-trade barriers,” said Michael Pillsbury, an outside adviser to Trump on China issues. “The non-trade barriers are where you can really inflict damage.”

China’s central government may have an interest in trying to keep any non-tariff responses firmly under its control for now. Boycotts and similar mass movements against U.S companies would not only damage Chinese business interests but could quickly morph into social unrest aimed at the government, said Deborah Elms, executive director of the Singapore-based Asian Trade Center.

“This would be playing with fire,” she said.

Instead, the Chinese government could ramp up “qualitative” actions that can remain firmly under its control. That could include tightening customs inspections, delaying regulatory approvals, invalidating patents, and other actions drawn from a playbook that Beijing has consistently relied upon in years past.

China could also try to interfere with U.S. company supply chains. For example, it could inspect Apple iPhone supplier Foxconn’s production facility and find violations to justify shutting them down for three months.

“Given the rate that Starbucks is expanding in China, my guess is the Chinese government will discover something that‘s not quite right,” said Elms.

Beijing could also try to undermine the impact of U.S. duties by letting the value of its currency slide, although that could bring larger problems it may want to avoid.
Watch President Trump call trade war with China a 'little squabble'

trade
Here’s how the U.S.-China trade war could end

By DOUG PALMER

“These are not surgical tools,” Elms said. “If I want to inspect the paperwork of a company, I can control that pretty well. When you start messing with currency, that effects the entire economy.”

For U.S. businesses, the calculus has changed as many companies now view China’s growing middle class and 1.4 billion consumers as their primary market where they now build and sell products.

With a middle class of 300 million people and growing, multinational companies like Boeing and General Motors are looking at futures more closely tied to China — where demand for aircraft and automobiles is expected to outpace the U.S. in the coming years.

It’s unclear if the pain of U.S. businesses in China will resonate with a president whose ultimate goal may be to decouple the U.S. and Chinese economies.

“I don’t think [Trump] will want to hear directly from all the Dennis Muilenburg’s of the world,” a former senior U.S. official who was posted in China said, referring to Boeing’s CEO. “If enough of them call, that might get his attention.”
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Offline RE

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More than anything else, this is what can get a Hot War with the Chinese going.  It's equivalent to embargoing Japan on Oil prior to WWII.

RE

https://www.businessinsider.com/huawei-ban-trade-war-tech-cold-war-2019-5

Trump's Huawei ban escalates the US-China trade war into a tech Cold War
Linette Lopez


US President Donald Trump with Chinese President Xi Jinping at Trump's Mar-a-Lago estate in 2017. AP

Opinion banner

    By giving Huawei Technologies the so-called death penalty, President Donald Trump's administration has shown it does not trust the Chinese government to act in good faith.
    Consider this a major impediment to any kind of trade deal.
    The US is no longer just trying to block China's companies from US markets — it's trying to block them from markets all around the world.
    In this environment, former Treasury Secretary Hank Paulson has said, "divorce is a real risk."
    Visit Business Insider's homepage for more stories.

By giving Huawei Technologies the " death penalty," the Trump administration has escalated tensions between the US and China to a level of hostility akin to a tech Cold War.

On Tuesday, the Trump administration put Huawei on the Commerce Department's "Entity List." It sounds benign, but the listing can make it nearly impossible for a company to do business with American firms.

This is a big problem for Huawei, considering the US is home to one in four of Huawei's suppliers, including the chipmakers Qualcomm and Micron Technology. Analysts at the risk consultancy Eurasia Group pointed out that without US suppliers, Huawei would be unable to conduct even routine maintenance and hardware replacement.

The implications of the Huawei situation are much further reaching than President Donald Trump's tariffs on Chinese goods. In moving to cut off Huawei's supplies, the Trump administration is directly attacking a company tied to the Chinese government.

And there could be more to come. A bipartisan group of senators are working on legislation that would put a ban on selling technology to any Chinese company that violates US sanctions by doing businesses in countries like North Korea or Iran.

There's also a bill sitting in the Senate Judiciary Committee called the China Technology Transfer Control Act. It would put all core technologies developed through China's "Made in China 2025" technology push on the Commerce Department's export-control list along with Huawei.

Made in China 2025 is meant to be the next phase in China's plan to evolve its economy into a major player in the global tech market. The China Technology Transfer Control Act would put a wrench in those plans.

These are more than trade-war moves — they're Cold War moves.

For those whose memory of Chinese history goes back only to its latest opening to the West, in the 1970s, this is probably a jolt. But the reality is that the US relationship with China is one of opening and closing — trust and hostility — going back to the 18th century.

And right now, it seems as if the pendulum has swung back toward hostility.
What is Huawei?

We know that Huawei makes phones and other telecommunications technology. We also know the Department of Justice charged Huawei with attempting to steal technology from a US company (a rather basic-looking T-Mobile robot named Tappy) and violating US sanctions to do business with Iran. We also know that we know next to nothing about who really controls the company aside from its founder, Ren Zhengfei.

After attending university, Ren joined the People's Liberation Army and developed technology for it. He left the army in 1982 and founded Huawei in 1987. His daughter, who is under house arrest in Canada as part of the Justice Department's case against the firm, is the CFO of the company. Ren owns 1.47% of Huawei, while the rest is owned by a trade union.

When questions about Huawei's control started surfacing in Western media, the company invited reporters to look at a thick book held in a locked glass box at Huawei's headquarters. That book, the company said, was the list of all the members of the trade union who own shares in Huawei. Those shares do not give them much power, though, and serve more as a profit-sharing agreement.

