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People who know nothing about economics or international trade should not ask here. They should study the subject for years and THEN...if they have any questions, ask others who might know....
Trump supporters tend to think in the same way he does...that is, I tweet and then everything instantly changes!
The reality is many actions take YEARS to actually come to their fruition. Sometimes decades.
IF - and that is a big IF, Trump continued to do this, China would win bigly. They have already won in many ways....because lots of other countries will see China as a more reliable trading partner than the USA. But such things will take many years to play out.
My guess is that many of the "uneducated that Trump loves" tend to think in periods of a few weeks. This is very typical...and is the difference between those who should govern and lead...and those who should not.
Oh, the US Stock market is up 1 to 3% YTD. It should be up 6-9% given the "booming" economy, which tends to be booming only for those who are wealthier.
So that's a difference of 7% or so (average)......
Since the US Stock Market is worth 34 Trillion, that means we just "lost" more than TWO TRILLION DOLLARS so far this year- which we would have if Trump left the free markets alone.
I think Trump will likely either be impeached or finally taken on by Congress before most of the damage is done...but a LOT has already been done.
Frankly, I don't care how China does. In one sense I wish everyone in the world success. But my thinking is win-win, not lose-lose-lose like Trump ends up doing.
Tons of lefties on here and everywhere else saying tariffs will help China destroy the US. Not my opinion just fact. It’s one of their talking points.
You mean it's a talking point that every single GOP member has preached (free trade, light or no tariffs) for decades?
And something that the left and center and independents also agree on (largely)?
Well, you are 100% right. Americans of ALL stripes agree on this. Now...some of the "uneducated" changed their mind when their King ordered them to do so, but that's not any way to run a country or an economy. Those people are the outliers. Even Trumps own inside admin thinks free trade is best but if they want a paycheck they have to make excuses for the King.
People who know nothing about economics or international trade should not ask here. They should study the subject for years and THEN...if they have any questions, ask others who might know....
Since the US Stock Market is worth 34 Trillion, that means we just "lost" more than TWO TRILLION DOLLARS so far this year- which we would have if Trump left the free markets alone.
Would you like to be embarrassed in this thread on your stock market claims or would you like me to keep them in the DOW 25k thread?
I am not sure what happened to the Republican believe in Capitalism and Free Trade.
Tariffs are negotiating tools...I don't know why you folks don't understand the obvious. The Trump administration is negotiating from a position of economic growth and strength, the perfect time to do it.
Quote:
Originally Posted by saltine
Xi is not liking this. You could see it in his eyes.
No he is not. And he's taking a big hit.
From Asia Times:
"China’s – or, perhaps, more correctly, Xi Jinping’s – propagandists hail him as an exceptional leader. Yet with the country faced with several serious and rising problems, notably a deepening and damaging trade war with the United States, people may now realize that the Chinese ruler isn’t as great as they trumpet."
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Quote:
Originally Posted by Listener2307
If the tariffs benefit China, why is their market down?
The Chinese stock market is in the toilet and headed further South. If the NeverTrumpers were right, shouldn't the Chinese stock market be doing well? Here's the chart for six months.
In fact, Japan just surpassed China in terms of market value.
Seems to me like the tariff discussions are working for America.
As already pointed out tariffs hurt all those involved.
In terms of China's response, it will most likely impose it's own tariffs on the US whilst trying to increase free trade with other countries and will also focus more on domestic growth.
One way the Chinese companies can get around the tariffs is to shift production to other countries such as Vietnam, Indonesia, Bangladesh etc.
So in the end the US could have just as big a trade deficit but spread over many more countries.
Quote:
Originally Posted by BBC
China could focus on domestic growth, by making sure it has the tools to keep the economy growing during tougher times and by expanding its trade and investment relations with other countries.
Mr Evans-Pritchard says China's "best option" in responding to tariffs is to be ready to prop up the economy. He notes there are signs that earlier moves to slow credit growth and rein in debt levels are changing already.
HSBC's Julia Wang says China will try to expand trade with countries other than the US. China recently hosted EU officials and discussed free trade.
"I think China has already been trying to diversify its trade and investment relationship away from the US since a few years ago, and now they will undoubtedly accelerate," she added.
Originally Posted by Peterson Institute for International Economics (PIIE)
A major share of US imports from China is produced by multinational companies, including those based in the United States. According to the list released last week by the US Trade Representative, the largest single category of targeted Chinese goods is computers and electronic products.
