China Downplays Chances For Trade Talks While U.S. Plays ‘Little Tricks’

[damirUSBiH + 327]

China’s state media signaled a lack of interest in resuming trade talks with the U.S. under the current threat to escalate tariffs, while the government said stimulus will be stepped up to buttress the domestic economy. So we will see a  trade war in full swing

[50 shades of black + 254]

Great! Let the games now begin!

[ThunderBlade + 231]

I assume they're too busy exporting food into North Korea so they don't go into another famine again,  sticking them with unwanted refugee border crossers....

[francoba + 93]

10 minutes ago, 50 shades of black said:

Great! Let the games now begin!

“China needs the U.S. surplus more than the U.S. needs China’s trade and finances,” notes Spanish author and economist Daniel Lacalle. “And that is why the trade war will not happen. Because China has already lost it.”

[rainman + 263]

Chinese deserve much better than rigid Communist party, but it's not my business. Primary fear coming from this: "There is a 40% chance of a U.S. recession in the next 2 years, according to a large majority of 120 economists, thanks to the U.S.-China trade war"(Reuters poll)

[Pavel + 384]

It will be the most difficult for them: “It sounds like this could go on for years, and we just can’t deal with it out here in the countryside. We are in our sixth straight year of declining farming income and there is not a lot of good news in sight..." - farm owner from Illionois.

[Ward Smith + 6,615]

4 hours ago, rainman said:

Chinese deserve much better than rigid Communist party, but it's not my business. Primary fear coming from this: "There is a 40% chance of a U.S. recession in the next 2 years, according to a large majority of 120 economists, thanks to the U.S.-China trade war"(Reuters poll)

What someone needs to do is go back in history to every "prediction" economists made and add up the wrong ones. I know someone who ran a hedge fund and hired an economist, and then proceeded to do the opposite of everything the guy predicted to great profit. Unfortunately the dolt figured out his boss' strategy and went reverse psychology, because rather than buck up and admit he was always wrong, he was bound and determined to influence strategy. He didn't last long after that, but the firm lost more than it should have.

 

[Enthalpic + 1,496]

5 hours ago, Ward Smith said:

What someone needs to do is go back in history to every "prediction" economists made and add up the wrong ones. I know someone who ran a hedge fund and hired an economist, and then proceeded to do the opposite of everything the guy predicted to great profit. Unfortunately the dolt figured out his boss' strategy and went reverse psychology, because rather than buck up and admit he was always wrong, he was bound and determined to influence strategy. He didn't last long after that, but the firm lost more than it should have.

 

SMBC nice!

d

 

[ceo_energemsier + 1,818]

https://www.reuters.com/article/us-usa-trade-china-options/no-easy-options-for-china-as-trade-war-u-s-pressure-bite-idUSKCN1SL0OU

[Ward Smith + 6,615]

16 hours ago, ceo_energemsier said:

https://www.reuters.com/article/us-usa-trade-china-options/no-easy-options-for-china-as-trade-war-u-s-pressure-bite-idUSKCN1SL0OU

From that article 

Quote

"The medium- to long-term ramifications on supply chains are being deeply underestimated. I would be severely concerned if I was China,” Robert Lawrence, a nonresident senior fellow at the Peterson Institute for International Economics, recently told journalists in Beijing, where a group from the think-tank met with senior Chinese officials.

An example the other way, Chips and bits

[ceo_energemsier + 1,818]

1 minute ago, Ward Smith said:

From that article 

An example the other way, Chips and bits

China keeps digging itself into a bigger and deeper hole, the US economy is booming while the Chinese isnt, they lost over 5 trillion $ in market value

[Ward Smith + 6,615]

4 minutes ago, ceo_energemsier said:

China keeps digging itself into a bigger and deeper hole, the US economy is booming while the Chinese isnt, they lost over 5 trillion $ in market value

Geopolitics is complex, yet simple. The USSR had the best chess players on the planet and were playing geopolitics like chess, and we were losing our a$$. Along came Reagan and changed the game from chess to poker. The USSR lost their a$$. The Chinese are the best at Go, and were treating geopolitics like Go, and we were losing our a$$. Along comes Trump and guess what? We're playing poker again, because the US are the world's best at poker. That's why we end up with all the chips

[Ward Smith + 6,615]

On 5/17/2019 at 4:31 PM, Enthalpic said:

SMBC nice!

d

 

The secret about math majors 

[Tom Kirkman + 8,860]

On 5/18/2019 at 7:31 AM, Enthalpic said:

SMBC nice!

d

My degree is in Sociology, with a minor in Behavioral Psychology.

