Trump regrets not having added even higher tariffs

[Jan van Eck + 7,558]

President Trump announced that he regrets not having increased tariffs on China even further.  He also announced that Japan will be taking more farm products, specifically corn.  That should take the sting out of losing the China soybean business.  I predict this will continue until tariffs hit 100%.  Does anybody predict what this does to the international containership trade? 

https://www.reuters.com/article/us-usa-trade-china/trump-regrets-not-raising-tariffs-on-china-higher-white-house-says-idUSKCN1VF0F0

Should be interesting to see how this plays out with U.S. crude shipments to China. Does anyone have any predictions?

[Douglas Buckland + 6,308]

Jan,

IN MY OPINION... we could see tariffs on Chinese goods incrementally increase, maybe 5% at a time, until either China decides to play ball or 100% is imposed. I do not think that Trump really cares which comes first and would be happy enough to simply disengage from China.

An incremental increase would give players time to adjust.

Obviously this will require a 'realignment' to the global supply chain, which is already occuring, and will cause some angst to the American consumer as they are weaned off of low cost, low quality Chinese products. In the long run this will be much more beneficial to the economies of not only the US, but others as well.

I am not qualified to comment on the containership trade, but I would guess that it would realign with the supply chain.

I would also hazard a guess that as tariffs increase and China plays a tit-for-tat game, that China will ban as much US oil as they feel they can do without.

[Jan van Eck + 7,558]

48 minutes ago, Douglas Buckland said:

I would also hazard a guess that as tariffs increase and China plays a tit-for-tat game, that China will ban as much US oil as they feel they can do without.

In 1940 - 41 the USA placed an export embargo on oil being sold to Japan.  The idea was to force Japan to abide by certain US wishes in Asia, specifically to pull back from invading its neighbors.  That one erupted in open war, which is not plausible today.  But it demonstrates that the US could, if it came to that, end up embargoing sales of oil to china.  At that point, there is no way for the Chinese to obtain US oil at any price, even by devaluing the currency. 

Right now China is attempting to strike at key US political domains to undermine the Trump re-election campaign.  But that presumes that (a) Trump will seek the nomination for a 2nd term, and (b) there there is no serious challenger from within the republican Party, and (C) that the Democrats run a marginal candidate that cannot garner votes from the general population.  And it also assumes that the affected vendors will not develop alternate markets for their products and will be unable to change their products to obtain new customers.  Those are all quite risky assumptions. 

Right now some farmers have gone from corn to soybeans.  The Chinese shut down US purchases of soy. OK, so the farmers can go back to corn, or the Federal Govt buys soy under a price-support system and the soy is re-sold to US producers of meats such as pigs, or the soy is re-sold into other countries that seek soy for animal feed, such as Europe or Pakistan, even if discounted, or the soy is converted into oil by pressing and new uses are found for that material.  For example, soy-based plastic packaging film would appear to have the advantage of being bio-degradable. Announcing a govt prize of say $5 million for the development of a new use would immediately stimulate a horde of inventors to get to it. 

What China is doing is risking permanently being removed from the US customer lists.  Because America and Americans are so technically innovative, that is a risky bet to place.  Not one I would do. 

[JR EWING + 123]

1 hour ago, Jan van Eck said:

In 1940 - 41 the USA placed an export embargo on oil being sold to Japan.  The idea was to force Japan to abide by certain US wishes in Asia, specifically to pull back from invading its neighbors.  That one erupted in open war, which is not plausible today.  But it demonstrates that the US could, if it came to that, end up embargoing sales of oil to china.  At that point, there is no way for the Chinese to obtain US oil at any price, even by devaluing the currency. 

Right now China is attempting to strike at key US political domains to undermine the Trump re-election campaign.  But that presumes that (a) Trump will seek the nomination for a 2nd term, and (b) there there is no serious challenger from within the republican Party, and (C) that the Democrats run a marginal candidate that cannot garner votes from the general population.  And it also assumes that the affected vendors will not develop alternate markets for their products and will be unable to change their products to obtain new customers.  Those are all quite risky assumptions. 