The economics professor Christopher Balding, formerly of Peking University, and the George Washington University Law School professor Donald Clarke wrote a paper examining the control of Huawei in April.

"Given the public nature of trade unions in China, if the ownership stake of the trade union committee is genuine, and if the trade union and its committee function as trade unions generally function in China, then Huawei may be deemed effectively state-owned," they wrote.

This is why the world — particularly the US's closest allies — is so circumspect about letting Huawei rule the future of telecommunications by building out 5G, or fifth-generation, wireless networks.

The former head of the UK intelligence agency, MI6, said allowing the company to build out the UK's 5G networks would give the Chinese government a "potentially advantageous exploitative position" in the country. Australia has even barred Huawei from building its 5G infrastructure outright.

Huawei is trying hard to assuage fears that it might build backdoors in its technology for the Chinese Communist Party to access. It is no doubt using China's vast network of lobbyists, friendly academics, and political allies to make that argument. And the company has gone so far as to promise to sign no-spy agreements with its customers, which itself is eyebrow-raising.
Tell me why did our love turn cold?

All of this is to say that the US does not trust Huawei. And since Huawei appears to have close ties to the Chinese government, it's safe to say that Trump's move against the company shows he doesn't trust the Chinese government either.

This has scholars like Balding wondering whether a trade deal can even be made under these conditions.

"This lack of trust is more than just an existential or theoretical implication but directly impacts the ability to reach a deal," he wrote as talks collapsed earlier this month.

"A major sticking point, from a variety of reports on multiple levels, appears to have been the issue of enforcement, verifiability, and or commitment," he added, concluding: "In other words, the lack of trust proved quite consequential."

To many in China, the US is being irrational. In January, the Hong Kong property tycoon Ronnie Chan, an American citizen who sits on the Council on Foreign Relations, told the South China Morning Post:

"People said China has been stealing technology. Well first of all, everybody steals technology. And number two, three years ago, I had a discussion with [former CIA director] general David Petraeus and [former US secretary of state] Condoleezza Rice on this subject of stealing technology from one another. Is that something that happened in the last one year? Did it get worse? It didn't get worse, so what changed your mind?"

But China has changed. Under President Xi Jinping it has become more totalitarian and abusive of human rights. Critics point to the millions of Uighurs living under surveillance and going through reeducation in Xinjiang; they point to Xi's never-ending anti-corruption drive that has helped to purge his enemies.

These changes and China's global ambitions set the stage for a prolonged standoff between the US and China. John Garnaut, a former journalist and Australian government official who came to have rare access to the Chinese Communist Party's ruling class, has argued that Xi is returning to the Chinese Communist Party's Stalinist roots.

Here's an excerpt from a speech Garnaut gave for the Asian Strategic and Economic Seminar Series called " Engineers of the Soul: Ideology in Xi Jinping's China":

"The challenge for us is that Xi's project of total ideological control does not stop at China's borders. It is packaged to travel with Chinese students, tourists, migrants and especially money. It flows through the channels of the Chinese language internet, pushes into all the world's major media and cultural spaces and generally keeps pace with and even anticipates China's increasingly global interests."
Cold future

What measures like giving Huawei the "death penalty" will do is sever the economic ties between the US and China. In the foreign-policy world this is known as "decoupling," and in March Chinese Premier Li Keqiang called such a notion " unrealistic."

Others, like former Treasury Secretary Hank Paulson, have been less certain.

"At this point, after 40 years, when we have had one kind of relationship but now, quite clearly, face the daunting task of transitioning to a new one — anchored in a realistic and more sustainable — strategic framework — divorce is a real risk," he said last year in an address at the Bloomberg New Economy Forum in Singapore.

That divorce could, according to Paulson, create an economic Iron Curtain dividing the world between the two largest economies.

Thanks to US-China trade tensions, this divorce is already happening in the world of supply chains, albeit with much confusion. Some US companies feel they must leave China but aren't sure where to go or how they'll be treated when they get there. It's a mess — the kind of mess that is made when the world gets colder.

This is an opinion column. The thoughts expressed are those of the author.
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Offline AJ

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Re: 🚛 Trade Warz
« Reply #50 on: May 18, 2019, 03:36:59 AM »
Interesting article. If collapse happens soon all this concern about China is meaningless. If collapse takes some time (10 - 20 years) maybe this means something. Are Xi and associates as clueless about collapse as the rest of the world in the west? Are these surveillance technologies and his Stalinist moves positioning Xi for a post tech/collapse world in China or beyond China? Will there be any greater geopolitical world once collapse happens? Sometimes I think this whole tech surveillance state stuff is meaningless if we collapse, and then maybe there will be actors trying to control what's left of "civilization" after it collapses?
AJ
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Re: 🚛 Trade Warz
« Reply #51 on: May 18, 2019, 03:46:14 AM »
Interesting article. If collapse happens soon all this concern about China is meaningless. If collapse takes some time (10 - 20 years) maybe this means something. Are Xi and associates as clueless about collapse as the rest of the world in the west? Are these surveillance technologies and his Stalinist moves positioning Xi for a post tech/collapse world in China or beyond China? Will there be any greater geopolitical world once collapse happens? Sometimes I think this whole tech surveillance state stuff is meaningless if we collapse, and then maybe there will be actors trying to control what's left of "civilization" after it collapses?
AJ

As I see it, the Chinese are clearly in denial about collapse, at least as much as Western countries.  If they had any CFS, they would be promoting a Back to the Land movement in China and trying to empty out their ridiculously Big Shitties.  But they're not, they're doubling down on Industrial and Technological culture.

