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US, China Will Hold Do-Over Trade Talks In Washington As Einsteinian Insanity Takes Hold

"I hope you keep up the good work."

Negotiations between both sides have achieved important progress in another step. Next week, both sides are going to meet in Washington. I hope you keep up the good work, and push for a mutually-benefiting and win-win agreement. That, apparently, is what Xi Jinping told Bob Lighthizer, Steven Mnuchin and more than a dozen other people gathered around him at the Great Hall of the People in Beijing on Friday at the conclusion of the latest round of trade talks between the US and China. After flying all the way to Beijing just a week after Liu He flew all the way to Washington, Bob Lighthizer and Steven Mnuchin will fly back to that same Washington where they'll have the same conversation with that same Liu He again next week. And all of this because Trump is too busy with his farcical "national emergency" and with preparations for a second summit with Kim Jong-Un to fit Xi into his schedule. Actually, no. That's not entirely accurate. As ever, there are structural issues that haven't (and probably won't) be resolved. Central to the impasse is China's subsidizing of SOEs and, of course, market access for foreign interests. Earlier Friday, FT reported that both the US delegation an
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2 comments on “US, China Will Hold Do-Over Trade Talks In Washington As Einsteinian Insanity Takes Hold

  1. Franceska says:

    “Central to the impasse is China’s subsidizing of SOEs”

    Effective tax rate of some main players ( I took them from official 10-K Forms)
    Facebook 13%
    Google 12%
    Amazon 11%
    Apple 16.5%
    Msft 19%
    Nflx 1%

    Not only they got a reduction from statutory 35% down to 21%, but thanks to stock-based compensation and other tax benefits the main ndx companies are paying well below 21%. (Msft and Aapl look like close to pay near statutory tax rate anyway).

    So, let me understand: Trump makes a gift to corporate America, runs trillions in deficit, companies find also several loopholes and come to pay 11% tax on average.
    How do we call that? Subsidizing as well?

    In some cases billions thrown to companies for the promise of creating jobs (unkept promises, see Tesla with its solar business for instance).

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