Right now some farmers have gone from corn to soybeans.  The Chinese shut down US purchases of soy. OK, so the farmers can go back to corn, or the Federal Govt buys soy under a price-support system and the soy is re-sold to US producers of meats such as pigs, or the soy is re-sold into other countries that seek soy for animal feed, such as Europe or Pakistan, even if discounted, or the soy is converted into oil by pressing and new uses are found for that material.  For example, soy-based plastic packaging film would appear to have the advantage of being bio-degradable. Announcing a govt prize of say $5 million for the development of a new use would immediately stimulate a horde of inventors to get to it. 

What China is doing is risking permanently being removed from the US customer lists.  Because America and Americans are so technically innovative, that is a risky bet to place.  Not one I would do. 

China aint negotiating with atrump. They are already planning to zero out export to US. Trump started something he now realises is a race to the bottom for the US. Classic.

Trump is liar, no one makes deals with liars. 

China will end this presidency and it cant happen fast enough. 

 

 

[Uvuvwevwevwe Onyetenyevwe Ugwemuhwem Osas + 96]

The price of US soybeans is only down approximately 15% compared to two years ago,
before the trade war started.
https://www.nasdaq.com/markets/soybean.aspx?timeframe=3y

The "talking heads" in the media never bother to do any fact checking.
They just keep repeating talking points.
Do they really expect conservatives in farm states will vote for some gender-confused feminist pro-abortion Trump hater
in the next election?  https://www.youtube.com/watch?v=BZVgl49yPzg

What about the $75B in Chinese retaliatory tarriffs?
On what?  The talking head have no idea.  I have no idea either because I can't find any info on that.
It's another vague scare tactic which is intentionally vague because it's weak.

Let's assume the $75B tariffs are mostly on US food products.
There is already high food inflation in China (and in Russia too).
https://tradingeconomics.com/china/food-inflation
https://tradingeconomics.com/russia/food-inflation

Instead of China/Russia buying food directly from the US, they will buy from a third-party country.
When food supplies run low in that third-party country, that third-party country will buy food from the US.
Food is a global commodity.  Tariffs on food can not target a single country.
You can not see the difference between a US soybean and a Brazilian soybean.
There is no "Made in USA" stamp on US soybeans.  They can mixed with other soybeans.

Tariffs on food simply add some overhead costs, as food is funneled through third-party countries.
The only way China/Russia could utterly devastate US farmers is to ban all imports of all or most food products.
This would really hurt US farmers, and put many out of business, but it would also literally kill off
millions of Chinese/Russians.
 

28 minutes ago, JR EWING said:

China aint negotiating with atrump. They are already planning to zero out export to US. Trump started something he now realises is a race to the bottom for the US. Classic.

It's funny that you brag about China ending exports to the US.
Nothing would make Trump supporters happier.
Go ahead and keep bragging.  Those of us with triple digit IQ's will laugh.
 

[JR EWING + 123]

Daaaa. You will be laughing allright when you go to the till. Not.

[JR EWING + 123]

39 minutes ago, Uvuvwevwevwe Onyetenyevwe Ugwemuhwem Osas said:

The price of US soybeans is only down approximately 15% compared to two years ago,
before the trade war started.
https://www.nasdaq.com/markets/soybean.aspx?timeframe=3y

The "talking heads" in the media never bother to do any fact checking.
They just keep repeating talking points.
Do they really expect conservatives in farm states will vote for some gender-confused feminist pro-abortion Trump hater
in the next election?  https://www.youtube.com/watch?v=BZVgl49yPzg

What about the $75B in Chinese retaliatory tarriffs?
On what?  The talking head have no idea.  I have no idea either because I can't find any info on that.
It's another vague scare tactic which is intentionally vague because it's weak.

Let's assume the $75B tariffs are mostly on US food products.
There is already high food inflation in China (and in Russia too).
https://tradingeconomics.com/china/food-inflation
https://tradingeconomics.com/russia/food-inflation

Instead of China/Russia buying food directly from the US, they will buy from a third-party country.
When food supplies run low in that third-party country, that third-party country will buy food from the US.
Food is a global commodity.  Tariffs on food can not target a single country.
You can not see the difference between a US soybean and a Brazilian soybean.
There is no "Made in USA" stamp on US soybeans.  They can mixed with other soybeans.

