|Who will lose in the looming US-China trade war? - for image text, go to https://asia.nikkei.com/Politics-Economy/International-Relations/Who-will-lose-in-the-looming-US-China-trade-war|
US-China remain on brink of trade war, but the big guns have yet to be fired, analysts say
The tit-for-tat conflict could get nasty if Beijing targets key US exports, like soybeans, but a conciliatory path might prove more fruitful
PUBLISHED : Monday, 02 April, 2018, 5:52pm
UPDATED : Monday, 02 April, 2018, 6:06pm
Washington is set to unveil punishing tariffs against Chinese products this week amid an escalating trade skirmish between the world’s two largest economies, which analysts say could prompt Beijing to retaliate against strategic US products such as soybeans.The United States is expected by Friday to release a list of the US$50 billion to US$60 billion worth of Chinese imports that will be affected following a Section 301 trade investigation into Beijing’s intellectual property practices, including its forced technology transfer policies. It comes as trade tensions and rhetoric have ramped up between the two countries, with US President Donald Trump reiterating long-standing complaints against intellectual property theft and China’s record-high trade surplus with the US … for more, go to http://www.scmp.com/news/china/diplomacy-defence/article/2139963/us-china-remain-brink-trade-war-big-guns-have-yet-be
BEIJING (AP) - China announced a $3 billion list of U.S. goods for possible retaliation in a tariff dispute with President Donald Trump and girded Friday for a bigger battle over technology policy as financial markets sank on fears of global disruption. The Commerce Ministry said higher duties on pork, apples, steel pipe and other goods would offset Chinese losses due to Trump's tariff hike on steel and aluminum imports. It urged Washington to negotiate a settlement but set no deadline. Trump said Friday that he was not concerned that the tariffs would be a drag on the stock market. He added: "China is going to end up treating us fairly." … for more, go to https://www.wpxi.com/news/china-may-hike-tariffs-on-us-pork-aluminum-other-goods/720414218
Socialist US? Capitalist China?
KUALA LUMPUR (April 2018): President Donald Trump is stepping up the global economic pressure on China and is set to unveil a tariff list targeting Chinese tech goods.
The list is believed to have targeted US$50 billion to $60 billion worth of annual imports from China!
The questions: Do you expect China to take the matter hands down? Do you expect China to go down on its knees?
Whatever and however you answer the questions, the US-China trade war that was sparked by Trump is not going to dissipate in the near future.
The trade war is likely to be a “global bruiser” but will either, the US or China, go for broke?
Trump does not look like one who will step on the brakes but will China relent? Unlikely?
It looks like Trump, who campaigned to “Make the US great again, is carrying out his electoral promises without fear or favour” and is prepared to make tough and decisive decisions that had seen many sackings in his administration.
In fact, Trump has no choice but to make tough decisions and to be seen as tough for the US.
The reason: The US is saddled with a national debt of between US$20 trillion and US$222 trillion (Read these for context: https://ilovemalaysiachinasilkroad.blogspot.my/2018/01/is-us-debt-us20-trillion-or-us222.html (Is the US debt US$20 trillion or US$222 trillion?) and https://ilovemalaysiachinasilkroad.blogspot.my/2017/10/whatever-analysts-say-china-russia.html Whatever analysts say, the China-Russia Combo is keeping the US world hegemony in check!) and the economic and financial survival of the country must be protected.
Read the analysis below titled “The US vs. China: A Study in Opposites” and form your own conclusion whether it makes any sense to the current state of affairs between the US and China:
"Trump to unveil China tariff list this week, targeting tech goods
Monday, 2 Apr 2018
1:51 PM MYT
Monday, 2 Apr 2018
1:51 PM MYT
|The Trump administration this week will unveil the list of Chinese imports targeted for U.S. tariff.|
WASHINGTON: The Trump administration this week will unveil the list of Chinese imports targeted for U.S. tariffs to punish Beijing over technology transfer policies, a move expected to intensify trade tensions between the world's two largest economies.
The list of $50 billion to $60 billion worth of annual imports is expected to target "largely high-technology" products and it may be more than two months before tariffs take effect, administration officials have said.
The U.S. Trade Representative's office needs to unveil the list of products by Friday under President Donald Trump's China tariff proclamation signed on March 22.
The tariffs are aimed at forcing changes to Chinese government policies that USTR says results in the "uneconomic" transfer of U.S. intellectual property to Chinese companies.
