Doomstead Diner Menu => Economics => Topic started by: RE on March 09, 2018, 01:56:34 AM

Title: 🚛 Trade Warz
Post by: RE on March 09, 2018, 01:56:34 AM
Kickoff article for a new Official Thread on tariffs, trade, protectionism, et al.

RE (

Trade Conflict Heats Up, Towards a Full-scale Global Trade War?
By Nick Beams
Global Research, March 08, 2018
World Socialist Web Site
Region: USA
Theme: Global Economy, Law and Justice

The Trump administration is expected to announce today how it will apply the tariffs on steel and aluminium outlined last week. While a full-scale global trade war has yet to break out, the major powers are manoeuvring for an impending conflict.

Yesterday, European Union Trade Commissioner Cecilia Malmström said the EU would take the case to the World Trade Organisation and work with others if Trump went ahead. The EU, she confirmed, has drawn up a list of products that would be subject to tariffs to the tune of €2.83 billion if the US proceeds. The targets could include certain types of bourbon, and food products such as peanut butter, cranberries and orange juice, as well as Harley Davidson motorbikes.

Malmström said she was reluctant to use the term “trade war” and the EU did not “want this to go out of proportion.” But she added:

    “[W]e need to take certain measures if this [happens]. It risks a serious blow to the European economy and to our workers.”

The European powers hope to be excluded on the basis that they are strategic allies of the US, so the “national security” grounds on which Trump announced the measures do not apply to them.

However, this argument, which was advanced by the now former head of Trump’s National Economic Council, Gary Cohn, who resigned on Tuesday, is not cutting much ice as the “America First” economic nationalists assume greater control in the White House.

Trump used a press conference with Swedish Prime Minister Stefan Löfven on Tuesday to single out the EU for attack.

    “The European Union has been particularly tough on the United States,” he said. “They make it almost impossible for the United States to do business with them. And yet they send their cars and everything else …”

This was a clear threat that if the EU responds to the steel and aluminium tariffs, then the US will hit back with moves against cars.

Canada—the largest exporter of steel to the US—and Mexico have also called for exemptions from the tariff plan. The Trump administration said any such exclusion depended on the two countries bowing to US demands in the ongoing renegotiation of the North America Free Trade Agreement (NAFTA).

Treasury Secretary Steven Mnuchin told CNBC yesterday there was a mechanism for a “carve out” of countries from the tariffs. But that would only apply to the extent that the US was “successful” in renegotiating NAFTA.

In a television interview yesterday, Commerce Secretary Wilbur Ross tried to sound a conciliatory note.

    “We’re not trying to blow up the world,” he said. “There’s no intention of that.”

Yet the administration’s actions have very definite global consequences, as the US Chamber of Commerce, one of the country’s largest business lobby groups, noted.

    “The US Chamber is very concerned about the increasing prospects of trade war, which would put at risk the economic momentum achieved through the administration’s tax and regulatory reforms,” an official statement declared. “We urge the administration to take this risk seriously and specifically to refrain from imposing new world-wide tariffs on steel and aluminium.”

The US actions have caused consternation in ruling political and financial circles around the world. Reserve Bank of Australia governor Philip Lowe attacked the Trump measures and warned that escalation and retaliation would produce a “very big shock for the world economy.”

Lowe said the moves were “highly regrettable and bad policy” but were manageable for the world economy, provided they were confined to two industries. He expressed the hope that other countries would “just sit still and do nothing,” saying:

    “That’s the hardest thing to do in some cases, because there’s a political imperative in some countries to kind of respond to what is seen as an unjust action.”

An emerging theme from opposition in the United States is not a repudiation of trade war as such, but concerns that the Trump administration has used a blunt instrument that hits US strategic allies rather than the real opponent, China.

In the Wall Street Journal, Greg Ip noted that the US was not the only country with a chip on its shoulder about trade. There were “countless others” when it came to China.

    “For President Donald Trump, this could be an opportunity to lead a coalition against China’s predatory trade behaviour. Instead, he is threatening trade war with the countries that would make up such a coalition, over commodities that are much less vital to the US economy and national security than the sectors threatened by China’s expropriation of intellectual property.”

This approach was reflected in a letter from 107 House Republicans sent to Trump yesterday, expressing “deep concern” about the prospect of broad global tariffs on steel and aluminium.

Warning of “unintended negative consequences” for the US economy, the letter said:

    “We support your resolve to address distortions caused by China’s unfair practices, and we are committed to acting with you and our trading partners on meaningful and effective action.”

Last August, the office of the US Trade Representative launched an investigation under Section 301 of the 1974 US Trade Act to determine whether Chinese actions in relation to technology transfer, intellectual property and innovation were unreasonable and detrimental to US interests.

The investigation’s report is expected within weeks. Under the legislation, the president has the power to retaliate for what are deemed to be unfair trade practices. A US investigation conducted last year claimed the annual loss to the US economy from counterfeited goods, pirated software and the theft of trade secrets was at least $225 billion and could go as high as $600 billion. It designated China as the main culprit.

Bloomberg reported that

    “under the most severe scenario being weighed, the US could impose tariffs on a wide range of Chinese imports from shoes and clothing to consumer electronics.”

It cited two people “familiar with the matter” who spoke on condition of anonymity.

China has so far adopted a low-key approach to the steel and aluminium tariffs, largely because it is well down the list of countries that export the metals to the US. But it is almost certain to respond to measures under Section 301.

Signalling that his administration is gearing up for action, Trump declared in a Twitter post yesterday:

    “The US is acting swiftly on intellectual property theft. We cannot allow this to happen as it has for many years!”

Financial Times economics columnist Martin Wolf this week noted that Trump’s action on steel and aluminium was unlikely to be the last.

    It was “more likely to be the beginning of the end of the rules-governed multilateral trading order that the US itself created.”

This assessment is borne out by Cohn’s resignation after he had failed to at least moderate the measures. It is a sure sign that, whatever the final form of the steel and aluminium tariffs, their imposition signifies the start of a descent into global trade war on a scale not seen since the disastrous conflicts of the 1930s, which played a major role in creating the conditions for World War II.
The original source of this article is World Socialist Web Site
Copyright © Nick Beams, World Socialist Web Site, 2018
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on March 11, 2018, 05:47:25 PM
This breakdown of steelmakers exporting to US is interesting:


While the tension has been focused on China, in fact the BRICS countries are all exporters - Brazil 13.5%, Russia 8.0%, China 2.2%, India 2.0%, South Africa 1.0%, Total BRICS 26.7%.  To that you could add Turkey 6% and maybe Vietnam 1% taking it to 33.7%, so fully one third of US imports could be withheld while WTO wrangles play out.

I imagine there is spare steel-making capacity in a host of other countries, and at a price that US producers couldn't compete with, otherwise why are they being imported now?

Since there's no good financial reason to have tariffs, they had to be put under the "national security" label, and unsurprisingly all US's allies started clamouring for national security exemptions and will get them in the end.  Thus these tariffs will end up being anti-BRICS, further cementing the Chinese Cold War split on which WW3 will be fought.

Title: Re: 🚛 Trade Warz
Post by: RE on March 11, 2018, 05:56:04 PM
This breakdown of steelmakers exporting to US is interesting:


While the tension has been focused on China, in fact the BRICS countries are all exporters - Brazil 13.5%, Russia 8.0%, China 2.2%, India 2.0%, South Africa 1.0%, Total BRICS 26.7%.  To that you could add Turkey 6% and maybe Vietnam 1% taking it to 33.7%, so fully one third of US imports could be withheld while WTO wrangles play out.

I imagine there is spare steel-making capacity in a host of other countries, and at a price that US producers couldn't compete with, otherwise why are they being imported now?

Since there's no good financial reason to have tariffs, they had to be put under the "national security" label, and unsurprisingly all US's allies started clamouring for national security exemptions and will get them in the end.  Thus these tariffs will end up being anti-BRICS, further cementing the Chinese Cold War split on which WW3 will be fought.

You have to factor in Demand Destruction here.  If the Konsumers cannot afford to buy the products made from steel, you need fewer steel producers.

Title: Re: 🚛 Trade Warz
Post by: Eddie on March 11, 2018, 06:06:49 PM
The graphic is very informative. More effect on Russia and Brazil than any of the others besides Canada. Canada getting exempted after all?  It seems very, very dumb to put a tariff on Canadian steel. But as David mentioned, the US put a big tariff on Canadian lumber already.
Title: Re: 🚛 Trade Warz
Post by: g on March 11, 2018, 06:24:15 PM
The graphic is very informative. More effect on Russia and Brazil than any of the others besides Canada. Canada getting exempted after all?  It seems very, very dumb to put a tariff on Canadian steel. But as David mentioned, the US put a big tariff on Canadian lumber already.

My feeling is that Trump is after China period.

This tariff bullshit is all some kind of war with the gooks, that is being orchestrated by the Generals baby sitting him in the White House. To view it in any other light or to try and makes sense of it is folly.

Trump is a graduate of Wharton, one of the most renowned educators of finance and economics as well as business practices in the world.

Does anyone seriously think that Trump isn't aware of these high school sophomoric views on tariffs being voiced here.  ::)
Title: Re: 🚛 Trade Warz
Post by: Eddie on March 11, 2018, 07:55:10 PM
Does anyone seriously think that Trump isn't aware of these high school sophomoric views on tariffs being voiced here.  ::)

I think Trump is playing by the populist playbook that got him elected. The Trump base thinks tariffs are great...because JOBS!

It's bullshit. He probably does know it.

Frankly, The Wharton School pedigree doesn't impress me. Not every Wharton grad is some kind of wunderkind. And half of every Wharton graduating class..... graduates in the bottom half of the class.
Title: Re: 🚛 Trade Warz
Post by: Nearingsfault on March 11, 2018, 09:56:48 PM
The graphic is very informative. More effect on Russia and Brazil than any of the others besides Canada. Canada getting exempted after all?  It seems very, very dumb to put a tariff on Canadian steel. But as David mentioned, the US put a big tariff on Canadian lumber already.
According to the stories I read yes we are getting exempted but for 30 days so long as we knuckle under on everything trump wants on Nafta... But understand there is no way the sitting government can roll over and play dead on this. This whole thing is really gaining steam locally. As to his skill level I think 45 years ago when he went to school maybe he knew these things but spending 4 decades surrounded by yes men as you live in gold encrusted penthouses and consume junk food clouds your mind...
Title: 🚢 Trump’s Travesty of Protectionism
Post by: RE on March 12, 2018, 12:01:32 AM (

March 9, 2018
Trump’s Travesty of Protectionism

by Michael Hudson

Photo by Tyler Merbler | CC BY 2.0

Trump’s series of threats this week was a one-two punch. First, he threatened to impose national security tariffs on steel and aluminum, primarily against Canada and Mexico (along with Korea and Japan). Then, he suggested an alternative: He would exempt these countries if they agree to certain U.S. demands.

But these demands make so little economic sense that they should be viewed as an exercise in what academia used to call power politics. Or in Trump’s world, Us versus Them, a zero-sum game in which he has to show that America wins, they lose.

It won’t work. Trump’s diplomatic ploy with Mexico is to say that he’ll be willing to exempt them from the steel and aluminum tariffs if they agree to (1) build the wall that he promised to make them build, and (2) give other special favors to the United States. He can then go to American voters and say, “See, we won; Mexico lost.”

This is unlikely to elicit a Mexican surrender. Its president already has said that building a wall makes no sense, and cancelled the planned diplomatic visit to Washington last week. Giving in to Trump’s election promise to American voters (or more to the point, indulging in his own ego trip about the wall) would be political suicide. Trump would crow that he made Mexico bow to his bidding.

Matters aren’t much better in Canada. While some Pennsylvania and Ohio steel companies probably will try to make Trump look good by hiring back a few hundred workers if and when the tariffs are announced, Canada and other suppliers would have to be laid off. Canadian resentment already has been building up for decades, ever since the auto agreement of the 1960s and ‘70s that favored U.S. suppliers.

But the real economic problem comes from within the United States itself. If new steel workers are hired, they may be laid off in a few months. Most important is the bigger economy-wide picture: The Chamber of Commerce and other groups have calculated that the loss of jobs in steel- and aluminum-using industries will far outnumber the new hiring of steel and aluminum workers.

NPR on Wednesday had a maker of beer kegs explain that if the cost of steel goes up, he can’t afford to match the prices of foreign keg manufacturers who buy their raw materials cheaper – and do NOT have tariffs raised on higher manufactures.

There are many good arguments for protectionism. These arguments are in fact much better than the free-trade patter talk used to indoctrinate college economics students. Of all the branches of today’s mainstream economics, free-trade theory is the most unrealistic. If it were realistic, Britain, the United States and Germany never would have risen to world industrial powers. (I review the fallacies of free-trade theory in Trade, Development and Foreign Debt.)

Economic history provides a long and excellent successful pedigree of good arguments for protective tariffs. Britain created its empire by protectionism, stifling manufactures in the United States as long as it pursued free trade. After the Civil War ended, America built up its industry and agriculture by protectionism, as did Germany and France. (I discuss the strategy in America’s Protectionist Takeoff: 1815-1914.)

But as each of these nations became world leaders, they sought to pull up the ladder and prevent other countries from protecting their own industry and agriculture. So they changed to “free trade imperialism.” The aim of industrial leaders is to convince other countries not to regulate or plan their own markets, but to let the United States engineer an asymmetrical trade policy whose aim is to make other countries dependent on its food exports and monopoly exports, while opening their markets to U.S. companies.

Since the 1920s the protectionist economies that came to support free trade have rewritten of history to white out how they got rich. The strategy of protectionism has been forgotten. Trump’s so-called protective tariffs against steel and aluminum are the antithesis to every principle of protectionism. That is why they are so self-destructive.

A really nationalistic trade strategy is to buy raw materials cheaply, and sell finished manufactured goods at a high value-added price.

The idea of industrial protectionism, from British free trade in the 19th century to U.S. trade strategy in the 20th century, was to obtain raw materials in the cheapest places – by making other countries compete to supply them – and protect your high-technology manufactures where the major capital investment, profits and monopoly rents are.

Trump is doing the reverse: He’s increasing the cost of steel and aluminum raw materials inputs. This will squeeze the profits of industrial companies using steel and aluminum – without protecting their markets.

In fact, other countries are now able to legally raise their tariffs to protect their highest-technology sectors that might be most threatened by U.S. exports. Harley Davidson motorcycles have been singled out. They also can block U.S. monopoly exports, such as bourbon and Levi blue jeans, or pharmaceuticals. Or, China can block whatever U.S. technology it decides it wants to compete with.

Trump’s tariff threats caused short-term aluminum prices to jump by 40 percent, and steel prices by about 33 percent. This raises the price of these materials to U.S. manufacturers, squeezing their profits. Foreign manufacturers will not have their materials prices increased, and so can out-compete with U.S. steel- or aluminum-using rivals. The global oversupply in fact may make the price of steel and aluminum decline in foreign markets. So foreign industry will gain a cost advantage.

On top of that, foreign countries can legally raise tariffs in their own markets – for whatever industries they deem will best gain from this advantage.

Trump’s tariffs will not induce new capital investment in steel or aluminum

America’s logic behind protective tariffs after the Civil War ended the Southern free-trade policies was that tariff protection would create a price umbrella enabling U.S. manufacturers to invest in plant and equipment. Britain already had made these sunk costs, so the United States had to include the cost of capital in its revenue.

That’s how America built up its steel industry, chemical industry and other manufacturing industry.

But no steel or aluminum company is likely to invest more or hire more U.S. labor as a result of higher tariff revenues. These companies may raise their prices, but neither investment nor trickle-down effects are likely.

For one thing, aluminum is made out of electricity, and America is a high-cost producer. Alcan – America’s largest supplier – has a rip-off deal with Iceland getting electricity almost for nothing.

For steel, it takes a long time to build a modern steel mill. No company will do this without an assured market. Trump’s tariff increases do not guarantee that.

America’s policy of breaking international agreements (we’re the “indispensable nation”)

Few companies, labor groups or banks in New York City have been willing to trust Mr. Trump in recent years. He should have called his book “The Art of BREAKING THE deal.” That’s how he made his money. He would sign an agreement with suppliers to his hotels or other buildings, and then offer only 80 cents (or less) on the dollar. He’d tell them, in effect: “You want to sue? That will cost you $50,000 to get into court, and then wait three or four years, by which time we’ll have made enough money to pay you on the cheap.”

Bank lenders had as much trouble getting paid as did Trump’s hapless suppliers. He made his fortune this way – so successfully that he seems to believe that he can use the same strategy in international diplomacy, just as he’s threatening to break the Iran agreement.

Will this work? Or are foreign economies coming to view the United States as “not agreement-capable”? In fact, will U.S. companies themselves believe that agreements signed today will still be honored tomorrow?

Trump’s national security ploy to bypass Congressional authority over trade policy

This is not the first time the United States has raised tariffs unilaterally. George W. Bush did it. And my 1979 book, Global Fracture, describes U.S. protectionism in the 1970s against other countries. America did it again and again.

But Trump has introduced some new twists. First of all, former U.S. protectionism had Congressional backing. But Trump has bypassed Congress, no doubt aware that steel-using and aluminum-using industries can mobilize Congressional support against Trump.

So Trump has used the one play available to the Executive Branch: the National Security umbrella. In a great mind-expansion exercise he claims that it would be a loss of national security to depend on neighboring Canada, Mexico, or allies such as South Korea and Japan for steel and aluminum. If he can convince a kangaroo trade court, this loophole is indeed allowed under WTO rules (GATT Article XXI). The idea was to apply to times of war or other great crisis. But U.S. steel and aluminum production has been steady for over a decade, and there seems to be no military or economic crisis affecting national security.

Suppose Trump gets away with it. Other countries can play this “national security” game. Any economic activity can be deemed national security, because every economy is an overall system, with every given part affecting all the others. So Trump has opened the door for overall asymmetrical jockeying for position. The most likely arena may be high-technology and military-related sectors.

Back in the 1980s this was called “Uncle Sucker” patter talk – acting as if the United States was the exploited party, not the exploiting actor in international trade and investment. Ultimately at issue is how much policy asymmetry the rest of the world is willing to tolerate. Can the United States still push other countries around as it has done for so many years? How far can America push its one-sided agreements before other countries break away?

Each foreign country threatened with loss of steel or aluminum exports has a more high-tech industry that it would like to protect against U.S. competition. The response is likely to be asymmetrical.

And here at home, how long will higher manufacturing industries back Mr. Trump and his policy that makes a travesty of “smart” protectionism?
Title: Re: 🚛 Trade Warz
Post by: Nearingsfault on May 31, 2018, 06:05:43 PM
The graphic is very informative. More effect on Russia and Brazil than any of the others besides Canada. Canada getting exempted after all?  It seems very, very dumb to put a tariff on Canadian steel. But as David mentioned, the US put a big tariff on Canadian lumber already.
According to the stories I read yes we are getting exempted but for 30 days so long as we knuckle under on everything trump wants on Nafta... But understand there is no way the sitting government can roll over and play dead on this. This whole thing is really gaining steam locally. As to his skill level I think 45 years ago when he went to school maybe he knew these things but spending 4 decades surrounded by yes men as you live in gold encrusted penthouses and consume junk food clouds your mind...
  looks like this is back in the news and picking up steam.  For clarification for non canadians; when every province agrees on ANYTHING in Canada its a big deal; they are all agreeing to counter duties. When the Conservative party grudgingly agrees their liberal rivals were right on ANYTHING its a big deal; leader of the opposition agrees with call for tariffs. Looks like we're doing this (
Could be another trade masterstroke by the art of the deal guy but looking less likely
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on June 01, 2018, 06:51:00 PM
Trump: "we don’t have the judges”, meaning bought and paid for judges.  So Trump will lose control of WTO. (
Countries want to limit US veto power at WTO
1 Jun, 2018

Some member countries of the World Trade Organization (WTO) want to create an appeal mechanism that would prevent the US vetoing decisions it dislikes, according to Russian Economy Minister Maksim Oreshkin.

By September four seats will be vacant at the Appellate Body, the WTO appeals chamber, leaving three judges out of the necessary seven. Washington has blocked appointments to the chamber, thus engineering a crisis in the system of settling global disputes.

According to Oreshkin, without the appointments, the WTO appeals body would stop working next year. On Thursday, Oreshkin met with trade ministers from WTO member countries, and they discussed a mechanism that would allow the appeals chamber to work without getting a green light from the US.

"What we have discussed, have suggested is to create a mechanism without taking into account the US stance, which would allow us to settle cases which are reviewed at this appeal commission. We would work on this," the minister told reporters.

Since 1995, the WTO has expanded to cover around 95 percent of world trade, which has more than tripled to around $18 trillion per year in goods alone. US President Trump has taken a sharp stance on the WTO saying it’s a “catastrophe”. “We lose the cases, we don’t have the judges,” he said in February.

Title: Re: 🚛 Trade Warz
Post by: g on June 01, 2018, 07:12:18 PM
This is a moot point.

Trump will pull his pants down and blow a fart in their face, he has no regard at all for these political clubs.

To my mind this whole trade war is bull shit political posturing play acting to the dim.

The world is to interdependent; we are completely dependent on imports from others.

Too many politicians with too much time on their hands to bull shit, grab headlines, and fill the heads of the dim with more bull shit rhetoric.

It's all nonsense and one more reason I choose to be a Libertarian.   

Title: Re: 🚛 Trade Warz
Post by: Agent Graves on June 01, 2018, 11:28:02 PM
Thats not the way I see it Golden Oxen. Tarriff on German cars will only make them more of a status symbol. Threatening any oil and gas company doing business in Iran only sends all their oil and gas to china via russian drilling experience. I could go on, but you get the point.
Title: Re: 🚛 Trade Warz
Post by: g on June 02, 2018, 03:54:44 AM
Thats not the way I see it Golden Oxen. Tarriff on German cars will only make them more of a status symbol. Threatening any oil and gas company doing business in Iran only sends all their oil and gas to china via russian drilling experience. I could go on, but you get the point.

Hi Agent Graves, Pleasure to finally talk with you and have the opportunity to welcome you to the Diner.

Yes, your drift is clear but only partially true In my view.

The world economy has become so integrated with such an amount of consumer goods available that an onerous tax on a BMW would only lead the show off class to perhaps switch to a Lexus or a Masserati, perhaps the ultimate Genesis luxury vehicle from South Korea or even the new high end Cadillacs that sticker for 70 grand.

We saw already in the last trade war actions a backdowns and list of exemptions listed within days after the foolish announcements had been made. Count me as still believing this is mostly political pandering to the dim, but of course your point that it does have some effect is certainly valid.

                                                    Again Agent Graves, Pleasure to meet you and welcome.
Title: Re: 🚛 Trade Warz
Post by: jdwheeler42 on June 02, 2018, 08:43:04 AM
This is a moot point.

Trump will pull his pants down and blow a fart in their face, he has no regard at all for these political clubs.

To my mind this whole trade war is bull shit political posturing play acting to the dim.

The world is to interdependent; we are completely dependent on imports from others.

Too many politicians with too much time on their hands to bull shit, grab headlines, and fill the heads of the dim with more bull shit rhetoric.

It's all nonsense and one more reason I choose to be a Libertarian.
Or, alternatively, it is hyperintelligent, recognizing that global supply chains are about to break down anyway, and he wants to get the US ready for a more localized economy....


Okay, well, that's the reason why I don't oppose it....
Title: Re: 🚛 Trade Warz
Post by: Nearingsfault on June 10, 2018, 07:43:41 PM
The globe and Mail is the more right leaning American friendly Toronto Paper. (
I don't really know how I feel about this ongoing train wreck. We need diversified markets and to foster more production at home. The orange one could be just the kick in the pants we need to understand deals with the US are not worth the paper they are printed on. A sure sign of Collapse as we all withdraw into our national echo chambers.
Title: ⛰️ The G7 summit collapses
Post by: RE on June 12, 2018, 12:31:21 AM (

The G7 summit collapses


June 11, 2018 Posted by Addison dePitt


By Alex Lantier,

Don Trumpone causes a big rififi among the leading imperialist mafia. The more chaos in the capitalist bloc, a bunch of plutocratic thugs, the better for the world. Merkel’s glaring at Trump is eloquent. Standing behind Trump is bloodthirsty consigliere Bolton.

In an unprecedented event, the G7 talks at Charlevoix in Quebec broke down Saturday, amid bitter recriminations and threats of trade war measures between countries at the heart of the world economy. Insoluble conflicts erupted over Washington’s threats to impose tariff barriers on billions of dollars of imports from the European Union (EU), Canada and Mexico.

The lead-up to the conference had been marked by acrimony, with French President Emmanuel Macron rhetorically proposing to sign a “6 country agreement,” excluding the United States. Photos emerged from the summit of German Chancellor Angela Merkel leaning over a table, glaring at Trump, who left the summit early, skipping talks on climate change.

The summit issued a final communiqué papering over the conflicts, as is usual in G7 summits, condemning protectionism but making a few criticisms of the World Trade Organization in line with US complaints. The US was expected to sign, but Trump, after listening to Canadian Prime Minister Justin Trudeau’s post summit press conference while en route to Singapore for a summit with North Korean President Kim Jong-un, fired off a volley of tweets that signaled a comprehensive breakdown of the G7 talks.

