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China backtracked on almost all aspects of U.S. trade deal – sources

reuters.com

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Re: China backtracked on almost all aspects of U.S. trade deal – sources

#61

Post by baybal2 »

rrggrr wrote: post #17

I suspect Xi wants this dispute to continue for internal Chinese reasons. The tariffs impact different sectors and regions in China differently. It may be continued tariffs are reducing overcapacity in a manner that allows Xi to save face internally. It could be the tarrifs are breaking the back of powerful exporting provinces (eg. Jiagnsu) and helping Xi consolidate power. It may also be the case that things need to…

> continued tariffs are reducing overcapacity

How will that work? I only see them increasing the overcapacity as the market for commodity stuff gets even smaller

> success of the Belt&Road strategy requires a shift from US/Western export to vast investment elsewhere;

China had almost 20 years to do so, but Chinese companies were blindly charging ahead into US market. Only very recently, the business community began to realise that the rest of the world is "not so bad" business-wise." Xiaomi and BBK brands were a hit in India, but their C-levels ignored India up until they were almost buried in money from Indian market.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#62

Post by rrggrr »

beart wrote: post #55
rrggrr wrote: post #17

I suspect Xi wants this dispute to continue for internal Chinese reasons. The tariffs impact different sectors and regions in China differently. It may be continued tariffs are reducing overcapacity in a manner that allows Xi to save face internally. It could be the tarrifs are breaking the back of powerful exporting provinces (eg. Jiagnsu) and helping Xi consolidate power. It may also be the case that things need to…

How does your theory jive with the fact that his news is censored within China? Wouldn't Xi want it to be public?

His primary audience is party members, military, provincial leadership and the largest economic players.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#63

Post by burfog »

scarface74 wrote: post #56
toasterlovin wrote: post #15

Earlier quoted context omitted.

It isn’t costing consumers much. I run a company that was affected by the tariffs. If we had kept manufacturing in China, cost of goods sold (COGS) would have gone up by 25%. But COGS are only 50% of the price customers pay for our products. So the price increase to our customers would have only been 12.5%. But we didn’t keep our manufacturing in China, we moved it to Taiwan and Vietnam. As a result, our COGS went up…

It isn’t costing consumers much. I run a company that was affected by the tariffs. So you’re generalizing your experience from a “company you run” to a country with a $19.39 trillion GDP....

Months ago, I saw an analysis done by a European financial firm. The burden of the tariffs is 83% paid by China. This is very well aligned with his example.

The burden we do pay isn't so bad. It can substitute for other taxes. We used to do this in a big way, funding the country without an income tax. The local employment is pretty good too. Those industrial jobs, for example steelworkers, are reducing income inequality.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#64

Post by rrggrr »

spectramax wrote: post #40
rrggrr wrote: post #17

I suspect Xi wants this dispute to continue for internal Chinese reasons. The tariffs impact different sectors and regions in China differently. It may be continued tariffs are reducing overcapacity in a manner that allows Xi to save face internally. It could be the tarrifs are breaking the back of powerful exporting provinces (eg. Jiagnsu) and helping Xi consolidate power. It may also be the case that things need to…

I don’t know how by cutting down exports Xi plans to consolidate power? Could you please expand on the mechanism by which this could happen? Tariffs are breaking backs of exporting provinces, may be they could be ill informed and Chinese propaganda can spin this to blame US.

Suffering constituencies (provinces, cities, banks, businesses) may have to make substantial concessions to Xi's leadership team/faction to obtain relief. Those concessions may be up front, or favors owed to be collected in the future. Politics 101.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#65

Post by jggreg »

baybal2 wrote: post #32
gdsdfe wrote: post #21

Earlier quoted context omitted.

I feel like none knows how to deal with the Chinese, there's a cultural gap that the US and Europe are not accounting for, the Chinese care a lot about saving face and status

To me it feels like Trump did it more or less intentionally. He seem to know that behind a stone faced facade, Xi is an anxious and insecure person — the same 7th grader he was when his family was purged.

