The Further Tariff Increase on Chinese Goods.

[Douglas Buckland + 6,308]

I am interested in have you guys and gals view the latest application of tariffs on Chinese goods destined for the US.

Is it 'bullying' by the US? Is it a justified move by the US to address the 'balance of trade'? Is China acting in good faith or simply stalling until the next US election? Intellectual property theft is a concern globally, are other nations supporting the tariffs to address this issue? And so on...

No rants please, just well thought out responses and opinions to advance the discussion.

Thanks in advance.

[DocManfred + 42]

Looking at it from a perspective of german national with business experience with China.

The growing strength of the Chinese economy and its military power is also reflecting the structural weakness of western economies, focussed mainly on short term profit and the ruling of greed. A lack of long term strategic thinking and acting.

I believe that also with these "tariffs" China will not change its "unfair" long term oriented industrial strategic policy significantly. And China does not want to loose its "face", what is very important in Asia.

The Chinese goverment spends a lot of ressources to ensure the internal stability (military, police, video and data surveillance, money for uproaring provices). If the US government hopes for a change via economical and political destabilisation, I do not believe that this will work. US stands for 20% of the global Chinese exports and the volume of these exports and the respective profits will only suffer a bit. They will find new markets for compensation.

I think that the Chinese government is in the better strategic position than the US with President Trump`s current policy. China can and will wait and see for the outcome of the next election in US and the time afterwards. US will suffer.

It would have been different if President Trump would have aimed for a multilateral approach of all nations with a common interest concerning China (e.g. TTP members, Europe, etc.).

 

 

 

 

 

 

 

[Douglas Buckland + 6,308]

Perhaps you are correct Manfred, regarding a 'multilateral approach', but I have not seen much enthusiasm from other countries to form a coalition to confront China regarding any trade imbalances, intellectual property theft, and so forth.

From what I can see, every other trading partner would rather continue the status quo as opposed to confronting China.

It could be surmised that other countries, Europe especially, agree to some extent with what Trump is attempting to accomplish, but are afraid of the Chinese response and will simply wait and see how it is eventually resolved.  

[Douglas Buckland + 6,308]

It is also interesting to note that although the US may only account for 20% of Chinese exports, it is stil China's largest single trading partner.

Yes, losing face is important to the Chinese culture, but 'business is business' and the loss of face is not a concern to others. China is presently losing face in Hong Kong, Taiwan and any nation affected by the Nine Line Map. I am not saying that any country should go out of their way to cause China to lose face, but China needs to understand that losing face has no bearing on global business.

[DocManfred + 42]

I think that many european governments and the commission of the European Union share numerous of the critics of the Trump administration with regard to missing reciprocity of Chinese economic policy, intellectual property theft, etc. Chinese companies buy European hightech companies with Chinese goverment support but business development of European companies in China is still quite restricted (as it is e.g. for US companies as well). The European Union and the german government have recently taken action by implementing hurdles concerning such acquisitions.

You are right, there was and there is not much entusiasm for an open confrontation with China in order to change this. And this has also to do with the stance of the current US government towards Europe, the European Union, Japan and other potential allies of US. President Trump is threating all of them with tariffs and none of them is keen on a multifront trade war. Surprise ?

It is up to the leader to build the team, isn`t it ?

[Gerry Maddoux + 3,627]

Everyone has an opinion, but I'll try to not go off on a rant. IMO, the tariff-induced trade war was about 10% good intentions because of stolen intellectual property and 90% a political tactic. I doubt seriously that tariffs will in any way stop the thievery of intellectual property. Not only that but the company that has suffered the most is Apple, and it seems to be doing just fine. As usual, there are unforeseen circumstances and collateral damage. For example, the spun steel used in oil and gas pipelines hadn't been produced in this country for a long time. Tariffs raised the cost of the Permian pipelines by 25%. Additionally, the Chinese are more accustomed to suffering than we are. I suspect they can take it. The good news is that the president is going to have to declare a victory and end the thing at some point--at which point the stock market will rally and carry him into a victorious election--or so he hopes. If he doesn't watch, he'll push too far, and we'll wind up in recession or even worse. Europe is in a heck of a shape, economically and politically. The president didn't get the rate cut he wanted so he issued more tariffs the next day. I suspect he made the Fed Head, Mr. Powell, vomit in his mouth. So while I'd like to leave politics out of this, I rather suspect that it is mostly about politics. I think we are past the point where we should worry about the rest of the world seeing us as a bully. We're in a nationalist mode, full throttle, and we're going to have to ride this train.

