"We're Not Going to Negotiate Anymore"

[footeab@yahoo.com + 2,131]

29 minutes ago, Zhong Lu said:

He won the Midwest, barely.  If some of those farmers decide not to turn out, or vote for someone else, he's going to lose because anyone who didn't vote for him last election isn't going to vote for him this election.  

If you won by 1%, and 2% decide to stay home, and you didn't get any NEW voters to vote for you in the meantime, you lose.  Get it? 

EDIT: Let's get back on topic. Even if Trump wins election, what's to stop the Chinese government from stalling out another 4 years?

Trump eventually goes away (if anything he'll die of old age).  Then what? 

Why would the tariffs not increase?  Why would Chinese imports not massively decrease?  Took 2 decades to get to this level.  Will not disappear over night.  Will take a while to move, but move manufacturers will.  EU isn't happy with China either and they import even more than the USA. 

What is pathetic and why I am pissed at Trump over this issue is that his messaging is so abysmally bad, when there are VERY simple and obvious hitting points to get public support, my youngest teenager child could do a better job. 

[Jakridge + 122]

The Chinese will negotiate before waiting out Trumps second term, which will happen.  They will probably negotiate sooner, they are used to prosperity more than they have ever had and will not let that dwindle down exponentially for long.  They have more to lose than we do.

[SKEP + 229]

5 hours ago, Jan van Eck said:

Let's remember that, in fact, China is NOT a currency manipulator, as charged by the inflammatory press and others.  What is happening is that the traders, those guys sitting in the exchange pits, have traded the Yuan down.  Now in the past when this has happened, or started to happen, the Chinese govt through their central bank has purchased yuan with dollars in their exchange reserves, thus supporting the currency  (and keeping the exchange rate within a narrow band.  This practice is called "defending the ____" (pick your currency:  UK pound, US Dollar,  China yuan).  Well. obviously, if you don't defend it, then it will float and find its own level.  Right now that level, as determined by traders, is lower than it was previously.  

China historically has purchased US dollars in order to prop up the dollar, and have the USA have more dollars with which to buy Chinese goods.  If the US did not have access to those dollars, which China has provided by buying US Treasury notes, then the US would be printing more, leading to an inflation and a devaluation of the US dollar.  That would make Chinese products more expensive to US buyers, and would tamp down the sales of Chinese goods to the USA.  SO the Chinese have been buying up these torrents of US notes and handing over US dollars for them.  IT was a lousy investment, incidentally, with very low interest rates of return. 

By allowing their currency to float, China is letting the market price the tariffs in into their goods.  And yes, this acts to counter the tariffs.  Can China continue to do that?  Sure they can.  The lower value of Chinese currency also makes US exports to China that much more difficult, as the currency revaluation will price those goods out relative to say machinery from Japan or Korea.  And China could also simply not purchase more US Notes at maturity, scrapping the roll-over of debt upon which the US, and particularly the trump Administration, has relied.  At that point, the US economic expansion goes into recession.  That gets ugly fast. 

Agree with everything except the rollover of US Treasuries.  That would be financial suicide for China. They will always be involved it U.S. auctions. 

China's economy has been in trouble for a long time, Europe's (Germany) economy has been in trouble for a long time.  

Analyst and even some Oil Price writers are not objective and show their bias against Trump. 

China went to war against U.S. economy over two decades ago.

Everything is not Trump's fault

I don't agree with much of what Trump does but he is right on this one.

The Chinese Government (Chinese Communist Party) and Communist Secretary General Xi Jinping's only option other than cut a deal is wait it out and hope Biden gets elected.

In the meantime much more damage will be inflicted on China's economy.

Companies are already planning to move out, cut back or just not start to mfg in China. Some irreparable damage has already been done to their economy.

They will cut a deal. 

Edited August 8, 2019 by SKEP

[Jakridge + 122]

1 hour ago, Zhong Lu said:

He won the Midwest, barely.  If some of those farmers decide not to turn out, or vote for someone else, he's going to lose because anyone who didn't vote for him last election isn't going to vote for him this election.  

If you won by 1%, and 2% decide to stay home, and you didn't get any NEW voters to vote for you in the meantime, you lose.  Get it? 

