China - USA trade war

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kingdragonfly

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#254382 9-Aug-2019 18:36

I don't know how Chinese-American trade war affects New Zealand economy, but interested in opinions.

Former Australian PM: Trump is wrong about China being a currency manipulator

CNBC Television

China's central bank has taken steps overnight Tuesday to steady its currency while still keeping it just a hair away from the key seven yuan-per-dollar level. Kevin Rudd, former Australian prime minister, ... join CNBC's "Squawk Box" team to discuss.

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#2293154 9-Aug-2019 18:57

I was going to start a thread on it, also the related cut of the OCR to 1%.

I guess I could be considered an economic pessimist at the moment, this is serious and puts NZ in a difficult position WRT trade and geopolitics. I hope it doesn't become a partisan sh*t-fight within NZ, as if NZ is seen to "takes sides" either way - we're going to lose.

There's nothing we can do to change what's going to happen.

kingdragonfly

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#2299187 14-Aug-2019 13:30

Trump and Xi Sittin’ in a Tree

By Thomas L. Friedman, New York Times

Both men have overplayed their hand and are desperate to be seen as the winner in their trade war.

By Thomas L. Friedman

I was glad to see the stock market get a boost from the news that Chinese and U.S. trade negotiators were talking again and that President Trump blinked a bit and pulled some of his planned tariffs.

But don’t be fooled. Trump and President Xi Jinping of China are still locked in a cage match over who is the true big dog in today’s global economy. Both are desperate not only to “win,” but to be seen to win, and not be subjected to the scorn of their rivals or critics on social media.

Precisely because neither leader feels he can afford that fate, both have overplayed their hands. Xi basically believes that nothing has to change — and all can be made to stay the same by the force of his will. Trump basically believes that everything has to change — and all can be made to change by the force of his will.

The rest of us are just along for the ride.

Let’s look at both men’s calculations and miscalculations. Trump was right in arguing that America should not continue to tolerate systemic abusive Chinese trade practices — intellectual property theft, forced technology transfers, huge government subsidies and nonreciprocal treatment of U.S. companies in China — now that China is virtually America’s technology equal and a rising middle-income country.

But fixing that problem does not seem to be Trump’s only, or even primary, goal. He is obsessed with China’s persistent trade surpluses with America, even though economists keep telling him those are driven by more than just China’s trade barriers. They’re primarily driven by U.S. fiscal policy, interest rates and America spending more than we produce, and importing the difference.

In his confusion, Trump has never spelled out what he considers “victory” in the trade war with China, which he initiated and declared to be “easy” to win. Are we seeking reciprocal treatment for U.S. companies in China (which should be the goal) or to eliminate our trade deficit with China? The first takes a lot of work with China, the second a lot of work at home.

But let’s assume that it’s the first. There are two ways to go about this: with tariffs or with allies. Trump has chosen to bludgeon China with tariffs on all $500 billion-plus of China’s exports to America and to go it alone — without the rest of the world — arguing that China only understands force.

I think there was a good case for the first $50 billion in tariffs that Trump imposed last year. They were focused on protecting critical U.S. industries — from microchips to robotics to machine tools — that are the foundation of a 21st-century economy, which, for national security reasons, the U.S. does not want to see entirely migrate to China.

But beyond that, relying solely on the tariffs hammer is a mistake. Tariffs hurt U.S. consumers and farmers as much as Chinese manufacturers, which is why Trump just blinked, and they have unintended consequences.

As Weijian Shan, a leading Hong Kong-based investor in China and author of the book “Out of the Gobi,” pointed out to me, in 2010 China unveiled the fastest supercomputer in the world. It was built with U.S.-made microprocessors.

In 2015, however, the Obama administration denied Intel a license to sell its microprocessor chips to four supercomputer labs in China because they worked on technology for the Chinese military.

So, the following year, Shan noted, China launched a new supercomputer powered entirely by homemade microprocessors. “As of 2018, China led the global supercomputing league table, with 206 of the world’s 500 fastest supercomputers,” said Shan. “The United States came in second, with 124.”

Lately, Trump has curbed the ability of U.S. software and hardware companies to sell their products to Huawei, a Chinese tech giant. So last week Huawei, the third-largest phone handset maker in the world, after Samsung and Apple, announced it was creating its own operating system to replace Google’s Android. It won’t be as good — today. But in a couple years?