The above comic is indeed true. 

Although with my B.A. in Sociology, I am unable to prove my assertion that the comic is true.  But I would be happy to prattle on endlessly with my opinions about why this comic is true.  Oh wait...

[Ward Smith + 6,615]

If you can make the time, I recommend watching This video

[ceo_energemsier + 1,818]

o

Edited May 19, 2019 by ceo_energemsier
wrong posting

[ceo_energemsier + 1,818]

https://finance.yahoo.com/news/chinas-top-diplomat-calls-u-restraint-trade-iran-155133088--business.html

[ceo_energemsier + 1,818]

US Ports’ Revenues Insulated from US-China Tariffs

ncreased tariffs on bilateral US-China goods trade may result in decreased traffic at certain US ports, says Fitch Ratings. However, revenues are not likely to be similarly affected in the medium term given the landlord-based operating model at many of the more exposed west coast ports in which contractual minimums provide a floor for revenues should volume declines worsen. Imports, which make up the largest share of volumes at many of the ports with higher exposure to Chinese trade, have thus far been resilient to the imposition of tariffs, though the risks to volumes will rise if trade protectionism is prolonged.

On May 10 the US increased existing tariffs to 25% from 10% on $200 billion of imports from China and additional tariffs on almost all remaining imports are being contemplated. China’s corresponding increase of 20% or 25% on approximately $60 billion of US goods was announced on May 13.

Volume data show some ports are feeling more of an effect than others, particularly when looking at US export volume as measured by loaded outbound 20 foot equivalent units (TEUs). Of the larger west coast, east coast, and Gulf of Mexico ports, there is a levelling off or decline in loaded exports, other than Port of Houston, TX, since tariffs were put in place in January 2018. This trend worsened in second-half 2018 onward as additional tariffs went online in June and September.

The steepest declines occurred at Virginia Port Authority (VPA, commonwealth port fund AA+/Stable), City of Long Beach (Port of Long Beach, senior lien revenue bonds AA/Stable), Port of Oakland (Oakland, senior lien revenue bonds A+/Stable), and in recent months, Los Angeles Harbor Department (Port of LA, revenue bonds AA/Stable) and Port Authority of New York and New Jersey (PANYNJ, revenue bonds AA-/Stable). “Empties” are rising by double digits, partly due to a catch-up effect as shippers reposition containers back to Asia after the tariff-driven rush in fourth-quarter 2018 led to congestion for many west coast ports.

 

Due to offsetting features unique to each of these credit’s revenue profiles, port volume declines are unlikely to directly translate to revenue reductions or affect ratings. In the cases of both Port of Long Beach and the Port of LA, the ports’ long-term guaranteed contracts with most tenants provide a revenue floor, which helps to insulate port revenue from trade-related volume volatility. In the case of Oakland and PANYNJ, bondholders benefit from diversified revenue pledges from business divisions in addition to port operations, namely airport operations in Oakland, and airport, road, rail, ferry and real estate assets in the case of PANYNJ, serving to mitigate volatility in any one area. VPA’s rating is based on the Commonwealth of Virginia’s legislative appropriations from the general fund if needed and is not reliant on port volumes or revenues.

The US imported $450 billion of goods from China in 2018, the vast majority of which arrive through seaports. In contrast with exports, all Fitch-rated ports continue to see volume increases in loaded imports since tariffs were introduced in January 2018, although with stronger growth for east coast and Gulf ports. As US imports from China tend to be made up of higher value cargos than exports, and comprise roughly 70% of loaded cargo for the Port of LA, Long Beach, and PANYNJ , and 50%-60% for the other ports considered here, the revenue effect of a decline in export cargo will likely be muted. Any long-term imposition of higher tariffs would result in lower US consumer demand, which would reduce US imports and curb trade volumes beyond 2019.