But 87 percent of these targeted products are produced by multinationals. Tariffs, which will reduce US imports of these goods, won’t hurt China as much as they will hurt multinationals.
Also hurt are the non-Chinese East Asian firms that are part of the supply chains that provide the parts and components that account for a large share of the value-added in these products. In computers and electronic products, for example, the Chinese value-added is less than half, according to my PIIE colleague
Suppose China does “run out” of goods to target with tariffs. It has other options to impose pain on the United States. For example, US goods and services produced and sold in China in 2015 (the most recent year these data are available) totaled $223 billion , far exceeding US exports to China of $150 billion in the same year.
The Chinese government can easily launch a propaganda campaign that would quickly lead Chinese consumers to shun these US goods. Apple’s $40 billion market in China for iPhones, the largest in the world, could quickly collapse. Similarly, General Motors sells more cars in China than in the United States, sales that could easily be disrupted by the Chinese government.
By contrast, Chinese investment in manufacturing in the United States is modest. The magnitude of Chinese goods made and sold in the United States is minuscule, only $10 billion in 2015. In short, China has many more opportunities to interfere with US firms operating in China than exists vice versa.
China can also further delay regulatory approvals that are central to the economic future of US companies. In short, it can make life miserable for companies now doing business in China under hard-won concessions by US negotiators over the years
Here is a wonderful article by The Financial Times. The Chinese have a VERY different view of what Trump is trying to do, and it worries them.
From the FT:
In Chinese eyes, Mr Trump’s response is a form of “creative destruction”. He is systematically destroying the existing institutions — from the World Trade Organization and the North American Free Trade Agreement to Nato and the Iran nuclear deal — as a first step towards renegotiating the world order on terms more favourable to Washington.
Once the order is destroyed, the Chinese elite believes, Mr Trump will move to stage two: renegotiating America’s relationship with other powers. Because the US is still the most powerful country in the world, it will be able to negotiate with other countries from a position of strength if it deals with them one at a time rather than through multilateral institutions that empower the weak at the expense of the strong.
My interlocutors say that Mr Trump is the US first president for more than 40 years to bash China on three fronts simultaneously: trade, military and ideology. They describe him as a master tactician, focusing on one issue at a time, and extracting as many concessions as he can. They speak of the skilful way Mr Trump has treated President Xi Jinping. “Look at how he handled North Korea,” one says. “He got Xi Jinping to agree to UN sanctions [half a dozen] times, creating an economic stranglehold on the country. China almost turned North Korea into a sworn enemy of the country.” But they also see him as a strategist, willing to declare a truce in each area when there are no more concessions to be had, and then start again with a new front"
Take a look at some of the articles on Chinese overseas investments. They are invested in Africa, Venezuela, other South American countries and are currently pumping a fortune into the new Silk Road. They are also spending a fortune on a military buildup. China is spread thin right now and they know it. Guess what libs, so does Donald Trump.
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Quote:
Originally Posted by Dockside
Here is a wonderful article by The Financial Times. The Chinese have a VERY different view of what Trump is trying to do, and it worries them.
From the FT:
In Chinese eyes, Mr Trump’s response is a form of “creative destruction”. He is systematically destroying the existing institutions — from the World Trade Organization and the North American Free Trade Agreement to Nato and the Iran nuclear deal — as a first step towards renegotiating the world order on terms more favourable to Washington.
Once the order is destroyed, the Chinese elite believes, Mr Trump will move to stage two: renegotiating America’s relationship with other powers. Because the US is still the most powerful country in the world, it will be able to negotiate with other countries from a position of strength if it deals with them one at a time rather than through multilateral institutions that empower the weak at the expense of the strong.
My interlocutors say that Mr Trump is the US first president for more than 40 years to bash China on three fronts simultaneously: trade, military and ideology. They describe him as a master tactician, focusing on one issue at a time, and extracting as many concessions as he can. They speak of the skilful way Mr Trump has treated President Xi Jinping. “Look at how he handled North Korea,” one says. “He got Xi Jinping to agree to UN sanctions [half a dozen] times, creating an economic stranglehold on the country. China almost turned North Korea into a sworn enemy of the country.” But they also see him as a strategist, willing to declare a truce in each area when there are no more concessions to be had, and then start again with a new front"
Take a look at some of the articles on Chinese overseas investments. They are invested in Africa, Venezuela, other South American countries and are currently pumping a fortune into the new Silk Road. They are also spending a fortune on a military buildup. China is spread thin right now and they know it. Guess what libs, so does Donald Trump.
