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Trump reinvented tariffs and it worked

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(edited)

5 hours ago, Douglas Buckland said:

Okay, so what do you do concerning those that possess certain resources (rare earth metals, oil, certain other ores,...)? Does the ‘global community’ mandate that they must trade these resources and also set the price?

How about labor and the cost thereof? Is the new world government going to mandate a global minimum wage?

You just saw the UK leave the EU because essentially they were not happy being ‘ruled’ by unelected officials in another country. We may see more leaving the EU shortly for the same reason.

People simply do not want globalization at the expense of sovereignty. Furthermore, there is no pressing need for it. Finally, you can see the attitude globally towards ‘elitism’ (not a real word, I know), globalization will simply allow the large multi-national corporations to effectively rule the planet. 

When the companies were predominately American globalism was great. Now that the tables have turned it's unfair and you want protectionism. How fair was it to others before?

US still wants and needs globalism, they are just trying to bully other nations to change policies so globalism returns to being favorable for the US.

Edited by Enthalpic
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(edited)

ISM under 50.  Farmers going bankrupt or struggling.  Everyone else is doing fine.  In other words, the sectors that are struggling the most are the ones that the government is interfering in the most.  Manufacturing and farming would be doing much better without the tariffs.  The irony is that the "Trump economy" has been awful for manufacturing, agriculture, and energy, the very people who voted for him, and good for everyone else, especially the blue states (service, banking, finance, tech).  The rich get richer, and guess which states are rich? The blue states.

No point in looking at individual successes/failures.  Anyone can cherry pick the data.  For manufacturing, I just look at the ISM.  And it does NOT support the view that the tariffs are a success.  

Edited by Zhong Lu
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5 hours ago, Marcin2 said:

I have no personal experience with Chinese steel so have no point of reference, but I think it is not actually necessary to have an opinion about such a straightforward topic.

But James, think for a moment: steel has grades according to a sets of globally known, widespread standards, ASTM one of them. China manufactures 53% of global output. Manufacture of steel with certain qualities is pretty straightforward once you are in steel-making business. This steel is used for decades in different applications. Some 7 billion tons in last decade, more than US in all history.

Gensteel needs to be biased, it is their job to be biased, using US steel is their primary business. I have never seen the waiter in a restaurant telling me, go to competition round the corner, their chef is much better. I had to experience this myself when stuck for the job for a week or so in a city or town I have never visited before.

I would like to delve into details of your generalization from your point of view cause you really seem to believe in it. This is not important because it is steel or Chinese. I am interested in a thought process, how uniform msm news stream creates peoples views and attitudes.

So you had steel of certain grade not meeting specification. Was there any lawsuit, what was the follow up ? I mean China is the major player at international markets, dump 50-100 million tons a year. I think there would be lawsuits, high profile cases, we would see it at news among how Chinese toys have lead in themselves, even administrative backlash at a country level, if there would be steel not meeting specification.

So you had steel of certain grade not meeting specification

Two Amethyst class semisubmersible Rigs built up to main deck then had to be stopped due to the steel quality docs being falsified. No MSN shrink required get off your high horse and stop focusing on trying to belittle individuals. It sucks!

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(edited)

32 minutes ago, James Regan said:

So you had steel of certain grade not meeting specification

Two Amethyst class semisubmersible Rigs built up to main deck then had to be stopped due to the steel quality docs being falsified. No MSN shrink required get off your high horse and stop focusing on trying to belittle individuals. It sucks!

I was not belittling you, if you had such impression I am sorry. It was genuine question about: What has gone wrong and what was the root cause of your opinion (now I now that insubstantiated) about quality of such a standard product like steel  ?

And the answer is you were victim of the dishonest intermediary, this is not the proof of the substandard quality of the Chinese steel.

And you were also the victim of your own bias towards Chinese steel producers imprinted into your mind  by some sort of msm propaganda. 
Step back and try to analyze your reaction and your possible bias. My questions were legitimate.

Edited by Marcin2
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1 hour ago, Enthalpic said:

When the companies were predominately American globalism was great. Now that the tables have turned it's unfair and you want protectionism. How fair was it to others before?

US still wants and needs globalism, they are just trying to bully other nations to change policies so globalism returns to being favorable for the US.