 

Shifts in production centers may be exacerbated by ongoing trade turmoil with China. This trend, already underway, has the potential to more permanently affect port cargo levels and shipping route decisions. Depending on where goods are produced, all-water routes via the Suez Canal may become comparatively more cost-effective for importing goods to the US compared with traditionally dominant transpacific routes.
Source: Fitch Ratings

 

[ceo_energemsier + 1,818]

Senior China official says trade war with U.S. could cut growth by 1 pct point-SCMP

A senior official of China’s ruling Communist Party said the trade dispute with the U.S. could reduce China’s growth pace this year by as much as 1 percentage point, the South China Morning Post reported on Friday, citing an unnamed source.

The paper said Wang Yang, a member of the Communist Party’s seven-person Standing Committee, told a delegation of Taiwanese businesspeople whose firms are based in China that the worst-case scenario from the trade war was a 1 percentage point drop in GDP growth this year.

Beijing has set a growth target of between 6% and 6.5% for 2019.

 

[ceo_energemsier + 1,818]

https://finance.yahoo.com/news/u-garlic-growers-profit-trade-war-most-farmers-051002840--finance.html

[ceo_energemsier + 1,818]

China's April Industrial Profits Fall as Trade Standoff Worsens

https://finance.yahoo.com/news/china-apos-april-industrial-profits-022840305.html

[ceo_energemsier + 1,818]

Shrinking China factory activity, faltering exports inflame economic anxiety

China’s factory activity in May slumped into a deeper contraction than markets had expected, heaping pressure on Beijing to roll out more stimulus to support an economy hit hard by a bruising trade war with the United States.

Friday’s weak manufacturing readings, which follow a recent raft of soft data across the retail, export and construction sectors, could inflame concerns about the risk of a global recession and push more central banks to adopt an accommodative monetary stance.

The official Purchasing Managers’ Index (PMI) fell to 49.4 in May from 50.1 in April, data from the statistics bureau showed. Analysts surveyed by Reuters had forecast the PMI to be down a notch at 49.9, below the 50-point mark separates expansion from contraction on a monthly basis.

Factory output expanded at a slower pace as new orders – a gauge of domestic and foreign demand – fell for the first time in four months. Export orders extended their decline for the twelfth straight month with the sub-index pulling back significantly to 46.5 from April’s 49.2, suggesting a further weakening in global demand.

“Export orders dropped back particularly sharply, which suggests that Trump’s latest tariff hike may already be undermining foreign demand,” said Julian Evans-Pritchard, senior China economist at Capital Economics.

While China’s exporters are feeling the pinch, Friday’s data showed import orders also contracted at a quicker pace, reflecting softening demand at home despite a flurry of growth-supporting measures that were rolled out earlier this year.

Some economists believe more stimulus is needed, likely through further cuts in the amount of cash banks hold as reserves and fiscal spending.

The downbeat data reflects insufficient demand that has become a “more prominent problem” and adds urgency for the government to intervene, Zhang Liqun, an analyst with the China Federation of Logistics and Purchasing (CFLP), said in a note.

Central bank governor Yi Gang, however, has suggested the room for further monetary easing had become more limited, while economists also expressed concerns about rising debt risks.

Zhang said that Beijing should focus on boosting domestic demand and improving “the ability to cope with fluctuations in external demand as soon as possible.”

Earlier this month, the People’s Bank of China (PBOC) announced a cut in three phases in the reserve requirement ratio for regional banks to reduce small companies’ financing costs. The PBOC has already delivered five RRR cuts since early 2018, lowering the ratio to 13.5 percent for big banks and 11.5 percent for small-to medium-sized lenders.

Beijing has also ramped up fiscal stimulus this year, unveiling tax and fee cuts amounting to 2 trillion yuan ($297 billion) to ease burdens on firms, while allowing local governments to issue 2.15 trillion yuan of special bonds to fund infrastructure projects.