I suspect China’s leaders are now drawing up a list of advanced industrial products for which they will never allow themselves to depend on America again. What are the long-term consequences of that?

There was another way: Trump should have signed the Trans-Pacific Partnership trade deal, which would have aligned the 12 biggest Pacific economies, excluding China, behind U.S.-designed global trading rules. Then he should have lined up the European Union countries, which suffer the same trade problems with China as we do, on our side. And then he should have told the Chinese we wanted to negotiate, out of the public eye, a new set of reciprocal trade arrangements: Whatever access Chinese companies received in the TPP and E.U. markets, we would get the same in China.

Instead of presenting this as America versus China vying to see whose narrow interests would prevail, Trump should have framed it as the world versus China vying to determine which global rules would prevail.

(What’s truly crazy is that Trump hasn’t explained to the world that his team has actually been demanding that China change its laws, to make some of its worst trade abuses illegal, which would actually benefit every country that trades with China.)

We want a world united by common rules, not one divided by a new digital Berlin Wall between America and China. And if it is going to be divided, let it be because the whole world sees that China won’t play by those common rules, not simply that China refuses to submit to a U.S. president obsessed with being seen to win and appears to be interested in America first and only.

Trump’s go-it-alone policy has in many ways made it easier for Xi to disguise the fact that no one really knows what China’s position is on trade. First, Xi’s team signaled a willingness to make concessions to Trump and then in May it pulled all the way back.

Xi has a real dilemma. China is so much more open today than it was 30 years ago but so much more closed than it was five years ago. And that is because Xi has been tightening the control of the Chinese Communist Party and made himself president for life.

But those moves fly in the face of what China needs to advance from a middle-income country to a high-income country. That requires more innovation, flexibility and openness — to ideas, to people and to trade. I don’t buy the argument that China has found a magic formula for making political repression, state control over large sections of the economy and innovation all work together for the long haul.

Trump thinks he can get all the change he needs without allies. Xi thinks he can keep everything the same — at home, vis-à-vis the U.S. and in Hong Kong — without change. I think they’re both wrong.

But I’d rather be Trump than Xi. Trump can retreat, compromise, change on a dime and call anything a win. We saw that on Tuesday. If Xi retreats on Communist Party control over his economy, and over Hong Kong, his whole system can unravel. That’s why this moment is so complicated and fraught with danger.

At a certain point, the more things change the more they can’t stay the same.

Fred99

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#2299540 15-Aug-2019 08:45

But I’d rather be Trump than Xi. Trump can retreat, compromise, change on a dime and call anything a win. We saw that on Tuesday. If Xi retreats on Communist Party control over his economy, and over Hong Kong, his whole system can unravel. That’s why this moment is so complicated and fraught with danger.

I don't agree with that part. To quote Bill Clinton's 1992 campaign "The economy, stupid".

Trump is desperate to be reelected, but if he loses support for the claim he's greatest smartest POTUS of all time, he's toast, Wall Street will turn on him, even Fox news will turn on him.

He's desperately tweeting - blaming the US federal reserve not dropping rates for the 3% slump on US share markets overnight. Now it's probably true that if they'd dropped rates further, it would have delayed the inverted yield curve, but if the US is headed toward recession, he's probably run out of time to defer it until after election 2020. Those rates and the yield curve aren't the cause of recession, they're reactions to perceptions of the market. He can try to talk markets up and interest rates down, but that doesn't change the fundamentals. If the rest of the world is headed toward recession as seems quite likely, it'll happen in the US too. If Trump wants to change that, he's going to have to cancel tariff hikes on China - Xi will have won.

Bluntj

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#2299602 15-Aug-2019 09:43

Fred99:

But I’d rather be Trump than Xi. Trump can retreat, compromise, change on a dime and call anything a win. We saw that on Tuesday. If Xi retreats on Communist Party control over his economy, and over Hong Kong, his whole system can unravel. That’s why this moment is so complicated and fraught with danger.

I don't agree with that part. To quote Bill Clinton's 1992 campaign "The economy, stupid".

Trump is desperate to be reelected, but if he loses support for the claim he's greatest smartest POTUS of all time, he's toast, Wall Street will turn on him, even Fox news will turn on him.