Exactly, globalization is only good when you are competitive, if not you need to protect your market. You simply cannot be competitive with Chinese economies of scale and huge domestic market. Take Huawei, US sanctions would kill any non Chinese company. But Chinese just bought 369 million smartphones in 2019, 142 of them Huawei, so company can exist and develop on domestic market basis. Or steel industry , Chinese consumption about 850-900 milion tons in 2019, they have exports very good, there are tariffs just good.

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Macau shuts down all casino action for 15 days, if you have been to Macau you will know it’s basically a Las Vegas and is only there because of the Casinos. This is very serious when you shut down one of the most lucrative streams of revenue. IMO this is far more serious than being reported on.

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15 hours ago, Marcin2 said:

I was not belittling you, if you had such impression I am sorry. It was genuine question about: What has gone wrong and what was the root cause of your opinion (now I now that insubstantiated) about quality of such a standard product like steel  ?

And the answer is you were victim of the dishonest intermediary, this is not the proof of the substandard quality of the Chinese steel.

And you were also the victim of your own bias towards Chinese steel producers imprinted into your mind  by some sort of msm propaganda. 
Step back and try to analyze your reaction and your possible bias. My questions were legitimate.

No bias here I have no reason at all to side with US steel, just based my point on Chinese steel on experience , take a look at a piece of weight bearing Chinese or Russian steel and then look at the same piece of equipment made under standards it’s almost 1/3 the size a weight.

Taken a good step back a replied in suit.

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6 minutes ago, James Regan said:

Macau shuts down all casino action for 15 days, if you have been to Macau you will know it’s basically a Las Vegas and is only there because of the Casinos. This is very serious when you shut down one of the most lucrative streams of revenue. IMO this is far more serious than being reported on.

Wrong thread but does it really matter OP omelette 😂

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23 hours ago, James Regan said:
On 2/3/2020 at 9:06 AM, Marcin2 said:

I am happy that you watch steel and steel tariffs. Steel is the good indicator of the new normal coming to the world with the rise of china.

Nobody can compete with China because of economies of scale - provided that China gets needed technologies.

In 2019 US output of steel was 87.9 M tons and in China 996.3 M tons. Increase in Chinese production in 2019, was larger than total US production.

I watch for a few years how China destroys global steel manufacturing in all countries. Only wise countries with steel tariffs will prevail as steel producers.

This is our future in everything from steel to 5G.

The question comes down to quality as always when discussing China and its products , you know what I’m saying as you all have complained about something built in China (fkn Chinese shit) if you haven’t your a liar or Chinese.

Chinese steel is of very low quality and does not pass the quality requirements for many segments in manufacturing such as large floating structures and high buildings, Chinese steel falls very short of ASTM standards and has very limited in house quality code.

Even Korea don’t buy Chinese Steel, been there seen Chinese landrigs being slapped out one a week and then worked on them two years later , not good!

https://gensteel.com/building-faqs/building-comparisons/chinese-steel-quality-vs-american-steel-quality

There are many steel mills in China producing ASTM grade steels and certified by European bodies to do so. In fact there are mills producing exotics such as Inconel grades as well.

However do they produce these to the required standards on a consistent basis? NO

Steel mills in China do not "fold" (mix) the metal often enough compared to European mills and this causes microscopic inclusions in the steel. Under heat (ie heat treatment to gain the required mechanical properties, or hot dip galvanising) these inclusions will expand and join other cracks that will eventually crack the bar that has been produced.

This is why many EPC's will specify "no Chinese material" or in Europe it will be to PED requirements.

That said I believe Marcin is correct that the majority of ASTM grades are produced in China. Take that as you will.

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17 hours ago, Enthalpic said:

When the companies were predominately American globalism was great. Now that the tables have turned it's unfair and you want protectionism. How fair was it to others before?

US still wants and needs globalism, they are just trying to bully other nations to change policies so globalism returns to being favorable for the US.

When did I ever indicate that I wanted protectionism? It is not a debate if you are speaking for me.

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1 hour ago, Douglas Buckland said:

When did I ever indicate that I wanted protectionism? It is not a debate if you are speaking for me.

