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The global trading system is starting to rearrange itself

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Re: The global trading system is starting to rearrange itself

#151

Earlier quoted context omitted.

It's not protectionism. Most of that manufacturing is not moving back to the U.S., it's moving to U.S. allies like Vietnam or Mexico, that would also be called third world countries. It really is what it says on the tin. It's a risk for the U.S. to be economically dependent on a state whose government does not share American values, and that is threatening its neighbors with invasion.

Vietnam and Mexico are not "US allies"

What definition are you using of ally? Normally countries are considered allies when they have formal agreements (treaties) between each other to cooperate for mutual benefit. By this measure, the US and Mexico are definitely allies.

Mexico is the USA's second largest trading partner worldwide. Exports of goods and services to Mexico support an estimated 1.1 million jobs (Department of Commerce). Mexico is also the second largest source of foreign crude oil to the USA, and the top export destination for US petroleum & natural gas. The US-Mexico-Canada agreement (USMCA) entered force in 2020, replacing NAFTA. The countries have a variety of complex ties. There are other treaties and areas of cooperation too, such as the International Boundary and Water Commission (IBWC). A security cooperation agreement called the Bicentennial Framework for Security, Public Health, and Safe Communities went into effect in 2021.

As for Vietnam, the US and Vietnam established a bilateral trade agreement in 2001. The US provides maritime security assistance to the country through the Maritime Security Initiative, Cooperative Threat Reduction Program, and through foreign military financing. US transferred Coast Guard cutters to Vietnam in 2017 and 2020 to bolster its law enforcement capabilities.

Those sound like alliances to me, but I'm interested to hear what other definition you're using.

Re: The global trading system is starting to rearrange itself

#152

> Biden’s “friend-shoring” initiatives What's CRAZY to me is why this hasn't always been the case. Who thought it was a good idea to depend on unfriendly countries like China? Right, I know who thought that. Those who also claimed "if we trade with them enough, they'll like us" did. Fuck depending on China, or Russia, for that matter. The West should have all its critical dependencies within it. At most we could get…

The whole existence of EU is to prevent war between countries within the union through making all depend economically on each other. So far it's been quite successful (0 wars so far AFAIK), but of course it's quite early to say. Many of the countries in EU have quite the war history with each other. It's easy to forget that countries like Denmark and Sweden, France and Germany, etc etc used to be bitter enemies with…

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Re: The global trading system is starting to rearrange itself

#153
post #145

Earlier quoted context omitted.

> The product is shipped overland from a Chinese factory to Vietnam or Korea, then some screws are tightened, some paint is slapped on, or a label is applied, and the product is re-exported. The whole point of this article is to rebute the point you've made. From the article: > The Economist’s basic argument is that because many of the goods exported to the U.S. from countries like Vietnam contain a lot of parts and…

But Chinese exports to the US increased . > In 2022, both U.S. exports to China and imports from China continued to grow for a third year in a row. U.S. exports totaled $153.8 billion, an increase of 1.6% ($2.4 billion) from 2021; U.S. imports from China totaled $536.8 billion, an increase of 6.3% ($31.8 billion); and the trade deficit with China was $382.9 billion, an increase of 8.3% of ($29.4 billion). - dept. of…

Those percentage increases seem to be lower than the rate of inflation at that time, which would mean the real value of imports and exports was flat or lower.

Re: The global trading system is starting to rearrange itself

#154
post #23

Earlier quoted context omitted.

It's possible to be perfectly cordial without being a US client state. Why should they have to be "in the fold"?

By the the fold I meant a country that generally plays by internationally accepted customs and cordiality, not a "US client state". If a country invites you to their joint military exercise, you don't spy on them during the exercise. This is basic common sense.

>internationally accepted customs

Which are more often than not US dictated.

>If a country invites you to their joint military exercise, you don't spy on them during the exercise

This is nonsense. No-one does this more than the US.

Re: The global trading system is starting to rearrange itself

#155

Earlier quoted context omitted.

> China is too big and too integrated into the world economics to fake or dismiss Chinese data Chinese statistics are notoriously biased. There is a cottage industry of hedge funds using satellite imagery to correct their figures and trade on it.

Can you name some of these hedge funds?

I know someone in the commodity business who uses satellite imagery for monitoring demand.

Re: The global trading system is starting to rearrange itself

#156
post #14

Earlier quoted context omitted.

