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China Once Looked Tough on Trade. Now Its Options Are Dwindling

nytimes.com

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Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#171

Post by pathseeker »

pergadad wrote: post #116
debacle wrote: post #65

Earlier quoted context omitted.

Our "trade war" with Canada is a proxy trade war with China. Our "trade war" with Europe is, to a much more limited degree, a proxy trade war with China. A big part of the rationale with all of these little trade wars is to make China stand alone on the global stage, so that they are more easily negotiated with. A secondary effect is to eliminate "Made in $country" goods that are 90% manufactured in China and finishe…

That doesn't make much sense at all. Ruining goodwill and relationships (and of course trade) with YOUR MOST IMPORTANT ALLIES is certainly not just proxy economic warfare. The EU economy as a whole is bigger than either China or the US. Don't try to find a logic when there clearly is none. Trade war with EU and Canada might be the most unhelpful thing Trump has done.

>Ruining goodwill and relationships (and of course trade) with YOUR MOST IMPORTANT ALLIES

That's not how this works. A trade tariff dispute doesn't mean anything about the relationships in other matters unless they are brought up as part of the negotiations. Each country isn't a single person being directed by their feelings being hurt.

So we can certainly negotiate with Canada to get them to lift dairy tariffs or whatever and still count on them not to allow Russia to setup air force bases there.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#172

Post by gricardo99 »

NathanCH wrote: post #166
gricardo99 wrote: post #165

Earlier quoted context omitted.

Possibly even at step 1. How many companies have 40-60% of their supply chain in the US? I would guess very few.

I mean, it doesn't have to be order numnuts

Ok, so ignore #1, and #2. What else? I actually don't see much at all on the list that is applicable in reverse.

I guess you could reverse the last two, and ignore the rest, but then it seems the whole point of parent comment is lost.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#173

Post by white-flame »

pathseeker wrote: post #161
gonvaled wrote: post #74

Extremely one sided comments, with a US centric view. The world is not the US, and HN readers are not only US citizens, so let me express a different point of view. Assumption: Trump wants fair trade. HN readers want fair trade. What is needed: fair trading rules, fair IP rules, fair capital structures, and a fair currency. Tackling some of the unfair trade practices does not address all those issues. In particular i…

>the favouring of US IP holders (as incumbents and head starters) You mean favoring the people that actually invented these things? I understand there isn't much of a notion of IP in China, but are you suggesting that it's unfair to not be able to copy IP and just manufacture without paying?

The allowance for copyright law to exist in the USA is "To promote the Progress of Science and useful Arts"; with a similar intent to patents to eventually bring more quality things into the public domain. So yes, anything outside of that, regardless of invention of non-science/useful-arts, and regardless of profitability, is fair game.

Any other enforcements and punishments are overreaches by government on behalf of lobbying. Many agree that the scope and punishments on the books in the USA far outweigh the punished behavior, and these are being foisted upon the rest of the world in strong-armed multinational agreements, against the will of the people on the receiving ends.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#174

Post by janekm »

toasterlovin wrote: post #122
ElBarto wrote: post #97

Time is on China's side. The US can throw a tantrum all they want. They should play a long game. There is no benefit for them in retaliating to hurt the US as long as it does not cause issues in domestic politics. They should focus on not getting hurt too much and let time do the rest.

I haven't fully through this through, but at a naive level it seems to me like the U.S. has the upper hand. Less trade between the two countries means U.S. consumers pay higher prices on non-essential items. But the impact on the Chinese is much more significant: people will lose jobs.

Thinking it through: The vast majority of goods imported from China are sold to US consumers by American companies, employing Americans. A 25% increase in cost of goods sold for these companies requires severe cost cutting, leading to the lay-offs of those American employees.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#175

Post by NikolaNovak »

pathseeker wrote: post #171
pergadad wrote: post #116

Earlier quoted context omitted.

That doesn't make much sense at all. Ruining goodwill and relationships (and of course trade) with YOUR MOST IMPORTANT ALLIES is certainly not just proxy economic warfare. The EU economy as a whole is bigger than either China or the US. Don't try to find a logic when there clearly is none. Trade war with EU and Canada might be the most unhelpful thing Trump has done.

>Ruining goodwill and relationships (and of course trade) with YOUR MOST IMPORTANT ALLIES That's not how this works. A trade tariff dispute doesn't mean anything about the relationships in other matters unless they are brought up as part of the negotiations. Each country isn't a single person being directed by their feelings being hurt. So we can certainly negotiate with Canada to get them to lift dairy tariffs or wh…

>>Each country isn't a single person being directed by their feelings being hurt.