[footeab@yahoo.com + 2,129]

China along with EVERY OTHER NATION when joined WTO agreed to:

1) Foreign businesses able to buy property and run their business without a domestic partner

NEVER happened

2) IP protection

Widespread Theft

3) Rule of law

Bribery and 99.9999% ruling in Chinese nationals favor

4) Publishing of rules in several languages

Never happened... Duh!  Why bother?  Since #3, #2, and #1

5) I forget but something about subsidies etc regarding energy and shipping .

Never happened and subsides increased. 

So, from my perspective: ALL of the above rules should have been enforced when CHINA joined the WTO 25~~~ years ago.   Why they were not?  GREED.  Unadulterated GREED.  Morals?  Nowhere to be found. 

[ronwagn + 6,290]

No one else has mentioned the "communist" (actually fascist) government which is similar to North Korea in the way it treats its people. I liked the way JFK put it 

Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty. John F. Kennedy
Read more at https://www.brainyquote.com/quotes/john_f_kennedy_114918

I think this is a great time to let China and the world know that America will not allow them to continue business as usual. It is time to play hardball with them. 

See my China topic at https://docs.google.com/document/d/1Wb2YoQGpSWTz32ljsiA_ey6FLVqc2Dpe7Fnpiqn9lBs/edit

South China Morning Post https://www.scmp.com/ 

Meanwhile in Russia https://www.themoscowtimes.com/

Edited August 4, 2019 by ronwagn
addition

[Douglas Buckland + 6,308]

9 hours ago, Gerry Maddoux said:

Everyone has an opinion, but I'll try to not go off on a rant. IMO, the tariff-induced trade war was about 10% good intentions because of stolen intellectual property and 90% a political tactic. I doubt seriously that tariffs will in any way stop the thievery of intellectual property. Not only that but the company that has suffered the most is Apple, and it seems to be doing just fine. As usual, there are unforeseen circumstances and collateral damage. For example, the spun steel used in oil and gas pipelines hadn't been produced in this country for a long time. Tariffs raised the cost of the Permian pipelines by 25%. Additionally, the Chinese are more accustomed to suffering than we are. I suspect they can take it. The good news is that the president is going to have to declare a victory and end the thing at some point--at which point the stock market will rally and carry him into a victorious election--or so he hopes. If he doesn't watch, he'll push too far, and we'll wind up in recession or even worse. Europe is in a heck of a shape, economically and politically. The president didn't get the rate cut he wanted so he issued more tariffs the next day. I suspect he made the Fed Head, Mr. Powell, vomit in his mouth. So while I'd like to leave politics out of this, I rather suspect that it is mostly about politics. I think we are past the point where we should worry about the rest of the world seeing us as a bully. We're in a nationalist mode, full throttle, and we're going to have to ride this train.

But couldn't it be argued that the reason that spun pipe has not been produced in the US in a long time, and the resulting cost increase for the pipelines, is a direct result of unfair business practices from China forcing the pipe companies to relocate to China?

Globalization assumes a level playing field, which does not exist if you take into account the cost of labor, distribution of resources and government subsidization of industries.

 

[Douglas Buckland + 6,308]

13 hours ago, DocManfred said:

I think that many european governments and the commission of the European Union share numerous of the critics of the Trump administration with regard to missing reciprocity of Chinese economic policy, intellectual property theft, etc. Chinese companies buy European hightech companies with Chinese goverment support but business development of European companies in China is still quite restricted (as it is e.g. for US companies as well). The European Union and the german government have recently taken action by implementing hurdles concerning such acquisitions.

You are right, there was and there is not much entusiasm for an open confrontation with China in order to change this. And this has also to do with the stance of the current US government towards Europe, the European Union, Japan and other potential allies of US. President Trump is threating all of them with tariffs and none of them is keen on a multifront trade war. Surprise ?

It is up to the leader to build the team, isn`t it ?