Tariffs on food simply add some overhead costs, as food is funneled through third-party countries.
The only way China/Russia could utterly devastate US farmers is to ban all imports of all or most food products.
This would really hurt US farmers, and put many out of business, but it would also literally kill off
millions of Chinese/Russians.
 

It's funny that you brag about China ending exports to the US.
Nothing would make Trump supporters happier.
Go ahead and keep bragging.  Those of us with triple digit IQ's will laugh.
 

Tripple digit IQ. It doesnt count when you add a decimal point. 

 

[Douglas Buckland + 6,308]

2 hours ago, JR EWING said:

China aint negotiating with atrump. They are already planning to zero out export to US. Trump started something he now realises is a race to the bottom for the US. Classic.

Trump is liar, no one makes deals with liars. 

China will end this presidency and it cant happen fast enough. 

 

 

How can China end his Presidency?

[oilexpert.nl + 36]

@DB 

When China does not give in. Trump will imply more tariffs, tit-for-tat, the DOW will plunge, economic downturn, less Trump voters.

China can suffer much more, definitely is prepared to suffer. History tells us a lesson here. Different way of thinking, money does not rule in China. Short term loss, versus long term gain. If you can call it gain.

[Douglas Buckland + 6,308]

3 minutes ago, oilexpert.nl said:

@DB 

When China does not give in. Trump will imply more tariffs, tit-for-tat, the DOW will plunge, economic downturn, less Trump voters.

China can suffer much more, definitely is prepared to suffer. History tells us a lesson here. Different way of thinking, money does not rule in China. Short term loss, versus long term gain. If you can call it gain.

Not an accurate assessment.

[ronwagn + 6,290]

5 hours ago, JR EWING said:

China aint negotiating with atrump. They are already planning to zero out export to US. Trump started something he now realises is a race to the bottom for the US. Classic.

Trump is liar, no one makes deals with liars. 

China will end this presidency and it cant happen fast enough. 

 

 

We had a Liar in Chief for eight years and you didn't even notice. What does that say about you?

https://docs.google.com/document/d/11axnqv_b3L2k9CD6HWNMwrdIECJZSxowxjO4RIc-rbE/edit

[Jan van Eck + 7,558]

3 hours ago, Douglas Buckland said:

How can China end his Presidency?

It cannot.  China has zero ability to influence the US elections, outside of the very small constituencies of union dock workers at West Coast ports.  Those then to be in States that typically have their Electoral College delegates vote Democratic, so the decrease in Asian trade, which might be calculated to depress dockworker numbers and wages, is not going to be a factor in the delegates to the Electoral College.  

Even if dockworkers were to be solidly Republican, an unlikely prospect, and they were all terminated and the docks closed, also an unlikely prospect, and then voted Democratic as a revenge vote against Republican Trump collapsing the China trade, it would have zero difference.  California, with the largest ports at Los Angeles and San Diego, votes Democratic anyway, and all delegates to the Electoral College are already Democrats.  So, where is the influence?  There is none. 

What is not mentioned in the latest round is that China now imposes a 25% tariff on American cars, and a 5% tariff on US-made car parts.  But aside from Buick, which manufactures cars inside China, there is no large trade of imported US cars anyway.  The big hit will be likely to Tesla, which has bet the company on manufacturing the Model 3 inside China, and will likely need auto parts from its US suppliers. Will Tesla fold as a result?  Probably.  But other poor management decisions will contribute more to Tesla collapse than whatever China dreams up.  Tesla only survives  because zealots keep handing it money.  By any metric the company is hopelessly upside-down and has no possibility of becoming self-sustaining by developing positive cash flow.  Its China gambit was the Hail-Mary Pass, and that looks like it is headed for the scuppers. 

Will Buick  (General Motors) take a big hit due to the China auto parts tariff?   Probably not. The Buick is a niche product directed at wealthier Chinese buyers, who have the cash to buy it even if the price creeps up by 10%.  So the reality is that the tariff is a paper tiger. 