He's desperately tweeting - blaming the US federal reserve not dropping rates for the 3% slump on US share markets overnight. Now it's probably true that if they'd dropped rates further, it would have delayed the inverted yield curve, but if the US is headed toward recession, he's probably run out of time to defer it until after election 2020. Those rates and the yield curve aren't the cause of recession, they're reactions to perceptions of the market. He can try to talk markets up and interest rates down, but that doesn't change the fundamentals. If the rest of the world is headed toward recession as seems quite likely, it'll happen in the US too. If Trump wants to change that, he's going to have to cancel tariff hikes on China - Xi will have won.

It was Trump who started the trade war by implementing tariffs. He must have thought that China wouldn't dare hit back.

kingdragonfly

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#2300167 16-Aug-2019 08:35

How World Leaders Ruined the Global Economy

New York Times, By Steven Rattner

They took the best growth picture in a decade and put us in danger of recession.

Why are so many key global leaders pursuing so many stupid economic policies?

As recently as January 2018, the International Monetary Fund issued one of its most upbeat economic forecasts in recent years, extolling “broad based” growth, with “notable upside surprises.”

By last month, the fund had sliced its forecast for expansion this year to 3.2 percent — a significant falloff from the 3.9 percent projection reiterated just six months earlier — and had pronounced the economic picture “sluggish.” American investors are more concerned; the bond market is sounding its loudest recessionary alarm since April 2007.

The deterioration in the economic picture is not the consequence of irresponsible behavior by banks or a natural disaster or an unanticipated economic shock; it’s completely self-inflicted by major world leaders who have delivered almost universally poor economic stewardship.

The trade war initiated by President Trump sits firmly atop the list of bad policies. But Brexit has tipped Britain into economic contraction. With European governments unwilling to pursue structural reforms, the continent is barely growing. President Xi Jinping of China has focused on standing up to Mr. Trump and solidifying his own power. After a promising start reforming the economy, India’s prime minister, Narendra Modi, has turned instead to oppressing his country’s Muslim minority.

And on and on.

None of this was necessary. As the January 2018 I.M.F. report indicated, the world economy was firing on all cylinders — “the broadest synchronized global growth upsurge since 2010” — as jobs were being added and inflation remained subdued.

Yes, Mr. Trump’s trade war and Brexit loomed, but amid hope that the former would prove empty and the latter would be softened.

Not so today.

Often against the recommendations of his more sensible advisers, Mr. Trump has implemented the country’s most protectionist actions since the 1930s. As a result, world trade has begun to fall for the first time in a decade, with noticeable economic impact. Last week, Goldman Sachs cut its already modest projections for fourth-quarter growth to 1.8 percent from 2 percent.

That’s a far cry from the “4, 5, 6” percent that Mr. Trump talked about just before his tax cut passed.

Nor has that been Mr. Trump’s only misstep in economic policy. Instead of nurturing growth with important investments like a robust infrastructure program, Mr. Trump deployed his political capital to secure tax cuts that disproportionately favored business and the wealthy.

The “sugar high” they produced quickly wore off. And now, instead of developing better policies, the president has chosen to attack the Federal Reserve, whose independence is cherished by investors, business people and economists.

Boris Johnson, Britain’s new prime minister, abandoned his predecessor’s notion of a “soft Brexit” that would have maintained some ties with the European Union. Instead, he reaffirmed his promise that his country would leave the E.U. on Oct. 31 with or without a deal. The pound quickly fell to its lowest level against the dollar since 1985. (It has since recovered slightly.)

Then there’s China. By virtue of both its remarkably fast industrialization and its protectionist policies, the nation has long been a trade threat. But four years ago, the government issued its “Made in China 2025” economic manifesto, which put in writing China’s plans to attain a leadership position in key new sectors, including robotics, pharmaceuticals and aerospace.

The notion of China using its state power to take on important American and European industries instead of pursuing market reforms set off alarm bells across the political spectrum and provided a concrete underpinning for Mr. Trump’s trade confrontation.

Mr. Xi, rather than acknowledging China’s protectionist practices, has proved unwilling to accept a new trade agreement with effective enforcement provisions. That has raised doubts about whether China is seriously interested in reforming its unfair trade practices — keeping key markets fully or partially closed, using state subsidies to favor its companies, forcing American companies to transfer technology to China and the like.

Of course, at least in the world’s democracies, voters bear substantial responsibility for electing these inadequate leaders. The rise of populism as a reaction to disaffection about economic and social conditions has been well documented as a principal driving force.