EDIT: Let's get back on topic. Even if Trump wins election, what's to stop the Chinese government from stalling out another 4 years?

Trump eventually goes away (if anything he'll die of old age).  Then what? 

 The majority if not all of Trump supporters have no reason not to vote for him again. There are very few out there that will not. On the contrary, there are many groups out there of Democrats who have had enough and have vowed to vote for Trump next time (Brexit, #walkaway). In addition to that the black vote is trending up for Trump and that is what has the Democrats so spooked and why they are on this racist, white supremacy rant, in a feeble effort to deter minorities from voting for Trump. Quite frankly, I think this just pisses people off more and will lead them more to Trump. There will be another rude awakening in 2020 just like the 85% chance that Hillary would win in 2016, people will be shocked at what the silent majority does not just for the presidency but for the house and the Senate as well. That being said I don't think the Chinese will have the stomach to stick out another 4 years especially if Trump keeps making it worse and worse on them. Trump has the support of the American people regardless of what the mainstream media says. People are sick and tired our country being taken advantage of and disrespected. The Democrats have nothing to offer and no candidate that can run on anything other than I hate the guy. That's not going to fly.

Edited August 8, 2019 by Jakridge

[SKEP + 229]

44 minutes ago, Wastral said:

Why would the tariffs not increase?  Why would Chinese imports not massively decrease?  Took 2 decades to get to this level.  Will not disappear over night.  Will take a while to move, but move manufacturers will.  EU isn't happy with China either and they import even more than the USA. 

What is pathetic and why I am pissed at Trump over this issue is that his messaging is so abysmally bad, when there are VERY simple and obvious hitting points to get public support, my youngest teenager child could do a better job. 

I know what you mean.  I want to put words in his mouth. Sometimes it's what he doesn't say. Sometimes it's what he does say.

[SKEP + 229]

2 hours ago, Jan van Eck said:

I think your analysis is correct.  This Chinese Government has written off "deals" with the Trump Administration.  It will be interesting to watch what happens at the next Treasury Bills auction.  The Chinese may be conspicuous for their absence. 

Where else is China gonna put their $3.6Trillion in reserves.  Bitcoin ?

China is getting a lesson in humility. 

They don't control the world.

Nor does U.S. 

OPEC has recently learned the same lesson in humility.

 

Edited August 8, 2019 by SKEP

[Enthalpic + 1,496]

2 hours ago, Jan van Eck said:

Let's remember that, in fact, China is NOT a currency manipulator, as charged by the inflammatory press and others.  What is happening is that the traders, those guys sitting in the exchange pits, have traded the Yuan down.  Now in the past when this has happened, or started to happen, the Chinese govt through their central bank has purchased yuan with dollars in their exchange reserves, thus supporting the currency  (and keeping the exchange rate within a narrow band.  This practice is called "defending the ____" (pick your currency:  UK pound, US Dollar,  China yuan).  Well. obviously, if you don't defend it, then it will float and find its own level.  Right now that level, as determined by traders, is lower than it was previously.  

China historically has purchased US dollars in order to prop up the dollar, and have the USA have more dollars with which to buy Chinese goods.  If the US did not have access to those dollars, which China has provided by buying US Treasury notes, then the US would be printing more, leading to an inflation and a devaluation of the US dollar.  That would make Chinese products more expensive to US buyers, and would tamp down the sales of Chinese goods to the USA.  SO the Chinese have been buying up these torrents of US notes and handing over US dollars for them.  IT was a lousy investment, incidentally, with very low interest rates of return. 

By allowing their currency to float, China is letting the market price the tariffs in into their goods.  And yes, this acts to counter the tariffs.  Can China continue to do that?  Sure they can.  The lower value of Chinese currency also makes US exports to China that much more difficult, as the currency revaluation will price those goods out relative to say machinery from Japan or Korea.  And China could also simply not purchase more US Notes at maturity, scrapping the roll-over of debt upon which the US, and particularly the trump Administration, has relied.  At that point, the US economic expansion goes into recession.  That gets ugly fast. 

I recall you disagreeing with me that a nation could devalue it's currency at will.

US loves to run on rapidly growing debt, and China is a major lender, I think much of your analysis is correct.  

"Sorry credit no good."