In regards to the President's 'stance toward Europe', I think it may be interesting to look at this from an American, historical perspective.

Which European nations have repaid their WW2 debt to the US? For those that have, how long did it take to do so? Has the US ever been reimbursed for the Marshal Plan? How many members of NATO have EVER honored their commitment of 2% of their GDP to fund NATO? Why does the US allow the UN to function on US soil and then pay an inordinate percentage of the cost?

It could be argued that many nations have been taking advantage of the the US largess for decades and that Trump, and those that elected him, simply decided that enough is enough.

Keep in mind that Trump is NOT a politician and is approaching issues from a business, not a diplomatic, perspective.

My comments are not meant to be offensive in the least, simply food for thought and to further this discussion. 

[Jan van Eck + 7,558]

5 minutes ago, Douglas Buckland said:

But couldn't it be argued that the reason that spun pipe has not been produced in the US in a long time, and the resulting cost increase for the pipelines, is a direct result of unfair business practices from China forcing the pipe companies to relocate to China?

I was under the impression that that pipeline pipe was mostly sourced out of a plant in Sault Ste. Marie, Canada, on the other side of the Strait of Mackinac Bridge.  That is a huge plant, originally "Algoma Steel," then got bought up by Dofasco from Hamilton, Ontario  (Dominion Ferrous and Steel Co, as I recall, starting out as a steel castings company for railroad castings needs a century ago, and now owned by Arcelor Mittal  or Mittal Steel, nominally out of Luxembourg but in reality an Indian Company), then went bust and taken over by an Indian Company, Essar Steel.  Lots of Canadian steel is now run out of India.  SInce the alternative was liquidation, the locals don't seem to mind. 

Algoma had the same problem with the Japanese steel plants that the Americans had with the Chinese:  dumping.  In the case of Canada, their problems were in part a function of an artificially inflated Canadian Dollar in currency exchange with Japan  (and the USA).  That has since gone away, with the collapse of Canadian industry and the concomitant drop of the Loonie.  Oh, well. 

[Jan van Eck + 7,558]

6 minutes ago, Douglas Buckland said:

Which European nations have repaid their WW2 debt to the US?

England,apparently.  You could argue that liberated neutral countries owed a debt, at least of gratitude, for their liberation, but I don't think the USA ever sent a bill.  Holland, Denmark, Belgium, yup without the USA and Canada, would still be occupied.  I can assure you that when Americans show up in Bastogne  (to see where their fathers fought in the Bulge), they are treated with reverence.  

13 minutes ago, Douglas Buckland said:

How many members of NATO have EVER honored their commitment of 2% of their GDP to fund NATO?

None, apparently.  Although the Baltic countries are making a big effort, might be there today. 

 

14 minutes ago, Douglas Buckland said:

Why does the US allow the UN to function on US soil and then pay an inordinate percentage of the cost?

You overlook that when the USA gets irritated with the UN it then refuses to pay its assessments.  They ran up to a billion dollars, and were embarrassed when billionaire Ted Turner volunteered to pay the US arrears of that billion.  I cannot recall if he did or if the US finally was embarrassed enough by Turner to go pay it, but it is not as if the USA has not stiffed the UN over the years, nobody is a saint here. 

 

16 minutes ago, Douglas Buckland said:

It could be argued that many nations have been taking advantage of the the US largess for decades and that Trump, and those that elected him, simply decided that enough is enough.

That is a perfectly fair statement. Cheers.

[Jan van Eck + 7,558]

3 hours ago, ronwagn said:

Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty. John F. Kennedy

while JFK  (President Kennedy) certainly made the speech, I was under the impression that the actual words were written by a speechwriter, possibly Ted Sorensen.  Ted wrote a lot of Kennedy's stuff.  Ted was brilliant. 

[Jan van Eck + 7,558]

3 hours ago, ronwagn said:

I think this is a great time to let China and the world know that America will not allow them to continue business as usual. It is time to play hardball with them. 