But the world is now suffering the consequences of these poor choices. Even in China, Mr. Xi did not take power forcibly; he rose through the Chinese political system — much like the Civil Service in other countries — and was awarded the presidency by his peers.

Occasionally, good choices have been made, such as the election of President Emmanuel Macron of France. But even that has not led to progress; public support for Mr. Macron turned to opposition when he instituted the much needed policy changes that he promised.

Any chief executive officer who botched his or her job as badly as most of these leaders have would be fired. Let’s hope that voters come to that realization when given the chance.

https://www.nytimes.com/2019/08/15/opinion/recession-stock-market.html

kingdragonfly

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#2301224 18-Aug-2019 15:19

Ho! Ho! Ho! The Tariffs Are Delayed

The Late Show with Stephen Colbert

Once again, President Trump has saved Christmas!

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Fred99

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#2301696 19-Aug-2019 13:19

kingdragonfly: Ho! Ho! Ho! The Tariffs Are Delayed

kingdragonfly

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#2305453 24-Aug-2019 19:24

Trump Jokes About Making the Dow Fall Nearly 600 Points

Vanity Fair, by Bess Levin

Earlier today, Donald Trump caused the Dow Jones Industrial Average to fall hundreds of points after he embarked on one of his most belligerent, unhinged rants to date.

Furious that China had (predictably!) retaliated against the US with $75 billion in fresh tariffs, the president—whose election supposedly signaled a “rebirth of capitalism”—had a full on authoritarian meltdown.

He tweeted that “our great American companies are hereby ordered to immediately start looking for an alternative to China,” despite having no power to do so; demanded that they manufacture their products in the United States; claimed that the US is “better off” without the second largest economy in the world; and threatened to respond to China’s aggression with more tariffs this afternoon.

Oh, and he also labeled the Federal Reserve chairman Jerome Powell, who Trump himself appointed, an “enemy” of America.

Yet according to Tariff Man, it wasn’t any of these things that caused stocks to plunge:

The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!

Funny! It’s hard to say which is scarier: that Trump actually thinks stocks fell off a cliff because a guy who didn’t even make the Democratic debates dropped out of the race, or that he’s making a joke that it could have been anything—and not, say, the fact that he spent the morning tweeting the economy closer to a recession. F_cking with people’s retirements for sport, comedy gold! Get this guy to an open mic night!

“Am I right that Trump sparked a market tanking, and now is making a stupid joke about it? Why would he do that?” asked the Washington Examiner's Tim Carney, a fellow at the conservative American Enterprise Institute. Why indeed!

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#2305591 25-Aug-2019 09:03

Trump Asserts He Can Force U.S. Companies to Leave China

New York Times, By Peter Baker and Keith Bradsher

President Trump asserted on Saturday that he has the authority to make good on his threat to force all American businesses to leave China, citing a national security law that has been used mainly to target terrorists, drug traffickers and pariah states like Iran, Syria and North Korea.

As he arrived in France for the annual meeting of the Group of 7 powers, Mr. Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977, a law originally meant to enable a president to isolate criminal regimes, not sever economic ties with a major trading partner over a tariff dispute.

“For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977,” Mr. Trump wrote. “Case closed!”

The president’s threat to all but cut off one of America’s most important trading relationships amid a so-far-unsuccessful trade war could disrupt a global economy already on the edge of recession while further unsettling companies in the United States that rely on China in their production of everything from clothing to smartphones.

Mr. Trump has often made drastic threats as a negotiating ploy to extract concessions, as when he vowed to close the border with Mexico or impose tariffs on its goods to compel action to halt illegal immigration. But if he were to follow through in this case, it would be the most significant break with China since President Richard M. Nixon’s diplomatic opening to Beijing in the early 1970s.

Even if it never comes to that and Mr. Trump ultimately backs down, the threat itself could still have a long-lasting impact on relations with China and perhaps embolden hard-liners in Beijing pressing President Xi Jinping to take a more confrontational approach to the United States.

Mr. Trump’s claim that he can order American companies to pull out of China also represented the latest audacious assertion of power by a president who has repeatedly crossed lines his predecessors did not.

While he took office criticizing President Barack Obama for exceeding his authority, Mr. Trump has gone even further in finding creative ways to take action on his priorities.