The agency's "Section 301" investigation authorizing the tariffs alleges China has systematically sought to misappropriate U.S. intellectual property through joint venture requirements, unfair technology licensing rules, purchases of U.S. technology firms with state funding and outright theft.
China has denied that its laws require technology transfers and has threatened to retaliate against any U.S. tariffs with trade sanctions of its own, with potential targets such as U.S. soybeans, aircraft or heavy equipment.
On Sunday, Beijing slapped extra tariffs of up to 25 percent on 128 U.S. products including frozen pork, as well as wine and certain fruits and nuts in response to steep U.S. tariffs on imports of aluminum and steel announced last month by the Trump administration.
Fears have arisen that the two countries will spiral into a trade war that will crush global growth.
TARGETING 'MADE IN CHINA 2025'
U.S. technology industry officials said they expected the Trump administration's list to target products that benefit from Beijing's "Made in China 2025" program, which aims to upgrade the country's domestic manufacturing base with more advanced products.
The state-led program targets 10 strategic industries for replacing imports with Chinese-made products: advanced information technology, robotics, aircraft, shipbuilding and marine engineering, advanced rail equipment, new energy vehicles, electrical generation equipment, agricultural machinery, pharmaceuticals and advanced materials.
"Foreign technology acquisition through various means remains a prime focus under Made in China 2025 because China is still catching up in many of the areas prioritized for development," USTR said in its report justifying the tariffs.
U.S. Trade Representative Robert Lighthizer has said that preserving America's technological edge is "the future of the U.S. economy."
Reports that the tariff list may also include consumer goods such as clothing and footwear drew strong protests from U.S. business groups, which argued that it would raise prices for U.S. consumers.
LIMITED TIME FOR TALKS
While there have been contacts between senior members of the Trump administration and their Chinese counterparts since Trump announced his intention to impose tariffs, there has been little evidence of intensive negotiations to forestall them.
"The administration is following the Japan model from the 1980s," said a tech industry executive. "They'll publish a Federal Register notice of tariffs on certain products, then try to reach a negotiated settlement over the next 60 days."
During his first stint at USTR in the Reagan administration, Lighthizer employed similar tactics to win voluntary Japanese export restraints on steel and autos.
Wendy Cutler, a former deputy USTR in charge of Asia negotiations, said that addressing the sweeping intellectual property allegations identified by USTR would require major changes to China's industrial policy. A 60-day settlement may not be realistic in that case.
"I think they've set up a high bar for what they need to achieve, in order not to impose these types of tariffs and investment restrictions," Cutler said. - Reuters
The US vs. China: A Study in Opposites
by Jeff Thomas
In the second photo, taken over forty years later, we have US President Barack Obama making a similar visit to China. This time, again literally as well as figuratively, Mr. Obama is on the left and Chinese President Xi Jinping is on the right.
Over the ensuing four decades, both countries have been changing dramatically. The US has become increasingly socialistic, more focused on Big Government and more of a totalitarian state. In 1972, it was the world’s foremost creditor nation; it is now the world’s foremost debtor nation. By contrast, China, since the death of Chairman Mao, has opened up considerably, with billions of people becoming upwardly mobile, in response to China becoming increasingly capitalistic.
To be sure, both countries retain some of their historical features, but increasingly, the US is acting like a country in decline, whilst China is acting like a country on the rise.
As a result of successful capitalism, the US became the world’s foremost power after World War II. Then, in the 1960s, the US began apologising for the spoils that came with that capitalism. It became increasingly popular for Americans (largely at the urging of the media and the political structure) to be ashamed of capitalistic achievements and to head in a more socialistic direction.
Republican politicians have needed to soften their views on capitalism in order to appear to be “good people.” (“Good people” has essentially come to mean “those who are prepared to take from the rich and give to the poor.”) They are now Republicans in name only. The US still has two major parties, but one is a moderately liberal party and the other is a vehemently liberal party.
China has gone in the opposite direction, becoming increasingly capitalistic. The results have been dramatic. Many Chinese now have all the trappings that Americans do. In addition, their government is expanding more each year into capitalism.
Again, these developments have followed along the lines of “Declining Empire” vs. “Burgeoning Empire.” Increasingly, the US approach to the world has become one of demanding that other countries subjugate themselves to the US, as though they are subsidiaries of the empire. The US has demanded that trade in many essentials (particularly energy) be settled in the US dollar.