Umm, sorry for being flippant, but are we reading the same news about US foreign policy last 18 months...? :-/

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#176

Post by nbhuik »

joefranklinsrs wrote: post #128

This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess) is 1.) 40-60 percent of a company’s supply chain moves out of China 2.) China restricting the movement of capital/equipments out of China (similar to what happened with Korean companies last year) 3.) China growing homebrew competitors to the foreign companies leaving…

As far as I know most of those are already happening today.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#177

Post by dahdum »

tim333 wrote: post #104
lgleason wrote: post #36

As much as some people here may hate Trump, the fact is that he was right when we said that it is difficult for us to lose a trade war with China since we import more from them than we export. Is there going to be some short term pain? Absolutely! But, long term it is likely to create more jobs in the US. As an extra bonus, there won't be as much of a carbon footprint for shipping things half way around the world and…

Trade doesn't really work like that. If I say buy a car off you it doesn't mean you've won and I've lost, just that we've done an exchange. If the government bans or taxes the exchange it probably just makes us worse off. Similarly with China trade there wasn't much of a problem till the stable genius decided to get worked up about things and it will probably cause both sides losses.

I don't see how you can claim there were no problems with trade before the tariffs, China outright bans far more American companies and classes of imports than the reverse.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#178

Post by sheepmullet »

pergadad wrote: post #116
debacle wrote: post #65

Earlier quoted context omitted.

Our "trade war" with Canada is a proxy trade war with China. Our "trade war" with Europe is, to a much more limited degree, a proxy trade war with China. A big part of the rationale with all of these little trade wars is to make China stand alone on the global stage, so that they are more easily negotiated with. A secondary effect is to eliminate "Made in $country" goods that are 90% manufactured in China and finishe…

That doesn't make much sense at all. Ruining goodwill and relationships (and of course trade) with YOUR MOST IMPORTANT ALLIES is certainly not just proxy economic warfare. The EU economy as a whole is bigger than either China or the US. Don't try to find a logic when there clearly is none. Trade war with EU and Canada might be the most unhelpful thing Trump has done.

> Trade war with EU and Canada might be the most unhelpful thing Trump has done.

Actually it’s an incredibly smart culturally sensitive move - it allows the Chinese to save face.

Instead of making it the West vs China the perception has been shifted to Trump trying to get fairer trade deals for the US even with close allies.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#179

Post by chmod775 »

joefranklinsrs wrote: post #128

This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess) is 1.) 40-60 percent of a company’s supply chain moves out of China 2.) China restricting the movement of capital/equipments out of China (similar to what happened with Korean companies last year) 3.) China growing homebrew competitors to the foreign companies leaving…

Even though the US are China's biggest trading partner, US trade "only" accounts for about ~18% of China's total trade.

China is still trading with other countries. While it may take a hit from US companies pulling some manufacturing out of China, some of those will be replaced by other - both Chinese and foreign - companies. Especially other foreign companies operating in China will profit from reduced competition for Chinese labor / manufacturing, encouraging them to move more manufacturing there. This will blunt the impact of manufacturing for the US market disappearing.

Also US companies will only withdraw in part from from China, since they can still manufacture goods intended for anywhere else in the world there - just not for the US.

In the end China will take a hit, but nothing close to requiring those measures you're picturing.

The US will have to bootstrap a lot of manufacturing to replace Chinese labor. This will sound good on paper and look good on some economic metrics, because it requires domestic investment. But since the American lifestyle won't be "subsidized" by cheap and exploitative Chinese labor anymore, the average American may actually find himself to have less than before.

And the rest of the world will profit from having two major players intentionally cripple each other.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#180

Post by gumby »

joefranklinsrs wrote: post #128

This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess) is 1.) 40-60 percent of a company’s supply chain moves out of China 2.) China restricting the movement of capital/equipments out of China (similar to what happened with Korean companies last year) 3.) China growing homebrew competitors to the foreign companies leaving…

> This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess)...

I agree with your conclusion but not your map; I see China investing and stepping up ag purchases from Brazil sub-saharan Africa; increasing the militarization of oil-producing countries, and exporting cheap products to Europe, Africa, South America and their southern mining province, Australia. The US will be forced to pay more for everything and so imports will shift to trans-shipment points; US exports will be more expensive as their imports will be more expensive. This seems like a generous gift of price support from the Trump administration to the rest of the world.

The US is a manufacturing powerhouse, but its production is bipolar: super cheap stuff too expensive to ship (paper, chopsticks, etc) and ultra-high-added-value stuff (extremely high precision bearings and the like). Not cars in huge volume but planes: sure! Tariffs don't address this structural issue; if anything they exacerbate it.

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