Tweet
On the trade wars ........ yep, there's more than one (The EU and China - the main ones) and this has become a clear theme of Trump's MAGA.
You don't read much that casts a positive light on this. It's mostly gloom and doom and some numbers indicate that there are, not insignificant, economic costs around the globe. I guess what you have to ask yourself are the trade advantages enjoyed by other countries as injurious to US trade as the Trump administration declares they are and, therefore, the alleged inequities justify the approach Trump is taking?
I haven't seen a definitive answer to that question. I don't believe anything that comes out of the lips of anyone representing the WH or the broader administration. I do think we suffer a news bias, superficiality of reporting and not much more believability of the reporting than the pronouncements of the current administration. It takes a lot of digging to get the facts in this matter straight.
The article linked below does flesh out a bit more today than was announced yesterday about the targets of the additional 10% tariffs the president announced yesterday. The targets are phones, apparel and China exports intended for retail sale. They do not target steel, auto parts or the broader sector of electronics. Tariffs on those three sectors would be extremely painful, both to the Chinese and the global market place, if steeper tariffs were imposed.
Kudlow was asked today about specifics of the latest tariffs and he named those three sectors but when pressed about impact he was less definitive saying they won't have much of an impact at home and we have figures to support that position. He didn't provide them. The commerce department did release a list of tariff targets prepared in May so, there is some visibility as to which products imported from China could be tariffed.
I hold to the premise that the latest tariffs are window dressing intended to send the message that Trump isn't going to back down on insisting that China needs to fix the macro and structural aspects of their economy that creates trade imbalances with the US. I mentioned these in a post up thread - the unresolved question of whether China is or is not a NME and the disadvantages to US companies who want to do business in China posed by the typical Communist state subsidization and controls of specific industry production.
I also believe that there is a strategic and concurrent plan to weaken the WTO. The purpose would be to get China to end it's reliance on the alleged do-nothing posture of the WTO when it comes to its declaration that it is NOT a NME. This declaration affects not just the US but a host of other nations trading with China. Allegations involving these unfair trade practices in the steel, energy and banking sectors have been brought before the WTO long ago and remain unresolved and in legal limbo.
This gets talked about all the time but the more I read the less important technology transfer disputes are in the bigger picture. These are micro issues compared to the much more impactful macro and structural issues involved with the NME question. As well, the impact of SOEs on anti-competitiveness concerns that SOEs present to foreign countries that want to do business within China markets are a major source of conflict between the US and China. When Chinese trade authorities make public statements that stipulate their country will not be intimidated by threats or forced to make changes to how they govern as Communists with the attendant centralized control of the means of production, it means fuck capitalism. We'll only allow it to permeate our model of governance to the extent that we will rigorously control that and on our terms not on the those of that the US is demanding.
TBH, I'm not sure Trump can win that battle but it is a good one when it is defined as I read it. That reality brings to the fore this question: Has President Deals bit off more than he can chew here? As for me, I don't think he has but getting China to reform it's economy at the macro and structural level is a hard row to hoe. It does appear that the Trump administration is demanding these kinds of changes as the price for China's admission to the world of free global traders. Demanding that China adapt a fully functioning market economy is going to take a while, if it will happen at all and I have my doubts, and be painful.
I'll add, I really don't think Trump being replaced by a D president is going to mean squat with respect to the China-US trade dispute. The same issues were being raised during the Obama administration over the entirety of it's years in DC. The D's during the Obama administration just didn't push China as hard as Trump has nor did they define the dispute as having strategic implications.
https://www.politico.com/story/2019/...-china-1632801
You don't read much that casts a positive light on this. It's mostly gloom and doom and some numbers indicate that there are, not insignificant, economic costs around the globe. I guess what you have to ask yourself are the trade advantages enjoyed by other countries as injurious to US trade as the Trump administration declares they are and, therefore, the alleged inequities justify the approach Trump is taking?
I haven't seen a definitive answer to that question. I don't believe anything that comes out of the lips of anyone representing the WH or the broader administration. I do think we suffer a news bias, superficiality of reporting and not much more believability of the reporting than the pronouncements of the current administration. It takes a lot of digging to get the facts in this matter straight.
The article linked below does flesh out a bit more today than was announced yesterday about the targets of the additional 10% tariffs the president announced yesterday. The targets are phones, apparel and China exports intended for retail sale. They do not target steel, auto parts or the broader sector of electronics. Tariffs on those three sectors would be extremely painful, both to the Chinese and the global market place, if steeper tariffs were imposed.
Kudlow was asked today about specifics of the latest tariffs and he named those three sectors but when pressed about impact he was less definitive saying they won't have much of an impact at home and we have figures to support that position. He didn't provide them. The commerce department did release a list of tariff targets prepared in May so, there is some visibility as to which products imported from China could be tariffed.
I hold to the premise that the latest tariffs are window dressing intended to send the message that Trump isn't going to back down on insisting that China needs to fix the macro and structural aspects of their economy that creates trade imbalances with the US. I mentioned these in a post up thread - the unresolved question of whether China is or is not a NME and the disadvantages to US companies who want to do business in China posed by the typical Communist state subsidization and controls of specific industry production.
I also believe that there is a strategic and concurrent plan to weaken the WTO. The purpose would be to get China to end it's reliance on the alleged do-nothing posture of the WTO when it comes to its declaration that it is NOT a NME. This declaration affects not just the US but a host of other nations trading with China. Allegations involving these unfair trade practices in the steel, energy and banking sectors have been brought before the WTO long ago and remain unresolved and in legal limbo.
This gets talked about all the time but the more I read the less important technology transfer disputes are in the bigger picture. These are micro issues compared to the much more impactful macro and structural issues involved with the NME question. As well, the impact of SOEs on anti-competitiveness concerns that SOEs present to foreign countries that want to do business within China markets are a major source of conflict between the US and China. When Chinese trade authorities make public statements that stipulate their country will not be intimidated by threats or forced to make changes to how they govern as Communists with the attendant centralized control of the means of production, it means fuck capitalism. We'll only allow it to permeate our model of governance to the extent that we will rigorously control that and on our terms not on the those of that the US is demanding.
TBH, I'm not sure Trump can win that battle but it is a good one when it is defined as I read it. That reality brings to the fore this question: Has President Deals bit off more than he can chew here? As for me, I don't think he has but getting China to reform it's economy at the macro and structural level is a hard row to hoe. It does appear that the Trump administration is demanding these kinds of changes as the price for China's admission to the world of free global traders. Demanding that China adapt a fully functioning market economy is going to take a while, if it will happen at all and I have my doubts, and be painful.
I'll add, I really don't think Trump being replaced by a D president is going to mean squat with respect to the China-US trade dispute. The same issues were being raised during the Obama administration over the entirety of it's years in DC. The D's during the Obama administration just didn't push China as hard as Trump has nor did they define the dispute as having strategic implications.
https://www.politico.com/story/2019/...-china-1632801
Comment