It’s called Bi Polarizing chat , some great chat rooms out there, Speaking to a forum of Two with 50 opinions gets interesting 🤔 

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On 2/4/2020 at 11:42 AM, Zhong Lu said:

ISM under 50.  Farmers going bankrupt or struggling.  Everyone else is doing fine.  In other words, the sectors that are struggling the most are the ones that the government is interfering in the most.  Manufacturing and farming would be doing much better without the tariffs.  The irony is that the "Trump economy" has been awful for manufacturing, agriculture, and energy, the very people who voted for him, and good for everyone else, especially the blue states (service, banking, finance, tech).  The rich get richer, and guess which states are rich? The blue states.

No point in looking at individual successes/failures.  Anyone can cherry pick the data.  For manufacturing, I just look at the ISM.  And it does NOT support the view that the tariffs are a success.  

By only looking at the ISM you are cherry picking the data. There are other, far better measures of what is happening then asking a bunch of purchasing agents who don't know shiff from shinola about the strategy of the companies they're working for. 

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(edited)

Don't care.  It's not like any of the other measures are any better. It's like that dude from a while back telling us that EIA data on oil supply is unreliable.  He's probably right, but does he have anything better? 

So I think I'll just stick to the official numbers, the numbers that can move the markets.  Wrong or otherwise, at least they TRY to get an accurate assessment, as opposed to reports from people with an obvious political bias.

Besides if manufacturing was doing so great why is US Steel (X) in the dumpster? 

EDIT: Though frankly X might be worth a buy soon given how much it's sold off.  

Edited by Zhong Lu

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(edited)

1 hour ago, Zhong Lu said:

Don't care.  It's not like any of the other measures are any better. It's like that dude from a while back telling us that EIA data on oil supply is unreliable.  He's probably right, but does he have anything better? 

So I think I'll just stick to the official numbers, the numbers that can move the markets.  Wrong or otherwise, at least they TRY to get an accurate assessment, as opposed to reports from people with an obvious political bias.

Besides if manufacturing was doing so great why is US Steel (X) in the dumpster? 

EDIT: Though frankly X might be worth a buy soon given how much it's sold off.  

ISM isn't even an official number. It's a stupid poll taken by stupid purchasing managers asking what they think might happen in the future. Some Wall Street traders used it once and it sorta kinda worked so now it's being treated as gospel? I don't think so

USS is in the dumps because it's a crappy highly unionized company using outdated and obsolete equipment to produce substandard products. Their number one product is rebar, which can be made by anyone and has low margins and even lower utility. Instead of looking at them, look at Nucor and Mittal. Modern, efficient and can quickly gear up and down for market conditions. 

By the way, I understand you like to trade. If so, don't use the crappy ISM index, at least use the Markit index, which has deviated quite a bit from the ever wrong ISM. Or perhaps you prefer losing money? 

Edited by Ward Smith
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(edited)

Markit uses surveys, too, just like ISM.  It, too, is a stupid poll taken by stupid purchasing managers asking what they think might happen.  The only difference it seems is they weight the responses differently. Is Markit an official number? I.e. is it any better?  

Again, there's no reason to get angry at the numbers, just because they didn't come out the way you wanted them to.   This is how bagholders are made.

EDIT: From the link that you sent:

Implied growth rates for manufacturing output, derived from the regressions and shown in chart 4, confirm the extent to which exaggerated growth signals were sent from the ISM surveys over 2017 and 2018. More recently, in 2019 both surveys have signalled falling manufacturing output trends. Note that, although running higher than the ISM data in September, the IHS Markit data are still indicating falling manufacturing output on a three-month-rolling basis, and the 'flash' IHS Markit PMI's output index even fell to its lowest since 2009 back in July, though the rate of contraction has eased slightly. Both surveys are therefore consistent in indicating that the manufacturing recession was most likely extended into the third quarter, but the September divergence remains a concern.

Edited by Zhong Lu

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(edited)

In Maoist era China, anytime the numbers didn't come out right, they either fudged it, or blamed the messenger.  That's why every year in Mao land, the economy was always growing because Chairman Mao was the Great Leader, and the economy CANNOT contract when the Great Leader is in power, no matter what the numbers say. Is that what America is like today? 