China Bulls talk about how China "plays the long game".  This is totally backwards.  China is playing the short game, looking to become the next Industrial Superpower, utilizing the same techniques and technologies as the West did, except too bad for the Chinese, they got there a Day Late and a Yuan short. Maybe they get a week or two at the top of the heap when Industrial Civilization comes crashing down.  Then they will be in even worse doo-doo than the FSoA is.  That country is a totally polluted sewer now.

RE
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Re: 🚛 Trade Warz
« Reply #52 on: May 18, 2019, 03:52:36 AM »
I agree with your "reasoned" analysis. BUT I think Xi also knows that a lot of China is still back in countryside and not as far removed from being farmers of the land as those of us in the West. Not many in the west could make a small farm run, a lot in China still know how. The problem for them in a crash is how to eliminate 90% of their population? Oh, wait, they have experience with that going back 5000 years - it's called starvation (except for the emperor!). :evil4:
AJ
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Re: 🚛 Trade Warz
« Reply #53 on: May 18, 2019, 04:03:16 AM »
I agree with your "reasoned" analysis. BUT I think Xi also knows that a lot of China is still back in countryside and not as far removed from being farmers of the land as those of us in the West. Not many in the west could make a small farm run, a lot in China still know how. The problem for them in a crash is how to eliminate 90% of their population? Oh, wait, they have experience with that going back 5000 years - it's called starvation (except for the emperor!). :evil4:
AJ

"Knowing how" and actually being ble to DO IT are 2 totally different things.  They have already converted over many traditional rice paddies into ones that can be farmed utilizing industrial machinery, and it's a full generation of people that have migrated away from the land to the Big Shities.  Besides that, the rice you grow with a polluted water table is almost as bad as GMO rice sprayed with Monsanto insecticides.  Then there are all those Chinese Nuke plants, which no doubt are about as well constructed as the new cities they slap together in a month or two.

RE
« Last Edit: May 18, 2019, 04:04:49 AM by RE »
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Trade Warz - The Polar Silk Road Comes To life
« Reply #54 on: May 18, 2019, 11:10:37 AM »


The Polar Silk Road Comes to Life as a New Epoch in History Begins

Matthew Ehret

May 16, 2019

Speaking at China’s second Belt and Road conference in Beijing featuring 37 heads of state, Russia President Vladimir Putin unveiled the intention to unite Russia’s Northern Sea Route with China’s Maritime Silk Road. This announcement should come as no surprise to anyone who has been paying attention to the close strategic friendship between both countries since the 2015 announcement of an alliance between the Russian-led Eurasian Economic Union and Belt and Road Initiative. This extension of the Maritime Silk Road represents a powerful force to transform the last unexplored frontier on the Earth, converting the Arctic from a geopolitical zone of conflict towards a new paradigm of mutual cooperation and development.

Putin gave a speech at the BRI forum on April 26 stating:


https://www.strategic-culture.org/news/2019/05/16/polar-silk-road-comes-to-life-as-new-epoch-history-begins/
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Offline RE

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I Pledge Allegiance to Walmart, as long as there are Low, Low Prices Every Day.

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https://www.npr.org/2019/05/20/724357301/in-trumps-trade-war-americans-will-be-asked-to-show-economic-patriotism


In Trump's Trade War, Americans Will Be Asked To Show Economic Patriotism


May 20, 20195:01 AM ET
Heard on Morning Edition
Jim Zarroli 2010


Chinese shipping containers are stored at the Port of Los Angeles in Long Beach, Calif. Americans, in bigger numbers than ever, like trade. But they also believe China doesn't play fair in trade.
Mark Ralston/AFP/Getty Images

Bob Best enthusiastically supports President Trump's tough policies against China and other countries.

"I'm not a big tariff guy. I'm a free trade guy," says Best, who manages a heating and air conditioning company in Kennesaw, Ga.

"But sometimes when the bully just doesn't listen, you've got to punch him in the mouth. And that's what he's doing."
For One U.S. Bike-Maker, Tariffs Are A Mixed Bag
Business
For One U.S. Bike-Maker, Tariffs Are A Mixed Bag

Best supports the president's actions even though they affect him directly. The price of the heating and air conditioning units that his company sells went up by as much as $150 apiece after the cost of building them went up because Trump placed tariffs on steel and aluminum imports last year. He had to pass the increase on to his customers.

Trump will have to appeal to Americans' national pride, and even their patriotism, to succeed in leveling the playing field with China. That's because virtually every American is likely to feel an impact if Trump's tariffs go forward on just about everything imported from China. He will have to persuade Americans that what's at stake transcends their own interests.

Americans may not like paying higher prices on imported products, but they are more likely to tolerate them if they perceive that American values are at stake, says Henry Olsen, senior fellow at the Ethics and Public Policy Center.

"I think you have an element of patriotism," Olsen says. "People recognize that the Chinese government is not a free government, it's not a democratic government, and that it's increasingly becoming a threat to us and the other countries that do believe in those things."
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As an abstract idea, Americans are big backers of trade. Seventy-four percent see trade as a net positive for the economy. Mohamed Younis, editor-in-chief at Gallup News, says most people believe trade lowers prices overall and leads to a greater selection of products.