That is not what is happening, Ron.  Rather, what you are seeing is a slow-motion disengagement.  Trump and his advisers have decided that it is time to move on, that China no longer represents the existential threat of nuclear war (with the USA), that it is unlikely to go invading its border countries  (having already knocked over Tibet), that it has control over Macau and Hong Kong  (and has bombed Quemoy and Matsu into rubble), and so is unlikely to go invade Taiwan with landing craft and a million troops with bayonets, notwithstanding the occasional saber-rattling.  The old rationale of sacrificing some portion of US manufacturing to the Chinese in order to buy peace has faded away, and there is no rational basis for continuing to sacrifice further generations of US workers to maintain China production.  Whether that assessment is correct or incorrect, time will tell.  Meanwhile, the disengagement will continue.  A crux of that disengagement are the tariffs. 

Remember that US companies that have been investing heavily in China manufacture are burned.  Take Tesla, which is leasing land for their China factory.  If they fail in govt quotas for rents and employment, the land (and the factory) will be taken away as a tax in kind.  Is Tesla likely to succeed?  Probably not; China has a policy of favoring their internal manufacturers, and Geely, the big local manufacturer, is more likely to be favored with special concessions including subsidies.  US companies operating there get drained of cash by the Chinese.  It is not a level playing field, and never will be.  The disengagement is the logical response. 

[Tom Kirkman + 8,860]

4 hours ago, ronwagn said:

See my China topic at https://docs.google.com/document/d/1Wb2YoQGpSWTz32ljsiA_ey6FLVqc2Dpe7Fnpiqn9lBs/edit

Ron, you may wish to add this to your list:

Here is a 1 hour video of Bannon absolutely hammering away at China, and highlighting many points that Mainstream Media refuse to touch.

Relevant to the latest round of Trumps tariffs against China.  Expect even more tariffs down the road, if China remains recalcitrant.

I assure you, MSM disinfo bread and circuses pablum will not provide you with the cerebral food for thought that this 1 hour monologue will.

Skip the first 12 minutes of intro, and I invite you to pay attention to Bannon poking some very powerful sacred cows, and hopefully raise your awareness of global points that are deliberately not covered by MSM. 

Sorry, no tl;dr short version.

Stephen K. Bannon Hammers China in Hokkaido Japan | YouTube

[Douglas Buckland + 6,308]

3 hours ago, Jan van Eck said:

That is not what is happening, Ron.  Rather, what you are seeing is a slow-motion disengagement.  Trump and his advisers have decided that it is time to move on, that China no longer represents the existential threat of nuclear war (with the USA), that it is unlikely to go invading its border countries  (having already knocked over Tibet), that it has control over Macau and Hong Kong  (and has bombed Quemoy and Matsu into rubble), and so is unlikely to go invade Taiwan with landing craft and a million troops with bayonets, notwithstanding the occasional saber-rattling.  The old rationale of sacrificing some portion of US manufacturing to the Chinese in order to buy peace has faded away, and there is no rational basis for continuing to sacrifice further generations of US workers to maintain China production.  Whether that assessment is correct or incorrect, time will tell.  Meanwhile, the disengagement will continue.  A crux of that disengagement are the tariffs. 

Remember that US companies that have been investing heavily in China manufacture are burned.  Take Tesla, which is leasing land for their China factory.  If they fail in govt quotas for rents and employment, the land (and the factory) will be taken away as a tax in kind.  Is Tesla likely to succeed?  Probably not; China has a policy of favoring their internal manufacturers, and Geely, the big local manufacturer, is more likely to be favored with special concessions including subsidies.  US companies operating there get drained of cash by the Chinese.  It is not a level playing field, and never will be.  The disengagement is the logical response. 

Jan, I find your comments to be very interesting, accurate and 'out of the box' (at least to my way of thinking). This is exactly the sort of thing I wanted when I started this thread! Well done!

Now I need to 'ruminate' on this disengagement idea...

[ronwagn + 6,290]

22 hours ago, Jan van Eck said:

That is not what is happening, Ron.  Rather, what you are seeing is a slow-motion disengagement.  Trump and his advisers have decided that it is time to move on, that China no longer represents the existential threat of nuclear war (with the USA), that it is unlikely to go invading its border countries  (having already knocked over Tibet), that it has control over Macau and Hong Kong  (and has bombed Quemoy and Matsu into rubble), and so is unlikely to go invade Taiwan with landing craft and a million troops with bayonets, notwithstanding the occasional saber-rattling.  The old rationale of sacrificing some portion of US manufacturing to the Chinese in order to buy peace has faded away, and there is no rational basis for continuing to sacrifice further generations of US workers to maintain China production.  Whether that assessment is correct or incorrect, time will tell.  Meanwhile, the disengagement will continue.  A crux of that disengagement are the tariffs. 