China can hit the US soybean production to cause trouble in the short term, but I predict that US agriculture is flexible enough to switch to other crops.  The US today is the literal breadbasket of the world.  It produces vast volumes of food, both grains and meats, and will continue to do so.  You will see soybeans follow where corn has gone: into animal feed, as the planet continues to drift towards a meat diet.  Even there, with a crop largely expanded just for China, the Chinese government has minimal leverage.  It can and will cause some short-term disruption, but that remains local and transient.  The bigger hit will be to the Chinese themselves, forcing more reliance on grains (rice) from the Southeast and from Indochina.  Those are self-inflicted wounds. 

[Jan van Eck + 7,558]

9 minutes ago, oilexpert.nl said:

When China does not give in. Trump will imply more tariffs, tit-for-tat, the DOW will plunge, economic downturn, less Trump voters.

The US will not go into some economic downturn even if China erected a 100% quota barrier and imported NO USA products.  China simply does not buy enough from the USA to make that sort of difference. Most containers heading back to China from West Coast ports travel empty.  It is so heavy in the empty-container trade that China is now manufacturing one-way containers.  The load goes here, and then the US can keep the container, much like a one-way wood pallet. Cheaper than trying to ship that container back by truck or rail to the port and paying the ship line to haul it back to China. Tells you all you need to know. 

[oilexpert.nl + 36]

Good detailed info. Directly China can not end his presidency, that is clear. Indirectly China can "force" Trump acting in such a way that he will loose support in the US. Trump can end his own presidency, without knowing. Or do we in Europe, put too much emphasis on this behavior?

 

 

[JR EWING + 123]

2 hours ago, ronwagn said:

We had a Liar in Chief for eight years and you didn't even notice. What does that say about you?

https://docs.google.com/document/d/11axnqv_b3L2k9CD6HWNMwrdIECJZSxowxjO4RIc-rbE/edit

If thats directed at me, i have no position on either trump or obama, bush or clinton or whatever warnongering crusader is in the Big house. I simply stated that China will be trumps undoing. Its a comment not a manifesto. This is eye for eye stuff, the chinese are playing trump and everyone is gonna end up paying for it. I doubt it will effect DT too much while hes swing his clubs in florida or wherever it is he likes to dig holes. But hes digging one now and his "art of the deal" never considered Chinese psychology. 

Much more staying power than the US im afraid.

Be prepared for expensive everything😂

 

 

 

 

[JR EWING + 123]

2 hours ago, Jan van Eck said:

It cannot.  China has zero ability to influence the US elections, outside of the very small constituencies of union dock workers at West Coast ports.  Those then to be in States that typically have their Electoral College delegates vote Democratic, so the decrease in Asian trade, which might be calculated to depress dockworker numbers and wages, is not going to be a factor in the delegates to the Electoral College.  

Even if dockworkers were to be solidly Republican, an unlikely prospect, and they were all terminated and the docks closed, also an unlikely prospect, and then voted Democratic as a revenge vote against Republican Trump collapsing the China trade, it would have zero difference.  California, with the largest ports at Los Angeles and San Diego, votes Democratic anyway, and all delegates to the Electoral College are already Democrats.  So, where is the influence?  There is none. 

What is not mentioned in the latest round is that China now imposes a 25% tariff on American cars, and a 5% tariff on US-made car parts.  But aside from Buick, which manufactures cars inside China, there is no large trade of imported US cars anyway.  The big hit will be likely to Tesla, which has bet the company on manufacturing the Model 3 inside China, and will likely need auto parts from its US suppliers. Will Tesla fold as a result?  Probably.  But other poor management decisions will contribute more to Tesla collapse than whatever China dreams up.  Tesla only survives  because zealots keep handing it money.  By any metric the company is hopelessly upside-down and has no possibility of becoming self-sustaining by developing positive cash flow.  Its China gambit was the Hail-Mary Pass, and that looks like it is headed for the scuppers. 

Will Buick  (General Motors) take a big hit due to the China auto parts tariff?   Probably not. The Buick is a niche product directed at wealthier Chinese buyers, who have the cash to buy it even if the price creeps up by 10%.  So the reality is that the tariff is a paper tiger. 

