U.S. says to slap tariffs on extra $200 billion of Chinese imports

[bristolboy]

And tariffs aren't the only way China can retaliate against the US:

How Rare Earths (What?) Could Be Crucial in a U.S.-China Trade War

And in one of its more strategic weapons, Beijing could use its dominance to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. 

https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html

 

[LomSak27]

 

Quote

 

Stock analysts who once downplayed the risks of the conflict are now starting to get seriously worried. 

Wall Street sees no easy off-ramps to U.S. trade war with China

• Global investors have mostly looked past the intensifying trade fight between the U.S. and China, even as the countries move to deploy tariffs on hundreds of billions of dollars in goods. But the mood on Wall Street is darkening, with analysts increasingly warning of the potential impact on financial markets as the world's two largest economies square off.

 

•  

Anyone with indexed mutual funds? It's been good hasn't it, and now, likely not going to be good. I have a couple K in USD floating around for trips outside. Tomorrow taking half of it down, chunking into baht in the Thai Bank Account.

gurgle .... arf.  The acid re-flux problems  of dealing with a semi senile, mentally unstable, ADD afflicted spud, who can't read three paragraphs in a row.

f

[mike324]

both countries need each other, imagine if US citizens buy all made in US products, the average income folks would suddenly be consider as living in poverty. Yes, if US stops buying chinese products, its just as bad for chinese citizens. So this trade war is does not make anything better. What trump is doing is silly.

 

 

[ExpatOilWorker]

3 hours ago, bristolboy said:

And tariffs aren't the only way China can retaliate against the US:

How Rare Earths (What?) Could Be Crucial in a U.S.-China Trade War

And in one of its more strategic weapons, Beijing could use its dominance to cut off key parts of the global supply chain. China is the major supplier of a number of mundane but crucial materials and components needed to keep the world’s factories humming. 

https://www.nytimes.com/2018/07/11/business/china-trade-war-rare-earths-lynas.html

 

It is like Saudi turning off the oil tap. There will be a price spike, but soon others will start producing more. Other mining companies could easily start to produce rare earth metals and once the do, China will forever have lost this market share.

[ExpatOilWorker]

3 hours ago, bristolboy said:

"China’s foreign currency reserves stand at US$3 trillion and China’s annual current account surplus is US$200 billion. And as most of China’s debt is domestic, the People’s Bank of China is still ultimately in control of sovereign monetary policy and can manipulate the exchange rate to favour its trade policy. This means China’s circumstances are worlds away from both Greece who had no monetary policy control, and the United States who had no exchange rate control."

http://nationalinterest.org/blog/the-buzz/scary-statistic-chinas-debt-gdp-ratio-reached-257-percent-22824

The coming Chinese real-estate crash is not one bubble. Beijing, Shanghai and a few of the southern cities might do very well for many years to come. The Chinese real-estate market is more like bubble wrap, some will pop, others will not.

So a few Greece size pops, even if they are in Yuan, could be systemic to the Chinese banking sector.

AIG nearly took down the American financial system.

[bristolboy]

16 minutes ago, ExpatOilWorker said:

It is like Saudi turning off the oil tap. There will be a price spike, but soon others will start producing more. Other mining companies could easily start to produce rare earth metals and once the do, China will forever have lost this market share.

No, It's' not like oil. There's not a lot of reserve capacity  with a spigot that can be turned on as necessary. Building a mining operation is a big slow deal. Right now over 80 percent of the world's rare earth minerals come from china.

[impulse]

4 hours ago, Srikcir said:

Aren't two of those Chinese-owned businesses that pay franchise fees to the American Starbucks and KFC? The more outlets the more franchise fees. Those fees are paid before profits, the net of which remain with the Chinese owners.

 

While I have no doubt that they're paying franchise fees, I suspect they're paying them to Starbucks and KFC of Ireland, LLC, where the multi-national corporations have set up with 1 or 2 employees to basically launder $$$ billion in profits at a 1% tax rate.    All perfectly legal, of course.

 

[Dumbastheycome]

On 7/11/2018 at 3:44 PM, car720 said:

Very close to the mark but not totally on the money.

And this is about money as always.

Don't look to Trump.  Look to who pulls his strings.

?