As this relationship has been crumbling in recent years, the US has responded by threatening other countries, creating sanctions against them, and even invading them. In doing so, the US has earned the reputation as the schoolyard bully of the world—the country that the world loves to hate. They still have to play ball with the US, but the resentment is growing globally.
(It should be noted here that, if and when a schoolyard bully does fall from his position, he is stomped on, not only by his challenger, but also by those who resented and hated him but had previously deferred to him and pretended to befriend him. Similarly, when empires fall from grace, “staunch allies” frequently switch sides rather quickly.)
In contrast to the US, the Chinese have, in recent decades, displayed the sort of capitalism that is indicative of a burgeoning global player. They are, in effect, saying, “We’re open for business and we’re here to deal. We have some creative ideas to offer that we think you’ll welcome.” They’re not twisting arms behind backs. They’re offering creative opportunities for other countries.
In addition, they’re not aiming for immediate gratification. Their aim is for long-term benefits, just as US goals once were. Today, the Chinese are buying up properties on every continent, setting up businesses, and making sure that the locals benefit from their investments.
In addition, they’re creating deals with governments that those governments could not create on their own. They seek out a country like Venezuela that is on the ropes economically and offer to buy heavily into Venezuela’s primary asset—oil—to the tune of tens of billions of dollars. The deal is not intended to provide a major return for China in the short term, but it does place China in the economic catbird seat in Venezuela over the long haul.
Around the globe, state-backed Chinese developers are offering creative deals to other countries’ political leaders. For example, if a small nation needs, say, a new port and the port costs $50 million (an amount that the country does not have), the Chinese offer to build the port for, say, $30 million, a bid that no other developer can meet. The Chinese developer takes a loss on the construction, but a part of the deal is that he gets a significant portion of the income of the port for, say, 50 or 75 years.
Chinese developers are now executing such deals in nearly every country in the world. What they lose in profits upon completion is made up for in long-term income. As a bonus, China not only owns property worldwide, it is a shareholder in the economies of countries worldwide.
This rapidly expanding global Chinese capitalism is receiving little notice in the US media, but that, most certainly, will change. As the US reaches its own economic tipping point—market crashes, currency collapse, etc.—and finds that it can no longer pay even the interest on its debt, it will also discover that it cannot pay out the benefits promised to the 50% of its population who pay no income tax but are recipients of governmental largesse. The US government will then find itself desperately trying to keep this portion of the population at bay, as payouts to recipients decrease. As a result, governmental capital projects will fail to receive funding. Someone will need to step in and offer “creative bidding.” Enter the Chinese.
Once the US is on more of a Third-World economic footing, it will have little choice but to accept the kinds of deals that the Chinese have recently offered in Jamaica, Egypt, Nicaragua, etc.
The result will be Chinese ownership not only of considerable US real estate and corporations within the US, but ownership of US infrastructure.
Today, the vestiges of Communism undoubtedly remain in China, but the move is decidedly away from Communism, toward capitalism. Conversely, the US seems to be hell-bent on replacing US capitalism with a socialist totalitarian state. Since more than 50% of Americans are now on the dole in some form, it seems highly unlikely that the US will suddenly reverse that direction, since the majority of Americans will vote for continued (and increased) government hand-outs.
Both Chairman Mao and President Nixon are now pushing up daisies, and their present-day replacements are reverse images of them. The future belongs to those who are productive.
As investment guru Jim Rogers has stated, the future belonged to the British in the 19th century and the Americans in the 20th century. The Chinese will own the 21st century. Accordingly, Mr. Rogers made Singapore his home.
We are passing through the early stages of a period of dramatic change. The economic and political world is in the process of turning upside down. Those who come out the other side of this change with their skin on will be those who have diversified both their wealth (however large or small) and, indeed, themselves, so that they are positioned to thrive in the future, rather than to remain where they are and be a part of the decline.
Editor’s Note: Unfortunately, there’s little any individual can do to change the trajectory of this trend in motion. The best you can do is stay informed so you can protect yourself… and even profit.
We just released a brand-new video presentation with details on China’s latest move… and the one group of stocks that could soar higher… - International Man"
|China is showing the United States that it will make good on its trade threats. The Chinese government said that tariffs on about $3 billion worth of US imports are going into effect Monday, hitting 128 products ranging from pork, meat and fruit to steel pipes. It's the latest move in escalating tensions between the world's two largest economies, which some experts fear could turn into a trade war … for more, go to http://money.cnn.com/2018/04/02/news/economy/china-us-tariffs-trade/index.html|