Remember that US companies that have been investing heavily in China manufacture are burned.  Take Tesla, which is leasing land for their China factory.  If they fail in govt quotas for rents and employment, the land (and the factory) will be taken away as a tax in kind.  Is Tesla likely to succeed?  Probably not; China has a policy of favoring their internal manufacturers, and Geely, the big local manufacturer, is more likely to be favored with special concessions including subsidies.  US companies operating there get drained of cash by the Chinese.  It is not a level playing field, and never will be.  The disengagement is the logical response. 

Whatever you think Jan, none of this would be going one if Hillary had been elected. She had China on her side financially. She knew what side her bread was buttered on. Trump is doing the right thing and is the only potential leader that would have done so. 

[Douglas Buckland + 6,308]

23 hours ago, Jan van Eck said:

That is not what is happening, Ron.  Rather, what you are seeing is a slow-motion disengagement.  Trump and his advisers have decided that it is time to move on, that China no longer represents the existential threat of nuclear war (with the USA), that it is unlikely to go invading its border countries  (having already knocked over Tibet), that it has control over Macau and Hong Kong  (and has bombed Quemoy and Matsu into rubble), and so is unlikely to go invade Taiwan with landing craft and a million troops with bayonets, notwithstanding the occasional saber-rattling.  The old rationale of sacrificing some portion of US manufacturing to the Chinese in order to buy peace has faded away, and there is no rational basis for continuing to sacrifice further generations of US workers to maintain China production.  Whether that assessment is correct or incorrect, time will tell.  Meanwhile, the disengagement will continue.  A crux of that disengagement are the tariffs. 

Remember that US companies that have been investing heavily in China manufacture are burned.  Take Tesla, which is leasing land for their China factory.  If they fail in govt quotas for rents and employment, the land (and the factory) will be taken away as a tax in kind.  Is Tesla likely to succeed?  Probably not; China has a policy of favoring their internal manufacturers, and Geely, the big local manufacturer, is more likely to be favored with special concessions including subsidies.  US companies operating there get drained of cash by the Chinese.  It is not a level playing field, and never will be.  The disengagement is the logical response. 

So Jan, if Trump is actually 'disengaging' from China, do you envision a US 'pivot' towards Asia?

The old allies  of the Second World War / Cold War era, except for perhaps the UK, no longer seem to be allied and the main agenda for Europe seems to be economics for the sake of the EU.

The expansion of NATO and the EU seems to be politically, not security driven. How many of the new NATO members will actually pledge 2% of their GDP to NATO in the present global economy? We have now seen Turkey, a NATO member, purchasing Russian air defense systems. Is NATO fragmenting?

 

[John Foote + 1,135]

On 8/3/2019 at 11:39 PM, Douglas Buckland said:

But couldn't it be argued that the reason that spun pipe has not been produced in the US in a long time, and the resulting cost increase for the pipelines, is a direct result of unfair business practices from China forcing the pipe companies to relocate to China?

Globalization assumes a level playing field, which does not exist if you take into account the cost of labor, distribution of resources and government subsidization of industries.

 

I don't think China has much to do with the high end pipe business. Think AccelMittal and Nippon Steel, maybe POSCO, Welspun kind of matters. I watched folks try and negotiate trying to get Nippon to set up shop locally. They won't give the farm away. Now the Chinese will dump the heck out of run of the mill line pipe. Most countries, including the USA, have massive tariffs on this stuff sanctioned by the WTO against China because of dumping. Russia and China would love to make deeper inroads in the seamless pipe business.

[Enthalpic + 1,496]

On 8/3/2019 at 11:16 PM, Jan van Eck said:

Ted Sorensen.  Ted wrote a lot of Kennedy's stuff.  Ted was brilliant. 

Sorensens tend to be brilliant.  It's in our Danish genetics.

[James Regan + 1,776]

On 8/4/2019 at 2:56 AM, Tom Kirkman said:

Ron, you may wish to add this to your list:

Here is a 1 hour video of Bannon absolutely hammering away at China, and highlighting many points that Mainstream Media refuse to touch.