Edited by Zhong Lu
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On 2/4/2020 at 2:06 PM, Enthalpic said:

When the companies were predominately American globalism was great. Now that the tables have turned it's unfair and you want protectionism. How fair was it to others before?

US still wants and needs globalism, they are just trying to bully other nations to change policies so globalism returns to being favorable for the US.

Globalism as in the GATT and Bretton Woods financial and monetary institutions, were a mercantile cost to Americans. The US market and its no tariff access to the new NATO allies was a bribe to the old empires to not fight each other and dismantle their imperial holdings, and join the US in fighting the Soviets. At no point were American economic interests a consideration at the setup of these arrangements. Indeed, Triffin's dilemma was formulated to warn against the inevitable economic cost of the dollar reserve system (namely a hollowing out of industry due to the need to provide reserve assets to the trading system). It didn't become a "real" benefit till the US went off the gold standard and was thus in breach of the Aramco lease terms, that the new arrangement was made with Saudi for oil payments and the import binge really got started.   

Greenspan formulated a US provided  synthetic gold bond made up  of a gold future and a treasury to supply Saudi with the gold they wanted. The EU and US financial systems issuing the futures were on the hook to provide the gold. Interest rates were driven up till the gold price reversed trend downwards as Larry Summers suggested in his paper on Gibson's Paradox. Though the US got the benefit of having oil imports paid by domestic currency, it was still suffering from Triffin's dilemma as demand for US treasuries etc. for repo assets in the Eurodolar and dollar reserve system brought an ever increasing trade deficit that was hollowing out US industries.  

The perpetual inflators of the 1960s and 1970s, at over 20% money supply growth were Japan Korea Italy Spain Portugal etc. and some really spectacular ones in S America. This got really bad in the 1980s till major threats of pulling the US out of the trade arrangement were made by Reagan, and Leitheizer negotiated the Plaza Accords. After which no major economy printed up money at that sort of growth rate till China came along. US trade deficits again blew up and US industry resumed its hollowing out. The benefit of paying for oil in the domestic currency was outweighed by the hollowing out effect of Triffin's dilemma.

The Fed, in trying to maintain the dollar's position raised rates to control inflation (and the gold price) despite knowing full well that it was China's doing (China was buying both oil and gold in large quantities off the futures markets as well as other commodities) and US interest rates had nothing to do with it and could not affect it directly. What it could do was blowing up the exchange system and the Eurodollar banks after bringing domestic bank dependent US business to a screeching halt (corporate and mortgage finance relied on the international bond market - not US banks). Combined with the imposition of Basel III rules, they got just the kind of crisis that stopped inflation. But it didn't stop China.  

What Lightheiser is trying to do is both retain a dollar settlement system and US involvement in protecting global trade, and sterilize the problem of Triffin's dilemma by slanting the tables distinctly to the US' mercantile interest's favor. It is not about a level playing field. It is about the US benefiting from each bilateral relationship with content  rules and quotas slanted in its favor. Trump's alternative proposal for his trade deals is to pull out and leave the world to fight it out over trade routes and oil supplies and let the chips fall where they may, and god help you if you can't feed yourself or need foreign markets to export to because your domestic consumption is dead. The US only cares for the former British empire and the growth markets of SE Asia and India. Everyone else has to pay to keep the US involved - and that means also that the US - on top of having a slanted playing field in its favor, - keeps control of Gulf oil and the global dollar reserve and clearing system.  The US is not there to protect Saudi or Iraq etc. but to control the oil. The old agreements about the US protecting the oil producer countries in return for an oil backed dollar are over. If the oil flow stops for some reason, then the US is there with its alliance to take control of the oil fields directly. 

As an alternative, the US is proposing via Judy Shelton, a gold reserve system with a US consortium controlled central bank, and no possibility of nations devaluing. For some odd reason, apparently this seems to be attractive to China.

'Lookup Peter Zeihan's books and presentations on the subject.

China's idea that establishing the Yuan as a global reserve currency will rain on it with food copper and oil, ignores the downside of Triffin's dilemma - that it must therefore bring a hollowing out of industry and take the incomes of the middle class down with it. 