Edited August 8, 2019 by Enthalpic

[Happy Go Lucky + 25]

1 hour ago, Zhong Lu said:

Trump eventually goes away (if anything he'll die of old age).  Then what? 

The same can be said of  President XI .....  he only da' prez for life

[Jakridge + 122]

1 hour ago, Wastral said:

Why would the tariffs not increase?  Why would Chinese imports not massively decrease?  Took 2 decades to get to this level.  Will not disappear over night.  Will take a while to move, but move manufacturers will.  EU isn't happy with China either and they import even more than the USA. 

What is pathetic and why I am pissed at Trump over this issue is that his messaging is so abysmally bad, when there are VERY simple and obvious hitting points to get public support, my youngest teenager child could do a better job. 

I think his messaging looks abysmally bad more than it really is because of the mainstream media controlling the narrative and interpretation of it. Quite frankly, I feel like this is what fighting back looks like and we are just not used to it.  Republican presidents in the past would not dare challenge the media or the Democrats for that matter in the manner that President Trump does. It might seem abysmally bad but I find it quite refreshing and whether you would like to admit it or not it is quite effective. We have to make a decision in this country. Are we going to Trend towards socialism like the Democrats are desperate for, or are we going to maintain our capitalistic free-market society that has created the wealthiest and most prosperous country in the history in the world that people are flooding into illegally to escape socialist $#!tholes?

[KeyboardWarrior + 527]

3 hours ago, Zhong Lu said:

Just like how the Trump trolls think the tariffs are a win for the US.  

What I'm also wondering is how long American farmers are going to put up with this.  Now that I think about it, I should have bough Brazilian soybean contracts several months ago.  Too bad there isn't an etf for that.  

As a rancher, I'm hoping that one result may be a jump in beef prices. 

[Zhong Lu + 845]

2 hours ago, Jakridge said:

The Chinese will negotiate before waiting out Trumps second term, which will happen.  They will probably negotiate sooner, they are used to prosperity more than they have ever had and will not let that dwindle down exponentially for long.  They have more to lose than we do.

George W. Bush believed that by invading Iraq he could win a quick victory.  Sooner or later after enough punishment his adversaries would negotiate with him, allowing him to end the war as he pleased.  At least that's what he believed.  Lyndon B. Johnson believed the same about Vietnam.  If someone told them that the other side isn't going to negotiate, they would have scoffed and claimed "well of course they'll negotiate.  They have more to lose than we do."  

Look at how that turned out.  Here's a question for you: what if the other side's pain tolerance is higher than what you can inflict? What do you do then? America's track record against adversaries that can outwait them, isn't very good.  

Edited August 8, 2019 by Zhong Lu

[Zhong Lu + 845]

55 minutes ago, Happy Go Lucky said:

The same can be said of  President XI .....  he only da' prez for life

Exactly.  Which means that if he chooses not to negotiate, then China won't be negotiating for the next 20 years (or whenever he dies).  How long can America wait? 

[Zhong Lu + 845]

2 hours ago, Wastral said:

Why would the tariffs not increase?  Why would Chinese imports not massively decrease?  Took 2 decades to get to this level.  Will not disappear over night.  Will take a while to move, but move manufacturers will.  EU isn't happy with China either and they import even more than the USA. 

 What is pathetic and why I am pissed at Trump over this issue is that his messaging is so abysmally bad, when there are VERY simple and obvious hitting points to get public support, my youngest teenager child could do a better job. 

Manufacturing moves to Vietnam, Cambodia, other SEA countries.  Costs go up, but still cheaper than America.  

[Zhong Lu + 845]

"They will cut a deal," some claim.

My question is this: how do you know that? Has Iran cut a deal? Has North Korea cut a deal? Has the Taliban cut a deal?

What if the other side simply doesn't "cut a deal?" What then? 

[ronwagn + 6,290]

7 hours ago, Zhong Lu said:

Question: if there's no further negotiation or agreement on trade between US and China, what next? 

I agree that China loses.  But how exactly does the US "win?" 

We win by switching to trading partners that allow FAIR Trade and do not steal or demand our trade secrets. Economic war is much better than a real war. We need to make sure it doesn't go that far. China has been allowed, to walk all over our face in the past few administrations, at least from Jimmy Carter on. 

