Here’s What China Will Do Under ‘Trade War Light’ And ‘Trade War Heavy’
China trade Trump xi jinping

Here’s What China Will Do Under ‘Trade War Light’ And ‘Trade War Heavy’

Ok, so assuming Trump manages to refocus after spending his morning gaming out possible scenarios for a "fast and hard" fist fight with former VP Joe Biden, the President will take action against China this afternoon in what's widely being billed as a significant escalation in global trade tensions. This is the result of U.S. Trade Representative Robert Lighthizer's investigation into China’s IP practices (the section 301 probe). Basically, Lighthizer can do whatever he wants if Trump gives

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21 thoughts on “Here’s What China Will Do Under ‘Trade War Light’ And ‘Trade War Heavy’”

  1. So we continue to “quake and shiver” like children and put up with whatever China does? China will do what China wants to do. Once they get to a self-sustaining economy, they will do all that you say and more, tariffs or not. All this fearmongering about “What will China do” is companies not wanting to give up their short-term profits. In any trade war scenario, China will suffer more than the US. That’s a given.

    At last we have a president with the balls to deal with China. Unfortunately, it has to be this dude.

    And Larry Kudlow is a joke. Every time he talks on CNBC, the others can barely supress their mirth. What a terrible choice!

    1. “China will suffer more than the US. That’s a given.”

      Well according to the Swiss banking giant UBS, in 2017 the Chinese consumer economy was US$7-trillion and growing at 9% per year with 50% household savings rate, while the US consumer economy was only $5-trillion growing at 2% and just 1% savings rate (means no future potential). Simple arithmetical consequence of one country having 4.2 times as many people as the other plus a faster growing, larger economy now.

      Bottom line: Swiss banks and wealth managers seem to disagree with your assessment.

      But, even if one accepts your hypothesis, both sides *will* LOSE (which should be point #1, full-stop)… And yours begs the question, who is more tolerant of any suffering? The ones who’ve been living a relatively cushy life for many decades or the ones who are already used to many decades of material hardship until recently and even inconceivable suffering in their living memory?

      Not sure about Kudlow being a totally “terrible choice”, but Trump sure was.

  2. I can’t believe for the Heavy scenario that they missed the checkmate option to cut-off rare earth minerals.

    Would soon mean the end of everything from IT/telecomm to electricity generation, manufacturing to military

    It’s precisely what Xi did over the islands dispute with Japan which then had no choice but to acquiesce.

    Seems like Mr Trump hasn’t thought this through much. But Mr Xi might well save this “trump” card as a contingency in case there’s ever something more serious than just trade frictions.

        1. I don’t think someone in China who must suddenly pay way more for US pork or beef feels he is kicking ass, nor of course does the US producer who is losing sales. As you wrote above, everyone loses and there are bad consequences. Stocks are down bigly this week everywhere and the dollar has been crushed – which for Americans means a double ass-kick to their financial net worth. So indeed, everybody is losing, except for the damn governments collecting more tax in the form of tariffs.

        2. But also, even with a large economy, they (China) are way behind in income per person. That’s because they have 4.2 times as many people with a similar sized economy that must be shared among so many people, So they’re about 75% poorer per person, and can’t catch up for many decades on that metric.

  4. This trade war, that we can only lose, will only have a lot of bad consequences. It will be bad for the stock market, bad for the economy, bad for the dollar, etc. Whenever the government tries to micromanage the economy, using taxation (tariffs), regulations, etc. it is saying we want a different outcome than the outcome that a free market determines. The government prevents the market from acting freely, and tries to manipulate it, to derive a political agenda, commanding decisions from the top down. Think the last time we had tariffs was under Baby Bush, but they didn’t last long after the administration “realized” we lost 200,000 US manufacturing jobs as a result.

    1. Kevin,
      Free market or “free” market? China, EU and others have pursued a mercantilism approach while the US has played open and free to our detriment because it was very good for the 1%. Everyone should play by the same rules: everyone open or everyone mercantilism. Obviously, everyone open might be preferred for a higher equilibrium state of trade and prosperity. But, fighting with your hand tied behind your back against someone fighting with both is silly.
      Charles

      1. Ok except that, almost everywhere, people say they play fair while everyone else takes unfair advantage, lol. Newsflash: US is among the worst cheaters of all.

        Fact: Since Mr Trump took office, the dollar has been devalued 23 fucking percent, intentionally if you heard US Treasury Secretary Mnuchin at Davos brag that dollar devaluation is helping US exporters. If that’s not cheating and “mercantilism”, then what the hell is? Obviously the Europeans think so because Draghi basically said as much in his next ECB presser.

        Meanwhile, Mr Trump has the audacity, or the ignorance or most likely both, to call others “currency manipulators”. Y’know, those whose currencies have in fact surged against Trump’s dollar devaluation – from Europe to Japan to China.

        A 23% currency devaluation is effectively equivalent to imposing a 23% tariff or border tax on *all* goods AND services from everywhere else. Thus the US is actually about the biggest currency manipulator and trade cheater anywhere – and in Mr Trump’s case, the biggest hypocrite about it too.

  5. When trump makes a move that is confounding the smartest people, I immediately try and look at solving the puzzle by thinking “how will this make money for trump or his rich friends?” The answer usually lies close by that reasoning. He is only motivated by making money or keeping his ass out of jail.

    A hundred years ago when he decided to run for President, he bragged openly that too much money is spent on campaigning and that he could run for office and make money at the same time. I understand there are still several million unspent and/or unaccounted for dollars in his campaign financial report.

  6. “This trade war.. will only have a lot of bad consequences”
    “China will suffer more than the US”

    Nope, the clear winner is China because now they can ban Justin Bieber and Bruno Mars tour there.

          1. i don’t really know what you are trying to “say” – both links are the same identical thing. Maybe could use the crap singer as a distraction is your point. Ok.

          2. Yeah both were same cartoon, sorry, but first was my (unsupported) embedded image attempt.

            Yep, it jokes S.Korea send their sexy K-Pop girls to distract N.Korea army boys. K-pop is a music genre not a “singer”, and they ARE sexy. Ask your kids lol? Example below: K-pop group “Twice” from S.Korea, filmed in the Asian city of vancouver. I like ’em & I’m not even a guy!

          4. Oh so grandchildren may know?..Ask/show ’em this Likey song by Twice; they”ll think grampa is cool :D.
            K-pop is quite popular with kids on the west coast. That’s where I came of age. This m/v is about kids feeling self-pressured to get likes on social media from selfies etc.

            Thing is, cross-border music is all good cuz it’s a growing force that helps bring people together, just like Bruno Mars & Ellie Goulding and others touring across Asia, in contrast to some others in the highest level of gov’t working to erect walls (both literally & metaphorically) to tear global civilization & people apart.

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