Trade War - how is that working out?

[begooode]

https://thehill.com/homenews/administration/443339-trump-defends-comments-on-who-pays-tariffs-after-top-aides

 

President Trump on Monday argued in a series of tweets that China will bear the brunt of the new tariffs his administration is imposing on China, a day after one of his top economic advisers said both the U.S. and China would be hurt by the economic fight.

 

Trump wrote in the tweets that there was no "reason" for U.S. consumers to pay the tariffs, arguing in part that people in the United States could avoid paying the tariffs by buying products produced in other countries or in the United States.

 

"Their is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today,” Trump wrote in one of the posts on Twitter.

In a second tweet, he said a consumer could "buy the product inside the USA (the best idea). He said companies would leave China for other countries such as Vietnam to avoid the tariffs.

 

Trump’s comments come just a day after his top economic adviser, Larry Kudlow, in an interview on "Fox News Sunday" with Chris Wallace, said both China and U.S. consumers would be hurt by the tariffs.

[ChemEngr79]

57 minutes ago, begooode said:

 

Trump wrote in the tweets that there was no "reason" for U.S. consumers to pay the tariffs, arguing in part that people in the United States could avoid paying the tariffs by buying products produced in other countries or in the United States.

 

What Trump fails to realize is that sourcing alternative supply for commercial and industrial goods is often a multi-year process even before the cascading local supply chain considerations.

 

Much of what we import from China are not fungible commodities like soybeans or crude oil...

 

Since there isn't global capacity to replace what we get from China, new facilities (in the US or elsewhere) will be required for much of our imports if companies decide they need to avoid the tariffs.

 

Production plants that cost hundreds or millions or billions of dollars take ~2-5 years to build after a decision is made. Most companies are currently taking a wait and see approach hoping these tariffs blow over.

 

 In the meantime, we will continue to import mostly from China and the US consumers will pay the 25% increase for a net loss to all. 

 

 

Edited May 13, 2019 by ChemEngr79

[begooode]

Trump: why did the costs of the MAGA hats go up by 25%!!  We need to increase the price to ensure no impacts to my donation flows!!

[chef]

1 hour ago, ChemEngr79 said:

What Trump fails to realize is that sourcing alternative supply for commercial and industrial goods is often a multi-year process even before the cascading local supply chain considerations.

 

Much of what we import from China are not fungible commodities like soybeans or crude oil...

 

Since there isn't global capacity to replace what we get from China, new facilities (in the US or elsewhere) will be required for much of our imports if companies decide they need to avoid the tariffs.

 

Production plants that cost hundreds or millions or billions of dollars take ~2-5 years to build after a decision is made. Most companies are currently taking a wait and see approach hoping these tariffs blow over.

 

 In the meantime, we will continue to import mostly from China and the US consumers will pay the 25% increase for a net loss to all. 

 

 

Yep. No one is building a Foxconn plant in Vietnam in a month. 

 

And even if you did, the workforce issue makes any sudden shifts (and by sudden I mean 2-3 years,) in tech production nearly insurmountable.  And that very much goes for here in the US as well. Meaning we couldn't staff all those jobs. And cannot even discuss wages.  Very different from say steel production or auto manufacturing where we've always been in the game albeit sometimes at higher cost. We just dont materially participate in tech manufacturing as in a Foxconn situation.  There is no immediate alternative. 

 

At least outside of arguing that we really dont need all these devices we think we need.  Which though potentially valid is a very different discussion. 

[begooode]

China strikes back and it seems the markets are not loving the news so far.  Go figure.

 

Soon after Trump tweeted "China should not retaliate," the country announced new tariffs

 

In a series of tweets this morning Trump took aim at China, writing that the country wants "to make a deal so badly" because the trade war is causing it to lose business to "Vietnam and other such countries in Asia." 

 

The tweets came just before China announced it will be raising tariffs on $60 billion worth of US goods beginning on June 1. 

 

Reminder: Trump's top economic adviser spent the weekend trying to defuse the trade war and demonstrate that trade negotiations between the two countries were proceeding.

[OILERMAN]

Trump can’t just say Putin told him to do it, he’s got to say something 

[OILERMAN]

Trump Seeks New $15 Billion Subsidy To Protect Farmers From His Own Trade War

 

The president falsely claims that tariffs are paid "directly" to the U.S. Treasury by China and indicates these nonexistent Chinese funds will cover the subsidy cost.

[MadMax]

6 minutes ago, OILERMAN said:

Trump Seeks New $15 Billion Subsidy To Protect Farmers From His Own Trade War

 

The president falsely claims that tariffs are paid "directly" to the U.S. Treasury by China and indicates these nonexistent Chinese funds will cover the subsidy cost.

I can't wait to see how the retards spin this.

[ChemEngr79]

3 hours ago, chef said:

Yep. No one is building a Foxconn plant in Vietnam in a month. 

 

And even if you did, the workforce issue makes any sudden shifts (and by sudden I mean 2-3 years,) in tech production nearly insurmountable.  And that very much goes for here in the US as well. Meaning we couldn't staff all those jobs. And cannot even discuss wages.  Very different from say steel production or auto manufacturing where we've always been in the game albeit sometimes at higher cost. We just dont materially participate in tech manufacturing as in a Foxconn situation.  There is no immediate alternative. 