Edited August 8, 2019 by ronwagn
addition

[Gerry Maddoux + 3,627]

These are great arguments, all the way around. So great that I'm reluctant to even post. However, in order to understand the Chinese mindset, you absolutely must read, "The Hundred-Year Marathon." I read it and forgot it. Then I read, just today, that President Xi has said before a group, and I paraphrase, "This is the last example of the Long March." And I don't know who capitalized long march. 

But it was chilling. The Long March--capitalized--was actually that 6,000 trip taken by a bunch of ragtag revolutionary soldiers who started in southeastern China and ended up 2 years later in northwestern China, fighting all the way, over 18 mountain ranges. They were fighting Chiang Kai-shek's soldiers. It took them two years: 1934-'35. When they finally arrived, more or less victorious, they put into power Mao Xedong. He is the one who came up with the concept of the hundred-year marathon. In one-hundred years, he said, we can be the preeminent power in the world. 

Well, I don't think that will happen, but I couldn't help but feel that President Xi felt it could happen. He visited an Iowa farm in 2005, again in 2012. He sat on a big John Deere tractor. He knows from soybeans. And he is well aware that the American farmer is the Achilles Heel of the American economy. It's true, China needs vast amounts of protein, more now that the Asian Swine flu has decimated their herds. But the world is involuting quickly. There are other places with land much expensive on which to grow hogs. American farmers are beginning to go bankrupt, helped along by the wet winter. President Trump will soon lose Wisconsin, Iowa, Ohio even. President Xi thinks that with mass shootings, market turmoil, farmers going broke, he can hang on until another American leader--one with a weaker hand--will gain power. I'm not sure he's right. 

Why not? Because as someone pointed out, the yuan would, if allowed to float, fall 50% in one day. It's being propped up. But it has been for years. Yes, the Chinese hold huge American debt in the form of treasury bills--3.2 trillion dollars worth. They have done very well on those, especially lately. They continue to buy, and I think they will in the future. Why? Because they need to prop up the yuan. They're in trouble with Hong Kong. Why? Because Hong Kong has been, for the last 34 years, pegged to the US dollar. China needs Hong Kong more than Hong Kong needs China. This has been a delicate balancing act for many years. It hasn't gotten any easier. 

So, who will win this hundred-year marathon? Well, I'm an American, not Chinese, so I naturally think America will. But I'm afraid that I also feel that none of this really had to happen. The company that has had more intellectual property stolen from it than any other is Apple, the most successful company in the world. If that's what happens when intel prop is stolen, please, steal some of mine! My Nobel Prize winning friend, now 83, tells me that never in the history of the world has anyone won a trade battle. I believe him. At some point, President Trump has to have a meeting, face to face, with President Xi. They have to eat a bowl of chocolate ice cream, laugh a little bit, recollect some of the funny things that have happened along the way, and then they have to agree on a common theme and make up. This will allow President Trump to win the election in 2020. It will give President Xi face too. The American farmers can once again grow their soybeans, and China can have all the pork it wants. The Dow will go up over a thousand points the next day. Oil will jump $5/barrel, because part of the deal is that China will turn its back on MbS and agree to take our very large crude carriers and LNG ships in its ports, to turn Iranian oil away. 

 

[ronwagn + 6,290]

3 hours ago, Wastral said:

Why would the tariffs not increase?  Why would Chinese imports not massively decrease?  Took 2 decades to get to this level.  Will not disappear over night.  Will take a while to move, but move manufacturers will.  EU isn't happy with China either and they import even more than the USA. 

What is pathetic and why I am pissed at Trump over this issue is that his messaging is so abysmally bad, when there are VERY simple and obvious hitting points to get public support, my youngest teenager child could do a better job. 

Trump is a master of messaging and tactics. He also has the cojones to follow through and do the right thing. All he can do is support the farmers as much as congress will let him. If he loses the next election it is not his fault, but the fault of the voters. Messaging is pretty hard to do well when 90% of the press, 70% of the Congress, 95% of Silicon Valley, 85% of the intelligentsia, 70% of the Deep State are dead set against you. Percentages are IMHO. 