But 62% of Americans believe trade with China is unfair, he says.
China Puts New Tariffs On $60 Billion Of U.S. Goods, And Stock Prices Reel
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China Puts New Tariffs On $60 Billion Of U.S. Goods, And Stock Prices Reel

Last week, Trump hiked tariffs on $200 billion worth of Chinese products from 10% to 25% and has threatened to levy that amount on an additional $325 billion worth of goods.

Tariffs are like taxes paid by importers at U.S. ports when they clear customs. Those businesses have to either swallow the cost themselves or pass it on to customers. The risk for Trump is that Americans will balk at paying higher prices. So far, there's little evidence that's happening.
Farmers Hope For China Trade Deal, But For Now They Worry About Tariffs' Impact
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Farmers Hope For China Trade Deal, But For Now They Worry About Tariffs' Impact

And support from some of the hardest hit remains firm. Even farmers, who have borne the brunt from the trade war, continue to support Trump in large numbers, says Rhonda Brooks, editor of Farm Journal, which regularly surveys ranchers and farmers about their political views.

"They believe very strongly that this is a president who is — more than any president in recent history, actually — who's really been talking about farmers and at least acknowledging them and that he wants to help them," Brooks says.
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https://www.theguardian.com/business/2019/may/23/donald-trump-trade-policy-hot-mess-conflicting-goals-few-winners-china-us-economy

Tariffs war with China has hurt almost every segment of the US economy

Jeffrey Frankel
Thu 23 May 2019 06.45 EDT
Last modified on Thu 23 May 2019 07.13 EDT


Donald Trump looks and talks like someone who would be perfectly satisfied if the tariffs became permanent. Photograph: Rex/Shutterstock

Earlier this month, the US President, Donald Trump, suddenly revealed that a trade agreement between the US and China was not imminent after all. On the contrary, on 10 May the Trump administration raised its previous 10% tariff on $200bn (£158bn) worth of Chinese goods to 25% and threatened to apply the same rate to the remaining $300bn or so of US imports from China by late June. China then retaliated with reciprocal tariffs on $60bn worth of US exports, effective 1 June. Surprised stock markets fell in response, with the S&P 500 down 4% over the first week of the renewed trade war.

US trade policy is a hot mess of conflicting goals. Given the current impasse in talks with China, and Trump’s general unpredictability, the inconsistencies of US trade policy – and their costs – are unlikely to go away soon.

For starters, US officials and some prominent economists defend the high US tariffs as a regrettable but temporary expedient, and a necessary means to a strategic end. On this view, the tariffs are a weapon that will enable Trump, the consummate dealmaker, to force concessions from China and the US’s other trading partners.
Could the US-China trade row become a global cold war?
Nouriel Roubini
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Yet Trump looks and talks like someone who would be perfectly satisfied if the tariffs became permanent. He continues to insist that China is paying the cost of the tariffs, sending money to the US Treasury. Moreover, he seems unfazed by the possible long-term effects of a protracted trade war: a decoupling of the Chinese and American economies, and a loss of gains from trade, including a dismantling of the supply chains on which so much industry in both countries depends.

At the same time, the Trump administration is demanding that China make it easier for American companies to set up operations in the country – in particular, by ensuring that US firms are not required to hand over technology or other intellectual property to local partners. However, this seems inconsistent with Trump’s goal of increasing US net exports to China, which would presumably involve American firms producing at home rather than in China.

The incoherence of Trump’s trade policies is even more worrying on closer inspection. If higher tariffs remain indefinitely – as appears possible – the US and the global economy will be worse off.
A container ship at the port of Qingdao in China.
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A container ship at the port of Qingdao in China. Photograph: STR/AFP/Getty Images

Trump’s gleeful belief that China is helping to fund the US government via the tariffs is outlandish. A tariff is a tax and it is US consumers and firms, not China, who are paying it. True, Chinese exporters might in theory have had to lower their prices if US tariffs had led to a sufficiently large drop in demand for their products. But two new studies by eminent economists using 2018 data find that Chinese exporters have not lowered their prices and that, as a result, the full extent of the price increase has been passed through to US households.
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According to one estimate, if Trump goes ahead with his threat to extend the 25% tariff to all imports from China, the cost for a typical US household will be $300-$800 a year; another puts the additional costs as high as $2,200 a year. Moreover, this does not count the cost to US firms, workers and farmers from lost exports – the result of Chinese retaliation and other effects, including appreciation of the dollar against the yuan.

An extended tariff war would also result in a loss of gains from US-China trade. Economists have long said that the public cannot be expected to understand the principle of gains from trade without having been taught British economist David Ricardo’s principle of comparative advantage. This idea – which states that trade between two countries can be mutually beneficial even when one country can produce everything more cheaply than the other – was famously described by the US economist Paul Samuelson as being both universally true and yet not obvious.

    To say that both countries gain overall from trade is not to claim that every citizen of each country benefits

But, in fact, one does not need a full grasp of the principle of comparative advantage to understand the basic idea of mutual gains from trade. If the buyer and the seller voluntarily agree to the exchange, then they both gain. This assumes that they are each good judges of what they want – or at least better than the government is. This assumption is usually correct, with some exceptions (such as users’ opioid purchases).

To say that both countries gain overall from trade is not to claim that every citizen of each country benefits. Changes in trade or tariffs give rise to winners and losers within each country. But whereas winners tend to outnumber losers when trade is liberalised, raising tariffs normally has the opposite result.

