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I would imagine the US sells soybeans to South America, whereupon they are then sold to China.
That’s not typcially how it would work with these trade issues. You can’t import China to US and send the goods to Mexico and legally avoid the Mexican tariffs on Chinese goods
I hope that you're right, that recent events are mere posturing and unfurling of peacock feathers; that after rhetorical points are scored, normalcy returns. But I worry that in some quarters there is too much fascination with really shaking things up, with really wholesale and invasive changes - so much so, that "broken glass" is deemed to be acceptable.
Normalcy returns with Trump claiming a big victory here and the Chinese doing the same over there. I really believe Trump is much more concerned about scoring a "win" than being in some long protracted murky trade war. And Trump is good at claiming victory no matter what the actual results are.
For example, cerium (Ce) is more abundant in the earth's crust than copper.
While China is the main supplier, various countries around the globe are in production of various rare earth elements; China, of course, then flooded the market to make non-Chinese mining operations un-economic, forcing production holds and closures. Then, of course, China limited exports and everyone got pissed, and they opened up more exports.
China doesn't want to choke off exports of rare earth metals because they really don't want significant production expertise to develop elsewhere.
You touched on one of the reasons it is time to fight China with this trade inequity that is going on.
In fact their practices are much more diabiolical:
If you would do your research you would realize Europe was one theater in a global war. Where were the Russians in the Japan/Pacific theater?
China does not have plenty of arable land. They are facing a dire shortage of water and arable land, and suffering from extreme environmental pollution. Throughout their history they have struggled to produce enough food to feed their people and the problem is expected to grow worse.
The market for food products is not going away but the market for cheap tupperware just might.
Are you trying to deflect? You mentioned WWII and how the "US were the saviors" and I "corrected" you...that's it. I'm not going to into Japan/Pacific as you're trying to use that as a deflection. Anyway, Chinese civilization goes back 4000 years...my friend. They know how to survive. China knows what's going on and will compensate for their needs. US is in debt to China;therefore, they are a very bad customer. Did you know that the EU is China's largest trading partner? And now that China has the PetroYuan and CIPS China's answer to the western SWIFT system (look it up and do your homework) China is well prepared. They've bought plenty of gold and developing trading with the Middle East and Africa. The One Belt-One Road that China has built allows China to deliver around the world. You just worry about the US...don't worry about China.
China doesn't have to dump US debt to harm us, all they have to do is stop selling us rare earth metals which play crucial roles in everything from smart phones to electric car motors, hard drives, wind turbines, military radar, smart bombs, laser guidance, and more..
We depend on them almost 100%
EXACTLY....!
Quote:
Originally Posted by Mircea
Um, Russia and Japan had entered into a peace treaty in 1931, specifically, a treaty of non-aggression.
Russia never possessed the large number of troop transports and landing craft necessary to invade foreign lands and islands (and still doesn't to this day). In fact, economically speaking, Russia was in no position to build the necessary ships required to assist the US in the Pacific Theater.
On top of that, the Russian navy in WW II had only a couple of battle ships, several cruisers and maybe 4-5 destroyers, which would not be enough to provide protection for troop transports and landing craft. Note that a good part of the Russian navy was also pressed into ground combat duty to defend Russia when Germany first attacked.
You ignore the fact that Russia forced Japan to maintain 27 combat divisions in Mongolia and Manchurian, for fear that Russia might invade.
If those 27 combat divisions were available for use in the South Pacific.....well, the US would not have prevailed so easily.
It wasn't until the Yalta Conference that FDR convinced Stalin to abrogate the non-aggression pact with Japan.
Anyway, the fact that Russia tied up 27 Japanese combat divisions is significant.
Thanks for this information...!
Quote:
Originally Posted by jackwinkelman
Normalcy returns with Trump claiming a big victory here and the Chinese doing the same over there. I really believe Trump is much more concerned about scoring a "win" than being in some long protracted murky trade war. And Trump is good at claiming victory no matter what the actual results are.
That’s not typcially how it would work with these trade issues. You can’t import China to US and send the goods to Mexico and legally avoid the Mexican tariffs on Chinese goods
I agree it doesn't "legally" avoid tariffs - but that doesn't stop it. Heck, for decades the world has had outright bans on technology transfer to rogue nations, and that didn't stop it.
China holds I believe 2 trillion dollars worth of US debt. Almost every media says it's a doomsday if China were to dump its holding in US debt.
Is anyone able to paint a picture of that scenario? Yes we all know price of US debt can plummet and yield can shoot up; I am talking 3,4, or even 10 steps beyond the obvious. What is that doomsday?
I for one, might convert most of my assets to US debt if 30 year Treasury yield goes to say 5-6%. Seems to me it would be a good opportunity to pick up some quality investment...
The worst thing that could happen is that the United States should fail to pay its debts when they come due. Defaulting. For the US to default on its debts would be catastrophic, because not only does it owe money to China, it also owes a great deal of money to the American people—who also buy Treasury securities. Literally billions of people would be hurt in the US and around the world.
OK maybe I take a crack at it. I'm definitely no expert on this.
Let's say China first stops buying new US debt. Forget what option they have otherwise, in this exercise they just want to screw the US. So the demand for US debt shrinks, and US govt starts to feel the pressure because we need someone to finance our government. Without people loaning Uncle Sam money, it cannot repay debt, cannot pay federal employees, and cannot pay people's entitlements like Medicare or Social Security payment.
The US govt will need to start paying more interest to encourage more demand, so the yield goes up. People such as myself could consider coming in at some point to buy Treasuries.
But China has ammunition in its hands. It can dump just enough debt to wipe out just enough demand, for there to be insufficient buyer for new US debt. If China lowers the price of its US debt enough so that the yield surpasses what Uncle Sam offers, yeah I'll buy from them instead of Uncle Sam. Now Uncle Sam faces the dilemma of having no cash to pay its bills, even if it is willing to borrow and willing to pay more. It just keep getting outbid. If Uncle Sam defaults, 200 years of good credit is down the tube and that's real damage.
Can the US govt orchestrate some kind of Quantitative Easing X to give itself some cash at this point? Can it sell Alaska back to Russia to raise money?
You touched on one of the reasons it is time to fight China with this trade inequity that is going on.
The rare earth industry was basically forced into non existence by chin...............unfair competition.
I think it is way past time to confront them........
When 5% of the world uses 25% of the world's resources (that was the USA a few years back - it's changing now, but still VASTLY skewed), it's a HECK of a thing to talk about inequity.
What you are really saying...if I can translate...is that you are entitled by some birthright to use 5X as much "stuff" as others on the planet.
It doesn't work that way any longer.
All these unfair practices provided lots of consumer items that we all bought....inexpensively.
AND, if these minerals are not "rare", it certainly will be no big deal to start up the old mines or dig new ones. After all, mining is a fairly easy thing to do with the machinery available these days.
Inequity is people living in cardboard shacks (Bangladesh, etc.) making your shirts. You don't seem too concerned about that.
China holds I believe 2 trillion dollars worth of US debt. Almost every media says it's a doomsday if China were to dump its holding in US debt.
I think a more likely scenario is that China will cease to purchase additional US debt. That will put the right amount of pressure on the US without completely destroying China's financial holdings.
It is also less likely to cause political reprisals like more active attacks like cancelling Boeing orders. Can you really launch reprisals against a country for not buying your debt?
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