China can hit the US soybean production to cause trouble in the short term, but I predict that US agriculture is flexible enough to switch to other crops.  The US today is the literal breadbasket of the world.  It produces vast volumes of food, both grains and meats, and will continue to do so.  You will see soybeans follow where corn has gone: into animal feed, as the planet continues to drift towards a meat diet.  Even there, with a crop largely expanded just for China, the Chinese government has minimal leverage.  It can and will cause some short-term disruption, but that remains local and transient.  The bigger hit will be to the Chinese themselves, forcing more reliance on grains (rice) from the Southeast and from Indochina.  Those are self-inflicted wounds. 

Apparently the russians got trump elected or at least thats the tripe being splattered all over the wire since 2016. Either way i didnt infer a direct interference and if i gave that impression it was not intended. Many things make and break a leader. Higher costs at the till for people with shallow pockets and getting goaded into a war can easily derail a president and he knows it well. Hes more keen to sort this out than the chinese but they have his pscchology worked out and are playing it. They are goading him. And hes throwing temper tantrums as he does. It probable destroying his golf game too. Hes very very predictable. 

[JR EWING + 123]

2 hours ago, ronwagn said:

We had a Liar in Chief for eight years and you didn't even notice. What does that say about you?

https://docs.google.com/document/d/11axnqv_b3L2k9CD6HWNMwrdIECJZSxowxjO4RIc-rbE/edit

For the record. Is trump honest or a liar. Personally i believe if his lips are moving hes lying about something.

[Jan van Eck + 7,558]

22 minutes ago, JR EWING said:

Be prepared for expensive everything😂

That is just silly. 

For goods still coming in from China, as their currency is being devalued, the end cost to US consumers is going to end up the same, unless tariffs go above 45%  (and they may).  

When currency devaluation plays itself out, which it will eventually, then US consumers and industrial customers will be buying from alternate sources.  There are lots of countries wanting to do business with the USA.  That sharp competition will keep prices inside the USA level, or declining, as world devaluation takes hold  (which it will).  

China and the United States are de-linking.  As China has much more export to the USA than the US does to China, it is the Chinese that will take the big hit.  That has ominous implications for the Communist leaders, who let us remember have become personally wealthy through their ownership or participation in large portions of that economy.  The peasants will go back to being peasants, not industrial workers, and the unemployed will go back to generating turmoil.  That is the way it is. 

The real issue is what this does to world oil prices.  World shipping consumes some 5% of global oil demand, and IMO 2020 will require conversion to light oil. As trade falls off, the pressure on light diesel will be less, so US internal diesel prices will start to drop.  Outfits like Maersk have built up these fleets of monster container-ships, hauling 18,000 TEU.  Those are too new to be scrapped or laid up.  That implies that the giant ships will continue in place, albeit at "slow-steaming" to save on fuel, and a good number of the smaller ships will become redundant.  Laying up a ship with no obvious future is expensive.  Some of those ships will go into shipyards for conversion of the perfectly good hulls into something else, either a ferryboat or a bulk dry carrier.  All that will be good for the shipyards but poor for freight charter rates, as the tonnage will be competing for less traffic.  Remember that as China gets less demand for its goods, there will also be less demand for bulk materials, such as bauxite for aluminum.  Other ships will be scrapped.  All in all, less fuel use in the shipping sector.

The light oil pumped inside the USA will go into gasoline, and eventually even that will end up displaced by biomass conversion into gasoline and diesel.  Some  biomass will go into jetfuel.  China will be shut out of US crude, probably by embargo, and that will free up light crude for conversion into plastics monomers.  The US will become a big exporter of plastics resins, the pellets that are then molded into plastics products.  That will displace Chinese plastics production. 

Finally, the US will stop importing dog food from China. You will see embargoes placed on Chinese foodstuffs, including animal feed.  

China and the USA are going to continue to disengage. The USA will do nicely, and China will take a hit. 

[ronwagn + 6,290]

50 minutes ago, JR EWING said:

For the record. Is trump honest or a liar. Personally i believe if his lips are moving hes lying about something.

I provided proof, you provided nothing. 