The problem is the rest of the world are quite happy trading with China and making free trade deals with them, it's the US and Trump who have constantly walked away from free trade deals.
The US is unlikely to get a free trade deal from the EU, as a lot of US Agricultural products from beef grown using hormones through to banned pesticides through to chlorine washed chicken through to genetically modifed crops through to food additives are banned in the EU.
Trump has talked about a free trade deal with Europe, but after TTIP talks collapsed such a deal is very unlikely, however the EU are looking to strike a trade deal with China.
As for the WTO, the US has been to the WTO more than any other nation and has been succesful on most occasions.
Whilst Europe is already discussing Post-Atlanticism, and signing new defence pacts, indeed the Germans are even now discussing the possibility of European nuclear forces. Whilst the German Foreign Minister Heiko Maas, stated recently that a new European force would allow Europe independence from the US and would allow Europe to hold the US to account for it's actions. It also should be noted that it was the US itself that never wanted Europe to form it's own defence pact seperate to NATO or to replace NATO.
The Chinese as already pionted out in my last post will concentrate on growing their domestic economy, whilst making new trade agreements with the rest of the world wherever possible. They can of course nake life difficult for the US, with US Multinationals relying on China, whilst China is not a democracy and can discourage the population rom buying US products from hi-tech goods through to US Cars, and at a state level orders for new aircraft would be made politically and Airbus would now take preference over Boeing. The Chinese are also looking to move their economy in to more hi-tech areas such as aircraft, cars, science and pharma, advaned machinary etc and may use the current situation in order to re-align their economy.
An increasingly isolated US is going to have very few allies, and I wouldn't put to much trust in Russia as a friend or indeed other countries run by despots.
As for North Korea, they are still developing new missiles and they are an extremely umpredictable regime.
If economic protectionism, tariffs and isolationism is winning then I would hate to see losing.
Last edited by Brave New World; 08-06-2018 at 10:15 AM..
Since the US Stock Market is worth 34 Trillion, that means we just "lost" more than TWO TRILLION DOLLARS so far this year- which we would have if Trump left the free markets alone.
I wouldn't say "lost" money, the "value" of the market went down.
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Quote:
Originally Posted by Gemdiver
I wouldn't say "lost" money, the "value" of the market went down.
I just don't understand the US.
With one hand Trump accuses allies of freeloading (the US actually spends a relatively small amount of it's defence budget on forces in Europe), whilst with the other he massively increases defence spending and then continually rattles on about creating a vastly expensive space forces and goes on about his massive infrastructure plans (which are not going to happen).
Most sensible nations try and reduce budget deficits instead of making the situation worse through tax cuts and more spending.
Reducing the budget deficit should be a priority, A America's cumulative deficit over the next decade is set to grow to $11.7 trillion compared to a previous forecast of $10.1 trillion whilst debt would hit $28 trillion, or about 96% of GDP, by 2028.
As for the US share makets is being buoyed by tax cuts for the wealthy and share buybacks.
For those that don't know what share buybacks are, they have been called the unacceptable face of capitalism and used to be illegal. On top of the Trump massive tax cuts for the wealthy, there has been over $1 Trillion in share buy backs which have artificially boosted the US stock market and US economy, and have benefited the wealthiest in American society.
Quote:
Originally Posted by Forbes
Let’s be clear. A massive extraction of resources for shareholders is not the way capitalism used to work. What’s now happening would have been illegal only a few decades ago. The principal mechanism enabling this massive shift of resources—an estimated $1 trillion in 2018 alone—is a practice known as share buybacks: firms purchase their own shares so as to increase the value of each individual share and so enrich the existing owners of shares.
When conducted on a large scale in the open market, share buybacks used to be considered illegal as they constituted obvious stock price manipulation. But they were effectively legalized in 1982 by a hard-to-understand SEC regulation: rule 10b-18. As a result, executives of public corporations, rather than creating fresh value and new customers through entrepreneurship and innovation, began extracting value for shareholders (and themselves) by buying back their own shares.
The emphasis on generating immediate returns to boost the current stock price in due course created a short-term focus in public corporations at the expense of innovation, long-term shareholder value, and the dynamism of the entire economy.
Last edited by Brave New World; 08-06-2018 at 11:04 AM..
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The Chinese on Trump’s Creative Destruction