They weren't unfriendly until we decided to make them so about 5 years ago. Policymakers in the late 90s couldn't necessarily predict swings in American opinion 20 years later.

China has been stealing IP and flaunting WTO rules for way longer than 5 years.

Snowden showed us that the US steals IP too, which is worse because it screams about how unfair it is when others do the same.

Re: The global trading system is starting to rearrange itself

#157
> The Economist does present one other piece of circumstantial evidence — a working paper by Caroline Freund of the IMF that finds that countries that have been increasing their exports to the U.S. tend to be countries that trade more with China. But this is a very far cry from showing that China’s value-added exports to the U.S. have remained constant.

It is not a "very far cry". It's almost a direct link. Industries don't just "spun out" of nothingness. These countries are not re-industrializing as much as they are re-labeling. Which is cheaper and has much better margins.

> But there are reasons to think that at least part of the drop in U.S. dependence on Chinese imports is real — at least, the recent drop in the last couple of years. First, Chinese exports overall are down substantially from 2021:

This is a really weird timeline to pick given that the pandemic year saw a very high increase in Chinese exports: https://tradingeconomics.com/china/exports If you look at it from that angle, it looks more like stabilizing to previous growth.

I find it interesting that both articles (The Economist) have the same prognosis, yet the came at two different conclusions: The restrictions did affect China, but only marginally. Some Chinese producers found ways around it by funneling their capacities through other countries. One is calling it a success and just a start. The other is calling it a failure.

Maybe it's too early?

Re: The global trading system is starting to rearrange itself

#158

Earlier quoted context omitted.

Vietnam and Mexico are not "US allies"

What definition are you using of ally? Normally countries are considered allies when they have formal agreements (treaties) between each other to cooperate for mutual benefit. By this measure, the US and Mexico are definitely allies. Mexico is the USA's second largest trading partner worldwide. Exports of goods and services to Mexico support an estimated 1.1 million jobs (Department of Commerce). Mexico is also the s…

Those two countries aren't on the verge of taking away the economic and technological dominance away from the US.

Therefore psychologically and in terms of US foreign policy, those countries are more allied to the US then China.

It's not black and white. It lives on a gradient.

Re: The global trading system is starting to rearrange itself

#159
post #38
post #24

Earlier quoted context omitted.

If you don't believe Chinese statistics, you can check that US import from China is back to pre-COVID volumes and rising. Honestly, I'm tired of this "oh they're totalitarian, so we cannot believe their statistics when it's good" stance. It looks so much like a comfortable self-deceit.

> Honestly, I'm tired of this "oh they're totalitarian, so we cannot believe their statistics when it's good" stance. It looks so much like a comfortable self-deceit. I’m tired of it too, but I think it’s better than “not use any data points” or “trust the super subjective data points put out by a totalitarian regime so they aren’t comparable to other countries.” I don’t think the US is perfect, but economic indicato…

Yeah the US leadership is smart enough to almost never lie outright. There are lots of more nuanced ways to technically tell the truth but still significantly warp the information to your benefit. I’m kind of surprised that China seems to be less savvy to this approach.

Re: The global trading system is starting to rearrange itself

#160
post #67
post #38

Earlier quoted context omitted.

> Honestly, I'm tired of this "oh they're totalitarian, so we cannot believe their statistics when it's good" stance. It looks so much like a comfortable self-deceit. I’m tired of it too, but I think it’s better than “not use any data points” or “trust the super subjective data points put out by a totalitarian regime so they aren’t comparable to other countries.” I don’t think the US is perfect, but economic indicato…

> I’m tired of it too, but I think it’s better than “not use any data points” or “trust the super subjective data points put out by a totalitarian regime so they aren’t comparable to other countries.” I understand this sentiment when it's applied to shithole countries where statistics cannot be verified in meaningful ways. But China is too big and too integrated into the world economics to fake or dismiss Chinese dat…

I don’t see how you can trust numbers from a government which fairly openly treats truth as malleable. Also, cadres are evaluated to a certain extent on their economic metrics, and of course a metric ceases to be reliable when your evaluation depends on it. But the real kicker is that the outgoing prime minister, Li Keqiang, did not trust the official numbers and developed his own calculation using other numbers. [1]

[1] https://en.m.wikipedia.org/wiki/Li_Keqiang_index

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