[ronwagn + 6,290]

1 hour ago, JR EWING said:

If thats directed at me, i have no position on either trump or obama, bush or clinton or whatever warnongering crusader is in the Big house. I simply stated that China will be trumps undoing. Its a comment not a manifesto. This is eye for eye stuff, the chinese are playing trump and everyone is gonna end up paying for it. I doubt it will effect DT too much while hes swing his clubs in florida or wherever it is he likes to dig holes. But hes digging one now and his "art of the deal" never considered Chinese psychology. 

Much more staying power than the US im afraid.

Be prepared for expensive everything😂

Most of the experts disagree with you. Show some real meat to your statements. You provide nothing but anti-Trump rhetoric. I have already provided back up for my statements. 

https://docs.google.com/document/d/1Wb2YoQGpSWTz32ljsiA_ey6FLVqc2Dpe7Fnpiqn9lBs/edit

http://www.gordonchang.com/article.htm

 

 

 

 

Edited August 26, 2019 by ronwagn

[JR EWING + 123]

2 minutes ago, ronwagn said:

I provided proof, you provided nothing. 

What proof did you provide. I care not a damn that the US is run by a phillandering lying despot except that it has an impact outside the US on people who didnt elect the muppet. 

As i said already, trump provides proof he is a liar daily. Whether its an illness like dementia or opiod abuse he just cant help himself. The fact he may actually believe some of his uttherings is even more worrying. 

I just pray his carnage is somehow self contained within the US. But alas.......

 

 

 

[ronwagn + 6,290]

1 minute ago, JR EWING said:

What proof did you provide. I care not a damn that the US is run by a phillandering lying despot except that it has an impact outside the US on people who didnt elect the muppet. 

As i said already, trump provides proof he is a liar daily. Whether its an illness like dementia or opiod abuse he just cant help himself. The fact he may actually believe some of his uttherings is even more worrying. 

I just pray his carnage is somehow self contained within the US. But alas.......

 

 

 

All you have to do is read the links. You are making yourself look ignorant. 

[JR EWING + 123]

I wouldnt waste any time reading links related to trumps credentials.

Trump is a liar. He cant help it. He publically lies, denies, calls everything fake news, 

Cest la vie. 

Deal with it Ron. 

 

 

[BigJets + 87]

Blocking Iranian oil was the best move Trump ever made.  This move has brought the Chinese machine to its knees; they just may not have realized it yet.   

I read this here somewhere, I believe it was a quote from one of the founding fathers... "at the end of the day gold is just a rock". 

Forget about stacking gold, or stacking cash, or stacking all the things you think have value.  If you can't feed your machine; the machine stops running.  China needs oil/energy, now.  Trump is making it very difficult for them to acquire energy.  China will begin to really feel the need for oil/energy about Q2-Q3, 2020.  

IMO, China is not prepared, at all, for life without Iranian Oil.  They do not have the force necessary to project against the USA Navy.  If/when Trump wins reelection, China will succumb from within.  Trump will completely dismantle, and replace China as a trading partner throughout his 2nd term.  By the end of Trumps 2nd term the USA economy will be so strong that Trump will handpick his successor.  Chinas global influence peeked under Obama, or maybe the 1st year of Trump.  By 2024 China's global influence will have shrunk so significantly that a nation like North Korea will have a higher GDP. 

[Jan van Eck + 7,558]

10 minutes ago, BigJets said:

China needs oil/energy, now.  Trump is making it very difficult for them to acquire energy

Yet remember that "oil," or more precisely crude oil, is used mainly for refining into bunker C for electricity generation, and gasoline and diesel for transport fuels.  All of that is readily available from outside China, there is lots of refining capacity in for example Rotterdam.  China is not being starved of electricity generation; China gets that from both hydro  (think Three Gorges Dam) and coal, which is largely imported from Australia.  The use of coal causes air quality problems in the Capital, part of the reason for the push to oil.  But if China finishes all those new coal plants it has been building outside the Capital, it can bring in power via transmission lines and keep to better air in Beijing. 

14 minutes ago, BigJets said:

Trump will completely dismantle, and replace China as a trading partner throughout his 2nd term.

That will be largely finished this term.  Nobody inside the USA that is purchasing their supplies from China is going to continue to face increasing import tariffs.  Nobody exporting to China is going to face the costs of market development to see it thrown away by China tariffs and quotas.  Disengagement will happen with lightning speed.  Just watch.