“Any invocation of the International Emergency Economic Powers Act in these circumstances and for these purposes would be an abuse,” said Daniel M. Price, who was an international economic adviser to President George W. Bush. “The act is intended to address extraordinary national security threats and true national emergencies, not fits of presidential pique.”

Under the weight of Mr. Trump’s tariff war, China has already fallen from America’s largest trading partner last year to the third largest this year. The United States remains China’s largest trading partner. China said Friday it would raise tariffs on American goods in retaliation for Mr. Trump’s latest levies, and he vowed hours later to increase tariffs even further.

China’s Commerce Ministry issued a statement on Saturday warning the United States to turn back from escalating conflict, but did not promise additional trade measures.

“This unilateral and bullying trade protectionism and extreme pressure violate the consensus of the heads of state of China and the United States, violate the principle of mutual respect, equality and mutual benefit, seriously undermine the multilateral trading system and the normal international trade order,” the statement said.

American business leaders warned that forcing companies to leave China would hurt the competitiveness of American industry and cause heavy financial losses.

“It’s difficult to move out of China, and any time they are forced to do so by tariffs, this is a momentous act,” said Ker Gibbs, president of the American Chamber of Commerce in Shanghai. ”We are in no position to give up the China market — it’s too large, it’s too important.”

Business leaders said the result could be a flurry of fire sales at greatly reduced prices as companies from other countries snap up American business interests.

Peter Baum of Baum-Essex, a firm that makes products like umbrellas for Costco and cotton bags for Walmart, said he had already moved much of his manufacturing to factories in Vietnam and Cambodia over the last year because of Mr. Trump’s tariffs.

As the trade war shows up in American cash registers, stock markets and retirement account statements, American shoppers and retirees will grow angry, Mr. Baum said.

“Both Trump and Xi have backed themselves into such a corner that this will go on through the U.S. election,” he said. “These two guys don’t realize that this could cause a global depression, not recession.”

In raising the possibility of an American withdrawal on Friday, Mr. Trump framed it not as a request but as a dictate he had already issued.

“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing our companies HOME and making your products in the USA,” he wrote on Twitter.

In fact, aides said, no order has been drawn up nor was it clear one would be. For the moment, they said Mr. Trump was signaling American businesses to begin to disentangle from China on their own.

But it accompanied a radical shift in assessment of Mr. Xi. In the past, Mr. Trump has effusively praised the Chinese leader as a friend, taking him at his word that he would buy American soybeans and stem the flow of fentanyl to the United States. In the last two days, Mr. Trump has accused Mr. Xi of not living up to his promises and called him an “enemy.”

Andy Mok, a trade and geopolitics analyst at the Center for China and Globalization in Beijing, said China was coolly assessing the latest American actions.

“In negotiations, and especially in high-stakes negotiations, the side that reacts emotionally generally is the side that does not do well,” he said. “The U.S. side is approaching this from a more emotional side, while China is more calm and calculating.”

Under the International Emergency Economic Powers Act, a president can declare a “national emergency” in case of “any unusual and extraordinary threat” to “the national security, foreign policy, or economy of the United States” from abroad. This triggers special authority for the president to regulate “any transactions in foreign exchange” by Americans.

The law was passed to define and restrain presidential power, which until then had been interpreted expansively under the Trading with the Enemy Act of 1917. It has served ever since as the main source of authority for presidents to impose sanctions on countries or individuals in response to specific national security threats, such as the Iranian hostage crisis that began in 1979.

As of March 1, presidents had declared 54 emergencies under the law, of which 29 were still active, according to the Congressional Research Service. Presidents have used it to target international terrorists, drug kingpins, human rights abusers, cyber attackers, illegal arms proliferators and multinational criminal organizations.

Presidents invoked the law when Iraq invaded Kuwait in 1990, when Serbia sent troops into Kosovo in 1998 and when Russia annexed Crimea in 2014. Among the countries targeted have been international outliers like North Korea, Sudan, Somalia, Yemen, Syria, Congo and Venezuela.

Using it in a trade dispute with a country like China would be a drastic departure. But Mr. Trump could make the argument that China constitutes a national security threat through the theft of intellectual property or its military buildup in the South China Sea.
...

https://www.nytimes.com/2019/08/24/world/europe/trump-g7-summit.html

Fred99

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#2305896 26-Aug-2019 08:17

Trump seemed to indicate at G7 that he'd reconsider tariff warfare on China. However his advisors seem to have reacted by saying that he meant to say that the US would go even harder, suggesting that an additional 5% would be added to tariffs already implemented or planned.