After Trudeau said that the communiqué criticized protectionism and that Canada would maintain its $16 billion retaliatory tariffs on US goods, the biggest Canadian tariffs since World War II, Trump hurled invective at Trudeau, warning that he “will not allow other countries” to impose tariffs. He accused what are nominally the closest US allies of having targeted the US for “Trade Abuse for many decades—and that is long enough.”

In another tweet, the US president threatened a major escalation of trade war measures with tariffs on auto imports and announced the breakdown of talks: “Based on Justin’s false statements at his news conference and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communiqué as we look at Tariffs on automobiles flooding the US market!”

This is the first time since G7 summits began in 1975—originally as the G5 with the United States, Japan, Germany, Britain and France—that all the heads of state could not agree on a communiqué.

What is unfolding is a historic collapse of diplomatic and economic relations between the major imperialist powers. For the three quarters of a century since World War II, a broad consensus existed internationally in the ruling class that the trade wars of the 1930s Great Depression played a major role in triggering that war, and that trade wars should be avoided at all costs. This consensus has now broken down.
The contradictions of world capitalism identified as the causes of world war by the great Marxists of the 20th century—between international economy and the nation state system, and between socialized production and private appropriation of profits—are exploding to the fore today.
. Explosive conflict and uncertainty dominate the world economy. The United States, the EU and Canada are preparing tariffs impacting untold billions of dollars in goods and threatening tens of millions of jobs worldwide. As the remarks of Trudeau and Trump show, US tariff threats are setting into motion an escalatory spiral of tariffs and counter-tariffs with potentially devastating consequences.

The collapse of the G7 talks cannot be explained by the personal peculiarities of Donald Trump. Rather, this historical milestone is an expression of US imperialism’s desperate attempts to resolve insoluble contradictions of world capitalism. Not only Trump, but prominent Democrats and large sections of the European media and ruling elite are all recklessly calling for trade war measures against their rivals.

Analyzing US imperialist policy in 1929, the year before the eruption of the Great Depression, Leon Trotsky warned: “In the period of crisis, the hegemony of the United States will operate more completely, more openly, and more ruthlessly than in the period of boom. The United States will seek to overcome and extricate herself from her difficulties and maladies primarily at the expense of Europe, regardless of whether this occurs in Asia, Canada, South America, Australia or Europe itself, whether this takes place peacefully or through war.”

The G7 summits were launched to manage conflicts between the major powers as the industrial and economic dominance established by US imperialism in World War II rapidly eroded, and after Washington ended dollar-gold convertibility in 1971. Still unable to catch up to its European and international competitors, the United States has for decades posted ever-larger trade deficits with rivals in Europe and Asia.

After the Stalinist bureaucracy dissolved the Soviet Union in 1991, lifting the main obstacle to US-led neo-colonial wars, Washington tried to counterbalance its economic weakness by resort to its vast military superiority.

Over decades of bloody neo-colonial wars that killed millions in Iraq, Afghanistan, Syria and beyond, the United States has sought to establish a powerful military position in the oil-rich Middle East. These wars placed its forces athwart key trade and energy supply routes of its main economic rivals.

Trump’s election and his denunciations of “trade abuse” of the United States by Europe, Japan and Canada marks a new stage in the crisis of world capitalism. Bitter US-EU divisions are growing not only over trade, but over EU opposition to the US policy of threatening Iran with war by ending the Iranian nuclear deal. After decades of economic crisis and neo-colonial war, the danger is rapidly emerging of a 1930s-style disintegration of the world economy into rival trading blocs and, as in that decade, the eruption of military conflict between them.

The contradictions of world capitalism identified as the causes of world war by the great Marxists of the 20th century—between international economy and the nation state system, and between socialized production and private appropriation of profits—are exploding to the fore today.

The European powers have responded to Trump with stepped-up threats of retaliatory measures. Following the summit, German Foreign Minister Heiko Maas called on the European powers to respond “together” in order to defend their “interests even more offensively.”

Historically, trade war has been a precursor to military conflict. Prior to the summit, French President Emmanuel Macron responded angrily to Trump’s threatened sanctions, declaring, “This decision is not only unlawful but it is a mistake in many respects. Economic nationalism leads to war. This is exactly what happened in the 1930s.”

Amid growing tensions with the US, all of the European powers are rapidly rearming. Just one week before the G7 summit, German Chancellor Angela Merkel signalled her support for Macron’s proposal to create a joint European defence force, open to British participation and independent of NATO.

The only viable response to the growing threat of trade and military war is the mobilization of the working class internationally in struggle against capitalism and the danger of war. As strikes and class struggle explode around the world—among teachers in the United States, metalworkers in Germany and Turkey, and the broad movement of workers against Macron’s austerity policies in France—the social force that can lead this opposition is coming to the fore. The turn now is to the building of an international, socialist anti-war movement based on the working class.

—Alex Lantier
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on June 15, 2018, 06:37:33 AM
That's better, a bit of upmanship, raise you $100 billion. (
Trump slaps China with $50 billion in trade tariffs on imports
15 Jun, 2018

The White House has announced a 25-percent tariff on $50 billion worth of Chinese goods in what it calls a clampdown on unfair trade practices by Beijing.

The US trade representative’s office said it issued a revised China tariff list covering 1,102 separate product categories. The first package of revised tariffs will apply to $34 billion of Chinese imports, on 818 product lines, and will enter into effect from July 6. The second package will target the remaining $16 billion of Chinese goods, on 284 product lines.

Since his presidential election campaign, US President Donald Trump has pledged to cut the trade deficit between the US and China and to curb Beijing’s allegedly unfair trade practices. Trump has also accused China of stealing US technology and intellectual property.

“In light of China’s theft of intellectual property and technology and its other unfair trade practices, the US will implement a 25 percent tariff on $50 billion of goods from China that contain industrially significant technologies,” according to the White House statement.

“This includes goods related to China’s Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the United States and many other countries.”

The step is expected to escalate trade tensions between the world’s two biggest economies. Earlier, Chinese officials warned of mirror measures, pledging to introduce import tariffs on US goods such as automobiles, aircraft, and soybeans.

Beijing said it would swiftly impose retaliatory levies on American imports worth $50 billion. Shortly after China's warning, the White House threatened tariffs on a further $100 billion of Chinese exports.

Since becoming president, Trump has unleashed numerous trade battles, including with countries considered traditional US allies. Earlier this month, Washington introduced 25-percent tariffs on steel imports and 10-percent levies on aluminum imports from the EU, Canada, and Mexico.

In March, the Trump administration imposed tariffs on imports of steel and aluminum from Russia, China, and India. The affected nations have appealed to the World Trade Organization (WTO), demanding compensation over what they call a “protectionist measure.”
Title: Re: 🚛 Trade Warz
Post by: agelbert on June 15, 2018, 09:31:06 AM


Title: Re: 🚛 Trade Warz
Post by: Palloy2 on June 19, 2018, 12:18:08 AM (
Trump raises stakes in trade war with China, targets further $200bn-worth of imports with tariff
18 Jun, 2018

Trump raises stakes in trade war with China, targets further $200bn-worth of imports with tariff
Port in Beihai, Guangxi province, China. © / Reuters

US President Donald Trump is looking to impose a 10 percent tariff on another $200 billion-worth of Chinese goods, after Beijing imposed reciprocal tariffs on US imports, as part of an expanding trade war with Washington.

In a statement released by the White House on Monday, Trump cited Beijing’s decision to respond to US tariffs on $50 billion-worth of Chinese imports, imposed earlier, as his reason to escalate the conflict.

“China apparently has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology,” Trump said. “Rather than altering those practices, it is now threatening US companies, workers and farmers who have done nothing wrong.”

The new US tariff will be imposed if China goes ahead and implements its new tariff on American goods, announced last week, the White House said, adding that trade between the two countries “must be much more equitable.” China is currently running a $376 billion surplus in trade with the US, according to the White House.

If Beijing choses to continue its tit-for-tat tariff policy with the US, Washington will impose further tariffs on imports from China in addition to the $200 billion announced, the statement warned.

Responding to the news, the Chinese commerce ministry said Beijing will retaliate by imposing similar penalties on American goods, if Washington delivers on its threat.

“The United States has initiated a trade war and violated market regulations, and is harming the interests of not just the people of China and the US, but of the world,” the Chinese ministry said in a statement.

As late as May 20, US Treasury Secretary Steven Mnuchin was saying the trade war with China was “on hold” and that negotiations with Beijing were ongoing. Last week, however, the Trump administration announced tariffs on 1,102 separate categories of Chinese products, to go into effect on July 6.

China responded by setting a 25 percent tariff on 545 American products, worth $50 billion, in agriculture products, cars, and seafood. Another 114 product categories, including chemicals, medical equipment and energy industry products, will be “announced later,” the Chinese state news agency Xinhua reported.

China is not the only country facing the prospect of a trade war with the US. The Trump administration, in its pursuit of the “America first” policy, has recently levied tariffs on imports of aluminum and steel from the EU, Canada and Mexico, angering their leaders and making for a very chilly G7 summit in Canada earlier this month.

French President Emmanuel Macron called the tariffs “not only criminal, but a mistake,” adding, “Economic nationalism leads to war.” He also hinted that the remaining countries of the G7 combined are a bigger market than the US and “we don’t mind being six, if needs be.”

Canadian Prime Minister Justin Trudeau called the tariffs “totally unacceptable” and an “affront” to Canada, describing the announcement from Washington as “a turning point in the Canada-US relationship.”

“We have to believe that, at some point, common sense will prevail. But we see no sign of that in the US action today," he said on May 31, announcing retaliatory duties on US imports.
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on June 19, 2018, 08:10:34 PM
Well, we won't sell them F-35s, easy.  Or Patriots. (
India Joins The Tariff War: The Party Is Just Starting!
Mike Shedlock via MishTalk

In response to Trump's tariffs on steel, India will put tariffs on Harley motorcycles, lentils, and almonds.

Following the well-established belief that "trade wars are easy to win", India counters Trump tariffs, to hike duty on US bikes, almonds, apples.

    India has proposed to raise import duty on 30 products, ranging from motorcycles and certain iron and steel goods to boric acid and lentils. The customs duty on some of the items may be raised up to 50 per cent, in a signal that New Delhi will hit back at America's protectionist policies that range from a tighter visa regime to higher import duties.

    The additional duty proposed to be hiked on these items ranges from 10 per cent to 50 per cent. Those at the lowest include almonds, walnuts and fresh apples - which will cost a little more for consumers as an additional duty of 10 percent is proposed to be imposed.

    But the real impact will be on products such as motorcycles over 800 cc - a move targeted at Harley-Davidson - where an additional duty of 50 percent has been proposed. This is seen as a real counter to President Donald Trump who had demanded a reduction in tariff on the cult bike brand.

    The government threatened further action. "India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the US," it added.

Party Just Starting

It's so easy when it's all easy. As Trump says "Trade Wars are Good and Easy to Win"

The party is just starting. Who's next?
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on June 19, 2018, 09:05:37 PM
Nothing has happened yet, but Apple's business in China makes $50 billion of iPhones, so is a major target for tariffs. (
Trump Tells Cook iPhones Will Be Spared Chinese Tariffs: NYT
Tyler Durden

America's business community is being squeezed by a Chinese government that is threatening hardball tactics like unexpected "customs delays" for goods produced by American (-owned or -invested) firms; and a White House that has steadfastly refused to back down from what by now has been acknowledged as a trade war by most. Gradually, even the market is waking up to the reality (considering that Dow futures are down 300+ points after Trump threatened another $200 billion in tariffs).


In the latest story of how American companies are responding to this fluid situation (there have been a lot of them in recent days), the New York Times  reports how all three constituencies - the Chinese government, the US government and the US business community (or at least one of its most high-profile factions) - have turned to Apple CEO Tim Cook as the unofficial "top diplomat" of America's tech community.

    Apple’s chief executive, Timothy D. Cook, may be the leader of the world’s most valuable public company, but lately he has had to act a lot like the tech industry’s top diplomat.

    Last month he visited the Oval Office to warn President Trump that tough talk on China could threaten Apple’s position in the country. In March, at a major summit meeting in Beijing, he called for “calmer heads” to prevail between the world’s two most powerful countries.

But in what is the key detail of the story the NYT - citing an anonymous individual - claims that the Trump Administration told Cook it won't slap tariffs on iPhones.

    The Trump administration has told Mr. Cook that it would not place tariffs on iPhones, which are assembled in China, according to a person familiar with the talks who declined to speak on the record for fear of upsetting negotiations. But Apple is worried China will retaliate in ways that hamstring its business, according to three people close to Apple who declined to be named because they were not authorized to speak publicly.

    Apple fears "the Chinese-bureaucracy machine is going to kick in," meaning the Chinese government could cause delays in its supply chain and increase scrutiny of its products under the guise of national-security concerns, according to one person close to the company. Apple has faced such retaliation before, another person said, and Reuters reported Ford vehicles are already facing delays at Chinese ports.

    There is also concern that Apple could face reprisals for legal and regulatory efforts in Washington that have made it difficult for the Chinese tech giant Huawei to sell its phones and telecom equipment in the United States.

While Cook met with Trump at the White House last month to discuss trade policy, it's unclear when the president made this promise. Of course, the White House's word is always subject to change, which is probably why Cook has embraced his new role with such zeal. And why not? His company has a lot to lose if it suddenly must raise the price of each iPhone X by 25%, or 250$ (giving it an astronomically unaffordable price tag of $1,250)...

But Cook has plenty to worry about from the Chinese government, too.

    In a trade and technology showdown between the United States and China, Apple and Mr. Cook have a lot to lose. With 41 stores and hundreds of millions of iPhones sold in the country, there is arguably no American company in China as successful, as high-profile and with as big a target on its back.

He also has a lot riding on this personally: Apple's growth in China is Cook's biggest on-paper accomplishment since taking over in 2011 from his mentor, Steve Jobs.

    Since he took over Apple from its co-founder Steve Jobs, in 2011, questions about whether Mr. Cook, 57, could recreate the magic that led to the iPod and iPhone have persisted. For Mr. Cook, the analogous breakthrough — and potentially his legacy as the heir to Mr. Jobs — has come not from a gadget, but from a geography: China.

    Under Mr. Cook’s leadership, Apple’s business in China grew from a fledgling success to an empire with annual revenues of around $50 billion — just a bit under a quarter of what the company takes in worldwide. He did this while China was tightening internet controls and shutting out other American tech giants.

Given China's growing importance to Apple's bottom line, Cook has spent quite a bit of time in the country, schmoozing with officials from the Communist Party. He can apparently speak basic Mandarin.

    Mr. Cook, who knows a bit of Mandarin, has attended China’s most important political events in a critical year for Mr. Xi. Days after a Chinese Communist Party congress wrote Mr. Xi’s ideas and name into the constitution, elevating him to the same status as Mao Zedong, Mr. Cook joined a small group of American and Chinese executives for a meeting where Mr. Xi lectured about innovation and reform.

    Later, Mr. Cook attended China’s World Internet Conference, an effort by Beijing to create a Davos-like conference for technology. There he met Wang Huning, a new member of China’s standing committee — the party’s top leadership group — and an ideological force behind China’s deepening authoritarianism.

    In March, just after an annual meeting of China’s rubber-stamp Parliament formally abolished presidential term limits, Mr. Cook attended a major summit meeting that brings together Chinese policymakers and corporate leaders.

And when critics assail him for condoning the Chinese government's increasingly authoritarian bent, Cook offers a convenient excuse: He's trying to change things "from the inside," he says.

    Mr. Cook has long defended Apple’s presence in China as a way to help change the country from the inside. "Each country in the world decides their laws and their regulations. And so your choice is: Do you participate, or do you stand on the sideline and yell at how things should be?" he said at a Fortune event in China in December. "You get in the arena, because nothing ever changes from the sideline."

Of course, if China actually believed that "regime change" was anywhere near the top of Cook's priorities, Apple would've been tossed out of the country with the other American tech giants. Meanwhile, the NYT says Cook has found it easier to access top officials from the Trump Administration than their counterparts from the Obama era.

While other tech firms have balked, Apple has acquiesced to seemingly every one of the Chinese government's demands. It stores data on Chinese-run servers, it removes apps from its China app store when the Chinese government disapproves. Still, Apple has faced retaliation from China in the past: After the Obama administration indicted five Chinese military hackers back in 2014, China delayed approvals of the iPhone 6, flagging it for additional security review. Apple viewed this as retaliation for US policy. And in 2018, Apple has more money invested in different parts of the Chinese economy than it ever has before, including two research-and-development centers and a $1 billion investment in the Chinese ride-sharing company Didi Chuxing.

In other words, Apple has a lot to lose if this trade war goes off the rails. And Wall Street analysts will be watching closely for any sign that the Communist Party is turning against Apple. As Dean Garfield, head of the Information Technology Industry Council, a trade group that represents Apple and other tech companies, tells the NYT that while Chinese consumers do love Apple products "they would also love Facebook and Google."

"Xi and the national party will do what's in their interest."

In other words: For Apple, it's either play ball, or get out.
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on June 20, 2018, 07:56:28 PM
Russia predictably joins the anti-steel tariff brigade. (
Russia to retaliate against US steel & aluminum tariffs – economy minister
19 Jun, 2018

Moscow will seek to retaliate against Washington’s unilaterally imposed steel & aluminum tariffs against Russia and other producers, said Russian Economic Development Minister Maksim Oreshkin.

“The US continues to apply protective measures by imposing additional import duties on steel and aluminum, and refuses to provide compensation for Russia's losses. That is why Russia is using its WTO rights and introducing balancing measures with respect to imports from the United States,” he said on Tuesday.

The US recently imposed tariffs on steel and aluminum. The trade penalties – 25 percent on imported steel and 10 percent on imported aluminum – took effect on June 1.

Russia’s response will apply to American goods that have an alternative produced within the country, Oreshkin said. In May, Russia informed the WTO about possible retaliatory measures in the amount of $538 million – exactly the same sum it stands to lose from America’s restrictions. The detailed list of affected American goods coming to Russia will be published within the next few days.

China, Russia, Japan, India, Turkey and the European Union have all said they don’t agree with the American tariffs on steel and aluminum, saying they cannot be explained by US security concerns – the pretext Washington has used to explain its actions. The affected countries will reportedly seek financial restoration through the WTO to the tune of $3.5 billion per year.
Title: 🚛 Trade War with the Krauts!
Post by: RE on June 22, 2018, 06:16:59 PM

Donald Trump’s Latest Threat Against Germany Is a Reminder That He Stretches the Law to Do Whatever the Heck He Wants

By Jordan Weissmann
June 22, 20183:42 PM


Donald Trump casually lobbed another serious economic threat at our geopolitical allies over Twitter today.

    Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!
    — Donald J. Trump (@realDonaldTrump) June 22, 2018

The tweet was aimed at the German auto industry, and it wasn’t a surprise, exactly. In May, we learned that Trump wanted to place a 25 percent tariff on foreign cars, using the same national security powers that he used to impose border taxes on steel and aluminum imports. As the tweet makes clear, however, our president is not even trying to maintain the legal fiction that these tariffs are actually about national security.

 The Trump administration’s great insight about trade policy has been to realize that it can use a relatively obscure Cold War-era law—Section 232 of the Trade Expansion Act of 1962—as an all-purpose permission slip to slap duties on foreign products. The statute empowers the president to raise tariffs in order to defend U.S. “national security” interests—a broadly defined concept that includes the “economic welfare of individual domestic industries” and the “weakening of our internal economy.” If the administration wants to take protectionist measures, in theory it just needs to have the Commerce Department produce a report first purporting to show that imports are undermining our ability to make stuff domestically. That’s all the legal cover Trump needs if he wants to rain down economic revenge on Angela Merkel for looking at him the wrong way.

And yet, Trump keeps giving the game away. After Trump said that he would impose tariffs on steel and aluminum under Section 232, the president announced on Twitter that he would only spare Canada and Mexico from them if they renegotiated NAFTA—thus making it clear that the levies were not about national security or protecting specific industries for the good of the nation at all, but rather gaining negotiating leverage. In the case of cars, the Commerce Department hasn’t even finished its report laying out a national security case yet, and Trump is already admitting that the tariffs are really about battering the EU into making trade concessions.

You’d think that this would all make room for a lawsuit to stop these tariffs, since the president has all but admitted that he’s only using national security as a thin pretense to do whatever the heck he wants. And yet, if its hearing on the administration’s Muslim travel ban are any indication, the Supreme Court appears to be very hesitant to second guess the White House’s official justifications for its actions based on the president’s actual statements. Trump doesn’t care what the law says. And sadly, it seems he doesn’t have to.
Title: 🚛 Trade Warz: Trump's Trade War Revives Fears China Will Devalue Yuan
Post by: RE on June 27, 2018, 01:36:26 AM (

Trump's Trade War Revives Fears China Will Devalue Yuan
Investor jitters over a major currency devaluation by China rattled markets in August in 2015 and January 2016. President Donald Trump's promised tariffs against the country's exporters have pushed such concerns back to the fore.


Bradley Keoun
Jun 26, 2018 2:45 PM EDT
Trump's Trade War Revives Fears China Will Devalue Yuan

President Donald Trump's escalating trade tiff with China is stoking investor concerns that the country might seek to devalue its currency, a fear that last gripped global markets and sent stocks reeling in 2015 and 2016.

China, which has closely managed its foreign exchange rate versus the dollar in recent years, could allow a steep drop in the value of the yuan as a way of retaliating against Trump's threatened tariffs, economists at Pittsburgh-based bank PNC warned this week in a report.
inRead invented by Teads

A cheaper currency for China would help to offset the effect of any tariffs on its exports to the U.S. by helping to keep the end products affordable for consumers. A weaker yuan would also reduce dollar-based profits for U.S. manufacturers that ship goods to China -- even as they face potential new tariffs from customs officials there.

"China could deliberately engineer a much larger depreciation of the yuan if its policymakers wanted to offset the damage from tariffs to export competitiveness," the PNC economists wrote. "While unlikely, the tail risk of a Chinese devaluation would be very bad news to the global economy if realized."

In the past five years, the two biggest monthly drops in the Standard & Poor's 500 Index of U.S. stocks have been triggered by just such fears. In August 2015, China made a sudden change to its exchange-rate-management policy, sending U.S. stocks down 6.3%. And in January 2016, as China showed signs of slowing economic growth and troubles managing a burgeoning debt load, investor fears of a further devaluation led to a 5.1% plunge in the U.S. stock index.

One concern is that global investors might rush en masse to pull capital out of China, leading to a broader selloff in emerging-market stocks, bonds and currencies.

The Federal Reserve's interest-rate increases in recent years have helped to make U.S. investments incrementally more attractive, pushing up the value of the dollar while weakening often-volatile emerging-market currencies.

"Export-oriented sectors started to see outflows in recent weeks, highlighting potential spillovers from escalation of U.S.-China tensions for EM more broadly," economists with the Institute of International Finance wrote Monday in a report.

Over the past week, China cut reserve requirements for its banks, a way of putting extra money into the economy without cutting interest rates. But the move has had an effect similar to that of loosening monetary policy: a weaker currency.

The yuan has slipped about 3% just in the past month, as the dollar strengthened against most world currencies.

On Monday, SEB, the Swedish bank, predicted that the Chinese yuan could weaken to 6.6 per dollar by the end of this year, compared with a previous projection of 6.2. On Tuesday, the currency traded at 6.58.

"The increasing threat of a trade war is weighing heavily on equities and currencies in export-depending emerging markets," Per Hammarlund, a strategist at SEB, wrote in the report. "More is coming."
Title: Re: 🚛 Trade Warz
Post by: Palloy2 on July 02, 2018, 05:15:00 PM (
Europe threatens US with new tariffs worth $300bn as trade war escalates
2 Jul, 2018

The United States could get a new round of retaliatory tariffs worth as much as $300 billion, if it moves ahead with new duties on European cars, the EU has warned.

In a written statement to the US Department of Commerce Brussels reportedly warned that imposing tariffs on European cars “will be harmful first and foremost for the US economy.”

According to the 11-page document, “an additional import tariff of 25 percent, applied to automobiles and automotive parts, would in first instance have a negative impact on US GDP in the order of $13-14 billion, and the current account balance of the US would be not affected positively.”

US President Donald Trump recently threatened to hit imports of European cars with a 20 percent tariff if Brussels doesn’t remove levies and other trade barriers on US goods.

Trump said on Sunday that the EU was “as bad” as China when it came to the way European countries traded with the US. He dismissed suggestions that his attacks on the EU were counterproductive and that he should instead strengthen relations with European countries to tackle the Chinese trade issue together.

Talking about “the car situation” Trump told Fox News: “The European Union is possibly as bad as China, just smaller. . . It is terrible what they do to us.”

The $300 billion figure identified by the EU is roughly equivalent to the value of US imports of automobiles and parts, which reached $330 billion in 2017.

According to the document, European carmakers produced 2.9 million vehicles, or 26 percent of American car production, in the US last year. Even without Chrysler, production by EU-owned companies in the US “still amounts to 16 percent of national production and 1.8 million vehicles.” The Commission noted that Chrysler was once “one of the traditional US ‘big three’ manufacturers” but is now of “European ownership.”

The EU document reminded Washington that European companies that produce in the US often import parts needed for their US factories, and also export large portions of their final product. “EU companies based in the US export a significant part of their production, thus contributing substantially to improving the US trade balance, which is a priority of the administration."