Many China observers have cautioned it will take time for those measures to fully kick in, with most not expecting the economy to convincingly stabilize until around mid-year.

Global markets, led by equities and currencies, stuttered as the weak Chinese data and Washington’s shock decision to impose tariffs on all Mexican imports rattled investors.
WORSE TO COME?

Trade tensions between Washington and Beijing escalated sharply earlier this month after the Trump administration accused China of having “reneged” on its previous promises to make structural changes to its economic practices.

Washington later slapped additional tariffs of up to 25% on $200 billion of Chinese goods, prompting Beijing to retaliate.

The tariff standoff has already taken a toll on global growth, trade and business investment. Further inflaming tensions between the economic giants, the Trump administration blacklisted Huawei Technologies Co Ltd, the world’s second-largest seller of smartphones, a blow that has rippled through global supply chains and battered technology shares.

Both sides appeared to be digging in as President Donald Trump threatens to increase taxes on all China imports while Beijing ramped up its criticism against Washington, saying provoking trade disputes is “naked economic terrorism”.

On Friday, former Chinese central bank governor Dai Xianglong said he expected no major breakthrough over trade at an anticipated meeting between Chinese and U.S. leaders in Japan at the end of June.

China’s exports unexpectedly fell in April on a sharp drop in shipments to the United States, while industrial output and retail sales also showed surprisingly weak growth last month. Data this week showed profits for industrial firms also contracted in April.

On the brighter side, despite the pronounced weakness in the manufacturing sector, China’s services industry showed solid expansion. Another survey released by the statistics bureau on Friday showed the official non-manufacturing Purchasing Managers’ Index (PMI) held steady at 54.3 in May, unchanged from April.

Services account for more than half of China’s economy, and rising wages have increased Chinese consumers’ spending power. But the sector softened late last year along with a slowdown in the broader economy.

The official May composite PMI, which covers both manufacturing and services activity, slipped to 53.3 from April’s 53.4.

Some analysts also worry the standoff with the United States could morph into a technology war and put more strain on China’s manufacturing sector.

“Our concern is not just on products affected by the tariffs, which we believe could have a longer impact on both the Chinese and U.S. economy unless trade negotiations resume,” wrote Iris Pang, Greater China Economist for ING bank.

“We also worry about technology companies’ production. The technology war is brewing even faster in May 2019, and could continue for the rest of the year.”
Source: Reuters

[ceo_energemsier + 1,818]

U.S. begins collecting higher tariffs on Chinese goods arriving by sea

https://www.reuters.com/article/us-usa-trade-china-tariffs/u-s-begins-collecting-higher-tariffs-on-chinese-goods-arriving-by-sea-idUSKCN1T22W7

 

[Tom Kirkman + 8,860]

If you have the time, you can watch the first 5 minutes or so of this news video.  It's about the escallating tariffs being imposed on Mexico by the U.S. until Mexico takes substantial action to address and reduce illegal immigration from Central America through Mexico, and into the U.S.

Trade issues are addressed as well.

There are clear links in the strategies in how the U.S. is tackling both China trade and Mexico illegal immigration, the logic is a beautiful thing.

The Fox News anchor (Chris Wallace) apparently is a bumbling, mindless, talking head dressed up in a pinstripe suit (I've never heard of this news anchor before, but I generally don't watch TV news, or TV, or Fox) but pay attention to the remarks by White House Acting Chief of Staff Mick Mulvaney.  Logical zingers galore.

[BenFranklin'sSpectacles + 762]

On 5/17/2019 at 8:01 AM, Pavel said:

It will be the most difficult for them: “It sounds like this could go on for years, and we just can’t deal with it out here in the countryside. We are in our sixth straight year of declining farming income and there is not a lot of good news in sight..." - farm owner from Illionois.

The old farming business models seem to be struggling.  Is there opportunity for innovation and change in agriculture?  E.g. I know some farmers who are branching into organic/grass fed beef, experimenting with new crop rotation strategies, and finding ways to reduce inputs.  What are you seeing?