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On 2/4/2020 at 2:42 PM, Zhong Lu said:

ISM under 50.  Farmers going bankrupt or struggling.  Everyone else is doing fine.  In other words, the sectors t that are struggling the most are the ones that the government is interfering in the most.  Manufacturing and farming would be doing much better without the tariffs.  The irony is that the "Trump economy" has been awful for manufacturing, agriculture, and energy, the very people who voted for him, and good for everyone else, especially the blue states (service, banking, finance, tech).  The rich get richer, and guess which states are rich? The blue states.

No point in looking at individual successes/failures.  Anyone can cherry pick the data.  For manufacturing, I just look at the ISM.  And it does NOT support the view that the tariffs are a success.  

You do realize that the point of supply side is that the downstream margins matter more than extraction and farm profits, which is why you attempt to lower their capital costs and taxation, because the low basic material output prices increase the margins and thus real incomes of the rest of the economy, same for intermediate production. The upstream economy is low margin commodities so the effect of lower capital costs and lower taxes is to lower product prices. 

But the retaliatory tariffs and 0 quotas did in the farmers. That was China's doing. The hit to US manufacturing is temporary and would have happened anyway as China labor costs were rising too quickly while productivity wasn't. The supply chains had to leave China in any case, just that tariffs and now Coronavirus, are making that process that much more urgent. 

 

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1 hour ago, 0R0 said:

Globalism as in the GATT and Bretton Woods financial and monetary institutions, were a mercantile cost to Americans. The US market and its no tariff access to the new NATO allies was a bribe to the old empires to not fight each other and dismantle their imperial holdings, and join the US in fighting the Soviets. At no point were American economic interests a consideration at the setup of these arrangements. Indeed, Triffin's dilemma was formulated to warn against the inevitable economic cost of the dollar reserve system (namely a hollowing out of industry due to the need to provide reserve assets to the trading system). It didn't become a "real" benefit till the US went off the gold standard and was thus in breach of the Aramco lease terms, that the new arrangement was made with Saudi for oil payments and the import binge really got started.   

Greenspan formulated a US provided  synthetic gold bond made up  of a gold future and a treasury to supply Saudi with the gold they wanted. The EU and US financial systems issuing the futures were on the hook to provide the gold. Interest rates were driven up till the gold price reversed trend downwards as Larry Summers suggested in his paper on Gibson's Paradox. Though the US got the benefit of having oil imports paid by domestic currency, it was still suffering from Triffin's dilemma as demand for US treasuries etc. for repo assets in the Eurodolar and dollar reserve system brought an ever increasing trade deficit that was hollowing out US industries.  

The perpetual inflators of the 1960s and 1970s, at over 20% money supply growth were Japan Korea Italy Spain Portugal etc. and some really spectacular ones in S America. This got really bad in the 1980s till major threats of pulling the US out of the trade arrangement were made by Reagan, and Leitheizer negotiated the Plaza Accords. After which no major economy printed up money at that sort of growth rate till China came along. US trade deficits again blew up and US industry resumed its hollowing out. The benefit of paying for oil in the domestic currency was outweighed by the hollowing out effect of Triffin's dilemma.

The Fed, in trying to maintain the dollar's position raised rates to control inflation (and the gold price) despite knowing full well that it was China's doing (China was buying both oil and gold in large quantities off the futures markets as well as other commodities) and US interest rates had nothing to do with it and could not affect it directly. What it could do was blowing up the exchange system and the Eurodollar banks after bringing domestic bank dependent US business to a screeching halt (corporate and mortgage finance relied on the international bond market - not US banks). Combined with the imposition of Basel III rules, they got just the kind of crisis that stopped inflation. But it didn't stop China.  

What Lightheiser is trying to do is both retain a dollar settlement system and US involvement in protecting global trade, and sterilize the problem of Triffin's dilemma by slanting the tables distinctly to the US' mercantile interest's favor. It is not about a level playing field. It is about the US benefiting from each bilateral relationship with content  rules and quotas slanted in its favor. Trump's alternative proposal for his trade deals is to pull out and leave the world to fight it out over trade routes and oil supplies and let the chips fall where they may, and god help you if you can't feed yourself or need foreign markets to export to because your domestic consumption is dead. The US only cares for the former British empire and the growth markets of SE Asia and India. Everyone else has to pay to keep the US involved - and that means also that the US - on top of having a slanted playing field in its favor, - keeps control of Gulf oil and the global dollar reserve and clearing system.  The US is not there to protect Saudi or Iraq etc. but to control the oil. The old agreements about the US protecting the oil producer countries in return for an oil backed dollar are over. If the oil flow stops for some reason, then the US is there with its alliance to take control of the oil fields directly. 