[Langsuan Man]

7 hours ago, ExpatOilWorker said:

It is like Saudi turning off the oil tap. There will be a price spike, but soon others will start producing more. Other mining companies could easily start to produce rare earth metals and once the do, China will forever have lost this market share.

Saudi only has to turn off the oil tap.  China has literally thousand of "taps to turn off".  Just wait till that little ball bearing on the hundred thousand dollar machine goes and their is no replacement available

 

Sure in the oil example above another producer will jump in a fill the gap because they already have the wells and infrastructure in place.  But who is going to build that factory to produce that ball bearing and how long will it take to ramp up production ?

 

This "trade war" is based upon faulty logic about trade deficits: 

 

Until someone comes up with a way to eat a US dollar it eventually has to come home: so stop all the false rhetoric about balance of payments and trade deficits   

[marco999]

On 7/11/2018 at 5:37 AM, pegman said:

The Chinese people can also stop eating at the 4,400 KFC's or having coffee at the >3,000 Starbucks or shopping at the >400 Walmarts.  American multi-nationals are using China as their largest expansion market. There is more at stake here than trade in goods like the draft dodger likes to bring up. 

Starbuck is a leftist company. I don't care of them and I boycott them

[vaultdweller0013]

On 7/11/2018 at 4:12 PM, IAMHERE said:

I can remember a time when there was no trade with Red China. All that trade went to friendly nations. China should take on a trade war vigorously and show the world

You mean the same friendly nations that have had tariffs placed on them for national security reasons?

[bristolboy]

6 hours ago, marco999 said:

Starbuck is a leftist company. I don't care of them and I boycott them

Starbucks is doomed.

[bristolboy]

6 hours ago, vaultdweller0013 said:

You mean the same friendly nations that have had tariffs placed on them for national security reasons?

If anyone needs prove of how brave the average American is, just consider those who live close to the Canadian border. Even in the face of the impending invasion by a savage Canadian horde, not one has budged.

[Srikcir]

7 hours ago, Langsuan Man said:

Saudi only has to turn off the oil tap. 

But the US wouldn't - 80% of US crude exports to Asia goes to China!

China is the second largest importer of US crude. Excluding Canada, China has imported more than twice as much US oil as any other country in the world in 2018.

"Tariff or no tariff, China might use oil as a weapon to pressure the US -- by simply not buying it,"

https://money.cnn.com/2018/07/12/investing/oil-exports-trade-war-china/index.html

China's increasing reliance on US crude imports is one of the US best efforts to balance trade with China!

[ExpatOilWorker]

10 hours ago, Langsuan Man said:

Saudi only has to turn off the oil tap.  China has literally thousand of "taps to turn off".  Just wait till that little ball bearing on the hundred thousand dollar machine goes and their is no replacement available

 

Sure in the oil example above another producer will jump in a fill the gap because they already have the wells and infrastructure in place.  But who is going to build that factory to produce that ball bearing and how long will it take to ramp up production ?

 

This "trade war" is based upon faulty logic about trade deficits: 

 

Until someone comes up with a way to eat a US dollar it eventually has to come home: so stop all the false rhetoric about balance of payments and trade deficits   

We have just established that turning off the tap or restricting rare earths is like putting a gun to your own head, even the Chinese are not that dumb. 

 

As this trade dispute (trade was is misleading) goes on, you can still buy all the ball bearings you want, they will just cost 10% more.

 

Imports are not added to a country's GDP number, so by having a trade surplus, China is growing on the cost of a slowdown in the US.

[bristolboy]

39 minutes ago, ExpatOilWorker said:

We have just established that turning off the tap or restricting rare earths is like putting a gun to your own head, even the Chinese are not that dumb. 

 

As this trade dispute (trade was is misleading) goes on, you can still buy all the ball bearings you want, they will just cost 10% more.

 

Imports are not added to a country's GDP number, so by having a trade surplus, China is growing on the cost of a slowdown in the US.

China once restricted the flow of rare earths to Japan but not to the rest of the world. It could do the same to the USA. And of course it's a sacrifice. But the damage inflicted on US industry would be far greater. It's proof of how ignorant Trump is that he imposed tariffs on China's intermediate good rather than final products thus damaging US industry far more than it did China's. China can cut off those intermediate products from its end, too.