Apparently Boris has been appealing for Trump to de-escalate trade war, understandable from both an ideological perspective, but also in facing the likely horror of the impact of a no-deal brexit on the UK economy, that it's only going to be worse if there's a simultaneous decline in the global trading environment. He's also between a rock and a hard place WRT a trade deal with the US. Trump's unpopular in the UK - even with many brexiteers. While it's unlikely that a deal would force the UK to "privatise the NHS" as remainers are suggesting, it's highly likely that the US negotiators would want to impose terms on patents / IP - much the same as what they negotiated for with TPP, but in that case met resistance and had to compromise. Any deal with the US would result in higher healthcare costs. That's going to be a bucket of cold sick to swallow. The UK isn't in a strong position to negotiate. Trump's also not in a position to negotiate freely - Pelosi has stated that dems will block any UK/US trade deal if peace in Ireland is threatened, and that not only seems inevitable the way things are headed toward a no-deal crash-out, but until the UK actually leaves - nobody knows.

Behind this also seems to be general/bipartisan consensus in the US, that increased trade with China over the past 1/2 century achieved nothing to benefit the world. IMO that's mistaken - I can remember Nixon's first visit to China on the TV news.
Skip forward and I can drive across town, jump on a US made Boeing owned and operated by a Chinese or NZ airline, and fly to China for a holiday or business trip. Hundreds of millions of Chinese have been raised out of poverty. The world is (or was) a better and safer place than 1972, despite continued Chinese brutality, totalitarianism, and unfortunate reversion / hegemony over the past few years.

If US unilateral economic warfare was solution to US problems, then there wouldn't still be a Castro running Cuba, NK wouldn't be test firing missiles, and Iran wouldn't be enriching uranium above levels agreed to before Trump got involved. It's delusional to think demonizing and isolating China can work - even if action is needed.

It's also delusional to expect that short-term, every US manufacturer with Chinese production can up sticks immediately and relocate to some low labour cost country and start churning out iPhones, and airplane parts, as if they might be able to if they were tee-shirts and plastic toys.

While Trumpists will proclaim that Trump hasn't started any wars, he's making the world a far more dangerous place. If the response to that danger is increased authoritarianism (likely) then the world takes a 100 year leap into the past.

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#2305928 26-Aug-2019 09:46

Fred99: ...Apparently Boris has been appealing for Trump to de-escalate trade war...

Britain’s Johnson offers rare — yet gentle — jab to Trump on China trade war

Washington Post, By Michael Birnbaum

British Prime Minister Boris Johnson on Sunday offered rare face-to-face criticism about the U.S. trade war with China to President Trump, but it was presented so gently that Trump may barely have registered it.

The two disrupters-in-chief met head-to-head for the first time since Johnson ascended to 10 Downing Street last month, over breakfast at the Group of Seven summit. Johnson’s assumption of power gives Trump a new spitball-throwing comrade at international meetings where the U.S. leader has often been isolated in his attempts to dismantle the multilateral global order.

But Johnson has had to walk a tightrope in his relationship with Trump, anxious to secure a strong trade partner in the middle of Brexit negotiations but wary of coming off as Trump’s lap dog. The U.S. leader is deeply unpopular in Britain. Johnson, who has a one-seat majority in the House of Commons, may soon face elections. Johnson has sometimes been called the “Britain’s Trump” — in a way that has not always been positive.

So Johnson treaded carefully on Sunday.

“Look, I just want to say I congratulate the president on everything that the American economy is achieving. It's fantastic to see that,” Johnson said. “But just to register the faint, sheeplike note of our view on the trade war, we’re in favor of trade peace on the whole, and dialing it down if we can.”

The “sheeplike” attitude may not play well in Britain. But the criticism probably will.

Even more extraordinarily, the jab from Johnson came shortly after Trump said he had gotten no pressure from allies to give up the trade war with China.

“I think they respect the trade war,” Trump said. “So, the answer is, nobody has told me that, and nobody would tell me that.”

Johnson said that “the U.K. has profited massively in the last 200 years from free trade.”

Trump pushed back, just a little bit.

“How about the last three years?” he said, a reference either to the three years since Britain voted to leave the European Union or to Trump’s 2016 election victory. “Don't talk about the last three. Two hundred, I agree with you.”