Trump appears to have engineered a spectacular example of this: his trade war with China has hurt almost every segment of the US economy and created very few winners. The losers include not only consumers but also firms and the workers they employ, from farmers losing their export markets to manufacturers forced to pay higher input costs. Even the US auto industry, which did not ask for Trump’s “protection”, is worse off overall because it has to pay more for imported steel and auto parts.

As a result, Trump has come close to accomplishing something seemingly impossible: tariffs that benefit almost no one. Protectionism is usually explained as the result of special interests wielding disproportionate power. Trump’s tariffs against Chinese goods do not fit this theory. And a theory that does explain them may not exist.

• Jeffrey Frankel is a professor at Harvard University’s Kennedy School of Government. He served as a member of President Bill Clinton’s Council of Economic Advisers
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https://www.scmp.com/tech/big-tech/article/3011700/tech-cold-war-how-trumps-assault-huawei-forcing-world-contemplate

Tech cold war: how Trump’s assault on Huawei is forcing the world to contemplate a digital iron curtain

    Recent US trade moves against China are not short-term negotiating tactics from Trump, they are opening salvos in a new tech cold war
    Many now think the real issue is whether China has the right to develop its own, home-grown hi-tech industry


Designed by Apple in California. Assembled in China. This familiar line on the back of iPhones has summed up the world order for the past two decades: American innovation married with low-cost Chinese manufacturing to deliver cheap, quality products for the world.

But as China pursues its own tech ambitions, a threatened US is moving to cut Chinese firms off from American scientific know-how and pushing the world into a tech divide that neither country has really prepared for.

The Trump administration has targeted Huawei Technologies, one of China’s tech champions, by launching a one-two punch combination in its fight to ensure that national security is not compromised in US telecoms infrastructure, while simultaneously reining back China’s dominance in next-generation 5G wireless networks.

By inking an executive order restricting US tech purchases by “foreign adversaries” that are deemed a national security risk, as well as putting Huawei on a government blacklist, the US has effectively cut off Huawei’s oxygen supply by limiting its access to critical chips and software from American companies.
Trump says Huawei could be included in deal to end trade war

This is not a short-term negotiating tactic by the Trump administration designed to extract a concession – rather it is the opening salvo in a new tech cold war that could upend the global supply chain and rewrite business orders worldwide.

“The Huawei case clearly shows that global economic networks have entered the realm of geo-strategy,” said Abraham Newman, a professor at the school of foreign service and department of government at Georgetown University. “The hyper-globalisation of the last twenty years is unsustainable given the real geopolitical constraints. We are entering a new phase,” said Newman, who is the co-author of several books including Voluntary Disruptions: International Soft Law, Finance, and Power.
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https://arstechnica.com/gadgets/2019/05/huaweis-us-ban-a-look-at-the-hardware-and-software-supply-problems/?utm_source=pocket-newtab

Who needs Qualcomm? —
Huawei’s US ban: A look at the hardware (and software) supply problems
Huawei's hardware independence is actually pretty good! The software, though...

Ron Amadeo - 5/21/2019, 9:35 AM


President Trump's Huawei ban is in full effect, and companies from all over the country are announcing they will no longer be doing business with Huawei. Google, Qualcomm, Broadcom, and Intel are all cutting ties with Huawei, and once this new 90-day exemption is up, really every US company would no longer be allowed to supply Huawei with technology or services. Trump's executive order is very broad, prohibiting "any acquisition, importation, transfer, installation, dealing in, or use of any information and communications technology or service" by any foreign company the US government deems a threat, in this case, Huawei.

With Huawei cut off from US technology, exactly how hard will it be for the company to continue to make smartphones? For an idea of how much Huawei would need to change, let's do a parts audit on the company's latest flagship smartphone, the Huawei P30 Pro. We'll see where each component comes from and what other options exist out there in the ecosystem. Between spec sheets, teardowns from iFixit, and EE Times, we can whip together a pretty good list of components and their countries of origin.
The Power of HiSilicon
Huawei

The System on a Chip is the heart of any smartphone, supplying most of your basic three-letter computer components like the CPU, GPU, LTE modem, GPS, and more. Huawei is better off than most companies in this area—it's one of the few companies (along with Samsung) that has its own chip-design division. Huawei's "HiSilicon" group designs SoCs for its smartphones, and the Huawei P30 Pro uses the HiSilicon Kirin 980 SoC. HiSilicon has its own LTE modem solution and is a leader in 5G modems.

Trade War! USA v. China

    ARM is the latest partner to shun Huawei, so how will it design chips?
    The US DOC gives Huawei a 90-day window to support existing devices
    Huawei’s US ban: A look at the hardware (and software) supply problems
    Google reportedly ends business with Huawei, will cut it off from Play Store [Updated]
    Trump tries to shut Huawei out of US market with executive order

View more stories
Most Android manufacturers rely on Qualcomm—a US company—for its Snapdragon SoCs with integrated LTE modems. Qualcomm has a near monopoly on the high-end smartphone market, thanks not only to reliably producing yearly SoC upgrades, but also by aggressively investing in and patenting cellular technologies. Qualcomm was one of the first companies to bring LTE to market, and it has been leading the charge toward 5G, too. Qualcomm has no doubt been patenting everything it can find along the way.

Qualcomm has been sued and fined for anti-competitive patent licensing, and it seems committed to creating a legal headache for any company that doesn't use its products. Apple and Qualcomm were feuding over Apple's use of Intel modems in its iPhones, and when the two companies settled, Intel quit the 5G modem business that same day. Samsung has its own Exynos line of processors but usually doesn't ship them in the US, instead using Qualcomm chips.