“Around 60 percent of automobiles produced in the US by companies with exclusive EU ownership are exported to third countries, including the EU. Measures harming these companies would be self-defeating and would weaken the US economy,” the document said. It pointed out that cars would become more expensive and harder to sell.

The Commission has also warned that imposing tariffs on European cars could elicit “countermeasures” from the US’s other trading partners. “The impact will be aggravated significantly by the likely countermeasures of US trading partners over a significant volume of trade,” it said.

At a summit in Brussels last week EU leaders warned that the bloc would respond to all US actions “of a clear protectionist agenda.” The EU Commission president Jean-Claude Juncker is expected to meet with Trump in Washington this month.
Title: 💱 After hitting new record low, Turkish lira pares some losses on central b
Post by: RE on August 13, 2018, 12:32:57 AM (


    Americas FX Asia FX EU FX

After hitting new record low, Turkish lira pares some losses on central bank statements

    The Turkish lira touched a new record low in early Asian trade.
    The lira crossed the 7 handle against the dollar before later paring some of those losses after its free fall in the previous session.

Cheang Ming   | @cheangming
Published 5 Hours Ago Updated 26 Mins Ago

People check currency exchange rates at a currency exchange office on August 11, 2018 in Istanbul.
Yasin Akgul | AFP | Getty Images

The Turkish lira retraced some losses after touching a new record low in Asia's Monday trade following a recent geopolitics-triggered free fall in the currency.

On Monday, the lira last traded down by around 3.5 percent against the greenback at 6.6475 at 2:30 p.m. HK/SIN. It had earlier dropped to a fresh all-time low of 7.24, before paring some losses after moves were taken to assuage market nerves frayed by the currency's recent weakness.

The retracement in losses came after the Turkish central bank moved to improve liquidity during Asia afternoon trade. Among the moves announced Monday were a slashing of lira required reserves held by banks by 250 basis points for all maturities, Reuters said.

Before that, Finance Minister Berat Albayrak had said in a Sunday interview with local media outlet Hurriyet that the government had a plan in place following the fall in the lira, Reuters reported. Albayrak said Turkish institutions will take "necessary steps" beginning Monday, but the news agency said few specifics had been provided on what those steps included.

The lira briefly plunged 20 percent against the dollar on Friday, finishing the U.S. session lower by some 16 percent after U.S. President Donald Trump said he had approved metals tariffs on Turkey to be doubled.

The weakness in the lira came against the backdrop of the Turkish economy facing major challenges, but it has come under pressure most recently after U.S.-Turkey talks over the detention of a U.S. pastor in Turkey appeared to make no major progress.

"The decline in the lira is multifaceted, caused not only by a weak external position in terms of current account deficit and inadequate currency reserves, but also the challenging political environment which exacerbates the vulnerabilities in the lira," Kerry Craig, global market strategist at J.P. Morgan Asset Management, wrote in a recent note.

"A mid-meeting rate hike and tightening of monetary policy may help to avert the lira's decline, to some extent," he added.

After calling for citizens to convert out of dollars and gold and buy the lira to help fight a "national struggle" last week, Turkish President Recep Erdogan said Sunday that the drop in the currency was not an accurate reflection of the country's fundamentals, Reuters said.

"There is no economic reason ... This is called carrying out an operation against Turkey," Erdogan said, based on a translation.

Although sentiment in the wake of the lira's plunge has been cautious, the turmoil in Turkey is not widely seen by analysts as posing a significant contagion risk for a broader financial crisis due to the confluence of factors that have resulted in the drop in the lira.

"[T]he drivers of the lira's decline are very specific to Turkey — therefore it should not derail the positive fundamentals in other emerging markets over a longer term," Craig said.

Still, some think the crisis could have a degree of fallout in the short term.

"While Turkey does not reflect any endemic risk amongst emerging markets, there could still be some sentiment spillovers into (emerging market) currencies and risky assets in the near term," Chang Wei Liang, a strategist at Mizuho Bank, said in a note.

— CNBC's David Reid contributed to this report.
Title: Re: 🚛 Trade Warz
Post by: azozeo on August 19, 2018, 09:56:38 AM

China finds itself reeling under trade disputes with the US, as the next round of tariffs on $16 billion worth of Chinese goods is expected to start on August 23. Earlier this week, Russia offered to bail out China from the trade war with Washington. Moscow offered 1 million hectares (2.5 million acres) of arable land available to Chinese farmers to meet its large-scale demand for soybeans — and of course, prevent a massive soybean shortage that would lead to political/social upheavals across the country. (
Title: Re: 🚛 Trade Warz
Post by: Nearingsfault on August 19, 2018, 10:05:03 AM
my understanding is half of China's soybeans already come from Brazil. I assume brazil or other non tariff countries will sell more to china at a premium and the US (and canada due to Nafta) will end up filling the void in south america at a lower price... That is trade wars, everyone loses. (
Title: Re: 🚛 Trade Warz
Post by: Surly1 on August 19, 2018, 12:04:54 PM

China finds itself reeling under trade disputes with the US, as the next round of tariffs on $16 billion worth of Chinese goods is expected to start on August 23. Earlier this week, Russia offered to bail out China from the trade war with Washington. Moscow offered 1 million hectares (2.5 million acres) of arable land available to Chinese farmers to meet its large-scale demand for soybeans — and of course, prevent a massive soybean shortage that would lead to political/social upheavals across the country. (

Saw a reference to the Russian land offer elsewhere as well.

BRICS Brothers have to hang together.
Title: Re: 🚛 Trade Warz
Post by: azozeo on August 19, 2018, 12:40:31 PM

China finds itself reeling under trade disputes with the US, as the next round of tariffs on $16 billion worth of Chinese goods is expected to start on August 23. Earlier this week, Russia offered to bail out China from the trade war with Washington. Moscow offered 1 million hectares (2.5 million acres) of arable land available to Chinese farmers to meet its large-scale demand for soybeans — and of course, prevent a massive soybean shortage that would lead to political/social upheavals across the country. (

Saw a reference to the Russian land offer elsewhere as well.

BRICS Brothers have to hang together.

Global dick swingin' has found a new all time how looow can you go, level.....

My crystal ball is telling me that this is a great opportunity for mom n' pop niche' markets to arise  :icon_sunny:
Title: Re: 🚛 Trade Warz
Post by: azozeo on August 20, 2018, 12:19:04 PM
by Peter Koenig for The Saker Blog

Sanctions left and sanctions right. Financial mostly, taxes, tariffs, visas, travel bans – confiscation of foreign assets, import and export prohibitions and limitations; and also punishing those who do not respect sanctions dished out by Trump, alias the US of A, against friends of their enemies. The absurdity seems endless and escalating – exponentially, as if there was a deadline to collapse the world. Looks like a last-ditch effort to bring down international trade in favor of — what? – Make America Great Again? – Prepare for US mid-term elections? – Rally the people behind an illusion? – Or what? (
Title: Trade Warz-How the Trade War Helps Hide Central Bank Sabotage Of The Economy
Post by: azozeo on September 19, 2018, 04:13:04 PM

Almost every aspect of the global economic downturn, which started ostensibly in 2007-2008 and is still ongoing to this day, can be traced back to the actions and policies of central banks. The Federal Reserve, for example, used artificially low interest rates and easy money to create a supposedly no-risk loan environment. This translated into a vast amount of toxic mortgage debt along with a web of derivatives (Mortgage Backed Securities) attached to that debt.

The Fed ignored all the signs and all the alternative analyst warnings. Agencies like S&P backed the Fed narrative that all was well as they gave AAA ratings to endless toxic market products. The mainstream media backed the Fed by attacking anyone that argued the notion that the U.S. economy was unstable and ready to falter. In that era of economics, the truth was effectively hidden from the public by the system through relatively standard means. Today, things have changed slightly. (
Title: Re: Trade Warz-How the Trade War Helps Hide Central Bank Sabotage Of The Economy
Post by: Eddie on September 19, 2018, 06:58:52 PM

Almost every aspect of the global economic downturn, which started ostensibly in 2007-2008 and is still ongoing to this day, can be traced back to the actions and policies of central banks. The Federal Reserve, for example, used artificially low interest rates and easy money to create a supposedly no-risk loan environment. This translated into a vast amount of toxic mortgage debt along with a web of derivatives (Mortgage Backed Securities) attached to that debt.

The Fed ignored all the signs and all the alternative analyst warnings. Agencies like S&P backed the Fed narrative that all was well as they gave AAA ratings to endless toxic market products. The mainstream media backed the Fed by attacking anyone that argued the notion that the U.S. economy was unstable and ready to falter. In that era of economics, the truth was effectively hidden from the public by the system through relatively standard means. Today, things have changed slightly. (

I read this one, and I started to comment on Brandon Smith's  site, but he's another self-important little prick who doesn't like critical thinking people questioning his glue-sniffing conspiracy theories. Why bother, he'd only delete my comment.

First, I don't think the 3.4% of the US national debt the Chinese own is likely to get dumped. The US is still too important a trading partner for them to let the yuan appreciate the way it would if they dumped their holdings. The Chinese have the yuan (reminbi) pegged to the dollar and they have to keep lots of dollars to make that happen. The safest way to do that is to own UST's

For the Chinese to get out of Treasuries, they would have to think that they didn't need US trade at all anymore. That might be someday, but it isn't true now.

De-dollarization, which has been ongoing to some degree, does not seem likely to me to be nearly the short term threat that some collapse writers think it is. I don't think these writers really understand how trade imbalances and their relation to currency pairs really works out in the real world.

Writers like Brandon Smith think the "globalists" will intentionally let the dollar fall precipitously, which will lead to the USD losing its reserve currency status. I don't think that's likely, not because I don't think the globalists have a agenda...they do, but there are plenty of reasons the dollar might surge higher in the short run.

If Italian banks failed (not unlikely)  and the EU does not assume their debt, for instance (likely they will, but assume the worst and say they did not) then the USD will go to the moon. If the US stock market crashes, the USD will go to the moon. The Euro lost nearly a 3rd of its value against the USD in the 2008 crash. Look it up.

Brandon is styling himself a "macro economist" these days. He called himself that in response to a recent comment I left there. i didn't waste my time questioning this article, which he managed to get published by Birch Gold. Gold sellers like to promote the whole "dollar is doomed" shtick. But it doesn't all quite hang together for me, when examined critically.

I don't think the USD would fail if China sold their last dollar. No hyperinflation, sorry. Not in the cards in today's world.

Brandon is somewhat right about the inflation part. We're about to get some major inflation the way we're now headed, although a stock market crash would be the kind of deflationary event that could cause that to reset, too. If US assets in general get clocked, like 2008 or even worse, then we'll likely get Europeans levels of QE here and zero or even negative interest rates again.

You can't have the kind of inflation that's heating up and now and have a deflationary asset crash too. Those things are mutually exclusive. We walk on the edge of a razor blade, with high inflation (not hyperinflation) on one side, and popping bubbles and falling stocks and real estate on the other side.

The part about a crash being blamed on Trump has some merit, and I do think it'd be a rallying cry for the socialists here, and we might see the Republican austerity and libertarianism replaced by new calls for basic income and more "free shit" as TBP used to call it. But that doesn't bother me. I'm not as married to "conservative ideals" like Brandon is.

Title: Re: Trade Warz-How the Trade War Helps Hide Central Bank Sabotage Of The Economy
Post by: RE on September 19, 2018, 07:40:19 PM
Brandon "Lexington & Concord" Smith sells his Globalist Conspiracy meme in large part because it plays well with the Zero Hedge crowd.  Gets him readership, and financial contributions no doubt as well.  I've watched his prose morph over the years and he becomes progressively more strident all the time and puts out some absolutely WACKY stuff which on an Economic level is much like David Koresh preaching the Bible.

Not that I don't think there is a Globalist Agenda, there most certainly is, but it is nowhere near so coordinated as BS makes it out to be.  Global Banksters are generally just reacting to events and trying to maintain their hegemony over global trade.  Which they are generally successful with, because the alternatives are positively laughable.  The Chinese Banking system makes Western Banksters look positively HONEST.  Gold is even more ridiculous than Chinese Banking, it just can't function in trade when the whole system depends on running deficits and loaning more money into existence.

Undoubtably, the Dollar will eventually crash.  But not before the Euro and the Yen go to the Great Beyond.  Will it be a deflationary crash or an inflationary one?  That's really impossible to say, but it really doesn't matter because in either case the current system of global trade goes KAPUT.

BS looks for somebody to blame that other right wing ideologues eat up like ice cream sandwiches.  Central Banksters and Da Fed are his whipping boys.  His theories though are so insane he makes AZ's Lizard Aliens more believable.  He's definitely on track for a nice Waco style snuffing by the FBI & ATF in his Colorado Bunker at some point.

Title: 🚛 Not ‘in Tatters’: Why the West Has Failed to Destroy Russia’s Economy
Post by: RE on September 25, 2018, 12:02:08 AM (

Not ‘in Tatters’: Why the West Has Failed to Destroy Russia’s Economy
September 24, 2018 branford perry



Eric ZUESSE | 23.09.2018 | Strategic Culture


Despite Barack Obama’s economic sanctions against Russia, and the plunge in oil prices that King Saud agreed to with Obama’s Secretary of State John Kerry on 11 September 2014, the economic damages that the US and Sauds have aimed against a particular oil-and-gas giant, Russia, have hit mostly elsewhere — at least till now.

This has been happening while simultaneously Obama’s violent February 2014 coup overthrowing Ukraine’s democratically elected pro-Russian President Viktor Yanukovych (and the head of the ‘private CIA’ firm Stratfor calls it “the most blatant coup in history”) has caused Ukraine’s economy to plunge even further than Russia’s, and corruption in Ukraine to soar even higher than it was before America’s overthrow of that country’s final freely elected nationwide government, so that Ukraine’s economy has actually been harmed far more than Russia’s was by Obama’s coup in Ukraine and Obama’s subsequent economic sanctions against Russia (sanctions that are based on clear and demonstrable Obama lies but that continue and even get worse under Trump).

Bloomberg News headlined on February 4th of 2016, “These Are the World’s Most Miserable Economies” and reported the “misery index” rankings of 63 national economies as projected in 2016 and 60 as actual in 2015 — a standard ranking-system that calculates “misery” as being the sum of the unemployment-rate and the inflation-rate. They also compared the 2016 projected rankings to the 2015 actual rankings.

Top rank, #1 both years — the most miserable economy in the world during 2015 and 2016 — was Venezuela, because of that country’s 95% dependence upon oil-export earnings (which crashed when oil-prices plunged). The US-Saudi agreement to flood the global oil market destroyed Venezuela’s economy.

#2 most-miserable in 2015 was Ukraine, at 57.8. But Ukraine started bouncing back so that as projected in 2016 it ranked #5, at 26.3. Russia in 2015 was #7 most-miserable in 2015, at 21.1, but bounced back so that as projected in 2016 it became #14 at 14.5.

Bloomberg hadn’t reported misery-index rankings for 2014 showing economic performances during 2013, but economist Steve H. Hanke of Johns Hopkins University did, in his “Measuring Misery Around the World, May 2014,” in the May 2014 GlobeAsia, ranking 90 countries; and, during 2013 (Yanukovych’s final year as Ukraine’s President before his being forced out by Obama’s coup), Ukraine’s rank was #23 and its misery-index was 24.4. Russia’s was #36 and its misery index was 19.9. So: those can be considered to be the baseline-figures, from which any subsequent economic progress or decline (after Obama’s 2014 Ukrainian coup) may reasonably be calculated. Hanke’s figures during the following year, 2014, were reported by him at Huffington Post, “The World Misery Index: 108 Countries”, and by UAE’s Khaleej Times, “List of Most Miserable Countries” (the latter falsely attributing that ranking to Cato Institute, which had merely republished Hanke’s article). In 2014, Ukraine’s misery-index, as calculated by Hanke, was #4, at 51.8. That year had 8 countries above 40 in Hanke’s ranking. Russia was #42 at 21.42. So: Russia’s rank had improved, but, because of the globally bad economy, Russia’s absolute number was slightly worse (higher) than it had been before Obama’s coup in Ukraine and subsequent sanctions against Russia. By contrast, Ukraine’s rank had suddenly gotten far worse, #4 at 51.80 in 2014, after having been #23 at 24.4 in 2013.

The figures in Bloomberg for Russia were: during 2015, #7 with a misery-index of 21.1; and projected during 2016, #14 with a misery-index of 14.5; so, Bloomberg too showed a 2015-2016 improvement for Russia, and not only for Ukraine (where in the 2016 projection it ranked #5, at 26.3, a sharp improvement after the horrendous 2015 actual numbers).


“Hanke’s Annual Misery Index — 2017” in Forbes, showed 98 countries, and Venezuela was still #1, the worst; Ukraine was now #9 at 36.9; and Russia was #36 at 18.1.

Thus: whereas Russia was economically sunningly stable at #36 from start to finish throughout the entire five-year period 2013-2017, starting with a misery-index of 19.9 in 2013 and ending with 18.1 in 2017, Ukraine went from a misery-index of 24.4 in 2013 to 36.9 in 2017 — and worsening its rank from #23 to #9. During that five-year period Ukraine’s figure peaked in the year of Obama’s coup at 57.8. So, at least Ukraine’s misery seems to be heading back downward in the coup’s aftermath, though it’s still considerably worse than before the coup. But, meanwhile, Russia went from 19.9 to 18.1 — and had no year that was as bad as Ukraine’s best year was during that period of time. And, yet: that coup and the economic sanctions and the US-Saudi oil-agreement were targeted against Russia — not against Ukraine.

If the US were trying to punish the people of Ukraine, then the US coup in Ukraine would have been a raving success; but actually Obama didn’t care at all about Ukrainians. He cared about the owners of America’s weapons-making firms and of America’s extractive firms. Trump likewise.

During that same period (also using Hanke’s numbers) the United States went from #71 at 11.0 in 2013, to #69 at 8.2 in 2017. US was stable.

Saudi Arabia started with #40 18.9 during 2013, to #30 at 20.2 in 2017. That’s improvement, because the Kingdom outperformed the global economy.

During the interim, and even in the years leading up to 2014, Russia had been (and still is) refocusing its economy away from Russia’s natural resources and toward a broad sector of high technology: military R&D and production.

On 15 December 2014, the Stockholm International Peace Research Institute headlined, “Sales by Largest Arms Companies Fell Again in 2013, but Russian Firms’ Sales Continued Rising,” and reported, “Sales by companies headquartered in the United States and Canada have continued to moderately decrease, while sales by Russian-based companies increased by 20 per cent in 2013.”

The following year, SIPRI bannered, on 14 December 2015, “Global Arms Industry: West Still Dominant Despite Decline,” and reported that, “Despite difficult national economic conditions, the Russian arms industry’s sales continued to rise in 2014. … ‘Russian companies are riding the wave of increasing national military spending and exports. There are now 11 Russian companies in the Top 100 and their combined revenue growth over 2013–14 was 48.4 per cent,’ says SIPRI Senior Researcher Siemon Wezeman. In contrast, arms sales of Ukrainian companies have substantially declined. … US companies’ arms sales decreased by 4.1 per cent between 2013 and 2014, which is similar to the rate of decline seen in 2012–13. … Western European companies’ arms sales decreased by 7.4 per cent in 2014.”

This is a redirection of the Russian economy that Vladimir Putin was preparing even prior to Obama’s war against Russia. Perhaps it was because of the entire thrust of the US aristocracy’s post-Soviet determination to conquer Russia whenever the time would be right for NATO to strike and grab it. Obama’s public ambivalence about Russia never persuaded Putin that the US would finally put the Cold War behind it and end its NATO alliance as Russia had ended its Warsaw Pact back in 1991. Instead, Obama continued to endorse expanding NATO, right up to Russia’s borders (now even into Ukraine) — an extremely hostile act.

By building the world’s most cost-effective designers and producers of weaponry, Russia wouldn’t only be responding to America’s ongoing hostility — or at least responding to the determination of America’s aristocracy to take over Russia, which is the world’s largest trove of natural resources — but would also expand Russia’s export-earnings and international influence by selling to other countries weaponry that’s less-burdened with the costs of sheer corruption than are the armaments that are being produced in what is perhaps the world’s most corrupt military-industrial complex: America’s. Whereas Putin has tolerated corruption in other areas of Russia’s economic production (figuring that those areas are less crucial for Russia’s future), he has rigorously excluded it in the R&D and production and sales of weaponry. Ever since he first came into office in 2000, he has transformed post-Soviet Russia from being an unlimitedly corrupt satellite of the United States under Boris Yeltsin, to becoming truly an independent nation; and this infuriates America’s aristocrats (who gushed over Yeltsin).

The Russian government-monopoly marketing company for Russia’s weapons-manufacturers, Rosoboronexport, presents itself to nations around the world by saying: “Today, armaments and military equipment bearing the Made in Russia label protect independence, sovereignty and territorial integrity of dozens of countries. Owing to their efficiency and reliability, Russian defense products enjoy strong demand on the global market and maintain our nation’s leading positions among the world’s arms exporters. For the past several years, Russia has consistently ranked second behind the United States as regards arms exports.” That’s second-and-rising, as opposed to America’s first-and-falling.

The American aristocracy’s ever-growing war against Russia posed and poses to Putin two simultaneous challenges: both to reorient away from Russia’s natural resources, which the global aristocracy wants to grab, and also to reorient toward the area of hi-tech in which the Soviets had built a basis from which Russia could become truly cost-effective in international commerce, so as to, simultaneously, increase Russia’s defensive capability against an expanding NATO, while also replacing some of Russia’s dependence upon the natural resources that the West’s aristocrats want to steal.

In other words: Putin designed a plan to meet two challenges simultaneously — military and economic. His primary aim is to protect Russia from being grabbed by the American and Saudi aristocrats, via America’s NATO and the Sauds’ Gulf Cooperation Council and other alliances (which are trying to take over Russia’s ally Syria — Syria being a crucial location for pipelining Arab royals’ oil-and-gas into Europe, the world’s largest energy-market).

In addition, the hit to Russia’s economic growth-rate from the dual-onslaught of Obama’s sanctions and the plunging oil prices hasn’t been too bad. The World Bank’s April 2015 “Russia Economic Report” predicted: “Growth prospects for 2015-2016 are negative. It is likely that when the full effects of the two shocks become evident in 2015, they will push the Russian economy into recession. The World Bank baseline scenario sees a contraction of 3.8 percent in 2015 and a modest decline of 0.3 percent in 2016. The growth spectrum presented has two alternative scenarios that largely reflect differences in how oil prices are expected to affect the main macro variables.”

The current (as of 15 February 2016) “Russia GDP Annual Growth Rate” at Trading Economics says: “The Russian economy shrank 3.8 percent year-on-year in the fourth quarter of 2015, following a 4.1 percent contraction in the previous period, according to preliminary estimates from the Economic Development Minister Alexey Ulyukayev. It is the worst performance since 2009 [George W. Bush’s global economic crash], as Western sanctions and lower oil prices hurt external trade and public revenues.” The current percentage as of today, 17 September 2018, is 1.9%, after having plunged down from 2.2% in late 2017, to 0.9% in late 2017; so, it is rebounding.

The World Bank’s April 2015 “Russia Economic Report” went on to describe “The Government Anti-Crisis Plan”:

On January 27, 2014, the government adopted an anti-crisis plan with the goal to ensure sustainable economic development and social stability in an unfavorable global economic and political environment.

It announced that in 2015–2016 it will take steps to advance structural changes in the Russian economy, provide support to systemic entities and the labor market, lower inflation, and help vulnerable households adjust to price increases. To achieve the objectives of positive growth and sustainable medium-term macroeconomic development the following measures are planned:

• Provide support for import substitution and non-mineral exports;

• Support small and medium enterprises by lowering financing and administrative costs;

• Create opportunities for raising financial resources at reasonable cost in key economic sectors;

• Compensate vulnerable households (e.g., pensioners) for the costs of inflation;

• Cushion the impact on the labor market (e.g. provide training and increase public works);

• Optimize budget expenditures; and

• Enhance banking sector stability and create a mechanism for reorganizing systemic companies.

So: Russia’s anti-crisis plan was drawn up and announced on 27 January 2014, already before Yanukovych was overthrown, even before Obama’s agent Victoria Nuland on 4 February 2014 instructed the US Ambassador in Ukraine whom to have appointed to run the government when the coup would be completed (“Yats,” who did get appointed). Perhaps, in drawing up this plan, Putin was responding to scenes from Ukraine like this. He could see that what was happening in Ukraine was an operation financed by the US CIA. He could recognize what Obama had in mind for Russia.

The “Russia Economic Report, May 2018: Modest Growth Ahead” says:

Global growth continued its 2017 momentum in early 2018. Global growth reached a stronger than- expected 3 percent in 2017 — a notable recovery from a post-crisis low of 2.4 percent in 2016. It is currently expected to peak at 3.1 percent in 2018. Recoveries in investment, manufacturing, and trade continue as commodity-exporting developing economies benefit from firming commodity prices (Figure 1a). The improvement reflects a broad-based recovery in advanced economies, robust growth in commodity-importing Emerging Markets and Developing Economies (EMDEs), and an ongoing rebound in commodity exporters. Growth in China – and important trading partner for Russia – is expected to continue its gradual slowdown in 2018 following a stronger than-expected 6.9 percent in 2017.

Putin’s economic plan has softened the economic blow upon the masses, even while it has re-oriented the economy toward what would be the future growth-areas.