 

At least outside of arguing that we really dont need all these devices we think we need.  Which though potentially valid is a very different discussion. 

Agreed.

 

Now at the margins, maybe ~10% of what we import from China can be replaced by currently available alternatives (still a lot of legwork and churn required to substitute); however, expecting much more than that even with 25% tariffs is pretty unlikely.

 

So the US consumers will be stuck with the 25% upcharge on ~90% of what we previously imported.

 

Yes, China will lose those marginal volumes and probably some additional from demand destruction caused by the higher prices.

 

A pretty solid lose/lose if large concessions are not extracted.

Edited May 13, 2019 by ChemEngr79

[chef]

25 minutes ago, ChemEngr79 said:

Agreed.

 

Now at the margins, maybe ~10% of what we import from China can be replaced by currently available alternatives (still a lot of legwork and churn required to substitute); however, expecting much more than that even with 25% tariffs is pretty unlikely.

 

So the US consumers will be stuck with the 25% upcharge on ~90% of what we previously imported.

 

Yes, China will lose those marginal volumes and probably some additional from demand destruction caused by the higher prices.

 

A pretty solid lose/lose if large concessions are not extracted.

It is a tough situation in that yes China in some ways IS screwing us over.  But we benefit from their low production cost as an level of standard of living.  People produce in China because it's generally the cheapest/best option.   Doing it elsewhere means our businesses make less money, and our consumers functionally get a pay cut since their pay checks will have less purchasing power. 

 

 I mean it's a whole helluva lot more complicated that than given, but in essence we've gotten ourselves - both of us really (meaning China too) - into a pretty unhealthy co-dependent relationship based on greed and need, not trust nor working together toward common goals.  We use each other, abuse each other. (Ok, this is starting to sound like me and my ex-wife again.... kidding! just been on the divorce jokes lately).  And though it can be validly argued why it shouldn't be like it is, well... it is.  And like a junkie coming off heroin sans methadone, you can say to yourself that you should quit, but it's going to suck hard in every way possible.

 

My take?  Work out whatever BS deal you need to now, knowing full well the Chinese won't enforce a ton of it. In the meantime do consider alternate sources of production both domestic and abroad (will all shift automated regardless so still be roughly a 90% reduction in staffing no matter where it takes place), giving industries a fighting chance to make shifts on a reasonable time line.  Eventually (like a decade+) things start to shift organically as Chinese labor market costs rise due to a likely growing national demand there for better wages and standard of living.  Maybe even have that conversation here about "stuff" and maybe why we don't need as much of it as we think - which also tanks the stock market except 10x so.  Therefore won't happen, shop away America.

 

 

[9 Nines]

Senior administration officials tell Axios that a trade deal with China isn't close and that the U.S. could be in for a long trade war.

 

The state of play: A senior administration official said the differences between the two sides are so profound that, based on his read of the situation, he can't see the fight getting resolved before the end of the year.

 

 

Trump yesterday held out the possibility of meeting Chinese President Xi Jinping at the G20 in Japan next month. That statement may have been made in part to calm the stock market, which yesterday had its worst day since January. (Lead Financial Times headline: Global markets reel.")

 

The bottom line: White House economic adviser Larry Kudlow was right when he said on Sunday that "both sides will suffer" in a U.S.-China trade war.

The Chinese economy will be harmed. But so, too, will America's. And so will American consumers, who will pay higher prices, and American farmers, who will be targeted for retaliation by China.

 

The question remains: Can Trump, facing a re-election race in 2020, outlast China's "president for life"?

 

Both Trump and Xi have to contend with hardliners in their parties. But only one of them can harness all the tools of authoritarianism.

 

Trump’s mindset on the Chinese is simple: They only respond to shows of brute force.

 

And he thinks they’ll suffer more than America will, because they buy fewer products.

 

I've asked several current and former administration officials whether Trump actually believes that China pays the tariffs — rather than the reality that U.S. importers and consumers do.

 

The consensus is "yes": That's what he actually believes.

 

And as one former aide said: There’s little point trying to persuade Trump otherwise, because his belief in tariffs is "like theology."

[WG53]

4 hours ago, Soxcat said:

The damn left is communist so of course they want China to have our secrets.  Their impact is actually far less significant on economic growth in the short term compared to any deal where we can prevent them from stealing from us long term. 

 

Oh, and China has put themselves in a co-dependent situation.  We are fine with or without them.  Despite what MSNBC and CNN say, Trump is doing the right thing. 

 

More Trump ball licking. 

 

Grow a fucking backbone you damn coward.

[Legaltitan]

So apparently trade wars are easy to win. And apparently China wants a deal "very badly". And Trump is the best at negotiating deals. 

 

So, almost a year after this trade war started... Why don't we have a deal? 

[Legaltitan]

Another query:

 

If tariffs are great and bring in billions into our great country, why would we work out a deal? Why not keep tariffs permanently? 

[begooode]

8 minutes ago, Legaltitan said:

So apparently trade wars are easy to win. And apparently China wants a deal "very badly". And Trump is the best at negotiating deals. 

 

So, almost a year after this trade war started... Why don't we have a deal? 

Nasty bit of trolling when "The Art of the Deal" author agreed to have his book reclassified as fiction after the story broke showing Trump's billion dollar loser.