[Zhong Lu + 845]

2 minutes ago, ronwagn said:

Trump is a master of messaging and tactics. He also has the cojones to follow through and do the right thing. All he can do is support the farmers as much as congress will let him. If he loses the next election it is not his fault, but the fault of the voters. Messaging is pretty hard to do well when 90% of the press, 70% of the Congress, 95% of Silicon Valley, 85% of the intelligentsia, 70% of the Deep State are dead set against you. Percentages are IMHO. 

Messaging and tactics that work in one culture may not necessarily work in another.  

[ronwagn + 6,290]

1 minute ago, Zhong Lu said:

Messaging and tactics that work in one culture may not necessarily work in another.  

I am not concerned about what works well for the masters of the people of China. I am concerned about the Chinese people. A large percentage of them know the truth, but dare not say what they want. China is a fascist tyrannical dictatorship with a leader for life. 

[Zhong Lu + 845]

4 minutes ago, ronwagn said:

I am not concerned about what works well for the masters of the people of China. I am concerned about the Chinese people. A large percentage of them know the truth, but dare not say what they want. China is a fascist tyrannical dictatorship with a leader for life. 

Well that's illogical.  Here you are claiming that people are brainwashed by the media in the US (which has freedom of press). 

So, given how powerful the media is, and given that the Chinese government has state control of the media, why do you believe there is any majority in China that will believe something that isn't state sanctioned or controlled? 

Edited August 8, 2019 by Zhong Lu

[ronwagn + 6,290]

1 hour ago, KeyboardWarrior said:

As a rancher, I'm hoping that one result may be a jump in beef prices. 

Well, feed should be a lot cheaper if you are fattening your own cattle. That should help you out. Plenty of rain, so you should have plenty of hay stored, or at least can buy it cheaper. I am looking for better beef prices, I think they are sky high, but I look back a long ways. It could be inflation.  If beef is high people like me eat more chicken and pork. 

[ronwagn + 6,290]

6 minutes ago, Zhong Lu said:

Well that's illogical.  Here you are claiming that people are brainwashed by the media in the US (which has freedom of press). 

So, given how powerful the media is, and given that the Chinese government has state control of the media, why do you believe there is any majority in China that will believe something that isn't state sanctioned or controlled? 

As I said, many Chinese have been to the United States. Word gets around, unless China is even more controlled than I think. 

[Douglas Buckland + 6,308]

5 hours ago, Zhong Lu said:

China does not particularly want a deal, at least not with this administration.  

Trump may believe the Chinese government wants a deal.  But that's not the same as the Chinese government actually wanting a deal, now, does it? 

Personally I'm wondering how long it takes before the real message (China is not going to negotiate) behind the yuan devaluation sinks in, that China isn't budging on trade. 

Obviously it hasn't sunk in yet.  

Lu, I think that you may be missing the point.

The US is actively disengaging from China and does not really care is China negotiates or not.

Yes, they will try to play a waiting game and hope to re-enter negotiations once Trump is no longer in office, but this assumes that a weaker man or woman will replace him. This is not a given.

Furthermore, if the next President even attempts to weaken America in regards to China while the US is still prosperous, that would be political suicide. Politicians loath political suicide.

 

[ronwagn + 6,290]

 

 

 

 

1 hour ago, Zhong Lu said:

George W. Bush believed that by invading Iraq he could win a quick victory.  Sooner or later after enough punishment his adversaries would negotiate with him, allowing him to end the war as he pleased.  At least that's what he believed.  Lyndon B. Johnson believed the same about Vietnam.  If someone told them that the other side isn't going to negotiate, they would have scoffed and claimed "well of course they'll negotiate.  They have more to lose than we do."  

Look at how that turned out.  Here's a question for you: what if the other side's pain tolerance is higher than what you can inflict? What do you do then? America's track record against adversaries that can outwait them, isn't very good.  

You make a good point there. We have new generations that are being tested. If they chose the socialist way it could be an ugly learning experience for them. 

[Zhong Lu + 845]

The next president can easily claim they're doing it for the good of American farmers.  It's not political suicide so long as you can spin it right.  Trump's support is not the majority.  It never was.  This will be in the Chinese government's calculations.

Everything I've heard is that the Chinese government is going to wait. No point negotiating with Trump since he's unpredictable and unreliable.  He doesn't stick to deals anyways, and he changes his mind all the time, so why talk to him? 

Edited August 8, 2019 by Zhong Lu