Huawei's Kirin 980 is based on the ARM architecture, which Huawei licenses from ARM Holdings PLC. ARM's headquarters is in England, but it now has a Japanese parent company, Softbank. Huawei is a fabless chip designer, meaning the company doesn't own a semiconductor foundry, so it must get its chip designs manufactured somewhere. Kirin chips are usually made at TSMC, (Taiwan Semiconductor Manufacturing Company Limited), which, wouldn't you know it, is headquartered in Taiwan. The running theme of this article is "Samsung would also be an option"—and for chip fabrication, Samsung would also be an option. Samsung (which is based in South Korea) produces Qualcomm's flagship chips and is actually one of the leading silicon manufacturers on Earth. We're doing good so far!
Update: ARM is out
A day after this article was published, ARM cut ties with Huawei, putting the company's chip design future in doubt. Despite being a non-US company, ARM says its designs contain “US origin technology," so it feels it would be in violation of the US export ban.

ARM helps Huawei design SoCs, so the export ban shouldn't affect immediate Huawei SoC production. Huawei also reportedly has its next-generation SoC, the Kirin 985, far enough along that the loss of ARM shouldn't affect it. The Kirin 985 is due out sometime in Q3 or later, so existing SoC projects should carry Huawei forward for the next 12-18 months.

The problem for Huawei is after that. With no support from ARM, Huawei will be unable to design SoCs for the future. If we assume a yearly upgrade cadence, then Huawei will have no SoC to upgrade to in Q3 2020. Even if the US/China trade war gets resolved by then, Huawei will be losing valuable development time between now and then.
The rise of BOE and Chinese displays

Huawei sources its displays from just about everybody, with Anandtech reporting various P30 variants using displays from the usual suspects: Samsung Display (South Korea) and LG Display (also South Korea), along with BOE Technology Group Co, a Chinese company. BOE is a real up-and-comer in the display market, and according to Bloomberg, it will blow past LG to become the number two supplier of OLED displays by the end of the year. If you haven't been paying attention to BOE, you should start.

Like Huawei, BOE has the blessing and financial backing of the Chinese Government, which helps explain its sudden and meteoric rise—Korea owns the OLED market, and BOE is China's answer. With the might of China behind it, BOE has started to go after Samsung Display's biggest customers and is trying to woo Apple to become a supplier for future iPhone displays. BOE even has the gall to start courting Samsung Electronics as a customer, hoping the company will dump its usual OLED supplier—uh—Samsung Display, in favor of BOE. Good luck with that.

Samsung has tried to stay ahead of this new Chinese rival with superior technology, mainly via the development of flexible displays for new-age foldable smartphones like the Galaxy Fold. Samsung invested six years of research and $130 million to develop bendable OLEDs that (sort of) work, so surely this will give Samsung some breathing room against its Chinese rival, right? Sadly for Samsung, South Korean prosecutors say Samsung's flexible display technology was stolen by one of its suppliers and sold to an unnamed display firm in China. After the Galaxy Fold, the next big foldable smartphone just so happens to be from China, and it's the Huawei Mate X. The supplier of the Mate X's flexible OLED display is BOE. No doubt BOE's technology was completely self-developed.

Under the P30 Pro's display is an in-screen fingerprint reader, an optical reader made by Goodix, a Chinese company. Goodix also supplies OnePlus with its optical fingerprint readers. Before the US ban, Qualcomm would have been another option, with its ultrasonic fingerprint reader that debuted in the Galaxy S10. If you're keeping score, we still haven't run into a US supplier.
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https://www.scmp.com/news/china/diplomacy/article/3012205/china-or-us-europes-impossible-choice-trade-war

China or the US? Europe’s ‘impossible choice’ in the trade war

    The EU is a top trading partner of both China and the US
    Bloc now in a difficult spot as Trump moves to ratchet up pressure on Beijing

Shi Jiangtao


US President Donald Trump at a welcoming ceremony in Beijing with China's President Xi Jinping in 2017. Photo: Reuters

Growing tensions between China and the United States over the escalating trade dispute – and the resulting global uncertainty – are forcing other countries to choose between the two economic superpowers.

The European Union, which is the world’s largest trading bloc and a top trading partner of both China and the US, is in a difficult spot since US President Donald Trump’s decision to ratchet up pressure on Beijing early this month – a move that included signing an executive order which effectively banned Chinese telecoms giant Huawei from accessing US supply chains.

“Europe is finding itself today in an extremely inconvenient position in which countries that seek to coexist with both China and the US are called to make an impossible choice and prove their allegiance to one of the parties over the other,” said Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington-based think tank.

As nationalist rhetoric heats up in the wake of an early-May breakdown in US-China trade talks, top officials from both countries have engaged in intense shuttle diplomacy aimed at securing support and shoring up alliances across Europe.

Chinese Vice-President Wang Qishan, a close ally of President Xi Jinping who formerly led trade talks with the US, is visiting Germany and the Netherlands this week, just days after another top Xi aide, Li Zhanshu, the Communist Party’s third-most powerful cadre, wrapped up a trip to Hungary, Austria and Norway.