The country that Putin in 2000 had taken over and inherited from the drunkard Yeltsin (so beloved by Western aristocrats because he permitted them to skim off so much from it) was a wreck even worse than it had been when the Soviet Union ended. Putin immediately set to work to turn it around, in a way that could meet those two demands.

Apparently, Putin has been succeeding — now even despite what the US aristocracy (and its allied aristocracies in Europe and Arabia) have been throwing to weaken Russia. And the Russian people know it.

PS: The present reporter is an American, and used to be a Democrat, not inclined to condemn Democratic politicians, but Obama’s grab for Russia was not merely exceedingly dangerous for the entire world, it is profoundly unjust, it is also based on his (and most Republicans’) neoconservative lies, and so I don’t support it, and I no longer support Obama or his and the Clintons’ Democratic Party, at all. But this certainly doesn’t mean that I support the Republican Party, which is typically even worse on this (and other matters) than Democratic politicians are. On almost all issues, I support Bernie Sanders, but I am not a part of anyone’s political campaign, in any way.

About the author

EricZuesseERIC ZUESSE, Senior Contributing Editor •  Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity. Besides TGP, his reports and historical analyses are published on many leading current events and political sites, including The Saker, Huffpost, Oped News, and others.
Title: 🚛 US farmers forced to leave crops rotting in fields as Trump's trade war bites
Post by: RE on November 21, 2018, 04:39:58 AM
So how many farmers and grain belt workers are going to vote for Trumpovetsky in 2020?

This is called shooting yourself in the foot.

RE (

US farmers forced to leave crops rotting in fields as Trump's trade war bites
Will Martin

US farmers are struggling amid the global trade war. Here, US President Donald Trump in Peosta, Iowa, in July 2018. Scott Olson/Getty Images

    American farmers are struggling to sell their products as tariffs introduced during the trade war between Washington and Beijing stifle demand.
    In certain states, farmers are being forced into plowing their crops under — effectively burying them under soil in fields — as there is simply not enough storage room in storage facilities.
    The problem is most acute for soybean farmers, as China generally buys around 60% of US soybeans, but purchases have basically stopped since tariffs began.

American farmers are struggling to find storage for crops that would usually be sold overseas, with some being forced to leave produce rotting in fields as a last resort, as the trade conflict between the US and China continues.

Farmers in various US states, farmers are being forced into plowing their crops under — effectively burying them under soil in fields — as there is not enough storage room in storage facilities, and they are unable to sell their products thanks to Chinese tariffs, Reuters reported on Wednesday.

All grain depots and silos are almost completely full, meaning farmers have to find their own storage solutions, or allow their crops to rot. Neither option is particularly palatable.

The problem is most acute for soybean farmers. China is the largest importer of soybeans in the world, but since the start of the trade war it has slapped US soybeans with a 25% tariff, and turned to Brazil in an attempt to meet domestic demand.

Chinese purchases generally make up around 60% of all US soybean exports, but those exports have practically stopped since the tariffs were introduced.

In Louisiana, as much as 15% of this year's soybean crop has been ploughed under, or is too damaged to sell, according to data analyzed by Louisiana State University staff and cited by Reuters.

Read more: 'We will never have a deal': China's former top trade negotiator warns Beijing is hurting itself in Trump tariff battle

xi trump point laughThe US and China's trade war continues. Xi Jinping and Donald Trump in Beijing in November 2017. Thomas Peter/Getty

There is some good news for farmers, however. Firstly, the Trump administration has started a programme of subsidies to try and lessen the impact of his trade war on US agriculture.

In August, the administration launched a $4.7 billion initial investment plan to help corn, cotton, dairy, hog, sorghum, soybean, and wheat farmers.

The program is slated to expand to as much as $12 billion. But according to Reuters, less than $900 million has been paid out so far.

On top of the subsidies, tensions between the two sides appear to be waning, with the US signaling a more conciliatory stance when it comes to tariffs. Trump has reportedly sidelined some of his most aggressively anti-China team members, with Peter Navarro, an uber-protectionist trade adviser, among those given a back seat.

The most significant sign that the US and China may actually come to some agreement came last week after reports surfaced that Beijing sent a letter to the Trump administration outlining possible concessions.

So far, the US and China have traded tit-for-tat tariffs on goods totalling $360 billion, with the US acting as the aggressor, and Trump threatening numerous times to place tariffs on all US imports from China, worth about $500 billion.
Title: 🚛 GM warned Trump that his China tariffs would hurt jobs. He now complains
Post by: RE on November 28, 2018, 12:38:51 AM
There's 15,000 White Trash who won't be voting for Trumpofsky in 2020.  Not to mention all the parts suppliers who will go outta biz.  Another perfectly aimed foot shot from the Donald.  ::)

RE (

GM warned Trump that his China tariffs would hurt jobs. He now complains that it's happening.
Callum Burroughs

Donald Trump nucelar deal President Donald Trump railed against GM for cutting jobs, but it's partly his trade war's fault. Chip Somodevilla/Getty Images

Analysis banner

    President Donald Trump is railing against GM's decision to close plants and ax about 14,000 jobs, events triggered in part by his trade war.
    Though it cited demand and other factors when announcing the latest job cuts, GM warned earlier this year that tariffs would hurt jobs and wages.
    Trump specifically criticized GM's decision to idle its plant in Ohio, a state that voted for him in 2016.

US President Donald Trump is railing against General Motors' decision to close plants and ax about 14,000 jobs, something his trade war helped trigger in the first place.

When listing reasons behind the job cuts on Monday, GM tiptoed around trade policy and blamed a host of other factors. But the company has been much more direct in its criticism of Trump's trade war in the past.

Earlier this year, GM lowered its profit forecasts for 2018, citing higher steel and aluminum prices caused by new US tariffs. And in June, GM warned that trade tariffs could lead to job losses and lower wages, telling the Commerce Department that higher steel tariffs would affect competitiveness.

The automaker, which employs about 110,000 workers, on Monday said it planned to halt production at a plant in Ohio, a state that voted for Trump in 2016.

GM did not specifically mention tariffs, instead citing "changing market conditions and customer preferences" among the reasons.

While that may be true, "the import tariffs probably accelerated the move," said Edward Alden, senior fellow at the Council on Foreign Relations. "GM is eliminating its lower margin passenger vehicles to concentrate on higher-margin products, and the rising cost of steel probably made made those lower margin vehicles even less attractive than they already were."

Trump lashed out at CEO Mary Barra. "I was very tough," he said, per CNN. "I spoke with her when I heard they were closing, and I said, you know, this country has done a lot for General Motors. The United States saved General Motors, and for her to take that company out of Ohio is not good."

Trump said he told the CEO that she had "better" reopen plants in the US soon.

Trump's trade war shows no signs of abating. He told The Wall Street Journal on Monday that he was likely to go ahead with a hike on tariffs on Chinese goods, increasing them to 25% from 10%. The tariffs have so far hammered global shipping, US farmers, and, perhaps, even iPhone users.

GM on Monday said its Lordstown Assembly plant in Warren, Ohio, would be "unallocated" by the end of 2019, as would its Oshawa Assembly plant in Oshawa, Ontario, its Detroit-Hamtramck Assembly plant in Detroit, and its propulsion-component plants in Maryland and Michigan. It also said it would cease operations at two unnamed assembly plants outside the US.

The stock soared 4.8% on Monday's announcement. On Tuesday, however, GM shares were down 1.5% in premarket trading as of 11 a.m. in London (6 a.m. EST).
Title: 🚛 Trade Warz: As Trump threatens to close border, billions in economic damage
Post by: RE on April 02, 2019, 02:52:04 AM
Can I still go across the border for a cheap dentist?

RE (

As Trump threatens to close border, experts warn of billions in economic damage
By Molly O'Toole, Noah Bierman and Eli Stokols
Apr 01, 2019 | 4:15 PM
| Washington
As Trump threatens to close border, experts warn of billions in economic damage

A rancher drives along the border fence separating his property in Cochise County, Ariz., from Mexico. (Brian van der Brug / Los Angeles Times)

When the Trump administration abruptly shuttered the San Ysidro border crossing for five hours on the Sunday after Thanksgiving following a skirmish with a group of migrants, holiday traffic snarled for hours south of San Diego.

Businesses on the U.S. side of the border lost about $5.3 million in sales, local officials said. Tens of thousands of people were temporarily stuck on both sides of the border, creating chaos in nearby areas.
inRead invented by Teads

President Trump now is threatening to exponentially increase the scale of that disruption, vowing to indefinitely close the U.S. border with Mexico to show his resolve — and his pique — as tens of thousands of Central American migrants continue to jam legal entry points and unguarded remote areas.

Trump’s acting chief of staff, Mick Mulvaney, said Sunday that the president, who has threatened to close the border before, is not bluffing. But White House officials declined to provide details of what, if anything, Trump intends to do.
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It is probably impossible to close the entire 2,000-mile-long border. But Trump could shut some or all of the 47 official entry ports, which process more than 1 million people and about $1.7 billion in commerce every day.

Even a limited and temporary closure would be felt from California to Texas. A longer-term closure would devastate local businesses and ripple through regional supply chains, directly affecting the farms and automobile manufacturers whose employees form the core of Trump’s political base.

It would quickly face legal challenges and add to chronic staffing problems for already-stretched U.S. immigration enforcement agencies. It also would require Mexico’s cooperation, which is hardly assured.

The U.S. Chamber of Commerce, a pro-business organization, warned Monday of “severe economic harm on American families, workers, farmers, and manufacturers across the United States” if Trump closes the border.

“I imagine they probably do have the authority to close any particular port of entry temporarily,” said Leon Rodriguez, director of U.S. Citizenship and Immigration Services from 2014-17. “Having said that, the political, logistical and economic consequences of doing that are potentially devastating.”

Even some of Trump’s immigration allies worry about the economic impact of a border shutdown.

“If this were to go on for more than a few days, you could see some American factories shutting down temporarily until it's over,” said Mark Krikorian, the director of the Center for Immigration Studies, a Washington think tank interested in restricting illegal immigration.

The White House could limit the economic impact, he said, by halting passenger, car and pedestrian border crossings while keeping rail and truck ports open.

“That would be one way to send a message to Mexico without as severe of an economic impact on the U.S.,” he said.

Trump, who shut part of the federal government for 35 days in December and January in a dispute with Congress over his demands for a border wall, may decide those risks are worth the potential political gain as he gears up for his reelection campaign.

He plans to travel to California on Friday for fundraisers in Los Angeles and a visit to the border at Calexico, where he is expected to highlight the recent surge in migrants from Central America.

The administration has amped up its rhetoric, vowing to crack down on what officials called a spike in asylum seekers from Central America that has overwhelmed U.S. immigration agencies.

Homeland Security Secretary Kirstjen Nielsen ordered the Customs and Border Protection commissioner to reassign 750 officers from ports of entry to help Border Patrol agents operating primarily between ports of entry and to consider increasing that number.

Nielsen told reporters Friday that closing ports of entry was also under consideration.

“If we have to close ports to take care of all of the numbers who are coming, we will do that. So it’s on the table,” she said.

Nielsen said pulling officers from busy crossing points would require closing some lanes that process cars and people.

Squeezing ports of entry almost certainly would put more strain on the officers and Border Patrol agents who are dealing with the crisis, however. Administration efforts to hire 15,000 new border agents and immigration officers have largely flopped — the agencies face thousands of vacancies instead.

If trucks carrying farm produce and car parts are barred from crossing the border, the economic impact would quickly spread.

Nearly $13.7 million in agricultural products move through the port of entry at Nogales, Ariz., every day, for example, said Veronica Nigh, an economist with the American Farm Bureau Federation in Washington. Because those products are perishable, even a short closure could hurt farmers and consumers on both sides.

“It’s not like we have steel that can sit in storage and wait for a year to be shipped after it’s produced,” Nigh said. “We’re talking about a matter of hours on a lot of these products.”

Similarly, the car parts shipped across the border each day are integral to supply chains that span the globe. A slowdown could idle workers and raise prices both in the United States and abroad.

After the 9/11 attacks in 2001, the George W. Bush administration stepped up inspections at border ports that brought crossings to a standstill in some areas.

Bush received a call from the president of General Motors, who said the auto giant would soon go bankrupt if the situation persisted, according to Alan Bersin, who served as a senior official in the Homeland Security Department in the Obama administration.

Bersin said Trump has the executive authority to seal off the border, but his threats are “ultimately a bluff.”

Last Tuesday, Nielsen held unannounced talks with Mexican counterparts in Miami, warning them of a slowdown at the border and urging them to do more to stop migrants traveling north.

On Wednesday, she signed what she hailed as a “historic” pact with the Northern Triangle countries of Guatemala, Honduras and El Salvador to curb unauthorized migration, including joint police operations to combat trafficking.

Even as Trump is seeking such cooperation, he said he would cut aid to the three Northern Triangle countries because “they haven’t done a thing for us.”

The State Department has been instructed to cut a total of $450 million that Congress had authorized for the three countries over the last two years but has not yet spent.

The administration is required to inform Congress and, in the event of objections, to negotiate the size of the cuts. But White House officials can also ignore those objections and simply allow the funding to expire.

“We have asked for details, and so far nothing,” said a senior congressional staffer with knowledge of Latin America. “The agencies were all caught off guard and now are scrambling to figure out what this means and what [Trump] was talking about.”

Times staff writers Jazmine Ulloa in Los Angeles and Tracy Wilkinson in Washington contributed to this report.
Title: 🚛 Trump Vows to Close Border, Even if It Hurts the Economy
Post by: RE on April 03, 2019, 01:30:28 AM (

Trump Vows to Close Border, Even if It Hurts the Economy

President Trump said on Tuesday that “security is more important to me than trade.”Credit Al Drago for The New York Times

By Jim Tankersley and Ana Swanson

    April 2, 2019

WASHINGTON — President Trump acknowledged Tuesday that closing the southern border with Mexico could damage the United States economy, but said protecting America’s security was more important than trade.

In remarks from the Oval Office, Mr. Trump reiterated his threat to shut the border if Mexico, America’s third largest trading partner, cannot restrict a flow of asylum seekers trying to cross into the United States. But the president’s economic team, concerned about the damage from such a move, said it was looking for ways to limit the fallout if Mr. Trump does do so.

“Sure, it’s going to have a negative impact on the economy,” Mr. Trump said, adding, “but security is most important.”

“Security is more important to me than trade,” he said.

Republican lawmakers, economists and business groups largely disagree with that assessment and warned this week that closing the border could cripple the flow of goods and workers and devastate American automakers and farmers, as well as other industries that depend on Mexico for sales and goods.


“Closing down the border would have a potentially catastrophic economic impact on our country,” Senator Mitch McConnell, Republican of Kentucky and the majority leader, said in an interview. “I would hope that we would not be doing that sort of thing.”

Mark Zandi, the chief economist at Moody’s Analytics, said that “a full shutdown of the U.S.-Mexican border of more than several weeks would be the fodder for recessions in both Mexico and the U.S.”
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Mr. Trump’s economic advisers have briefed him on the potential financial damage from a border shutdown and started looking for ways to mitigate it, including possibly keeping certain trading avenues open.

Larry Kudlow, the director of the National Economic Council, said Tuesday in a brief interview that the Trump administration was trying to secure the border without harming the economy.

“The question is,” he said, “can we deal with that and not have any economic damage? I think the answer is we can. People are looking at different options.”
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Mr. Kudlow added that the administration was “looking for ways to allow the freight passage — some people call it truck roads.”

“There are ways you can do that, which would ameliorate the breakdown in supply chains,” he said.

But business leaders say there is no way to contain the damage from even a partial shutdown of the 2,000-mile border that the United States shares with Mexico. Nearly $1.7 billion of goods and services flow across the border daily, as well as nearly a half-million legal workers, students, shoppers and tourists, the U.S. Chamber of Commerce said Monday.

On Tuesday, officials with the chamber called a partial border shutdown “uncharted territory” and said such a policy would have negative economic consequences, particularly for communities along the border.

“We don’t know whether that is feasible or not,” said Neil Bradley, the chamber’s executive vice president and chief policy officer.

Even if it is possible, a partial shutdown would still cause significant disruptions for industries that are highly integrated across the border, including automobiles, machinery and electronic equipment.

“The North American auto industry will be crippled” in a week, Kristin Dziczek, a vice president for the Center for Automotive Research, an industry research group, said in a tweet.

Mr. Trump’s pledge to close the border comes in response to what officials with the Department of Homeland Security say is an increase in migrant families who are flooding America’s immigration system, leading to overflowing detention centers and mass releases of migrants.
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The president told reporters that if Mexico cannot restrict the flow of asylum seekers trying to cross into the United States, and if Congress cannot agree to several immigration restrictions that Mr. Trump has long pushed for, “the border is going to be closed.”

While 76,000 migrants crossed the border in February, that number is nowhere near the migration levels seen in the early 2000s. And a majority of the migrants crossing the border now are Central American families looking for asylum, as opposed to Mexican individuals looking for work. Homeland security officials could quickly deport Mexican individuals seeking employment, but, by law, they cannot swiftly deport Central American families or unaccompanied children.

Homeland security officials have said they expect the number of crossings to surpass 100,000 this month. And a senior department official said those traveling in and out of ports of entry were already feeling an effect: There was a three-hour wait at the port of entry in Brownsville, Tex., according to the official, and there were around 150 trucks backed up and waiting to cross at Otay Mesa, in California.

On Monday, Kirstjen Nielsen, the homeland security secretary, said she would divert up to 750 border patrol officials from ports of entry to areas in between the ports to handle large groups of migrants crossing the border. A senior homeland security official also said the administration could start closing traffic lanes at the ports.

“The crisis at our border is worsening,” Ms. Nielsen said, “and D.H.S. will do everything in its power to end it.”

Senator Lindsey Graham, Republican of South Carolina and one of Mr. Trump’s external advisers, has been urging the president to ease off the threat. On Tuesday, Mr. Graham portrayed Mr. Trump’s latest broadside as less an eventuality and more a calculated bargaining position.

“You are taking a bad problem and, by closing the ports of entry, you are creating another problem,” he said during an interview. “To the extent that he wants to redeploy resources to the points of entry to deal with the ungoverned spaces — that will create economic upheaval, but that will hopefully lead to a solution.”


Border activity makes up a relatively larger share of Mexico’s economy than the United States’, meaning Mexico would most likely have more economic damage from a border closing, Mr. Zandi said.

But that does not mean the United States would be in a winning position. Communities across the country would probably see supply chain disruptions, product shortages, seizures in stock and bond markets and a plunge in already-fragile business confidence, Mr. Zandi said. The disruption would be especially sharp in the border states of California, Arizona, New Mexico and Texas, which all have Mexico as their No. 1 export market.

Any closure could have far-ranging implications for a wide range of industries — including automotive, electronics and apparel — that source small components and deliver their products on a just-in-time basis on both sides of the border.

It could also be devastating for the agriculture industry. Since the North American Free Trade Agreement began in 1994, American farmers have moved toward specializing in corn, soybeans, chicken, dairy, pork and beef to supply to Mexico, while Mexican farmers have specialized in fresh fruits and vegetables to send to the United States. Any delays in deliveries of these products could lead to near immediate price hikes and empty supermarket shelves, which would hit low-income Mexicans and Americans the hardest.

Christin Fernandez, the vice president for communications at the Retail Industry Leaders Association, said that slowing or halting screenings at major ports near the border would lead to product delays and potentially higher shipping costs.

“The entire retail ecosystem is sustained on the expectation that America’s retailers can provide consumers with the goods they want and need, when they need it, at the best possible prices,” Ms. Fernandez said. “If our suppliers are feeling the pain, retailers will feel the pain, and, ultimately, it is consumers that will bear the burden.”

Stock markets do not appear to be pricing in any risk of a border closure. The S&P 500 was essentially unchanged on Tuesday, and it remains near a six-month high.

Zolan Kanno-Youngs and Glenn Thrush contributed reporting.
Title: 🚛 Trade Warz: Experts say China isn't too worried about Trump's tariff threats
Post by: RE on May 07, 2019, 12:28:54 AM
Of course not.  The Koch Bros have assured the Chinese that Trumpovetsky will be brought back into line.  The Donald will then claim an AMAZING VICTORY of his clever negotiating skills.  ::)

RE (

Experts say China isn't too worried about Trump's tariff threats
The Chinese strategy, one expert said, is basically to let Trump bluster and then resume talking with more serious administration officials.

China's Vice Premier Liu He shakes hands with U.S. Treasury Secretary Steven Mnuchin as Yi Gang, governor of the People's Bank of China (PBC) and U.S. Trade Representative Robert Lighthizer stand next to them at Diaoyutai State Guesthouse in Beijing, China on March 29, 2019.Nicolas Asfouri / Pool via Reuters file

May 6, 2019, 2:27 PM AKDT
By Corky Siemaszko

The Chinese were not surprised by President Donald Trump's threats to impose more tariffs on their goods, several experts said Monday — they just assumed it was Trump being Trump.

On Sunday, Trump appeared to imperil the ongoing trade talks with China — sending stock prices on a roller coaster ride Monday — with the surprise announcement that he intended to impose tariffs on almost all goods imported from China by Friday.

“I am not sure how literally Trump’s threat is being taken in Beijing, but he has articulated essentially the same threat before,” William Hurst, a Northwestern University political science professor and an expert on Chinese politics and legal institutions, wrote in an email to NBC News.

“So it is likely not a surprise, except perhaps in its timing.”

And Trump may have inadvertently strengthened the Chinese bargaining position, Hurst said.

“The U.S. seems to want trade negotiations to conclude quickly, whereas it is probably in China’s interest to delay or drag them out as long as possible,” Hurst said.

“I think the Chinese leadership generally views Trump as a weak president with some erratic tendencies,” he added. “Trump is at least potentially useful for China because he is accelerating America’s retreat from the world and alienating erstwhile allies and partners as he does so.”

Trump tweeted his tariff threat Sunday and accused the Chinese of trying “to renegotiate” parts of the deal that both sides were thought to have already agreed on.

Earlier this month, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer had characterized the proposed trade deal as “getting into the final laps.”

But Trump tweeted that he would raise import taxes on $200 billion in Chinese products to 25 percent from 10 percent as of Friday. That's on top of a 25 percent duty on another $50 billion of Chinese imports. Beijing had imposed penalties on $110 billion of American goods.

Stock prices initially plunged on Wall Street on Monday amid fears of an all-out trade war between the world’s two largest economies before staging a stunning comeback as investors bet China and the U.S. would reach a trade deal despite Trump — not because of Trump.

Hurst said China is playing a long game against the U.S. while Trump wants to appear that he’s trying to make good on his promise to protect industry in the Rust Belt states he needs to win re-election.

“China hopes to paint Trump and the U.S. not so much as adversaries but increasingly as outliers and antagonists in the international economic and security order,” Hurst said. “If the United States becomes more isolated and less trusted, this weakens any claim to American hegemony. China does not want to topple the United States, but wants to fill some of the space left open as America recedes from its position of global dominance."

The Chinese view Trump “as untrustworthy and difficult,” said Phillip Braun, a Northwestern University finance professor who is an expert on Chinese politics and once served as an adviser to the prime minister of Thailand.

“When he makes announcements like this, it makes it difficult for the Chinese,” he said. “They can’t be seen by their own people as capitulating to Trump.”

So their strategy, Braun said, is basically to let Trump bluster and then resume talking with Mnuchin and Lighthizer.

“In the end, Trump just wants to look good,” Braun said. “The Chinese saw what happened with NAFTA when he threatened Mexico and Canada with tariffs.”

Braun was referring to the North American Free Trade Agreement, which Trump had called the “worst trade deal in the history of the world” when he was running for president.

NAFTA was also deeply unpopular in states such as Michigan, Pennsylvania and Ohio, which had, for generations, seen good-paying manufacturing jobs migrate to Mexico.

In the final months of talks to renegotiate NAFTA, Trump threatened to impose a 25 percent tariff on automobile and auto parts exports to the U.S. from Mexico and Canada.

“Without tariffs we wouldn’t be talking about a deal,” Trump said in October after announcing a new agreement to replace NAFTA called the United States-Mexico-Canada Agreement.

But neither the U.S. nor Mexico and Canada have ratified the new deal.

A team from Beijing was set to have talks with American negotiators Wednesday while the two companies push for a trade agreement, according to CNBC. It was unclear if the talks would still be taking place Wednesday.
Title: 🚛 Trade war fears are crushing stocks, and sell-off could keep going
Post by: RE on May 08, 2019, 12:42:51 AM (

Trade war fears are crushing stocks, and sell-off could keep going if there is no deal by Friday
Traders work on the floor of the New York Stock Exchange as the Federal Reserve Board Chairman Jerome Powell holds a news conference on December 19, 2018 in New York City.
Spencer Platt | Getty Images News | Getty Images

    Stocks were slammed Tuesday amid worries the global economy and earnings would take a hit from a trade war between the U.S. and China.
    While many analysts still expect a deal, there are concerns that the Trump administration will unleash higher tariffs at the end of the week, hurting the global economy, aggravating tensions with China and extending the time frame for the talks.
    The stock market Tuesday took the announcement of tariffs as a sign of potentially serious problems in the trade negotiations, unlike Monday when it reacted to President Donald Trump’s tariff threats as simply a bargaining posture.