The body language was nothing but friendliness. The two leaders pointed at each other and grinned. They told jokes and cracked up their aides. Trump and Johnson are both nationalists and populists, offering a devil-may-care attitude toward some of the international institutions that have underpinned the global order since World War II.

But the friendliness masked a range of disagreements. Britain wants to preserve the 2015 nuclear deal with Iran; Trump pulled out of it. Britain is waffling about a broad ban on Huawei technology in its cellular networks; Washington is pushing one. Britain has also sought swifter movement to fight climate change; Trump questions the science.

Still, at their Sunday breakfast — hours after Trump clashed with other leaders abut his desire to bring Russia back to the annual summits — the U.S. leader had only friendly words for his British counterpart, at least in public.

“He's the right man for the job. I've been saying that for a long time. It didn’t make your predecessor very happy,” Trump said, referring to his frosty relationship with former British leader Theresa May.

Trump said the United States and Britain could sign a free trade deal as soon as Britain leaves the European Union.

“So, we're going to have some very good trade talks and big numbers,” Trump said. “Before, we were sort of stymied. Well, I was stymied by the other side.”

Britain faces an Oct. 31 deadline to leave the European Union. If it exits without a transition deal to ease the way, analysts warn of deep economic pain on both sides of the English Channel.

https://www.washingtonpost.com/world/britains-johnson-offers-rare--yet-gentle--jab-to-trump-on-china-trade-war/2019/08/25/f854aecc-c720-11e9-8067-196d9f17af68_story.html

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Fred99

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#2306018 26-Aug-2019 10:57

kingdragonfly:

“So, we're going to have some very good trade talks and big numbers,” Trump said. “Before, we were sort of stymied. Well, I was stymied by the other side.”

Pelosi:

If Brexit undermines the Good Friday accord, there will be no chance of a U.S.-U.K. trade agreement passing the Congress. The peace of the Good Friday Agreement is treasured by the American people and will be fiercely defended on a bicameral and bipartisan basis in the United States Congress.

I assume that when he said he was "stymied by the other side", he means by May. There's at least another "other side" to the story.

Futures trading has opened on US exchanges, immediately down over 1% on top of the 2% fall on Friday. Gold is up, oil is down.

Trump's had a great G7 according to Trump, he sold some corn to Japan. He'd better come up with some good news fast. I'm sure he'll give it a go.

(I'm actually becoming more suspicious that the conspiracy theory could be true - about Trump & Assoc running an extension of the "pump and dump" schemes that he used in the '80s, those of his cronies who are "in the know" about future rants and tweets are running the biggest insider trading scheme of all time - reaping billions or even trillions on the market swings he can deliberately create with fewer than 255 characters).

Fred99

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#2306087 26-Aug-2019 11:45

See - Trump reads my posts (/s) - within a few minutes he posts this:

I'd expect some follow-up to that tweet, he'll probably be desperately trying to arrange a meeting with Xi to announce talks or whatever, claiming victory.

If the leader of any other first-world nation carried on like him - deliberately interfering with markets, there would be bi/multi partisan calls for their resignation. Rightly so.

kingdragonfly

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#2306090 26-Aug-2019 11:52

Reminds me of this cartoon

kingdragonfly

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#2306227 26-Aug-2019 14:57

Business Groups Warn of Peril as Trump’s Trade War Spirals

New York Times, By Nathaniel Popper

The latest whipsawing escalations in the United States’ trade war with China prompted a wide array of business organizations to warn over the weekend that American consumers and workers would soon be caught in the crossfire.

It is now looking increasingly likely that few large American companies will be able to sidestep the toll exacted by the new tit-for-tat tariffs that China and President Trump rolled out on Friday.

Many business leaders have kept a low profile as the trade war intensified, for fear of attracting President Trump’s ire, and in the hope that the threats of tariffs could be negotiating tactics that will lead to some sort of trade agreement.

But with several tariffs already in place, and President Trump staking out an even more aggressive stance on Friday, many industries are reckoning with just how serious the situation has become.

Joshua Bolten, the president and chief executive of the Business Roundtable, an organization representing the leaders of the largest American companies, said on Sunday that many C.E.O.s were already “poised right on top of the brake.”

“The risk is that everybody’s going to slam on the brake, and that would be a disaster,” Mr. Bolten said on “Face the Nation” on CBS.