Wang’s trip will coincide with US Secretary of State Mike Pompeo’s arrival in Berlin for talks with Chancellor Angela Merkel on Friday. The US State Department said Pompeo would also visit the Netherlands, Switzerland and Britain.
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Pompeo’s four-nation trip is expected to pave the way for further travel by Trump himself, who is set to visit Britain and France early next month.
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The EU is in a delicate balancing act, as deteriorating US-China relations coincide with its own widening rift with the US over trade. European ties with Beijing stand at a crossroads, amid signs of a gathering storm and growing rivalry.

In a landmark shift in its policy on China, the European Commission – the executive arm of the EU – for the first time labelled it an “economic competitor” and “a systemic rival” in a policy paper in March.

Observers say that, with the return of trade war tensions, Europe – already caught in the middle of the unfolding US-China rivalry – will become an important battlefield for the two giant nations’ geostrategic political machinations.
German Chancellor Angela Merkel with Chinese President Xi Jinping in Paris in March, has said she will not block Huawei because Europeans are “pragmatic and realistic”. Photo: EPA-EFE
German Chancellor Angela Merkel with Chinese President Xi Jinping in Paris in March, has said she will not block Huawei because Europeans are “pragmatic and realistic”. Photo: EPA-EFE
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“The common view in Europe is that the EU basically agrees with the substance of American criticism of China, but does not agree with the methods and manners of confrontation,” said Tamas Matura, a China specialist who is an assistant professor at Corvinus University of Budapest and president of the Central and Eastern European Centre for Asian Studies.

“The EU and its member states are deeply interested in the stability of a free and global economy, and disruption from any side is undesirable,” he said.
US and Europe’s shared cynicism over China masks different approaches

John Seaman, a research fellow at the French Institute of International Relations, said European countries in general shared most of the US’ concerns about China.

Those concerns include market openness and reciprocity, fair competition and the outsize role of the Chinese state and the Communist Party in China’s economy, security risks to critical infrastructure, authoritarian politics, human rights, Beijing’s political influence abroad and, in particular, China’s growing technological prowess.

Seaman called Washington’s latest moves against Huawei “a clear turning point in the US approach to China”.

“It seems that we’re still at the beginning of a much more structurally confrontational approach on the part of the US, wherein the Trump administration is looking to leverage all dimensions of American power,” he said.
The EU’s China strategy puts European unity to the test

Philippe Le Corre, a senior fellow in the Europe and Asia programmes at the Carnegie Endowment for International Peace, also saw Trump’s actions on Huawei as the moment that the world’s largest telecoms equipment maker became “a symbol of Chinese brands going abroad”.

US officials have accused Beijing of reneging on commitments to end its allegedly improper trade policies – prompting the Trump administration to raise tariffs on US$200 billion worth of Chinese imports from 10 to 25 per cent after the sides wrapped up an 11th round of talks earlier this month in Washington without reaching a deal.
Chinese Vice-President Wang Qishan, a close ally of President Xi Jinping, is visiting Germany and the Netherlands this week. Photo: EPA-EFE
Chinese Vice-President Wang Qishan, a close ally of President Xi Jinping, is visiting Germany and the Netherlands this week. Photo: EPA-EFE
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Beijing, which has countered that any deal needs to be balanced, answered the US side by imposing punitive tariffs on US$60 billion of American products.

Trump had already turned up the pressure on Beijing two weeks earlier with his executive order that effectively banned US companies from supplying Huawei and its affiliates with critical components, on the grounds that national security was at risk.
Who will replace European Commission President Juncker?

Washington has for months tried to forge an international alliance against Huawei, which has risen to become a pillar of Beijing’s bid to expand its global influence on trade and technology.

While Australia and Japan have taken their own action against Huawei, closing ranks behind the US, many American allies in Europe remain undecided about whether to adopt sweeping bans against the Chinese company.

This is despite having similar security concerns over Huawei’s leadership in the development of fifth-generation, or 5G, mobile telecommunications technology that enables data to be transferred at a speed 20 times faster than existing standards.

During their trip to Europe, Trump and Pompeo are expected to further press traditional US allies to side with Washington on China and Huawei in particular, citing concerns that the company’s products may support spying by Beijing and disrupt the allies’ communications networks.

But leaders in France, Germany, Britain and the Netherlands have so far vowed to stay the course and break with Washington over its effort to keep a ban on Huawei equipment.
China deal gives Italy edge over ‘jealous’ rivals: Italian minister

Despite concerns about the potential pitfalls of using the Chinese company to supply vital digital infrastructure, many European leaders insist they have set tough rules and security standards for the supplier.

Merkel and French President Emmanuel Macron have said they will not block Huawei or any other company because Europeans are “pragmatic and realistic”.
From left: EU Commission President Jean-Claude Juncker, Chinese President Xi Jinping, French President Emmanuel Macron and German Chancellor Angela Merkel meet in Paris in March amid growing jitters over Beijing's massive investments in Europe. Photo: AFP
From left: EU Commission President Jean-Claude Juncker, Chinese President Xi Jinping, French President Emmanuel Macron and German Chancellor Angela Merkel meet in Paris in March amid growing jitters over Beijing's massive investments in Europe. Photo: AFP
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Seaman said the issue came down to what the Trump administration saw as the end goal of its confrontational approach and whether its hardline tactics would reflect a long-term strategy that could outlast Trump’s controversial, unconventional presidency.

For instance, on 5G, Seaman said, many governments had started from a network security approach. Their focus has been on measures that could be taken to make 5G networks safer and more resilient – and light on geopolitics.
European politics is in flux, but the news is not all bad for investors

“There is a sense that the two cannot be separated, but focusing only on geopolitical risk and failing to develop the principles, procedures and practices that will ensure that the backbone of tomorrow’s ultra-connected society is secure, is just as dangerous,” the researcher said.