[flagged]

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#66

Post by duxup »

I think this is a very strange development. I'm a bit surprised they would backtrack at all.

Rather in the past they've agreed to various regulations and laws and ... just not enacted or simply enacted and not followed them. That last part being the real question in all these details, does it matter if a deal gets made anyway?

If anything the traditional route would have allowed the POTUS to declare victory and everyone just move on, but this is far more confrontational and unusual based on my understanding.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#67

Post by SolaceQuantum »

beart wrote: post #55
rrggrr wrote: post #17

I suspect Xi wants this dispute to continue for internal Chinese reasons. The tariffs impact different sectors and regions in China differently. It may be continued tariffs are reducing overcapacity in a manner that allows Xi to save face internally. It could be the tarrifs are breaking the back of powerful exporting provinces (eg. Jiagnsu) and helping Xi consolidate power. It may also be the case that things need to…

How does your theory jive with the fact that his news is censored within China? Wouldn't Xi want it to be public?

None of the politics above implied involvement with the public; the public are generall a periphery in this discussion and possibly a detriment to inform the public too much about the details of what's going on, which would allow the public to speculate and make their own decisions.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#68

Post by duxup »

nabla9 wrote: post #25

Maybe China was just playing time and trying to time the trade conflict. US elections are next year. If the trade war escalates this summer, the effect on voters and the US economy will be hardest 6 to 12 months from now. After that the US economy will start to adjust for the new normal.

Concerns about China though aren't likely to change.... I'm not sure voters will feel like "We need to strike a deal with China" ... and accordingly I'm not sure it is so much a Chinese advantage.

If things are worse, voters could be just as angry and willing to vote for someone who wants to fight ... more with China over trade.

This could be a case where China might want to stoke a problem, and get more blowback than they otherwise would have. The current POTUS (elected dude to a lot of things including economic concerns by some voters) has already proven you can put up a fight and the sky doesn't fall... and a politician might not see making a deal advantageous to China as a good political move, or even likely to produce a lot of economic benefit.

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#69

Post by scarface74 »

burfog wrote: post #63
scarface74 wrote: post #56

Earlier quoted context omitted.

It isn’t costing consumers much. I run a company that was affected by the tariffs. So you’re generalizing your experience from a “company you run” to a country with a $19.39 trillion GDP....

Months ago, I saw an analysis done by a European financial firm. The burden of the tariffs is 83% paid by China. This is very well aligned with his example. The burden we do pay isn't so bad. It can substitute for other taxes. We used to do this in a big way, funding the country without an income tax. The local employment is pretty good too. Those industrial jobs, for example steelworkers, are reducing income inequal…

So we are creating those jobs at a cost of $900K per job. Tariffs are hardly ever a good way to create jobs.

https://www.washingtonpost.com/business/2019/05/07/trumps-st...

Re: China backtracked on almost all aspects of U.S. trade deal – sources

#70

Post by logfromblammo »

logfromblammo wrote: post #60
Leary wrote: post #11

The most recent tweets by Trump regarding this: "The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to “negotiate” with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come... Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier)…

The import tariffs are paid by the people inside the importing nation. A US import tax on Chinese goods is a tax on American consumers and manufacturers. The way to tax China itself would be an export tax on money bound to China, including the transfers of immobile or intangible assets to Chinese nationals or corporations via domestic exchanges or brokerages--and including the cash value of transferred intellectual p…

Another way to wipe out a history of past trade imbalances would be to announce the retirement of the domestic currency, citing counterfeiting or hacking, hyperinflation, or whatever else that may sound plausible.

You then allow only your own nationals to exchange old money for new money. In order to avoid losing all of the value of their old money, foreign holders would have to buy something from a domestic person, who could then exchange the currency.

A smart exchanger would then either keep the new cash, or buy back their sold things at a lower price. In effect, it ends up being a one-time tax on domestic currency being held abroad. Any country that had been building up a reserve of your currency via trade deficits either has to settle up immediately by importing a giant bolus of your trade goods, or it gets screwed.

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