GS: Markets React To Federal Reserve Interest Rate Announcement in New York 181219

Investors are worried the U.S. and China may not find enough common ground to head off a new round of tariffs later this week that could bite into global growth, squeeze profit margins and drive down stock prices.

Trade negotiators are scheduled to meet this week in Washington, but recent tensions make it less likely a deal will be agreed to before the Trump administration unleashes a new round of tariffs. Analysts say a deal is still possible, but the risks have risen that there will be more tariffs before a deal can be agreed, and it could then take a lot longer than expected for an agreement to be hammered out.
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Stocks plunged and bonds rose in a safety trade Tuesday, after the Trump administration set the clock ticking on a 12:01 a.m. ET Friday deadline for raising tariffs to 25% on $200 billion in Chinese goods. Trump administration officials said they still expect to meet with a Chinese trade delegation this week, but at a media briefing late Monday they said their Chinese counterparts reneged on some key areas of agreement in trade talks.

The Dow fell more than 473 points to 25,965, and the S&P 500 was off 48 points at 2,884.

“It all depends on what happens Friday. Traders were not expecting this. The market is trying to discount it in case tariffs get reinstated,” said Scott Redler, partner with “This is a curve ball, unexpected scenario.”

With the threat of tariffs, analysts say many of Wall Street’s assumption for profits and growth would have to be tossed —suggesting that stocks could be too richly priced near recent highs.

The forward price-to-earnings ratio on the S&P 500 was at 17 times earnings expectations. “That has to come down because growth has to come down...A good part of what went on in this market was predicated on a deal getting done in the first place. If that’s not the case, we have to start taking [earnings] estimates down,” said Art Hogan, National Securities chief market strategist.

Keith Parker, chief U.S. equities strategist at UBS, said the hit to S&P 500 earnings would be 2% or greater, if the 10% tariffs on $200 billion in Chinese goods are raised to 25%. Parker said earnings would be hit by 7% if there was a full blown trade war, while the S&P 500 could trade in a range of 600 points on different scenarios of escalation of trade wars to de-escalation. The S&P is now near the top of the range, he said.

“We think the most likely path is the deal. But escalation risks have risen and the growth backdrop is bit better so [investors should be] selectively staying involved in cyclicals and look for ways to hedge,” said Parker. “The S&P is probably trading much more in line with a status quo or some form of a deal. I would say it’s not pricing that trade war scenario.”

The seeming divide between Chinese officials and the Trump administration added to concerns, after week’s of positive commentary from both sides.

Hogan said China’s comments are problematic and could indicate the two sides are far apart. “They’re not going to back down from the parts of the deal they want. They don’t want to have a full account of the deal made public,” he said.
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But at the same time, leaders in Washington and Beijing may feel like they have more leverage in the negotiations. China’s recent data has shown its economy is stabilizing after months of fiscal and monetary stimulus. The Trump administration too must be feeling upbeat after a strong U.S. jobs report and higher stock prices.

Analysts said the threat of new tariffs puts assumptions about the market at risk, including the expectations for 3% earnings growth this year. Earnings in the first quarter grew at 1.2%, much better than earlier estimates for a decline, and second quarter S&P 500 earnings growth is expected at 1.5%, according to Refinitiv.

On Tuesday, stocks reversed the pattern of Monday, where the worst losses were in the early morning as markets reacted to President Donald Trump’s Sunday afternoon tweets threatening more tariffs. As the day went on, stocks shook off losses as traders took the president’s threats as more a bargaining ploy by the president.

Global equity markets could also take a hit, as global growth would expected to slowdown on another round of tariffs.

“If we have the increase from 10% to 25%, that would lower Chinese growth by a half a percentage point, and global growth by 0.2 of a percentage point,” said Cesar Rojas, global economist at Citigroup. The impact on U.S. growth would be less than a tenth of a percentage point.

“I think that we will get a deal,” said Rojas. “I’m still hopeful there will be an announcement that tariffs will not increase, and that they will come to an agreement...If that’s not the case, and there is a tariff increase on Friday , I will change my base case to having an escalation of trade tensions.”

Rojas said if that’s the case, then a deal might be a much longer way off. China might not come back to the table in a serious way, until after it felt the pain of tariffs. The U.S. would also be hit by Chinese tariffs, and that would also come as U.S. growth was already slowing down from last year’s level.
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“The problem is we don’t know what the stick point is. This is the black box. We’re still concerned because neither side said anything positive,” Hogan said, adding the situation could easily be made worse by tariffs.

“That’s where this turns form a trade negotiation to a trade war because it’s bad for both economies,” Hogan said.

Stocks that would be hurt most by the increase in tariffs include retailers, tech, and industrials. Caterpillar fell 2.3%; SMH, VanEck Vectors Semiconductor ETF lost 2.3%

Goldman Sachs retail analysts Tuesday said companies had been moving to protect themselves against tariffs, when they were at 10% but may have not expected the increase to 25%, given optimism around the talks. Investors may also not have factored in any further tariffs.

“Within our consumer coverage, the most significant category on the $200bn list was furniture - retailers exposed to this category, such as Big Lots (BIG), could see a negative impact, ” the wrote. But the analysts added that companies that buy goods from China, such as Dollar Tree and Five Below could also be negatively impacted.

“We note that DLTR already included the impact of a move to 25% in FY19 EPS guidance, but based on our conversations, investors were anticipating upside if tariffs stayed at 10%,” they wrote.
Title: 🚛 U.S. escalates trade war amid negotiations, China says will hit back
Post by: RE on May 10, 2019, 02:45:52 AM (

May 9, 2019 / 8:05 PM / Updated an hour ago
U.S. escalates trade war amid negotiations, China says will hit back
David Lawder, Yawen Chen


WASHINGTON/BEIJING (Reuters) - The United States escalated a tariff war with China on Friday by hiking levies to 25% for $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal.

But even as Beijing threatened retaliation, negotiators in Washington agreed to stay at the table for a second day, keeping alive hopes of an eventual agreement.

U.S. President Donald Trump, who has adopted protectionist policies as part of his “America First” agenda, issued orders for the tariff increase, saying China had “broke the deal” by reneging on commitments made during months of negotiations.

Trump also said he would start the “paperwork” on Friday for 25% duties on another $325 billion in Chinese imports.


In Beijing, China’s Commerce Ministry said it “deeply regrets” the U.S. decision, adding that it would take necessary countermeasures, without elaborating.

Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume efforts on Friday to rescue a deal that could end a 10-month trade war between the world’s two largest economies.

The Commerce Ministry said negotiations were continuing, and that it “hopes the United States can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation”.

With negotiations in progress and no action from the Trump administration to reverse the increase, U.S. Customs and Border Protection imposed the new 25% duty on more than 5,700 categories of products leaving China after 12:01 a.m. EDT (0401 GMT) on Friday.
A general view of Kwai Tsing Container Terminals for transporting shipping containers in Hong Kong, China July 25, 2018. REUTERS/Bobby Yip

The Office of the U.S. Trade Representative separately said seaborne cargoes shipped from China before midnight were not subject to the new tax as long as they arrive in the United States prior to June 1. Those cargoes will be charged the original 10% rate.

The grace period was not applied to three previous rounds of tariffs imposed last year on Chinese goods, which had much longer notice periods of at least three weeks before the duties took effect.

“This delay might create an unofficial window during which the U.S. and China can continue to negotiate,” investment bank Goldman Sachs wrote in a note, adding that it was a “somewhat positive sign” that talks were continuing.

Trump gave U.S. importers less than five days notice about his decision to increase the rate on the $200 billion category of goods to 25%, which now matches the rate on a prior $50 billion category of Chinese machinery and technology goods.

U.S. stock futures fell and Asian shares pared gains after the United State went ahead with its threatened tariff hike, reflecting investors worries that a protracted trade war would hit global economic growth.


E-mini futures for U.S. S&P500 slipped, was last down 0.2% in volatile trade. MSCI’s broadest index of Asia-Pacific shares outside Japan was more than 1% lower. Chinese share markets fell on their reopen after the lunch break but quickly recovered ground, as investors took heart from the continuation of talks.

The yuan also strengthened against the dollar.

“I think the Chinese in the end will want to keep negotiations going. The question is: where do they go for retaliation?” said James Green, a senior adviser at McLarty Associates who until August was the top USTR official at the embassy in Beijing.

Green expected China to increase non-tariff barriers on U.S. companies, such as delaying regulatory approvals, as it couldn’t hit the same amount of imported U.S. goods with higher tariffs.
Slideshow (3 Images)

The biggest Chinese import sector affected by the latest tariff hike is a $20 billion-plus category of internet modems, routers and other data transmission devices, followed by about $12 billion worth of printed circuit boards used in a vast array of U.S.-made products.

Furniture, lighting products, auto parts, vacuum cleaners and building materials are also high on the list of products subject to the higher duties.

Gary Shapiro, chief executive of the Consumer Technology Association said the tariffs would be paid by American consumers and businesses, not China, as Trump has claimed.

“Our industry supports more than 18 million U.S. jobs – but raising tariffs will be disastrous,” Shapiro said in a statement.

“The tariffs already in place have cost the American technology sector about $1 billion more a month since October. That can be life or death for small businesses and startups that can’t absorb the added costs.”


Economists and industry consultants have said it may take three or four months for American shoppers to feel the pinch but retailers will have little choice but to raise prices on a wide range of goods to cover the rising cost of imports before too long, according to economists and industry consultants.

Even without the trade war, China-U.S. relations have continued to deteriorate, with an uptick in tensions between the two countries over the South China Sea, Taiwan, human rights and China’s plan to re-create the old Silk Road, called the Belt and Road Initiative.

Reporting by David Lawder in Washington, and Yawen Chen, Michael Martina, Ryan Woo and Ben Blanchard in Beijing; Editing by Simon Cameron-Moore
Title: 🚛 China Armed With Powerful Market Weapons in Duel With Trump
Post by: RE on May 10, 2019, 02:36:49 PM (

China Armed With Powerful Market Weapons in Duel With Trump
By Katherine Greifeld
May 9, 2019, 1:05 PM AKDT Updated on May 10, 2019, 5:05 AM AKDT

    Currencies, Treasuries and soybeans are seen as cudgels
    Yuan and beans have fallen, but bonds have remained buoyant

Current Time 0:08
Duration Time 3:29
U.S. Raises Tariffs as China Says It's Forced to Retaliate: What's Next?

Iris Pang, Greater China Economist at ING, talks about the trade spat between the U.S. and China.

China has a powerful financial-market arsenal for its trade tussle with America, including a hoard of Treasuries and its currency. But using those weapons is not without cost.

Beijing said it will be forced to retaliate -- but didn’t specify how -- after U.S. President Donald Trump followed through with his threat to raise tariffs Friday on $200 billion of Chinese imports to 25% from 10% percent. But simply responding with its own tit-for-tat tariffs isn’t China’s most likely move, said Brad Setser, a former Treasury official who’s now a senior fellow for international economics at the Council on Foreign Relations.

“Matching the U.S. dollar-for-dollar on the U.S. tariffs would imply raising a 25% tariff on all U.S. imports, including those that go into China’s exports,” Setser said. “China certainly could do that, but it would in many cases damage China directly.”

Trump pays attention to financial markets. He has often tweeted about stocks as they’ve zoomed to record highs. After Trump announced the tariff hike on Sunday, the S&P 500 dropped four straight days.

China, the world’s second-largest economy, has markets levers it can pull to escalate the battle. Here are some of them:
Devalue the Yuan

Chinese policy makers could devalue the yuan to offset the impact of U.S. duties on China’s economy. The offshore yuan weakened 5.5% against the dollar in 2018, drawing Trump’s ire and fueling speculation that the country was deliberately weakening its currency. While it has fallen 1.8% this week, the currency rose on Friday after the People’s Bank of China set its daily fixing at a stronger-than-expected level.

However, China’s painful experience with devaluing the yuan in 2015, which prompted capital to flee the nation, is likely to dissuade a similar move, according to Tao Wang, UBS Group AG’s chief China economist and head of Asia economic research. “China doesn’t like the self-fulfilling outflows that come as a result of depreciation, which tend to diminish domestic confidence,” she said. “In addition, yuan depreciation last year angered the Trump administration and led to higher U.S. tariffs.”

Currency has been a focal point in the trade talks. The U.S. has sought a yuan stability pact as part of an eventual deal, according to people familiar with the matter.
Dump Treasuries

China owns $1.1 trillion of U.S. government debt, more than any other foreign nation. If it pared back its holdings in that $15.9 trillion asset class, that could be a potent weapon. Bond markets were jolted last year by a report that Chinese officials recommend slowing or halting Treasury purchases.

However, China doesn’t really have other good options for where to park its $3.1 trillion in foreign-currency reserves -- the world’s largest stockpile -- making this an unlikely path, according to Ed Al-Hussainy of Columbia Threadneedle Investments. In addition, if China dumps Treasuries, that could cause prices to plummet, driving yields higher and devaluing whatever U.S. debt the country is still holding. So far, bonds have rallied, not fallen.

“Any sharp moves higher in U.S. yields both adversely impact the valuation of their existing Treasuries stock and could spark a dollar rally,” the strategist said. “The financial and FX stability risks of this policy could outweigh the benefits.”
Balk at Soybeans

China, the biggest buyer of U.S. soybeans, has already slapped a 25% duty on them. Much of the crop is grown in Midwestern states that make up Trump’s electoral base, making its fate even more important to the president.

Before the trade negotiations soured, China made what U.S. Agriculture Secretary Sonny Perdue described in February as some “good faith” purchases. Now, future buying might be up in the air. While devaluing the yuan or dumping Treasuries would be harder to pull off, balking at soybeans would be a relatively easy move, Setser said.

“There are some easy things for China to do,” including withdrawing from soybeans, he said.

Futures on the crop have dropped 11% since April 10.

— With assistance by George Lei, Mario Parker, and Philip Glamann
(Updates U.S.-China state of play in 2nd graf and yuan pricing.)
Title: 🤡 Here’s how China may retaliate to Trump’s tariff hike
Post by: RE on May 13, 2019, 12:52:31 AM (

Here’s how China may retaliate to Trump’s tariff hike
Published 3 hours ago
Huileng Tan
Weizhen Tan
The U.S. flag flies at a welcoming ceremony between Chinese President Xi Jinping and U.S. President Donald Trump in 2017.
Getty Images News | Getty Images
Key Points

    U.S. President Donald Trump on Friday hiked the tariff rate to 25% on $200 billion of Chinese goods.
    China’s Commerce Ministry said it would take countermeasures against the American tariff hike. It did not announce what its response would entail but said it “deeply regrets” the turn of events.
    Experts said China is likely to use a number of methods to economically strike back at the United States.

Beijing has a host of options to retaliate against the latest the hike in U.S. tariffs on Chinese imports, experts said on Monday.

The latest round of trade talks between American and Chinese negotiators concluded on Friday without a trade agreement. Those negotiations fell under the shadow of U.S. President Donald Trump’s threat to more than double the tariff rate to 25% on $200 billion of Chinese goods — which he made good on just after midnight ET on Friday.

China’s Commerce Ministry said immediately after those new rates came into effect that it would take countermeasures against the American move. It did not announce what its response would entail but said it “deeply regrets” the turn of events.

Experts told CNBC that Beijing’s response could end up combining several ways to hurt the U.S.

“I expect that China will retaliate and they will do it in as commensurate a way as they can, and that will include not just imports,” said Susan Shirk, former deputy assistant secretary of state during the Clinton administration. “I think our farmers and our farm exports to China will be targeted because that’s what President Trump cares about politically,”

She added that she expects added pressure on American firms operating in China, potentially including a slowdown in approvals for banks and checks on imports.

“Really anything could be fair game, and I would be extremely surprised if there were no retaliation,” said Shirk, who is now the 21st Century China Center chair at the University of California San Diego School of Global Policy and Strategy.

Another option for Beijing’s retaliation could include currency depreciation, analysts said. That is, a drop in value for the yuan would give Chinese exports a trade advantage and potentially offset the impact of U.S. tariffs.

“We think the currency is one area in which Beijing has a clear advantage over Washington,” Bo Zhuang, chief China economist at research firm TS Lombard, said in a note on Friday.

He said China’s shrinking current account balance, and the tariffs re-escalation “will create an opening for the (People’s Bank of China) to accept further market-driven depreciation ” of the yuan in the second half of this year.

“Note though that, while the People’s Bank of China may tolerate more yuan depreciation, they may be wary of using it as a retaliatory tool. As well as inciting Trump’s wrath, a weaker currency would also risk triggering capital outflows and damage efforts to open China’s economy,” Seema Shah, senior global investment strategist at Principal Global Investors, cautioned in a note.

Many have cautioned that China could dump its more than $1 trillion worth of U.S. debt in retaliation, but one expert told CNBC on Monday that such a move would ultimately not be in the country’s best interest.

“The largest holder of U.S. Treasurys in the world is China, and so they hurt their own balance sheet as much as they incrementally hurt the U.S. and the losses that they would be forced to recognize are very, very real,” said James Sullivan, head of Asia ex-Japan equity research at J.P. Morgan.

Yet despite the array of options available to Chinese President Xi Jinping for retaliation to the American tariff hike, he doesn’t necessarily have the upper hand.

“I think there are workarounds, but this public chicken game between President Trump and President Xi is very, very difficult for President Xi to work his way out of,” said Shirk.

— CNBC’s Jacob Pramuk, Everett Rosenfeld, Eustance Huang and Reuters contributed to this report.
Title: 🤡 The Realities Of Trump's Trade War
Post by: RE on May 13, 2019, 04:28:28 AM
Title: 🚛 Trade Warz - Lobster shortage in Beijing!
Post by: RE on May 13, 2019, 04:43:36 PM
Blowback is a bitch.  Trumpovetsky is getting creamed on this one.

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

RE (

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 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.
Title: 🚛 Trump pushes for new bailouts for farmers hurt by his trade war
Post by: RE on May 15, 2019, 08:38:39 AM
Socialism! lol.

RE (

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.”
Title: 🚛 Death by paperwork: Tariffs aren’t China’s only trade weapon
Post by: RE 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.


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

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


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.”

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.”

“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'

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


“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.”
Title: 🚛 Trump's Huawei ban escalates the US-China trade war into a tech Cold War
Post by: RE on May 17, 2019, 06:57:03 PM
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 (

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.
Title: Re: 🚛 Trade Warz
Post by: AJ 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?
Title: Re: 🚛 Trade Warz
Post by: RE 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?

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.

Title: Re: 🚛 Trade Warz
Post by: AJ 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:
Title: Re: 🚛 Trade Warz
Post by: RE 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:

"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.

Title: Trade Warz - The Polar Silk Road Comes To life
Post by: azozeo 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: (
Title: 🚛 In Trump's Trade War, Americans Will Be Asked To Show Economic Patriotism
Post by: RE on May 21, 2019, 12:08:29 AM
I Pledge Allegiance to Walmart, as long as there are Low, Low Prices Every Day.

RE (

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
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
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
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.
Title: 🚛 Tariffs war with China has hurt almost every segment of the US economy
Post by: RE on May 24, 2019, 01:07:16 AM (

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
Read more

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.
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
Title: 🚛 Tech cold war: how Trump’s assault on Huawei is forcing the world to contempl
Post by: RE on May 26, 2019, 01:56:57 AM (

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.
Title: 🚛 Huawei’s US ban: A look at the hardware (and software) supply problems
Post by: RE on May 27, 2019, 12:23:03 AM (

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

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.
Title: 🚛 China or the US? Europe’s ‘impossible choice’ in the trade war
Post by: RE on May 30, 2019, 12:41:26 AM (

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

“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

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.
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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.
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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

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.
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“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

“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.
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“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.
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“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

“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.”
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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.
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“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.”
Title: 🚛 The Realities Of Trump's Trade War
Post by: RE on May 30, 2019, 12:53:05 AM
Title: 🚛 China threatens to blacklist foreign companies after Huawei ban
Post by: RE on June 01, 2019, 12:28:03 AM (

China threatens to blacklist foreign companies after Huawei ban
Julia Horowitz byline

By Julia Horowitz and Steven Jiang, CNN Business

Updated 10:47 AM ET, Fri May 31, 2019

Huawei and 5G: What's at stake

London (CNN Business)Beijing is preparing a blacklist for foreign companies as trade tensions with the United States continue to escalate.
The Chinese government is working to establish an "unreliable entity list" which would include foreign companies, individuals and organizations, according to a statement Friday from China's Commerce Ministry.
Companies that violate market rules will be added to the list, according to the statement. Other targets include firms that block supplies to Chinese companies for "non-commercial reasons" or otherwise damage their interests.
The exact details of the plan will be announced soon, the statement added.

Huawei calls on Washington to 'halt illegal action' against the company
Huawei calls on Washington to 'halt illegal action' against the company
The move to establish a blacklist comes after the United States hit Huawei with an export ban, effectively barring US companies from doing business with the smartphone and telecom equipment maker.
The Trump administration claims that Huawei equipment can be used by China for spying. Huawei has repeatedly denied that it poses a risk, saying the restrictions are an attempt to put it out of business.
Jude Blanchette, a senior adviser at the risk consultancy Crumpton Group, said that American companies are responding to the blacklist threat by going into "triage" mode.
"Your reaction is not going to be, 'This is no big deal,'" said Blanchette, who added that US businesses are already assessing the probability that they'll be targeted by Beijing.
Huawei fight
The US campaign against Huawei, one of China's most powerful tech companies, reached new heights earlier this month when the Trump administration added it to a list of companies said to undermine American interests.
That forced crucial suppliers like Google (GOOG) and ARM Holdings to cut ties with the Chinese company, while top carriers in the United Kingdom and Japan delayed the launch of Huawei smartphones.
Now China's blacklist could target those same companies, penalizing them for complying with the US ban.
"They have not identified which companies this means but I'm sure, knowing the Chinese as I do, that they will do counterpart targeting matching the US," said Harry Broadman, a former US trade negotiator. He added: "Clearly their buttons have been pressed, with the way we're dealing with Huawei."
Huawei CEO says China shouldn't punish Apple
Huawei CEO says China shouldn't punish Apple
For Huawei, which had aimed to become the top smartphone brand globally by the end of 2020, the ban could pose an existential threat.
Huawei bought $70 billion worth of components and parts last year from 13,000 suppliers. Of that, about $11 billion was spent on products from US businesses including Qualcomm (QCOM), Broadcom (AVGO) and Microsoft (MSFT).
Analysts had predicted that China could target US businesses as a result of the Huawei ban. Trust between the United States and China is running low as new rounds of tit-for-tat tariffs go into effect.

China has always had a range of powerful tools that it could use to target foreign firms, said Nicholas Consonery, director at consultancy Rhodium Group.
"The point is we are now in an environment where retaliatory steps against US entities operating in China is becoming more probable," he said.

Brian Fung contributed reporting.
Title: 🚛 How tariffs on Mexican imports could affect what you pay for vegetables and c
Post by: RE on June 01, 2019, 02:52:14 AM (

How tariffs on Mexican imports could affect what you pay for vegetables and cars
Paul Davidson, USA TODAY Published 5:13 p.m. ET May 31, 2019 | Updated 7:32 p.m. ET May 31, 2019

Stocks tumbled on Wall Street Friday after the U.S. announced plans to expand its trade war to Mexico. (May 31) AP


An American economy and shopper already bracing for an escalation in the U.S. trade war with China was hit by an equally damaging blow this week when President Trump unexpectedly ratcheted up his battle with Mexico.

From produce to cars, a wide variety of Mexican goods could become more expensive if Trump follows through on his threat to hit Mexican imports with tariffs that soon could climb to 25%. Trump wants to pressure Mexico into doing more to halt the flow of Central American migrants to the U.S. via the Mexican border.

The tariffs, set to begin June 10, would gradually climb to 25% on October 1 if Mexico doesn’t take steps “to dramatically reduce or eliminate” the number of migrants, Trump said on Thursday. Such a strategy would hurt American shoppers, the economy and stocks, experts say, just as U.S. growth is slowing and the threat of more tariffs on Chinese imports looms larger.

After the first 5% tariff in June, tariffs would increase by 5 percentage points each month before reaching 25% on Oct. 1

Mexican tariffs rattle stocks: Dow, stocks end lower on threat of tariffs on Mexican imports and recession fears

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USA TODAY economics reporter Paul Davidson breaks down the potential impact.

    On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..
    — Donald J. Trump (@realDonaldTrump) May 30, 2019

How much does the U.S. import from Mexico?

Mexico is the second-largest exporter to the U.S. behind China, shipping $346.5 billion in goods to the country in 2018, up 10.3% from 2017. Top imports are vehicles, machinery, TVs, furniture, appliances and agricultural products such as avocados and other vegetables, and beer and wine.
Can Trump legally use tariffs to prod Mexico on immigration?

The International Emergency Economic Powers act of 1977 does give the president the authority to impose tariffs in a national emergency. Trump has said he regards the influx of migrants through Mexico as such a crisis, using it to justify a shutdown of the Mexican border earlier this year. But Fred Bergsten, co-founding president of the Peterson Institute for International Economics, says that claim is dubious and almost certainly would be challenged in court. Even if the border crossings represent an emergency, it’s highly questionable that Mexico could stop them, he says. A federal judge could order the tariffs removed while the case is hashed out in court, Bergsten says.
Mexican President Andres Manuel Lopez Obrador speaks during a press conference at the Treasury Hall of the National Palace in Mexico City, Mexico, on Dec. 5, 2018.