President Trump’s latest moves, Mr. Bolten said, could “disrupt trade and commerce in a way that would cause huge damage — not just to the Chinese economy, but to the global economy and the U.S. economy.”

The American economy has so far been relatively resilient as the two sides battle. But several recent signs suggest that the tit-for-tat is beginning to broadly hit American businesses.

The American manufacturing sector, for instance, shrank in August for the first time since 2009, according to data released last week from the research group IHS Markit.

“America’s manufacturing workers will bear the brunt of these retaliatory tariffs, which will make it even harder to sell the products they make to customers in China,” the president and chief executive of the National Association of Manufacturers, Jay Timmons, wrote on Twitter on Friday.

While corporate earnings have held strong, several companies said last week that they were trimming their profit expectations as a result of the trade war.

On Friday, after China announced new tariffs and Mr. Trump ordered American companies out of China, the Standard & Poor’s 500 index slid 2.6 percent and the tech-heavy Nasdaq composite fell 3 percent. After the markets closed, the president announced more tariff increases.

China said on Friday morning that it would impose new tariffs on $75 billion of American imports. A few hours later, President Trump announced on Twitter that he would be raising tariffs further on $550 billion of goods coming from China.

The biggest shock was from Mr. Trump’s statement that he was ordering American companies to “immediately start looking for an alternative to China.”

The president said he had the power to do so as a result of a 1977 law that has traditionally been used to deal with security and military threats.

Over the weekend, some of Mr. Trump’s advisers tried to somewhat soften the blow of the president’s words.

Treasury Secretary Steven Mnuchin, speaking on “Fox News Sunday,” said that Mr. Trump had the authority to make such a demand if he declared a national emergency but that he had not yet done so.
...
There is still significant uncertainty on how many of the steps that China and Mr. Trump have announced will come into effect. The president has stepped back or delayed previous tariffs. And on Sunday the president said he was having “second thoughts” about the threats he made last week. But shortly thereafter, the White House press secretary, Stephanie Grisham, said that the president’s regret was that he had not raised tariffs even further.

American businesses have already begun taking steps to respond. The toymaker Hasbro said last month that it was planning to shift a significant portion of its manufacturing from China to other Asian countries by 2020.

The American toy industry is particularly reliant on Chinese factories, which account for 88 percent of its production, according to the National Retail Federation. But the figures are also large for other major portions of the retail industry.

David French, the senior vice president for government relations at the retail federation, said this weekend that companies were facing a difficult road because it could take years to make the kind of moves that the president has demanded.

“It’s impossible for businesses to plan for the future in this type of environment,” Mr. French said in a statement. “The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers. Where does this end?”

President Trump has said that he expects China to pay the costs of the tariffs he has imposed. But the direct costs of the tariffs are generally paid by the companies importing goods from China, who can then pass them along to consumers.

The Consumer Technology Association, which represents the largest electronics companies, has said that the tariffs are already costing the American tech sector $1.3 billion a month, and could raise the price of cellphones by $70 and the price of laptops by $120, on average.

JPMorgan Chase analysts recently predicted that the overall costs to American families of the tariffs were likely to be between $1,000 and $1,500 a year.

“Tariffs are taxes on Americans, putting us on the wrong economic path and compromising our global leadership,” the president and chief executive of the technology association, Gary Shapiro, said on Friday. “How much longer will our families, companies and economy be forced to bear the financial burden of this misguided trade policy?”

China appears to be aiming its tariffs at parts of America where support for President Trump is particularly strong, like farm country in the Midwest. China’s actions on Friday, for instance, add 5 percentage points to the 25 percent tariff already paid on American soybeans.

The president of the American Farm Bureau, Zippy Duvall, said after the latest announcements that “continued retaliation only adds to the difficulties farm and ranch families are facing and takes the situation in the exact wrong direction.”

China also added new tariffs to cars made in America. Tesla, as well as the Germany carmakers Daimler and BMW, are the most vulnerable to the additional levies. Six of the top 10 vehicle models exported from the United States to China, the world’s biggest car market, are from the two German brands, according to the forecaster LMC Automotive.

In private, auto executives say that, for now, the uncertainty is a greater concern than the potential material impact of the tariffs. One auto executive who spoke on the condition of anonymity said the industry was more worried that it cannot predict what might happen next or how bad it might get.

https://www.nytimes.com/2019/08/25/business/trump-trade-war-businesses.html

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