Relevant to the latest round of Trumps tariffs against China.  Expect even more tariffs down the road, if China remains recalcitrant.

I assure you, MSM disinfo bread and circuses pablum will not provide you with the cerebral food for thought that this 1 hour monologue will.

Skip the first 12 minutes of intro, and I invite you to pay attention to Bannon poking some very powerful sacred cows, and hopefully raise your awareness of global points that are deliberately not covered by MSM. 

Sorry, no tl;dr short version.

Stephen K. Bannon Hammers China in Hokkaido Japan | YouTube

Wow an hour well spent listening to Steve Bannon leathering the Chinese, listening to him it all makes sense but then listening to any good oratorio is convincing. Now it makes sense why China is picking off all the low hanging fruit in Africa etc, building islands in the South China Sea. 

Very interesting indeed many thanks @Tom Kirkman for the nod.

 

[Tom Kirkman + 8,860]

40 minutes ago, James Regan said:

Wow an hour well spent listening to Steve Bannon leathering the Chinese, listening to him it all makes sense but then listening to any good oratorio is convincing. Now it makes sense why China is picking off all the low hanging fruit in Africa etc, building islands in the South China Sea. 

Very interesting indeed many thanks @Tom Kirkman for the nod.

James, great to see you listened to and understood Bannon's points.  Bet you will now have a slightly different view of the Trump vs. Xi trade war when the general mainstream media wails and gnashes their teeth about tariffs. 

Once you have been red pilled on a particular topic, and you understand what is actually going on with the bigger picture strategy, MSM becomes annoying disinformation.

[James Regan + 1,776]

13 minutes ago, Tom Kirkman said:

James, great to see you listened to and understood Bannon's points.  Bet you will now have a slightly different view of the Trump vs. Xi trade war when the general mainstream media wails and gnashes their teeth about tariffs. 

Once you have been red pilled on a particular topic, and you understand what is actually going on with the bigger picture strategy, MSM becomes annoying disinformation.

Tom undoubtedly SB is such a fluid talker and know his subject matter. I wondered why he was down here in Brasil during and after the successful Jair Bolsonaro campaign. He is also advising Eduardo Bolsonaro on his potential position in Washington as US Ambassador.

Anyone who has an opinion either way on China may want to watch the speech, if your a Democrat watch it anyway even if you don’t have an opinion.

[Jakridge + 122]

5 hours ago, Enthalpic said:

Sorensens tend to be brilliant.  It's in our Danish genetics.

Be Careful with braggadocia of your white priveledged heritage.  The progressives are certainly monitoring.  😉

[SERWIN + 749]

On 8/3/2019 at 11:53 PM, Douglas Buckland said:

It could be argued that many nations have been taking advantage of the the US largess for decades and that Trump, and those that elected him, simply decided that enough is enough.

Keep in mind that Trump is NOT a politician and is approaching issues from a business, not a diplomatic, perspective.

My comments are not meant to be offensive in the least, simply food for thought and to further this discussion. 

And that is what it all boils down to, running a government is actually a BUSINESS. You bring money in and you spend money on the country. And for so long the trade deals we have had sucked, always an advantage to the other country at our expense. I am surprised Trump hasn't called the loss of manufacturing in the US a national security emergency, because from where I sit it sure looks like one. Who's going to make all the stuff we will need if war breaks out? China? What if we are at war with them? Huh!! I have watched the manufacturing in this country go away in spectacular fashion ever since that idiot Clinton signed that crappy NAFTA deal. And joining the WTO? What a joke, everyone in the world should have been up in arms as soon as the whole thing started, all the unfair practices by the Chinese gov't. But everyone stood around like idiots and let it happen. Now everyone's economies are somehow tied to the Chinese in various ways and it will be hard to undo the damage they have done to the rest of the world's economies. It will take time, but we can ween ourselves from them.....

My son is dumb enough to believe that there is no trade deficit, that everything is even/even. He has NO CLUE about what I have been watching for the last thirty years. I honestly don't believe that any of China's trading partners are on an even/even scale. I really believe that everyone is suffering from a deficit with China because of their unfair trade practices....