Mexican President Andres Manuel Lopez Obrador speaks during a press conference at the Treasury Hall of the National Palace in Mexico City, Mexico, on Dec. 5, 2018. (Photo: Sashenka Gutierrez, EPA-EFE)
How much would prices go up?

A 5% tariff would likely be absorbed by retailers and manufacturers. But much of a 25% tariff likely would be passed on to shoppers, Bergsten figures, increasing costs by up $86 billion across the economy. The Trade Partnership, a research group, thinks the overall total of tariffs will be less simply because U.S. retailers and manufacturers will buy less product from Mexico because of the duties.
A red 2019 Ram 1500 Limited, an upscale full-size pickup truck.

Good sales of Ram pickups helped FCA offset a decline in Jeep sales in North America. (Photo: Fiat Chrysler Automobiles)
Let’s break it down. How about car prices?

While a 5% tariff could have no effect, prices could go up by several thousand dollars per model in the worst case scenario -- permanent 25% tariffs, says Jeff Schuster, president of global vehicle forecasting at LMC Automotive.

For example, a $30,000 vehicle imported from Mexico would suddenly be hit with $7,500 in duties. How much automakers pass on to car buyers depends on how long the tariffs last, he says.

Key models imported from Mexico to the U.S. include, for example, the second- and third-most popular models in America: Fiat Chrysler’s Ram pickup and GM’s Chevrolet Silverado pickup. Automakers would want to avoid major spikes in individual models, choosing instead to spread out the costs across their entire lineup.

All told, Deutsche Bank projected an average price increase of about $1,300 per vehicle.

“For the consumer I think initially it’s a wait and see, but it could become costly,” Schuster said.

And car parts would be affected, too. “So even holding on to an existing vehicle will become more expensive,” according to the Center for Automotive Research.
Tariffs on all Mexican imports could hurt U.S. consumers

Tariffs on all Mexican imports could hurt U.S. consumers (Photo: Mark Wilson / Getty Images)
Where else will shoppers feel the impact?

One of the first places is the supermarket. Mexico sold U.S. grocers $26.2 billion worth of food in 2017. The produce section is especially vulnerable. Half of Mexican food imports are fruits and vegetables. Produce has a shorter shelf life than items like beer, so U.S. supermarkets will start paying them faster than products that may be sitting in a warehouse.

Supermarkets may try to mitigate higher Mexican imports by buying some imports from other countries – but that’s harder to do for some categories: Almost 95% of imported strawberries come from Mexico. Supermarkets may also try to blunt the higher costs of some items by raising prices of higher-volume staples that are less affected. So even though 7% of banana imports come from Mexico, a grocer might raise those prices slightly to keep from raising avocado prices (almost 90% of imports from Mexico) too sharply.
Mexico sold U.S. grocers $26.2 billion worth of food in 2017.

Mexico sold U.S. grocers $26.2 billion worth of food in 2017. (Photo: Getty Images)
What else on store shelves?

Beer. Mexico is a top exporter of beers thanks to the popularity of brands like Corona, Modelo and Dos Equis. The U.S. imported $3.2 billion worth of Mexican beer in 2017. Mexico also exported more than $1.3 billion in Tequila and other liquors.
Will this make my guacamole very expensive?

Avocados imported from Mexico have become a mainstay of the American diet. For example, of the 51 million pounds in the U.S. the week of May 19, almost 37 million came from Mexico, according to the most recent data from the marketing group Avocados from Mexico.

Phil Flynn, senior market analyst at the Price Futures Group in Chicago, said that while the proposed tariff is 5%, shoppers would end up paying 10% more at stores and, at least at the beginning, California avocados could cover some of it.

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A glass of sparkling water with slices of lemons and limes.

 (Photo: Getty Images)
What does this mean for my summer picnic?

It depends on what you serve. The U.S. imports plenty of fresh fruits and vegetables besides avocados, including cucumbers, berries, tomatoes, lemons and limes.

Phil Lempert, founder of, which tracks industry news and trends, says prices for all foods from Mexico could catapult to more than 20% higher.

“What we’re going to see happen is Mexico, as we’ve seen with China, will find other partners (to sell) produce to, beer to, tequila to,” he said. “What I think will happen is that resource for us will dry up. We’ll have scarcity, so prices will go much higher than 5%.”
How about electronics?

“A lot of parts come out of China but a lot of production and assembly go on at the Mexican border,” says Sage Chandler, vice president for international trade policy at the Consumer Technology Association.

Top consumer tech imports include desktop PCs and servers ($24.3 billion in 2018), TVs, ($8 billion) and refrigerators and freezers ($3.8 billion), the CTA says.

Chandler says there’s a lot of confusion coming out of the White House. Would tariffs apply to products made in Mexico that come into the U.S. or anything that ships from Mexico regardless of its country of origin? And some tariffs could be applied, she says, on multiple occasions, as products or parts move back and forth across the border.

Consumers are price sensitive when it comes to tech products, and consumer electronics companies could even cancel planned back-to-school promotions or deals tied to Amazon Prime Day, says Bernie Thompson, CEO of Plugable, a leading developer of docking stations and other computer peripherals.
How would tariffs affect mall purchases?

It's unclear which goods would see the biggest price hikes as retailers often shy away from sharing pricing strategies for specific items in advance. However, Mexico’s textile exports to the U.S. are sizable. Produce, appliances and electronics and clothiers could be affected heavily if the tariffs were to occur, according to Daniel Martins, the founder of DM Martins Research.
What would the effect be on the U.S. economy?

A 25% tariff would reduce economic growth next year by seven-tenths of a percentage point, says economist Greg Daco of Oxford Economics. It would mean 600,000 fewer jobs. And that doesn't include the impact of the tariffs Mexico would impose on U.S. exports in retaliation. Throw in that and proposed tariffs on another $300 billion in Chinese imports later this year and the spreading trade war could tip the country into recession.
Why did Trump take this dramatic step?

Besides pressuring China on illegal immigration, Goldman Sachs says Trump hopes the gambit prods Congress into finally passing the United States-Mexico-Canada Agreement, known as the new NAFTA. The administration earlier Thursday submitted the text of the deal to Congress, launching a process for lawmakers to vote on it.
car carrier

The U.S. president on Thursday said the nation will impose tariffs on all goods imported from Mexico unless the country stems the flow of illegal migrants to the United States. The auto industry, in particular, could take a big hit. (Photo: Lalocracio / Getty Images)
Could the strategy work?

Bergsten says it could work by forcing Mexico to take more aggressive steps to curb immigration. After all, exports to the U.S. make up about 30% of the Mexican economy, according to Oxford, and 25% tariffs are likely to topple that country into recession. It’s not clear, though, how well Mexico will respond to such a brass-knuckled approach, Bergsten says. Meanwhile, U.S. lawmakers have indicated the tariffs will only make them less likely to pass USMCA.

“It’s very risky,” Bergsten says. “It could blow up the whole” trade agreement while burdening Americans with higher prices.
How about stocks?

The Dow Jones industrial average fell 354 points Friday, or 1.4%, as investors blindsided by the tariffs worried they could undercut the trade deal or even lead to a recession.
A male soybean farmer crouched down while inspecting plants in a field

Soybean is a key battleground area in the U.S. and China trade dispute. (Photo: Getty Images)
Will Mexico retaliate?

Mexican officials said they will respond strongly. So expect tariffs on virtually all U.S. goods exported to Mexico if the U.S. hits Mexico with a 25% duty. U.S. exports to Mexico totaled $265 billion last year. Among the leading products are machinery, cars and plastics. Mexico is the nation’s second-largest market for agricultural products, especially corn, soybeans, dairy and pork. That would compound the struggles of American manufacturers and farmers already hobbled by China’s tariffs.

Contributing: Edward C. Baig, Dalvin Brown and Zlati Meyer in New York: Nathan Bomey in Virginia; and Alexander Coolidge in Cincinnati.
Title: 🚛 'Mayhem,' 'Crippling,' 'Serenity now': Trump's threatened tariffs on Mexico w
Post by: RE on June 01, 2019, 01:11:23 PM

'Mayhem,' 'Crippling,' 'Serenity now': Trump's threatened tariffs on Mexico would spur chaos, Wall Street warns
Rebecca Ungarino
Jun. 1, 2019, 09:06 AM


    Stock markets around the world were thrown into disarray Friday after President Donald Trump unexpectedly announced he planned to impose tariffs on US-bound goods from Mexico.
    Strategists and economists think the worst is yet to come.
    Visit Markets Insider's homepage for more stories.

Investors already on edge from the ongoing trade war between the US and China are dealing with a new headache.

Financial markets were thrown into disarray on Friday after President Donald Trump threatened to impose tariffs, starting June 10, on all the goods the US imports from Mexico until the "illegal immigration problem is remedied."

Global equities plunged. The Mexican peso cratered. Germany's 10-year Bund yield scraped to the deepest below zero on record low. The VIX, the S&P 500's "fear gauge," touched a two-week high. And strategists, economists, and analysts up and down Wall Street warned the worst is yet to come.

"So this is no more about free and fair trade, reciprocity, and protection of technological expertise," Peter Boockvar, the chief investment officer at Bleakley Advisory Group, said Friday in an emailed report he called "Serenity Now."

"Tariffs can be thrown around as an economic bomb for anything now," he said. "Global growth rates will only continue to suffer."

The Trump administration's sudden announcement comes as Washington and Beijing are locked in their own trade dispute that has been dragging on for over a year. Experts say the duties Trump is threatening could heavily impact supply chains between the US and Mexico — and inject a new wild card into equity markets.

A bonus just for you: Click here to claim 30 days of access to Business Insider PRIME

"Despite a less severe impact on GDP, the impact on supply chains and economic activity could be significant, implying that financial markets could be affected materially," Nomura research analysts led by Lewis Alexander said in a note out Thursday.

Automobiles and capital goods are two groups particularly sensitive to the proposed tariffs as they accounted for most of the US's imports from Mexico last year, the analysts said. Auto stocks like General Motors and Ford slid on Friday, and a team of Deutsche Bank economists said the anticipated costs for US automakers would be "crippling."

"With businesses already grappling with the ramp up in US-China trade tensions, further uncertainty created by tonight's announcement could amplify a decline in business confidence," they wrote.


The development knocked down equity markets, at least in the US, that were already in the midst of a dismal run. May marked the first negative month of 2019, and the Dow Jones Industrial Average fell for a sixth-straight week.

The S&P 500's "large topping pattern remains in effect, which, after the latest Tariff news on Mexico, has a chance of playing out further now," said Frank Cappelleri, the chief market technician at Instinet, told clients Friday.

He added in a note out early Friday called "Mayhem" that the S&P 500 has "decidedly broken down," with a downside target of 2,650. The benchmark index has already fallen 7% from its May 1 high, and that would mean a drop of another 3.6% from here.

Still, the question remains whether Trump's announcement is a negotiating tactic or whether the proposed tariffs will be implemented on June 10.

"Could the threat of monthly escalating tariffs on Mexico be a negotiating ploy? Certainly," Sam Rines, the chief economist at Avalon Advisors, told clients on Friday.

"That might even be the most probable outcome of the threat. But — even if it is just a negotiating ploy — it is not something that can be ignored. The threat creates incremental uncertainty, further crippling already flagging business investment."

Read related coverage from Markets Insider and Business Insider:

The US-China trade war just sparked a $14.6 billion exodus from emerging markets

Trump's latest trade-war grenade has the global economy heading towards a scenario where no one wins

The Mexican peso is getting clobbered after Trump threatens to hit Mexican goods with tariffs

Avocado buyers Chipotle and Calavo Growers are getting slammed as Trump's Mexico tariffs threaten to raise prices
Title: 🚛 Worst May Be Yet to Come for U.S. Jobs as Trade War Intensifies
Post by: RE on June 08, 2019, 01:44:15 AM (

Worst May Be Yet to Come for U.S. Jobs as Trade War Intensifies
By Reade Pickert
June 7, 2019, 12:25 PM AKDT


    Shock May slowdown saw weakness spread from goods to services
    Consumer spending may get hit as employers put plans on ice

Current Time 0:05:48
Duration Time 1:40:13
'Bloomberg Markets: The Close' Full Show (6/7/2019)

How Wall Street Views the U.S. May Jobs Report

The slowdown in U.S. hiring seen in Friday’s jobs report could get even worse, as President Donald Trump’s still-escalating trade war threatens further blows to employers.

The May payroll figures -- which missed all economist estimates and included steep downward revisions -- translated into a four-month average jobs gain of 127,000. That’s the slowest since 2012, and compares with an average of 201,000 over Trump’s first two years as president.

The numbers showed strains beyond goods-producing industries that are typically on the trade front-lines. A measure of the breadth of job-creation fell to a two-year low, and service providers also saw the fewest gains in that period, with weakness from health care to retail. As for manufacturing, it added an average of 3,000 jobs in the past four months -- the worst numbers since Trump took office pledging to revive America’s factories.
Industries add fewest workers in nearly two years

The report -- which also included the slowest wage gains since September -- suggests trade tensions were already hitting the labor market, and could have a bigger effect should Trump follow through on threats of more tariffs on imports from China. Investors increased bets that the Federal Reserve will cut interest rates to contain the fallout.

“The heightened degree of uncertainty related to the trade war has likely encouraged some employers to be a bit more cautious in this environment, and hold back some hiring plans until they have a better idea of how things are going to progress,” said Michelle Meyer, head of U.S. economics at Bank of America Corp.

“My concern is that in the coming months the uncertainty shock gets bigger and we see a larger impact,” Meyer said.

But the slowdown in hiring reflects more than just tariffs. Concern about slowing growth in the U.S. and abroad may be giving companies another reason to pull back, said Sam Bullard, senior economist at Wells Fargo & Co.

“We’re definitely late in the economic cycle and maybe that is also weighing upon firms not wanting to get too far ahead of their skis,” Bullard said. “There’s certainly a lot of uncertainty outside the U.S. as well, not just trade related, but just softening economic activity numbers in China and Europe.”

    What Our Economists Say

    “Hiring in sectors directly related to international trade has cooled over the past several months, and the downdrafts now appear to be stretching into related industries. More broadly, rattled economic confidence appears to be resulting in a cautious approach to hiring across the private sector.”
    -- Carl Riccadonna and Yelena Shulyatyeva, economists
    Click here for the full note.

It’s possible that one-time events hit the labor market last month. Flooding in the central U.S. could have reduced the May payroll number by 40,000 jobs, Kevin Hassett, the departing chairman of Trump’s Council of Economic Advisers, told Bloomberg Television.

While the Labor Department didn’t mention any special weather impact, Bullard said it’s “reasonable” that the flooding lowered the May numbers following an outsize bump in construction jobs in April.

Still, the slowdown means “you’re probably going to have less money in people’s pockets,” Bullard said. “That translates into most likely lower consumer spending growth as well.”
U.S. hiring 3-month average steps down, falling below 1- and 2-year averages

U.S. stocks jumped on Friday, amid expectations the Fed will move to boost growth in line with Chair Jerome Powell’s comment this week that the central bank will “act as appropriate to sustain the expansion.” Most Fed watchers said there’ll probably be no interest-rate cut before July, allowing time for more data to come in.

Meyer said markets will be watching for a sustained downtrend in indicators, like the Institute for Supply Management’s non-manufacturing survey, as well as in payrolls.

“If that becomes clear, then I think we should prepare for more significant slowing in the economy,” she said.

— With assistance by Katia Dmitrieva
Title: 🤡 The deal that Trump announced would avert tariffs on Mexico reportedly mostly
Post by: RE on June 09, 2019, 01:25:21 AM
aka, Trumpovetsky folded like a wet napkin to Wall Street.

RE (

The deal that Trump announced would avert tariffs on Mexico reportedly mostly includes things Mexico agreed to do months earlier
Michelle Mark

President Donald Trump claps after greeting supporters waiting at the White House with first lady Melania Trump as they returned to the White House, Friday June 7, 2019, in Washington. Associated Press/Jacquelyn Martin

    President Donald Trump announced a new deal on Friday to avert major tariffs on all imports from Mexico into the United States.
    Trump had vowed to impose the tariffs on June 10 if Mexico did not crack down on migrants traveling through the country en route to the US.
    But the deal announced Friday contains few new concessions from Mexico, The New York Times reported Saturday.
    Instead, the deal contains actions that Mexico had agreed to months earlier.
    Visit Business Insider's homepage for more stories.

The deal with Mexico that President Donald Trump said Friday would avert his impending tariffs mostly contains actions that Mexico had agreed to months ago, The New York Times reported Saturday.

Among the items included in the agreement was a promise to deploy Mexico's National Guard throughout the country and its southern border — but officials from both countries say the Mexican government had already vowed to do so in March, according to The Times.

Another part of the deal was to expand Mexico's cooperation with a Trump administration effort to force asylum-seekers to wait in Mexico while their cases move through the US immigration court system. But Mexico had actually agreed to the arrangement in December, The Times reported.

Throughout the last week, Trump administration negotiators tried to convince the Mexican government to adopt what's known as a "safe third country" agreement, which would force most migrants to seek asylum in Mexico, rather than the United States. But Mexican officials resoundingly rejected the policy.

Read more: DEAL REACHED: Trump says upcoming Mexico tariffs will be 'indefinitely suspended'
Mexican President Andres Manuel Lopez Obrador arrives at a rally in Tijuana, Mexico, Saturday, June 8, 2019. Associated Press/Eduardo Verdugo

But President Donald Trump has praised the Mexican president for his cooperation.

"I would like to thank the President of Mexico, Andres Manuel Lopez Obrador, and his foreign minister, Marcelo Ebrard, together with all of the many representatives of both the United States and Mexico, for working so long and hard to get our agreement on immigration completed!" Trump tweeted Saturday.

Trump also tweeted Saturday morning that Mexico had agreed to "immediately begin buying large quantities of agricultural product from our great patriot farmers." Mexico agreed to no such thing, Bloomberg News reported, citing three Mexican officials.

The Times reported that it's unclear whether Trump understands that the deal with Mexico includes few major concessions, or whether he has simply touted the agreement as a way to save face, amid tariffs that experts agreed would damage both countries' economies.
Title: 🤡 Trump’s Trade Threats are Really Cold War 2.0
Post by: RE on June 19, 2019, 01:03:26 AM (

June 14, 2019
Trump’s Trade Threats are Really Cold War 2.0
by Michael Hudson

Photograph Source: PAS China – Public Domain

President Trump has threatened China’s President Xi that if they don’t meet and talk at the upcoming G20 meetings in Japan, June 29-30, the United States will not soften its tariff war and economic sanctions against Chinese exports and technology.

Some meeting between Chinese and U.S. leaders will indeed take place, but it cannot be anything like a real negotiation. Such meetings normally are planned in advance, by specialized officials working together to prepare an agreement to be announced by their heads of state. No such preparation has taken place, or can take place. Mr. Trump doesn’t delegate authority.

Trump opens negotiations with a threat. That costs nothing, and you never know (or at least, he never knows) whether he can get a freebee. His threat is that the U.S. can hurt its adversary unless that country agrees to abide by America’s wish-list. But in this case the list is so unrealistic that the media are embarrassed to talk about it. The US is making impossible demands for economic surrender – that no country could accept. What appears on the surface to be only a trade war is really a full-fledged Cold War 2.0.

America’s wish list: other countries’ neoliberal subservience

At stake is whether China will agree to do what Russia did in the 1990s: put a Yeltsin-like puppet of neoliberal planners in place to shift control of its economy from its government to the U.S. financial sector and its planners. So the fight really is over what kind of planning China and the rest of the world should have: by governments to raise prosperity, or by the financial sector to extract revenue and impose austerity.

U.S. diplomacy aims to make other countries dependent on its agricultural exports, its oil (or oil in countries that U.S. majors and allies control), information and military technology. This trade dependency will enable U.S. strategists to impose sanctions that would deprive economies of basic food, energy, communications and replacement parts if they resist U.S. demands.

The objective is to gain financial control of global resources and make trade “partners” pay interest, licensing fees and high prices for products in which the United States enjoys monopoly pricing “rights” for intellectual property. A trade war thus aims to make other countries dependent on U.S.-controlled food, oil, banking and finance, or high-technology goods whose disruption will cause austerity and suffering until the trade “partner” surrenders.

China’s willingness to give Trump a “win”

Threats are cheap, but Mr. Trump can’t really follow through without turning farmers, Wall Street and the stock market, Walmart and much of the IT sector against him at election time if his tariffs on China increase the cost of living and doing business. His diplomatic threat is really that the US will cut its own economic throat, imposing sanctions on its own importers and investors if China does not acquiesce.

It is easy to see what China’s answer will be. It will stand aside and let the US self-destruct. Its negotiators are quite happy to “offer” whatever China has planned to do anyway, and let Trump brag that this is a “concession” he has won.

China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama got. And doesn’t he deserve it more? After all, he is helping to bring Eurasia together, driving China and Russia into an alliance with neighboring counties, reaching out to Europe.

Trump may be too narcissistic to realize the irony here. Catalyzing Asian and European trade independence, financial independence, food independence and IT independence from the threat of U.S. sanctions will leave the U.S. isolated in the emerging multilateralism.

America’s wish for a neoliberal Chinese Yeltsin (and another Russian Yeltsin for that matter)

A good diplomat does not make demands to which the only answer can be “No.” There is no way that China will dismantle its mixed economy and turn it over to U.S. and other global investors. It is no secret that the United States achieved world industrial supremacy in the late 19th and early 20th century by heavy public-sector subsidy of education, roads, communication and other basic infrastructure. Today’s privatized, financialized and “Thatcherized” economies are high-cost and inefficient.

Yet U.S. officials persist in their dream of promoting some neoliberal Chinese leader or “free market” party to wreak the damage that Yeltsin and his American advisors wrought on Russia. The U.S. idea of a “win-win” agreement is one in which China will be “permitted” to grow as long as it agrees to become a U.S. financial and trade satellite, not an independent competitor.

Trump’s trade tantrum is that other countries are simply following the same economic strategy that once made America great, but which neoliberals have destroyed here and in much of Europe. U.S. negotiators are unwilling to acknowledge that the United States has lost its competitive industrial advantage and become a high-cost rentier economy. Its GDP is “empty,” consisting mainly of the Finance, Insurance and Real Estate (FIRE) rents, profits and capital gains while the nation’s infrastructure decays and its labor is reduced to a part-time “gig” economy. Under these conditions the effect of trade threats can only be to speed up the drive by other countries to become economically self-reliant.
Title: 🤡 Trump and Xi meet Saturday — If it goes poorly, the global economy could teet
Post by: RE on June 26, 2019, 02:50:30 AM (

Trump and Xi meet Saturday — If it goes poorly, the global economy could teeter into recession
Published Tue, Jun 25 2019 2:37 PM EDTUpdated Tue, Jun 25 2019 9:11 PM EDT
Patti Domm @pattidomm
Key Points

    The outcome of the G-20 meeting between U.S. President Donald Trump and China President Xi Jinping could be a watershed moment that could impact the course of markets and the global economy for the second half of the year.
    The G-20 summit in Osaka could end in a ‘feel good’ moment for markets, but the thorny issues in U.S.-Chinese trade talks are unlikely to be resolved and tariffs are expected to continue.
    The meeting between President Trump and President Xi Saturday could lead to improved negotiations but the drag on the economy from tariffs and weakened sentiment is expected to continue until there is a real deal.
    One economist said if the talks fail and the trade war escalates, the world is at risk of a recession.

President Donald Trump and China’s President Xi Jinping make joint statements at the Great Hall of the People in Beijing, Nov. 9, 2017.
Jonathan Ernst | Reuters

Stocks are likely to see a temporary relief rally and bonds could sell off if there is a ‘ceasefire’ declared in the trade wars by the U.S. and China this weekend, but the damage to the global economy could continue until a tariff-ending deal is struck.

Wall Street has been handicapping the outcome of the much anticipated meeting between President Donald Trump and President Xi Jinping, and many investors believe the two will likely agree to hold off on new tariffs and restart negotiations, but existing tariffs would not be rolled back by much, if at all.

The meeting, at the G-20 summit, is so important that market pros broadly see it as an event that could affect the course of markets for the rest of the year; impact the trajectory of global economic growth, and help determine when and what actions the Federal Reserve and other central banks might take.

“You just amp up the odds even greater that we’re going to have a global recession, if there’s no detente between the U.S. and China. With respect to G-20, I don’t think there will be anything negative, and it will probably be a ‘kumbaya’ moment,” said Peter Boockvar, chief investment strategist at Bleakley Advisory Group.

Trade representatives have been meeting ahead of the Osaka dinner between Trump and Xi Saturday, and even with so much at stake, there are no expectations for a significant deal in the near future. Bank of America Merrill Lynch surveyed investors and found that about two-thirds expected that there would be no deal this weekend, but there would be no new tariffs either.

While few expect an absolute failure at the meeting, UBS economists said if that were the case and the trade war escalated with new tariffs, the world could see a recession-like slowdown in growth.

If the trade war escalates, “we estimate global growth would be 75 [basis points] lower over the subsequent six quarters and that the contours would resemble a mild ‘global recession’ —similar in magnitude to the Eurozone crisis, the oil collapse in the mid-1980s and the ‘Tequila’ crisis of the 1990s,” UBS global head of economic research Arend Kapteyn wrote in a note.
Ceasefire scenario

An unnamed Trump administration official told Reuters on Tuesday that U.S. goals for the talks are to reopen negotiations and there could be a possible agreement on no new tariffs. The official said the U.S. would like negotiations to resume where they broke down in May.