As an alternative, the US is proposing via Judy Shelton, a gold reserve system with a US consortium controlled central bank, and no possibility of nations devaluing. For some odd reason, apparently this seems to be attractive to China.

'Lookup Peter Zeihan's books and presentations on the subject.

China's idea that establishing the Yuan as a global reserve currency will rain on it with food copper and oil, ignores the downside of Triffin's dilemma - that it must therefore bring a hollowing out of industry and take the incomes of the middle class down with it. 

Very interesting points. I'm giving a purple.

Overall, no disagreement. The media criticises the US for having no foreign policy, but the reality is the US has a very identifiable policy for those with eyes to see.  Aspects like the petro-dollar, NATO, trade and tariffs, +900 military bases world-wide, are but tools in the grand scheme. These imperialistic  tools have worked very well since 1972, but are now becoming less effective. History may not repeat precisely, but the American Empire has supplanted the British Empire, and will suffer the same fate. With the huge US debt, the ever increasing costs to run the empire, astronomical levels of derivatives, and now competition from China and Russia, the fate may come sooner than later.

The risks and dilemma you note are precisely the reasons why China does not wish to be the next sole hedgemon nor to have the next sole reserve currency.  Unlike the US, China has learned from history and has no desire to repeat the mistakes.  The Chinese like gold and thus may be interested to return to a gold standard, but not one controlled by the US.  With cryptocurrency evolving, and China's development of it, I should think the world will have incentive to shift to multiple cryptos backed by gold. 

A crypto-gold would spell the death of the petro-dollar. For every 1% of global GDP gained by China, the USA loses 1%. As China continues to reach out across Eurasia, the GDPs of all countries increase, thus decreasing the USA global share.  The consequences of this may be dire.  The policy of the US is full-spectrum dominance, and the general attitude of Americans is to go down fighting. So should the world expect full-spectrum war to achieve full-spectrum dominance: cyber, currency, trade, bio, chemical, nuclear?  

 

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1 hour ago, 0R0 said:

You do realize that the point of supply side is that the downstream margins matter more than extraction and farm profits, which is why you attempt to lower their capital costs and taxation, because the low basic material output prices increase the margins and thus real incomes of the rest of the economy, same for intermediate production. The upstream economy is low margin commodities so the effect of lower capital costs and lower taxes is to lower product prices. 

But the retaliatory tariffs and 0 quotas did in the farmers. That was China's doing. The hit to US manufacturing is temporary and would have happened anyway as China labor costs were rising too quickly while productivity wasn't. The supply chains had to leave China in any case, just that tariffs and now Coronavirus, are making that process that much more urgent. 

 

True. Remains to be seen how long is 'temporary'. The supply chains do not 'have to' leave China, as much as they 'choose to'.  The 'virus' may or may not accelerate the flight of capital.

For those industries that can be economic using very unskilled labour and the most basic of raw materials, I suppose the labour factor may tip the balance to another country. But this picture has very much more in it than cheap labour only. You should talk to anyone who has tried to establish a viable operation in such countries. I know from experience the disadvantages far far outweigh the advantages. But maybe the virus will tip the scales - remains to be seen.

Overall, I concur with the studies that conclude very little has been accomplished by the trade war - to date.  Jobs have not returned to the US, China buys items it intended prior to the 'war', effects on currencies are negligible, US consumers pay higher prices, and the overall mood is hostile.  But, these are turbulent days, so anything that can change will. 

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3 hours ago, frankfurter said:

The supply chains do not 'have to' leave China, as much as they 'choose to'.  The 'virus' may or may not accelerate the flight of capital.

Capitalism seems superior to Socialism and Authoritarianism in this case.

China's Authoritarian response / coverup to the Coronavirus is likely going to badly hit China's GDP this year. 

The fallout from China's top-down "everything is ok"  mandate should become increasingly apparent later this year.  "Everything" is most definitely *not* ok in China.  The official numbers are laughable.