Duncan Freeman, a research fellow at the EU-China Research Centre of the College of Europe in Brussels, said that although trade and technology were separate issues, Washington’s ongoing disputes with Beijing on those topics underlined the changing balance in bilateral ties.

“The recent conflict over trade and technology is occurring in the wider context of the rise of China and the decline of the US that has been taking place in recent decades,” he said.

“The US’ dominant global position is based on its economic and technological power which underlies its military strength, but it has become clear that the US is losing that position in key areas.”
How Italy’s deal with China shows up the cracks in the EU

While Freeman did not see Trump’s China policy as creating a tipping point in the long-term global balance of power, he agreed that the US approach to dealing with China marked a significant policy shift.

“The policy will not achieve its apparent aim of rebalancing the relative decline of the US and rise of China, and we can expect further friction as this process continues,” he said.
US Secretary of State Mike Pompeo is to arrive in Berlin for talks with German Chancellor Angela Merkel on Friday. Pompeo’s European trip also includes visits to the Netherlands, Switzerland and Britain. Photo: Reuters
US Secretary of State Mike Pompeo is to arrive in Berlin for talks with German Chancellor Angela Merkel on Friday. Pompeo’s European trip also includes visits to the Netherlands, Switzerland and Britain. Photo: Reuters
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“A key factor will be how the US manages its long-term decline as a global power, and whether China manages its increasingly important position in the global system to avoid confrontation with the incumbent leading power.”

Freeman said it should also be remembered that, like Japan and many other US allies, the EU itself is a target of Washington on trade, as the Trump administration regards the EU as being almost as bad as China in its embrace of protectionism.
Will the EU go the way of the Soviet Union?

“It is difficult for the EU to adopt a completely independent position as it is dependent on both the US and China in key areas of its security and economy,” he said.

Freeman said that although the Trump administration’s policies had raised Europe’s concerns over security and economic relations with the US, and put transatlantic relations under question, EU-US ties remained central to EU policy.

Therefore, “there is unlikely to be any major shift away from this in the short term”, Freeman said.

What is more, China had had little success in its attempt to create common ground with the EU since Trump’s election in November 2016, Freeman said.
The Sinophile driving Italy’s hopes of a New Silk Road deal with China

“In fact, the rhetoric on China in much of the EU has got tougher in recent years, although this is not uniform, especially in some member states which seek closer ties with China,” he said.

Matura of Corvinus University also said Trump and his top officials would be making a grave mistake if they were to alienate their European allies, when Trump clearly wanted to score a major success in his conflict with China ahead of next year’s presidential contest.
Hungarian Prime Minister Viktor Orban (right, centre) attends a meeting of the Belt and Road Forum in Beijing in April. Photo: AP
Hungarian Prime Minister Viktor Orban (right, centre) attends a meeting of the Belt and Road Forum in Beijing in April. Photo: AP
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“The policies of the Trump administration have been very mixed so far, as it confronted China and degraded US global leadership at the very same time,” he said.

“If Washington really wants to contain China, the economic-political-social decoupling will continue. But the US cannot be successful without rebuilding global trust in its leadership.

“Bullying everyone, including its very own allies, is not a viable way to preserve US dominance in the world.”
Pompeo ‘saddened’ as Italy signs up for Chinese project

Matura and other observers agree the US’ allies in Europe and Asia eventually might be dragged into the looming economic cold war between Washington and Beijing.

“Although many say that it is due time for the EU to get more independent from the US, it would take many years to develop the necessary technological or military capabilities to act as an independent major player,” Matura said.

“Despite its theoretical ambitions, the EU has never been able or never been pushed to grow up to its potential.
Italy’s move to join New Silk Road may see EU tighten stance on China

“The most optimistic scenario is that in case of a US-China confrontation, Europe would try to gain just enough time to develop its own capacities.

“In reality, however, I expect the EU to play the role of a mediator between the two sides.”

Luft noted that although some European countries, such as Italy, had chosen to side with China on flashpoint issues – such as Xi’s aggressive trade and infrastructure push, the Belt and Road Initiative – “few in Europe are courageous enough to openly confront Trump for fear of his wrath”.

Seaman said Trump’s unilateral, “America first” crusade might have caused agitation in Europe and even fuelled some deep resentment of the US president, his policies and his country, but it had not led to an embrace of China.

“Broadly speaking, Europe is looking to hedge in the best way it can and avoid getting dragged into a US-China confrontation in which it has to make stark choices,” Seaman said.
Switzerland to sign belt and road deal during Maurer’s China trip

“The risk for the US comes in over-leveraging their economic power in such a way that it generates a rift [in Europe] that won’t play out in the short term, due to the state of dependency, but [leads to] a longer-term strategy to become more resilient to the various levers of American power,” he said.

And what will become of European political leadership and cohesiveness after the recent European parliamentary elections, which saw modest wins for the anti-EU populist right-wing movement?

“There is a risk that Europe itself will become even more fragmented than it is today, at a time when the geopolitical context demands that Europeans band together,” Seaman said.

“We’re already seeing Washington and Beijing trying to push their influence on the continent, with the Huawei/5G case as a clear example.

“But a further fragmentation of the EU will only increase the need for China and the US to pay closer attention to Europe as a field of competition.”
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