Boockvar said markets should react positively to a “ceasefire” scenario, and stocks could rally, while bond sell off and the dollar could bounce. “The fact tariffs are still on will limit the extent of that relief rally,” he said. “If all of a sudden people say the Fed won’t have to be as aggressive because there’s potential for a trade deal, then you will see an adjustment in the bond market.”

After months of leaving interest rates on hold, the Fed signaled last week that it could cut interest rates this year, with the first cut possible in July. The Fed has said it is concerned both by trade and a slowing global economy.

Citigroup global economist Cesar Rojas said he expects a “ceasefire with a hand shake agreement” between Trump and Xi that would avoid escalation of the national security issues and tariffs, and aim for a deal later this year. Trump would likely refrain from putting his threatened 25% tariffs on the remaining $300 billion in Chinese goods that so far have not been impacted.
Economic impact of trade war

“That still harms the economy because we still have the tariffs in place on the $250 billion and also because you will have continued uncertainty,” he said. Rojas said the hit to the U.S. economy from existing tariffs is expected to be about 0.1 percentage points of GDP, but 0.8 percentage points to Chinese growth over the next one to two years.

The trade war has become complicated by other issues, such as the U.S. black listing of Chinese telecom company Huawei. On the other side, China has dominance over rare earth minerals and could invoke a damaging embargo. There are also other sources of tension, like the U.S. sanctions on Iran, a supplier of Chinese oil .

Economic damage has also shown up in the trade data of both counties. The U.S. trade deficit narrowed by 2.1% in April, but the decline in both imports and exports signaled that the U.S. was trading less with the rest of the world. The deficit with China, however, surged 29.7% in April to $26.9 billion.

Capital Economics said the exports of Chinese goods that were not under tariff increased to the U.S., but specific Chinese exports, subject to tariffs, dropped off.

“Shipments of goods in the $50 [billion] list were almost 30% lower in the first four months of 2019 than they were a year before. Exports of goods in the $200 [billion] list, which had been holding up fairly well last year, have now slumped as well,” wrote Capital Economics. “In contrast, exports to the US of non-tariffed goods have been growing at broadly the same pace as China’s exports to the rest of the world. These will be the next in the firing line if there is a further escalation in the trade war.”

In the U.S., the trade wars have hit business confidence and slowed investment spending, and that could continue. “To the extent that there is uncertainty remaining, we’re going to see a delay in investment, and that hits the economy,” Rojas said.

If Trump and Xi agree to keep negotiating that could head off more severe problems but not stop the impact of the trade conflict from spreading, economists said.

On Tuesday, the latest consumer confidence reading fell sharply to 121.5, about 10 points lower than May. The Conference Board said the escalation in tariffs and trade tensions earlier in the month “appears to have shaken consumer confidence.”
Grand bargain?

Bank of America Merrill Lynch economists say there is little chance a “grand bargain” can be reached in Osaka, and in fact the Trump administration has lowered expectations for one. They noted that for instance, Commerce Secretary Wilbur Ross said that “the most that will come out of the G-20 might be an agreement to actively resume talks.”

While both countries ultimately want a deal, China may be willing to play a long game and Trump is not yet being pressured by the 2020 election. The pivot by the Fed to position for a rate cut has helped calm markets and drive stocks to new highs, giving Trump more leeway.

“Another reason to fade the chances of a breakthrough is that the US administration is not under much pressure to compromise at the moment. Our framework for the trade war has consistently been ‘no pain, no deal.’ With the stock market near its all-time high, markets expecting a strong ‘Powell put’ and GDP growth running at more than 3% yoy, the US is likely to try to drive a hard bargain. Like it or not, the Fed’s dovish message of offsetting downside risks encourages trade war escalation,” the BofA economists noted.

They also note that the two sides appear to be very far apart, and talks broke down in May because China reportedly did not want to commit to changes in its laws to help allay U.S. concerns about intellectual property theft, forced technology transfers and currency manipulation.

“Without such commitments, it is difficult to imagine that the U.S. will acquiesce to China’s red line that any trade agreement should include the removal of all tariff increases since last year,” the economists noted.

Even if there is a handshake agreement Saturday, the trade tensions could escalate later, as they did after the two leaders met in Argentina last year.

“Just because he doesn’t do [more tariffs] now doesn’t mean he doesn’t eventually do it,” said Boockvar. But there are also reasons for Trump to take a more moderate stance. “I think the data is becoming clear that we’re seeing slowing, and he’s got an election coming up.”
Title: 🤡 If Trump can’t make a deal with Xi, rising tariff impact could help Democrats
Post by: RE on June 29, 2019, 12:37:46 AM (

If Trump can’t make a deal with Xi, rising tariff impact could help Democrats
Published 6 hours ago
Kevin Breuninger   @KevinWilliamB
John W. Schoen   @johnwschoen
A docker works in front of a container ship at Qingdao Port in Qingdao, Shandong Province of China.
ChinaFotoPress | Getty Images
Key Points

    Tariffs could become a political hot-button in 2020 if Trump’s trade war continues.
    Trump is scheduled to discuss trade with Chinese President Xi Jinping at the G-20 summit. But he has also threatened to impose tariffs on hundreds of billions in Chinese goods.
    Some Democratic presidential have already lashed out at Trump on tariffs.

GP: China economy shipping GDP 181101 Asia

If President Donald Trump’s high-stakes trade talks at the G-20 summit with Chinese President Xi Jinping are a bust, the ongoing trade war could become a potent issue for Democrats in the 2020 election.

Trade talks between the world’s two largest economies stalled out last month, and some experts and administration officials are predicting that Trump’s meeting with Xi on Saturday could rekindle the negotiations. A senior White House official told CNBC that Trump might agree to a truce in the trade war without asking for very much from Xi in that meeting.

But current and former administration officials have cautioned that a deal with China likely won’t come at the G-20 itself. Trump has also threatened on multiple occasions to levy duties on $300 billion in Chinese goods that are imported to the U.S., which would result in taxes on nearly all U.S. imports of Chinese products.

The Trump administration has slapped tariffs on $250 billion worth of Chinese goods. China has responded with $110 billion in tariffs on U.S. goods, as the two sides grapple over issues including trade deficits, alleged Chinese intellectual property theft and forced technology transfers.

U.S. tariffs on China and other sources have reportedly already raised prices on some goods. The Becker Friedman Institute of Economics at the University of Chicago, for instance, found that the price of washers and dryers rose by 12% in response to tariffs levied in 2018.

Taxing all imports from China would do the same for many more products — and that could be a liability for Trump’s reelection chances.

Trump has long touted the benefits of tariffs as a way to bring companies back to the U.S. and make tax revenue. But tariffs also raise costs on American families by hundreds of dollars: the Federal Reserve Bank of New York found that tariffs imposed 2018 led to an annual cost of $419 for the typical household.

When Trump hiked tariffs on $200 billion of Chinese goods to 25% in May after the trade talks broke down, that annual cost shot up to $831 per year, according to the New York Fed.

Trump could open himself up to more attacks from Democrats on tariffs as the 2020 election nears. And while it was hardly the main focus of the first presidential debates, some candidates have already lashed out.

“The tariffs and the trade war are just punishing businesses and producers and workers on both sides,” entrepreneur Andrew Yang said during the Democratic primary debate Thursday night.

China’s retaliatory tariffs, which hit a wide variety of agricultural products, are already deeply affecting U.S. farmers in states that Trump won in the 2016 election.

Yang recalled an interaction he had with an Iowa farmer “who said he spent six years building up a buying relationship in China that’s now disappeared and gone forever. And the beneficiaries have not been American workers or people in China. It’s been Southeast Asia and other producers that have then stepped into the void.”

The White House in May rolled out a $16 billion farm and ranch aid package for those affected by the trade war. Trump assured farmers that his tariffs on Chinese imports would cover the cost.

South Bend, Ind., Mayor Pete Buttigieg appeared to be citing the New York Fed’s analysis when he knocked Trump’s tariffs at the debate Thursday night. “Tariffs are taxes. And Americans are going to pay on average $800 more a year because of these tariffs,” Buttigieg said.

“Folks who aren’t in the shadow of a factory are somewhere near a soy field where I live. And manufacturers, and especially soy farmers, are hurting,” Buttigieg added.
Title: 🤡 Trump Bows to Xi Jinping's Huawei Demands at G20
Post by: RE on June 29, 2019, 01:31:54 PM
Trumpovetsky folds again to the Chinese.  If you played Poker like that, you'd be broke before the deal made it around the table.  ::)

RE (

Trump Bows to Xi Jinping's Huawei Demands at G20

Selling American chips to a company branded as a security risk was only one of the areas where Trump gave ground.
Gordon G. Chang
Updated 06.29.19 10:52AM ET / Published 06.29.19 8:47AM ET


The United States will resume sales of products to Huawei Technologies, the Chinese telecom equipment manufacturer, President Donald Trump said in his post-G20 press conference Saturday in Osaka.

The action appears to be a surrender to publicly issued Chinese demands.

Effective May 16, the U.S. Commerce Department added Huawei, the world’s largest telecom-equipment manufacturer, to its Entity List. As a result, no American company, without prior approval from the Bureau of Industry and Security, may sell or license to Huawei products and technology covered by the U.S. Export Administration Regulations.

In recent weeks, Beijing had demanded the Trump administration withdraw the designation. On Thursday, for instance, the Wall Street Journal reported that Huawei’s removal was one of China’s three main preconditions to a trade deal. The other two demands were the lifting of tariffs Trump had imposed under Section 301 of the Trade Act of 1974 and the end to Washington’s efforts to get China to buy U.S. goods in excess of what was agreed in December 2018.

American companies had begun complying with the Entity List prohibition, but Intel, Qualcomm, and other chip suppliers have lobbied the Trump administration to ease the ban on Huawei, which American officials believe poses a threat to American national security. Washington, to inhibit Chinese spying, is trying to persuade American allies to not install Huawei equipment in soon-to-be-built 5G telecommunications networks.

Trump, however, undercut these efforts Saturday by making it appear that his Huawei campaign was merely a tactic to gain an advantage in the so-called “trade war” with China.

Trump, in response to a reporter’s question at the Osaka press conference, refused to confirm he would be taking Huawei off the Entity List, and he did mention there would be a meeting Sunday or Tuesday on the topic. Nonetheless, the president’s initial words made it clear that his administration would resume the flow of high-tech American products to the embattled Chinese company.

Trump’s just-announced concession on Huawei mirrors his reprieve last May of ZTE, another large Chinese telecom-equipment maker. Trump, in what he described as a “personal favor” to Chinese ruler Xi Jinping, removed ZTE from the Entity List.

Trump, in his initial comments at the press conference in Osaka, said that Huawei matters would be decided at the end of the trade talks. Presumably this is a reference to efforts of his administration last month to prevent the company from selling telecommunications equipment to American network operators—Trump last month issued an executive order on the subject—and perhaps a reference to the Justice Department’s criminal prosecutions of Huawei and its chief financial officer, Meng Wanzhou. The U.S. has filed an extradition request for Meng, currently held in Vancouver.

Trump also mentioned at the press conference that he would not be imposing any additional tariffs on Chinese goods. Previously, he had threatened to tariff an additional $325 billion of such products.

In other comments, Trump said trade talks would resume and that China had agreed to start buying American farm products.
Title: 💱 Europe Circumvents U.S. Sanctions On Iran
Post by: RE on July 01, 2019, 12:10:26 AM
Trumpovetsky is having ZERO success, anywhere.

RE (

Europe Circumvents U.S. Sanctions On Iran
Frances Coppola Senior Contributor
Banking & Insurance
I write about banking, finance and economics.

Europe has found a way of circumventing U.S. sanctions on Iran. The governments of France, Germany and the United Kingdom have developed a special purpose vehicle (SPV) to enable European businesses to maintain non-dollar trade with Iran without breaking U.S. sanctions. That SPV, known as INSTEX, is now up and running.
WASHINGTON, DC - JUNE 24: President Donald Trump signs an executive order imposing fresh sanctions on Iran in the Oval Office of the White House on June 24, 2019 in Washington, DC. Next to Trump, Vice President Mike Pence and Treasury Secretary Steven Mnuchin. (Photo by Oliver Contreras/For The Washington Post via Getty Images)

WASHINGTON, DC - JUNE 24: President Donald Trump signs an executive order imposing fresh sanctions on Iran in the Oval Office of the White House on June 24, 2019 in Washington, DC. Next to Trump, Vice President Mike Pence and Treasury Secretary Steven Mnuchin. (Photo by Oliver Contreras/For The Washington Post via Getty Images) Getty

The three governments announced the successful implementation of INSTEX at a meeting of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA) on June 28, 2019. The meeting was chaired on behalf of the EU by the Secretary General of the European External Action Service (EEAS), Helga Schmid, and was attended by representatives of China, France, Germany, Russia, the United Kingdom, and Iran.

In a statement, Schmid said:

    France, Germany and the United Kingdom informed participants that INSTEX had been made operational and available to all EU Member States and that the first transactions are being processed. Ongoing complementary cooperation with the Iranian corresponding entity (STFI), which has already been established, will speed up. They confirmed that some EU Member States were in the process of joining INSTEX as shareholders, the special purpose vehicle aimed at facilitating legitimate business with Iran. They are also working to open INSTEX to economic operators from third countries.

JPCOA is better known as the “Iran nuclear deal.” The U.S. unilaterally withdrew from JPCOA in May 2018, when it reimposed sanctions on Iran’s oil export sector. But other countries, including EU member states, have so far declined to follow suit. They claim that Iran is complying with the terms of the deal, and the U.S.’s decision to reimpose sanctions was unjustified.
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When the U.S. withdrew from JPCOA, it said that companies breaking the reimposed sanctions would face stiff penalties. Among the companies the U.S. administration listed as potential sanctions-breakers was the Brussels-based international messaging service SWIFT, which is the lifeblood of international payments. In November, evidently concerned about the potential consequences for global payments if the U.S. retaliated against it, SWIFT announced that it would comply with U.S. sanctions:

    In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, Swift is suspending certain Iranian banks’ access to the messaging system. This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system.

This was widely seen as a setback for the EU, which had been hoping that SWIFT would defy the U.S. and maintain payment services to Iran. But European governments were still determined to find a way of keeping trade with Iran going. If SWIFT wouldn’t help, they would create something to replace SWIFT for Iranian trade. Thus, INSTEX was born.

Exactly how does INSTEX facilitate trade with Iran without making sanctions-busting cross-border payments? In a word – barter. INSTEX matches the Euro payments of companies buying goods from Iran with the Euro receipts of companies selling goods to Iran. Imagine a company based in France wants to sell transport equipment to a buyer in Iran. Receiving Euro payments directly from that buyer would break U.S. sanctions. So instead, the French company would register the sale documentation with INSTEX. INSTEX would look on its own books for a company buying foodstuffs from Iran. It would match the two cash flows so that in effect the two European companies pay each other. The goods would still travel to and from Iran, but the money would stay entirely within the EU.

On the Iranian side, INSTEX is mirrored by a similar SPV, known as STFI. STFI would likewise match incoming and outgoing transactions. So the two Iranian entities would also effectively pay each other. Thus, everyone would receive their goods and payments, but no money would cross the Iranian border.

INSTEX will most likely facilitate trade by smaller firms, especially in humanitarian produce (food, medicines), at least to start with. However, trade volumes need to be high enough for INSTEX to be able to match cash flows reliably. If volumes fall too low, or become significantly imbalanced, there would be payment delays and potentially solvency problems for INSTEX itself. European governments, concerned that companies might be reluctant to use INSTEX for fear of U.S. retaliation, have therefore taken two further steps to encourage its use.

Firstly, they have created a “diplomatic shield.” INSTEX is explicitly backed by the three sponsoring governments, and its governing council consists of high-level government officials. The JPCOA statement also reveals that other EU countries are becoming shareholders of INSTEX. The idea is that the U.S. would find it diplomatically difficult to pressure companies whose governments are backing INSTEX. Admittedly, the present U.S. administration has shown little concern for diplomatic niceties: if a country does something it doesn’t like, it retaliates. It is therefore unclear how effective this “diplomatic shield” will be.

Secondly, as the JPCOA statement indicated, the aim is to open INSTEX to third countries. China and Russia were both present at the meeting, and both have an interest in trading with Iran. Crucially, their trade could include oil. The European Council on Foreign Relations (ECFR) observes that “the SPV is more likely to succeed if it links with revenues related to Iran’s oil exports to countries such as China, India, and Japan.”

Washington has not yet responded to the announcement that INSTEX is up and running. But it could regard such defiance of its stance on Iran as an unfriendly act, particularly as tensions escalate between the two countries over the shooting down of an American drone. Arguably, by helping companies circumvent sanctions, the EU is inviting retaliatory action. But should the U.S. really be able to force other countries to follow its lead when those countries fundamentally disagree with its stance?

The fact that INSTEX's implementation went ahead despite President Trump imposing additional sanctions on Iran shows how little support there is in Europe for the U.S. administration's belligerence. If INSTEX also succeeds in attracting major third countries such as China, the U.S. may find itself increasingly isolated. This could call into question not only the relationship between the U.S. and its allies, but also the U.S.'s power in the world.
Title: 🤡 What exactly is happening with Huawei right now?
Post by: RE on July 02, 2019, 12:01:26 AM
I ALMOST feel sorry for the trader trying to trade this shit now.  Every time Trumpovetsky farts, the wind reverses and the sails on the ship of state all do a hard jibe.


Photo: Kevin Frayer (Getty)

What exactly is happening with Huawei right now?

You could be forgiven if you feel like you’ve lost the plot. The Chinese tech giant has been an important but difficult-to-track chess piece in the increasingly tense rivalry between Beijing and Washington. In one moment, it’s a potent enemy spying on us, and there’s no compromise in sight. In the next, it’s a trade piece worth bargaining.

Pivoting drastically and without any explanation, President Donald Trump announced this weekend that American companies would be allowed to sell software and hardware components to Huawei, effectively reversing U.S. policy on the matter. The announcement came following a G20 summit meeting in Japan on Saturday where Trump and Chinese President Xi Jinping agreed to pause new tariffs and continue trade negotiations.

It’s a step away from conflict that’s been escalating and occasionally swerving virtually ever since Trump entered the White House.
Article preview thumbnail
Trump Says He'll Relax Sanctions on Huawei as Part of Trade Talks With China

Donald Trump and his Chinese counterpart, Xi Jinping, met during the Group of 20 summit in Osaka,…
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The decision to reverse on the Huawei ban first instituted in May—after Trump called the company “dangerous”—drove some marquee Republicans to criticize the administration. Here’s Florida Senator Marco Rubio on Twitter calling the move a “catastrophic mistake” and promising congressional action.

Other Republicans including Florida Senator Rick Scott and Tennessee Senator Marsha Blackburn joined in the criticism of Trump’s move.

Huawei, on the other hand, was pleased. On an official Twitter account, the company posted: “U-turn? Donald Trump suggests he would allow #Huawei to once again purchase U.S. technology!”

Feeling deja vu? We’ve been here before. Last year, Trump banned business with the Chinese telecom company ZTE, and Rubio cheered as both cited persistent national security threats originating from Beijing. Trump then reversed course and Rubio, saying the U.S. got played, called for congressional action.

You’re probably wondering now what changed regarding Huawei. Why signal danger and then reverse course? And really, what exactly has changed? Is everything back to the way it was before the trade war commenced?

After a vague press conference from the American president and some opaque notes in Chinese state-controlled press, no one is really clear. Trump did, however, say that the deal was regarding “equipment where there’s not a great national security problem with it.”

Appearing on Fox News on Sunday, White House adviser Larry Kudlow said American businesses can sell to Huawei as long as the sale is not a national security threat. Kudlow said the Commerce Department would look to grant “some temporary licenses” to American firms to sell to Huawei.

This vagueness leaves unanswered whether Google can still provide its Android operating system to Huawei phones or whether Microsoft can license Windows to Huawei laptops—although a Microsoft spokesperson told CNBC that it would “continue to offer Microsoft software updates to customers with Huawei devices.”
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Both U.S. and Chinese firms have talked publicly about their business suffering due to the geopolitical conflict between the two countries. Chinese chipmakers have said they wouldn’t hit Chinese national targets as a result of the trade war while American tech companies have been pushing the White House to end the fight so they can continue selling to China.

“I said, that’s okay, that we will keep selling that product, these are American companies that make these products. That’s very complex, by the way,” Trump said, according to Bloomberg. “I’ve agreed to allow them to continue to sell that product so that American companies will continue.”

Several American companies, including Intel and Micron, had already resumed sales to Huawei three weeks ago despite the lack of a clear and public deal on the matter.
Title: ⛩️ Trade War Is Hiding China's Big Problems
Post by: RE on July 28, 2019, 01:50:49 AM (

Jul 27, 2019, 02:21pm
Trade War Is Hiding China's Big Problems
Panos Mourdoukoutas


The ongoing US-China trade war is a distraction from China’s big problems: the blowing of multiple bubbles and the country’s soaring debt, which will eventually kill economic growth.
It happened in Japan in the 1980s. And it’s happening in China nowadays.
The trade war is one of China’s problem that dominates social media these days. It’s blamed for the slow-down in the country’s economic growth, since its economy continues to rely on exports. And it has crippled the ability of its technology companies to compete in global markets.
But it isn’t China’s only problem. The country’s manufacturers have come up with ways to minimize its impact, as evidenced by recent export data. And it will be solved once the US and China find a formula to save face and appease nationalist sentiment on both ends.

One of China’s other big problems , however, is the multiple bubbles that are still blowing in all directions. Like the property bubble—the soaring home prices that makes landlords rich, while it shatters young people’s dreams of starting a family, as discussed in a previous piece here.
New Home Prices 2015-19

New Home Prices 2015-19 Koyfin

Unlike the trade war, that’s a long-term problem. Low marriage rates are followed by low birth rates and a shrinking labor force, as the country strives to compete with labor-rich countries like Vietnam, Sri Lanka, the Philippines and Bangladesh—to mention but a few.
Then there’s the unfavorable “dependency rates” — too few workers, who will have to support too many retirees.
And there’s the impact on consumer spending, which could hurt the country’s bet to shift from an investment driven to a consumption driven economy.
Japan encountered these problems over three lost decades, even after it settled its trade disputes with the US back in the 1980s. China experience many more.
Meanwhile, there’s the infrastructure investment bubble at home and abroad, as discussed in a previous piece here. At home infrastructure investments have provided fuel for China’s robust growth. Abroad infrastructure investments have served its ambition to control the South China Sea and secure a waterway all the way to the Middle East oil and Africa’s riches.


City overpass in the morning

While some of these projects are well designed to serve the needs of the local community, others serve no need other than the ambitions of local bureaucrats to foster economic growth.
The trouble is that these projects aren’t economically viable. They generate incomes and jobs while they last (multiplier effect), but nothing beyond that—no accelerator effect, as economists would say.
That’s why this sort of growth isn’t sustainable. The former Soviet Union tried that in the 1950s, and it didn’t work. Nigeria tried that in the 1960s ;Japan tried that in the 1990s, and it didn’t work in either of those cases.
That’s why bubbles burst - and leave behind tons of debt.
Which is another of China’s other big problem s.
How much is China’s debt? Officially , it is a small number: 47.60%. Unofficially, it’s hard to figure it out. Because banks are owned by the government, and give loans to government-owned contractors, and the government owned min ing operations and steel manufacturers. The government is both the lender and the borrower - o ne branch of the government lends money to another branch of government, as described in a previous piece here.
But there are some unofficial estimates. Like one from the Institute of International Finance (IIF) last year, which place d China’s debt to GDP at 300%!
Worse, the government’s role as both lender and borrower concentrates rather than disperses credit risks. And that creates the potential of a systemic collapse.
Like the Greek crisis so explicitly demonstrated.
Meanwhile, the dual role of government conflicts and contradicts with a third role -- t hat of a regulator, setting rules for lenders and borrowers. And it complicates creditor bailouts in the case of financial crisis, as the Greek crisis has demonstrated in the current decade.
Title: ⛩️ Stocks sink after Trump raises tariffs on China: Dow sours after positive mor
Post by: RE on August 01, 2019, 04:26:14 PM (

Stocks sink after Trump raises tariffs on China: Dow sours after positive morning
Associated Press Published 2:58 p.m. ET Aug. 1, 2019 | Updated 4:57 p.m. ET Aug. 1, 2019

Traders works after the opening bell at the New York Stock Exchange (NYSE) on Wall Street, August 1, 2019, in New York City. (Photo: JOHANNES EISELE, AFP/Getty Images)

Stocks dropped sharply Thursday and bond prices spiked after President Donald Trump announced the U.S. will slap a new 10% tariff on some $300 billion worth of goods from China beginning next month.

The news erased a broad rally on Wall Street, sending the Dow Jones Industrial Average from a gain of more than 250 points and fell as much as 278. The S&P 500 had been on pace for its best day in nearly two months.

The escalation in the long-running and costly trade dispute comes only a couple of days after both sides resumed negotiations. In a series of tweets, Trump noted that while the slow-moving trade talks have been “constructive,” China has not followed through on some prior agreements, including the purchase of large quantities of U.S. agricultural products.