Supply chains are being mangled, and will likely get mangled much more, quite swiftly.

One Belt One Road is not looking so shiny and sparkly anymore, even to its most avid true believers.  One Belt One Road is currently being aborted in real time, as the OBOR supply chains get gutted.

Walmart will not be pleased, and that pleases me immensely. 

The Globalism Uber Alles vs Populism Pushback battle continues, and Globalism is currently getting slapped in the face with a bowl of insipid bat soup.

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1 hour ago, Tom Kirkman said:

Capitalism seems superior to Socialism and Authoritarianism in this case.

China's Authoritarian response / coverup to the Coronavirus is likely going to badly hit China's GDP this year. 

The fallout from China's top-down "everything is ok"  mandate should become increasingly apparent later this year.  "Everything" is most definitely *not* ok in China.  The official numbers are laughable.

Supply chains are being mangled, and will likely get mangled much more, quite swiftly.

One Belt One Road is not looking so shiny and sparkly anymore, even to its most avid true believers.  One Belt One Road is currently being aborted in real time, as the OBOR supply chains get gutted.

Walmart will not be pleased, and that pleases me immensely. 

The Globalism Uber Alles vs Populism Pushback battle continues, and Globalism is currently getting slapped in the face with a bowl of insipid bat soup.

True, the virus will hit China's economy: how hard remains to be seen.  And which nation has declared China to be its enemy? Which opposes the OBOR with all its might? Which began the currency war?  The trade war?  Connecting dots is not so difficult.  

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9 hours ago, 0R0 said:

What Lightheiser is trying to do is both retain a dollar settlement system and US involvement in protecting global trade, and sterilize the problem of Triffin's dilemma by slanting the tables distinctly to the US' mercantile interest's favor. It is not about a level playing field. It is about the US benefiting from each bilateral relationship with content  rules and quotas slanted in its favor. Trump's alternative proposal for his trade deals is to pull out and leave the world to fight it out over trade routes and oil supplies and let the chips fall where they may, and god help you if you can't feed yourself or need foreign markets to export to because your domestic consumption is dead. The US only cares for the former British empire and the growth markets of SE Asia and India. Everyone else has to pay to keep the US involved - and that means also that the US - on top of having a slanted playing field in its favor, - keeps control of Gulf oil and the global dollar reserve and clearing system.  The US is not there to protect Saudi or Iraq etc. but to control the oil. The old agreements about the US protecting the oil producer countries in return for an oil backed dollar are over. If the oil flow stops for some reason, then the US is there with its alliance to take control of the oil fields directly. 

I tend to think the operative word is trying. There is no guarantee of success; I think this strategy would have been far more effective if executed 15 years ago. 

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Phase one of the trade agreement promises a drop in the in balance from 366 billion to 166 billion over two years. 
There will be further discussions on the remaining 166 billion among other issues in phase 2. 
The success of this deal and its future will hinder on compliance of phase one. We will be tracking the billions with interest just like the N American trade agreement

The US has tremendous buying capacity and we’ll see over time which countries will buy US products in return. 

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4 hours ago, Rasmus Jorgensen said:

I tend to think the operative word is trying. There is no guarantee of success; I think this strategy would have been far more effective if executed 15 years ago. 

15 years ago the expectation was that integrating China into the global market would alter China into a more democratic and rules led society and open government. Instead it instituted Chinese methods of capturing commercial business by subsidies and theft of IP and industrial espionage. It corrupted the world trading system and transnational organizations and didn't temper the CCP. Its hardliners kept key power centers and when things turned, demoted the reformers and consolidated power as China's demographics started to slow their growth. They created a new Mao figure and concentrated power hierarchy, to reassure them of the strength of their position and then went all out to apply technology to suppress dissent and track everyone.

Maintaining the "all is well" meme in China is the CCP's first priority. But it works both ways, the delusion is not only among the people, as intended, but in the leadership. Information is redacted as it flows up the hierarchy to create as pretty a picture as the intermediate levels can credibly produce. 

The CCP, as the last remaining "communist" organization of size, is very much aware of their precarious position. Their paranoid surveillance state and social scoring system is distorting discourse to the point of neither society, business nor the party itself being able to get a picture of reality in any sphere. 

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