Retail apocalypse: Flagship stores shutting down

The new tariff would take effect Sept. 1. The U.S. has already applied tariffs of 25% on $250 billion worth of goods from China. Beijing has retaliated with tariffs on $110 billion in American goods, including agricultural products, in a direct shot at Trump supporters in the U.S. farm belt.

Companies that rely heavily on doing business with China took the brunt of the selling. Apple quickly went from a gain of 1.4% to a loss of 2.3%. Electronics retailer Best Buy went from a slight gain to a drop of 9.3% in heavy trading.

Banks, industrials and energy companies also fell. Utilities and real estate stocks rose as traders shifted money into more stable, high-yield stocks. Bond prices spiked as traders sought safety. The yield on the 10-year Treasury dropped to the lowest it’s been since the 2016 election. The price of U.S. crude oil skidded 8%.

The afternoon sell-off puts the market on track to extend its losses for the week. The S&P 500 had its worst day in two months Wednesday after the Federal Reserve’s latest interest rate policy signals disappointed investors.

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Keeping score

The S&P 500 index was down 0.9% as of 2:36 p.m. Eastern time. The Dow dropped 251 points, or 0.9%, to 26,612. The Nasdaq composite lost 1%. The Russell 2000 index of small companies slid 1.6%.


Prices for U.S. government bond rose sharply, sending yields even lower. The yield on the benchmark 10-year Treasury fell to 1.90%, the first time it’s been below 2% since July 3. That yield, a benchmark used to set interest rates on mortgages and other loans, has been declining steadily since November, when it traded as high as 3.23%.

Meanwhile, the yield on the 2-year Treasury note slid to 1.73% from 1.87% late Wednesday, a very large move.
Title: ⛩️ Fact check: Trump says China is paying for his tariffs. He's wrong.
Post by: RE on August 02, 2019, 04:29:14 PM (

Fact check: Trump says China is paying for his tariffs. He's wrong.
"Somebody in the U.S. is paying higher prices," one economist said.
Aug. 2, 2019, 11:06 AM AKDT
By Jane C. Timm


President Donald Trump told an Ohio audience Thursday that China is footing the bill for the massive tariffs he's slapped on foreign goods coming into the United States.

“Don’t let them tell you, the fact is — China devalues their currency, they pour money into their system. Because of that, you’re not paying for those tariffs. China’s paying for those tariffs,” the president said, hours after announcing the new set of tariffs on Chinese goods. “Until such time as there is a deal, we will be taxing the hell out of China.”

But economists say that's not how tariffs work, and that Americans are the ones footing the bill so far.
The facts

Trump has long championed his methods — last year he dubbed himself "Tariff Man" — as righting wrongs inflicted on the U.S. by other countries. But most economists agree a trade war hurts the economy and consumers alike.

Tariffs are taxes on goods coming in to the U.S., paid by the importer. The exporter — in this scenario, China — doesn't pay a thing.

"All of the U.S. tariffs have been passed to U.S. importers, U.S. retailers, U.S. consumers,” said Stephen Redding, a Princeton University economist and author of a recent study analyzing the effects of Trump’s trade war in 2018. “Somebody in the U.S. is paying higher prices.”
Title: ⛩️ Trump's frustration with China boils over
Post by: RE on August 03, 2019, 12:07:28 AM (

Trump's frustration with China boils over


08/02/2019 02:04 PM EDT

President Donald Trump announced on Thursday that he’ll impose a 10 percent tariff on roughly $300 billion in Chinese imports starting on Sept. 1 | Mark Wilson/Getty Images

President Donald Trump’s decision this week to ratchet up the trade war with Beijing by slapping more tariffs on Chinese goods came after aides thought they had talked him out of it weeks ago, according to two people close to the discussions.

But the president’s annoyance with China finally boiled over this week after Treasury Secretary Stephen Mnuchin and U.S. Trade Representative Robert Lighthizer returned from trade talks in Shanghai and reported that Chinese officials offered no new proposals for ending an impasse that’s persisted since May, according to the people.

Trump’s Twitter announcement on Thursday that he’ll impose a 10 percent tariff on roughly $300 billion in Chinese imports starting on Sept. 1 drew a quick reaction from China on Friday, further imperiling chances of progress in the talks. The U.S. is trying to get China to make commitments to rein in policies it says amount to widespread theft of U.S. technology and intellectual property.

“China will not accept any form of pressure, intimidation or deception,” Chinese Foreign Ministry spokesperson Hua Chunying said at a press conference Friday.

China‘s Ministry of Commerce released a statement that said Beijing would impose countermeasures.

“The U.S. has to bear all the consequences,” the statement said. “China believes there will be no winners of this trade war and does not want to fight. But we are not afraid to fight and will fight if necessary."

The renewed tensions come after initial optimism following a meeting between Trump and Chinese President Xi Jinping in Japan in late June.
Trump: China tariffs haven't 'cost our consumers anything'

Trump seemed convinced that China would resume huge purchases U.S. farm goods as a goodwill gesture for getting the stalled talks back on track, the people said. But the Chinese have not made significant purchases of soybeans or other commodities since the meeting.

One of the sources close to the discussions said the president is also deeply angry about what he sees as Xi’s failure to deliver on a promise to rein in exports of fentanyl to the U.S. The powerful opioid drug is blamed for fueling a U.S. addiction crisis.

Trump had been intent on making another tariff announcement in mid-July, but with the Shanghai meeting coming up, Lighthizer, Mnuchin and senior economic adviser Larry Kudlow initially talked the president out of the decision, the people said.

A USTR spokesperson denied that happened, saying it is “100 percent false” that Lighthizer had initially talked Trump out of tariffs.

On Friday, Kudlow defended Trump’s decision.

“In terms of the progress of the deal, the president is not satisfied,” he said to reporters at the White House.

Kudlow said there are still plans to meet with the Chinese for another face-to-face meeting in Washington.

“There’s certainly a month here before the tariffs go into place. A lot of things can happen in a month. A lot of good things can happen in a month,” Kudlow told Bloomberg Television on Friday. He added that agriculture purchases by China “would certainly help the story.”

Meanwhile, Kudlow downplayed the consumer impact of additional tariffs on China as “minuscule.”
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The targeted list of goods includes consumer goods like smartphones, clothing, shoes and other retail items. The decision earned backlash from the retail and business groups who warn that a continued tariff campaign will only damage what is now a strong U.S. economy.

The National Association of Manufacturers said the new tariffs would “certainly” get Beijing’s attention. “But it also has the attention of manufacturing workers in the U.S. and their families who are feeling the negative impact of the current tariffs and will be made even less competitive with this new tax on trade,” said the group’s president and CEO, Jay Timmons.

Kudlow later told Bloomberg Television that the White House has models to show a minimal impact the tariffs might have but declined to elaborate.

“The impact has fallen very heavily on China and our consumer sector remains strong,” he said.

Numerous studies have shown that tariffs on foreign goods are almost always paid by U.S. importers and the added cost is usually passed down the line to retailers and ultimately consumers.

The U.S. has already imposed a 25 percent tariff on about $250 billion worth of Chinese goods, representing mostly intermediate goods and inputs used in manufacturing.
Title: 🎥 Trump's Trade War (full film) | FRONTLINE
Post by: RE on August 23, 2019, 02:44:14 AM
Title: 🤡 As Trump Escalates Trade War, U.S. and China Move Further Apart With No End i
Post by: RE on September 01, 2019, 03:22:49 AM (

As Trump Escalates Trade War, U.S. and China Move Further Apart With No End in Sight

A cargo ship in Qingdao, China. The president has raised American tariffs to a level not seen since the 1960s.Credit Agence France-Presse — Getty Images

By Ana Swanson

    Sept. 1, 2019, 12:01 a.m. ET

WASHINGTON — President Trump’s trade war with China entered new territory on Sunday as his next round of tariffs took effect, changing the rules of trade in ways that have no recent historic precedent and driving the world’s two largest economies further apart.

American tariffs on foreign goods had already climbed higher than any time since the 1960s before Sunday, when the United States imposed a new 15 percent tariff. The levies on food, clothing, lawn mowers and thousands of other “Made in China” products come as the president prepares to tax nearly everything China ships to America. The move will bring average tariffs on Chinese imports to 21.2 percent, up from only 3.1 percent when Mr. Trump came into office, according to data from the Peterson Institute for International Economics.

China has responded by raising barriers to American companies and their products, while easing them for other nations. Trade between the world’s two largest economies has slumped, and China, which had long been America’s biggest trading partner, dropped to third place in the first half of the year, behind Mexico and Canada.

American companies that once believed the trade war would blow over are now scrambling to limit their exposure to China, in some cases shifting production to other countries, like Vietnam, to avoid tariffs that will soon reach as much as 30 percent.
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When he initially began his trade war, the president said his goal was to improve conditions for American companies operating in China, reduce the trade deficit between the two nations and create a more level playing field for American companies competing with Chinese firms.

His combative approach, he said, would secure a historic trade deal that would result in China buying billions of dollars’ worth of American farm products and stop Beijing from “stealing” technology from United States companies.

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But after months of stalled negotiations and China’s refusal to give in to America’s demands, his strategy has taken a more punitive turn. Mr. Trump, who has emphasized his view of the two countries as economic enemies and geopolitical rivals since his presidential campaign, has more recently advocated a rapid “decoupling” between nations that have become economically dependent on each other over the past two decades.

Over a week ago, Mr. Trump called China’s president, Xi Jinping, an “enemy” and threatened to use his emergency powers to force American companies out of China. He increased existing and future tariffs and his aides said the president’s only regret was not raising them even higher.

Mr. Trump’s conflicting goals — trying to make China a fairer place for American companies to do business while simultaneously punishing companies that are operating there — are threatening to turn what began as a limited skirmish into a drawn-out and costly quagmire, with little sense of how the United States or China will retreat.


“For those who supported tariffs as a tool to bring the Chinese to the table to reach a big deal, all of this now seems beside the point,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies. “It’s pointless casualties. And those pointless casualties will be the companies whose exports are eliminated, and consumers who will pay more and have less choice.”

Mr. Trump could still reverse course if China makes concessions — or if the American economy weakens and shows signs of slipping into recession, particularly as the election nears.

But so far, there have been few signs of amelioration, only strident statements. Major gaps remain between the two nations. An initial discussion in Shanghai in July prompted no breakthroughs, though the two sides may meet again in September.

“I think that’s one of the reasons we’ve been unable to make a deal — that we have competing objectives in the administration,” said Wendy Cutler, a vice president at the Asia Society Policy Institute and a former acting deputy United States trade representative. “I think that has caused China to be uncertain about where this is all headed.”

Mr. Trump continues to insist that his tariffs are hurting China but not the American companies that operate there. On Friday, he noted that American companies were leaving China in response to his tariffs, a development that put the United States in an “incredible negotiating position.” Any business that complained about financial pain from the tariffs were ignoring the obvious culprit for their troubles, he said.
ImageThe toymaker Hasbro is among the companies that have said they will shift their supply chains to emerging manufacturing hubs in Vietnam, India, and elsewhere.
The toymaker Hasbro is among the companies that have said they will shift their supply chains to emerging manufacturing hubs in Vietnam, India, and elsewhere.CreditJeenah Moon for The New York Times

“A lot of badly run companies are trying to blame tariffs,” he told reporters before heading to Camp David. “In other words, they’re run badly and they’re having a bad quarter or they’re just unlucky in some way. It’s not the tariffs. It’s called bad management.”


The Trump administration continues to look for other ways to limit the ability of American companies to do business with China. The Commerce Department is moving forward with new export controls that would restrict American firms from selling sensitive technology, like artificial intelligence and quantum computing, to Chinese firms. And it has blacklisted several Chinese technology companies, including the telecom giant Huawei, from buying sensitive American technology.

“We’ve never seen anyone do what President Trump has done,” said Chad P. Bown, a senior fellow at the Peterson Institute for International Economics. “It looks more and more like this is the new normal.”

Mr. Bown’s research shows that the trade war is entering a period of rapid escalation. Tariffs between the United States and China remained roughly constant from October 2018 to the middle of this year. But after talks between the two sides collapsed in May, the president set into motion a series of increases that will raise American tariffs on China by about 12 percentage points in six months, and will ultimately tax the vast majority of goods China sends to the United States. China, in response, has raised tariffs on $75 billion worth of American products and halted purchases of farm products.

“The trade war has been kind of on a slow burn for a while, but things are now really ramping up in a hurry,” Mr. Bown said.

On Sunday, China began charging a 33 percent tariff on American soybeans, compared with just 3 percent for those coming from Brazil or Argentina, Mr. Bown says. On Dec. 15, China will start taxing American autos and auto parts at a 42.6 percent rate, compared with 12.6 percent for those from Germany or Japan.

Those barriers are quickly reconfiguring the global economy. American imports from China fell by 12 percent in the first half of the year, while exports to China dropped 19 percent. Chinese trade with other countries has increased, offsetting some of that fall from the United States.

Some major multinational companies have announced in recent days that they are trying to quickly reduce their reliance on China. The toymaker Hasbro and clothing retailers like Express and Abercrombie & Fitch have said they will shift their supply chains to emerging manufacturing hubs in Vietnam, India, and elsewhere. Some of that shift was already underway, given China’s rising wages, but the trade war has made that move financially imperative.


“While we’re still in that part of the world, we’ve moved out of China in a very meaningful way,” Harvey S. Kanter, the president of Destination XL Group, which sells clothes for big and tall men, said last week on an earnings call.

Express, for its part, told investors last week that it planned to reduce the percent of units sourced from China from 20 percent today to approximately 8 percent by the middle of next year.

Those decisions, which require companies to make significant investments in setting up new facilities, finding workers and training them, are unlikely to be undone even if the two countries ultimately walk back from the trade war.

“We’ve created high hurdles to get back to the way things were, and that means we’re probably not going to,” Mr. Kennedy said. “I think the relationship now is essentially in free fall.”

Each tariff increase has also taken the United States in the opposite direction from where trade policy had been pointing for decades. After years of trying to reduce tariffs and encourage free trade, the United States now has a higher average tariff rate with the rest of the world than many developing countries, including China, Russia and Turkey, said Torsten Slok, the chief economist at Deutsche Bank Securities.

Mr. Slok said that while it had not been a smooth path, average American tariff levels had been trending downward for 200 years.

“That is now what is being reversed, by tariffs moving up to a level that we haven’t seen in decades,” he said.

Jeanna Smialek contributed reporting.
Title: Re: 🚛 Trade Warz
Post by: Surly1 on September 01, 2019, 03:45:59 AM
No problemo. "Trade Wars are easy to win," amirite? Right? Bueller?

"It’s not the tariffs. It’s called bad management.”
-Tangerine Twitler

There's the money shot. It is ALWAYS someone else's fault.
Title: Re: 🚛 Trade Warz
Post by: Surly1 on September 01, 2019, 04:00:57 AM
In re Trade Wars, here's one take:

Donald Trump just sealed his fate

| 12:01 am EDT September 1, 2019

Palmer Report » Analysis

It’s midnight eastern time, which means Donald Trump’s new tariffs on Chinese goods have officially gone into effect. Unless Trump changes his mind between now and the opening bell on Tuesday morning, the stock market will plummet in such ugly fashion, it’ll make the recent downturn look like a walk in the park. So why is Trump doing this, and what now?

Even the ever-delusional Donald Trump has surely figured out by now that his tariffs have backfired, and that his trade war has been lost. China isn’t going to back down. The Chinese government, which will still be in power long after Trump is gone, has the luxury of simply outlasting him in this conflict. Whoever the next president is, and whatever her or his policies might be, China will find it favorable to Trump’s economic lunacy.

The thing is, if Trump backs down now, he’ll be admitting – to himself and to the American public – that he lost and that he screwed up the economy in the process. That’ll cost him votes in 2020. But if he keeps going with the tariffs, it’ll wreck the economy to the point that it’ll cost him a lot more votes in 2020. So he’s doing what people often tend to do when they know they’re going to lose: he’s continuing with his losing strategy in the hope some random impossible thing will happen and he’ll get lucky in the end. It won’t.

The thing is, Trump set this hard deadline for himself tonight, and now he’s stuck with it. Maybe he thought China would cave. Wrong. At this point China has made clear that it’s willing to tank its own economy in the name of tanking the U.S. economy, if that’s what’s necessary to get rid of Trump as soon as possible. China’s government can survive a recession. Trump can’t.

Donald Trump can still post a tweet in the morning, announcing that he’s decided to cancel the tariffs because he’s reached some kind of imaginary agreement in which China has caved to him. But that would just get him laughed at. He can wait until the stock market goes off a cliff on Tuesday, and then perhaps one of his handlers will sit him down and explain to him that his presidency ends now if he doesn’t cave. Then maybe he will cave.

But as of a minute and a half ago, Donald Trump has locked himself into either 1) escalating this trade war at the cost of his presidency, or 2) backing down in humiliating fashion, which would also likely cost him his presidency. Either way, Trump just sealed his fate.

Title: Re: 🚛 Trade Warz
Post by: Surly1 on September 01, 2019, 04:05:27 AM
... and here is another. Chris Hayes in conversation with Henry Blodget. This is closer to my own view, in which it is difficult to envision a winning strategy. A recession may be baked in the cake.
there is video at the link.

MSNBC host Chris Hayes thinks President Trump's stance on China is 'not at all crazy'

Jan. 2, 2019, 10:50 AM
Volume 0%
  • Chris Hayes, host of "All In with Chris Hayes" on MSNBC, spoke with Business Insider at Ignition 2018 on political issues.
  • Hayes gave his take on the ongoing trade war with China and said "trade hawkishness against China" is justified.
  • He also said he doesn't trust President Trump to "navigate the difficulties of diplomacy" if the US entered a cold war with China.

Henry Blodget: Alright let's come back to the other question, which is, so what issue do you think President Trump is right about that most liberals are wrong?

Chris Hayes: I actually think the problem with the President is that there is the abstract position he has and then like the actual embodied version of it as run through his extremely strange brain. I think a sort of trade hawkishness against China and a posture of trade hawkishness against China is not at all crazy and not at all unjustified.

I think there are lots of things that China is doing and has been doing for a long time that are genuinely destructive that generally speaking the American political class has been too content to sort of play "Patty Cake" with them. I think there are really important geopolitical reasons not to enter into a cold war with China and I certainly don't trust the President to navigate the difficulties of that diplomacy but on a variety of issues there are all kinds of reasons to be genuinely more confrontational with China over their industrial policy.

Blodget: Just before we came on stage, you noted that the President just tweeted that he is quote, "a tariff man."

Hayes: I'm a tariff man!

Blodget: Yes! And so do you think that's reasonable?

Hayes: No, I mean that's a good example of like, he genuinely has a sincerely... sincerely felt and long-held view on trade that I think is deeply mercantilist and emanates from the fundamental worldview that he has over all other worldviews which is that everything is zero sum. Really views that, it's like if you're getting over on me, then I'm not getting over on you and vice versa. And that's the only way things work and who screws who. Who gets the bigger piece of the pie? I think he views all trade that way.

I think like the basic insights of Adam Smith "Wealth of Nations" and the idea of comparative vantage in trade are generally true. I think the modern trading system is broken in all kinds of ways and I think there are ways in which it's not crazy to use tariffs as a tactic to create different kinds of rules and regulatory structures for international trade. Again, do I trust him to pursue that? No I do not.

Title: 🚛 Trade War Spins Out Of Control
Post by: RE on October 09, 2019, 02:24:01 AM (

5,536 viewsOct 8, 2019, 08:07pm
Trade War Spins Out Of Control
Panos Mourdoukoutas

Container trucks arrive at the Port of Long Beach on August 23, 2019 in Long Beach, California. - President Donald Trump hit back at China on August 23, 2019, in their mounting trade war, raising existing and planned tariffs in retaliation forAFP/Getty Images

The US-China trade war is spinning out of control, spreading into new areas.

 At least that’s the impression one gets, following a couple of moves by Washington on Tuesday, upping the trade war game with Beijing. Like blacklisting several technology facial-recognition and artificial intelligence (AI) technology companies, including Hikvision, Megvii Technology, iFlytek Co and SenseTime.

This means that these companies cannot buy US technology, and they cannot sell their products to US markets either.

Then there’s U.S. State Department’s decision to impose visa restrictions on some Chinese officials for committing acts that Washington considers unacceptable.

Ted Bauman, senior analyst and economist at Banyan Hill Publishing, sees Washington’s new moves as an effort to apply maximum pressure on Beijing, as trade talks are about to resume.
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“The latest blacklist announcement is consistent with the Trump administration's strategy of seeking new sources of leverage in the ongoing trade negotiation,” he says. “I don't think it's a coincidence that this announcement came hard on the heels of leaked reports that they are considering limiting U.S. investor capital flows to Chinese companies. It's as if the administration has realized that the Chinese are not going to back down in the face of increased U.S. tariffs, so they are casting around for other ways to threaten the Chinese.”

And that seems to be the case on the Chinese side. “A US decision to blacklist 28 Chinese entities, which was announced shortly before high-level Chinese and American officials meet in Washington for a new round of trade talks, is typical of the Trump administration's trade talk tactics and showed the US was seeking to benefit by further pressuring China, Chinese experts warned on Tuesday,” say Huang Ge and Song Lin in a Globaltimes editorial.
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Bauman thinks that the blacklist is actually a “good idea.” But he’s concerned with the timing. “The problem is that the two countries’ economies are heavily intertwined. Concerns about these issues should have been raised long ago when the Chinese had less leverage,” he says. “As many people are beginning to realize, by ignoring these things for so long, the U.S. has helped to create the Chinese “monster” and it may be too late to do anything about it.”

Meanwhile, Bauman thinks that Washington’s strategy may not work. “The problem is that this is all starting to appear a little desperate, and the Chinese have picked up on that,” he says. “The most recent news from the Chinese side is that they’re are no longer interested in a grand bargain on trade, and will only focus on short-term issues.”

What does it mean for the future of trade talks? “That means the Chinese either want to get this current round of discussions over with so they can wait for a new U.S. administration to talk to, or they are openly mocking the Trump administration by saying, ‘go ahead and do your worst, we don't care,'" he concludes.

In either case, Washington is making it less likely that any deal will be reached between the two sides any time soon. It’s just a matter of time before Beijing comes up with its own blacklist of US firms, and imposes its own restrictions on American officials.

Wall Street is beginning to sense this prospect, selling off after Washington announced its new moves, closing sharply lower for the day.
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Title: 🚛 America's factories are in trouble. The trade war is only part of the problem
Post by: RE on October 14, 2019, 12:08:05 AM
El Trumpo is really bringing those jobs back!  ::)

RE (

America's factories are in trouble. The trade war is only part of the problem
Anneken Tappe

By Anneken Tappe, CNN Business

Updated 9:10 AM ET, Sun October 13, 2019


New York (CNN Business)The trade war is hurting America's factories, but it's not the only culprit. The strike at General Motors and Boeing's 737 Max crisis are taking a toll as well.
This trifecta of challenges worries analysts and economists that the manufacturing sector could contract for the third-straight month in October. Lower output from American factories could drag down US GDP growth in the third and fourth quarters.
American manufacturing is already hurting. Trade tensions between the United States and China have weighed on global demand and input costs. A trade deal could help, but it wouldn't alleviate the impact from the ongoing GM (GM) strike or the seven-month grounding of Boeing's (BA) workhorse jet.
GM and Boeing are two of the largest industrial companies in the United States, and their struggles will make a dent in October factory activity.

"The full effect of the GM strike will be felt in the October data," said Tom Derry, CEO of the Institute of Supply Management. When the strike will be resolved remains unclear.
"I wouldn't expect us to be out of contractionary territory in manufacturing and the GM situation will make whatever the number would have been a little worse," Derry added.
The GM strike, in which 50,000 workers walked off the job in mid-September, has still not been resolved. It is costing the company some $90 million a day. The disruption is also rippling through the car maker's supply chain. Some 10,000 American companies supply GM with products and services, like car seats and computer chips. Many have had to cut back production due to the work stoppage.
Economists polled by Refintiv have average expectations of 47.8 for the Institute of Supply Management's October manufacturing index — down from the previous month. (A reading below 50 indicates the manufacturing sector is contracting.) The index, which will next be published on November 1, has fallen for two months in a row.
GM's strike could also show up in the October jobs report. With nearly 50,000 workers not receiving their regular salaries, it could even have an effect on consumer spending during the holiday season.
Meanwhile, Boeing's scaled back production of its 737 Max is weighing on its export contribution, as many of those grounded jets were destined for foreign markets.
The grounding already shaved a quarter percentage point off second quarter GDP, Michael Pearce, US economist at Capital Economics estimates. This drag could persist into the end of the year. In July, the company said it might have to temporarily halt production of the jet, which was grounded in March after two fatal crashes.
The New York Federal Reserve's GDP forecasting model estimates GDP growth of 1.3% in the fourth quarter, compared with 2% in the third quarter.

Although the American consumer has broadly remained strong throughout the turbulence of the year, the trade war has also begun to show up in confidence surveys. Together this also doesn't bode well for consumer data in the fourth quarter. Even though Friday's University of Michigan consumer sentiment survey was better than expected, with fewer survey participants mentioning the trade war, nearly a third of people still brought it up as a concern.
But unlike the trade war, the GM strike could be resolved relatively soon, leading factory activity to rebound. So its negative impact on the manufacturing sector or GDP data might be short lived.