[stevenl]

2 hours ago, ExpatOilWorker said:

We have just established that turning off the tap or restricting rare earths is like putting a gun to your own head, even the Chinese are not that dumb. 

 

As this trade dispute (trade was is misleading) goes on, you can still buy all the ball bearings you want, they will just cost 10% more.

 

Imports are not added to a country's GDP number, so by having a trade surplus, China is growing on the cost of a slowdown in the US.

Who is 'we' and where did you establish this? Certainly not here in this thread.

[ExpatOilWorker]

1 hour ago, bristolboy said:

China once restricted the flow of rare earths to Japan but not to the rest of the world. It could do the same to the USA. And of course it's a sacrifice. But the damage inflicted on US industry would be far greater. It's proof of how ignorant Trump is that he imposed tariffs on China's intermediate good rather than final products thus damaging US industry far more than it did China's. China can cut off those intermediate products from its end, too.

The result of China restricting rare earths to Japan, was that Japanese industries started to find alternatives.

 

It is a nonsense conversation anyway. China will never do it.

[bristolboy]

1 minute ago, ExpatOilWorker said:

The result of China restricting rare earths to Japan, was that Japanese industries started to find alternatives.

 

It is a nonsense conversation anyway. China will never do it.

"Started to find alternatives". That's right, and if they had only a couple of weeks more, they would have been fine without them. Do you have any idea of how much research and effort would have to go into replacing materials that are at the heart of the high tech industry?

[ExpatOilWorker]

5 minutes ago, stevenl said:

Who is 'we' and where did you establish this? Certainly not here in this thread.

Luckily there is a more enlighten world outside this thread. 

[ExpatOilWorker]

2 minutes ago, bristolboy said:

"Started to find alternatives". That's right, and if they had only a couple of weeks more, they would have been fine without them. Do you have any idea of how much research and effort would have to go into replacing materials that are at the heart of the high tech industry?

China burned their fingers with rare earths before, that are not going to burn the whole house down to the ground. They will NOT do it, no point is talking about it.

 

https://en.wikipedia.org/wiki/Rare_Earths_Trade_Dispute

 In 2014, the WTO ruled against China, which led China to drop the export quotas in 2015.

[bristolboy]

Just now, ExpatOilWorker said:

China burned their fingers with rare earths before, that are not going to burn the whole house down to the ground. They will NOT do it, no point is talking about it.

 

https://en.wikipedia.org/wiki/Rare_Earths_Trade_Dispute

 In 2014, the WTO ruled against China, which led China to drop the export quotas in 2015.

This time they can invoke national security. WTO allows for that exception. And what great penalty would they suffer if they ignored the WTO?

[whatsupdoc]

6 minutes ago, bristolboy said:

This time they can invoke national security. WTO allows for that exception. And what great penalty would they suffer if they ignored the WTO?

The WTO will first rule against the USA for unjustifiably invoking national security. And if there is a penalty Trump will probably want to leave the WTO.

[ExpatOilWorker]

3 minutes ago, whatsupdoc said:

The WTO will first rule against the USA for unjustifiably invoking national security. And if there is a penalty Trump will probably want to leave the WTO.

Don't think so.

 

“Made in China 2025” does violate WTO strictures that forbid discrimination against fellow members. Many of the plan’s local-content and licensing requirements, rigged standards, homegrown technical regulations and market-distorting subsidies are designed to protect Chinese companies against foreign competition. Commercial and cyber-espionage, forced transfers of technology, and rampant intellectual property theft are all plainly illegal under WTO rules.

What this means, first of all, is that the WTO system is perfectly capable of holding China to account for many of its trade abuses. If a coalition of China’s trading partners, led by the U.S., were to bring a detailed complaint backed by facts before the body’s appellate court, they would almost certainly win. And China, which has respected adverse judgments in the past, could for the most part be expected to comply, in part because the alternative would entail expensive economic sanctions.

 

https://www.bloomberg.com/view/articles/2018-07-12/cheating-on-technology-isn-t-going-to-help-china-get-ahead

Edited July 13, 2018 by ExpatOilWorker

[whatsupdoc]

2 minutes ago, ExpatOilWorker said:

Don't think so.

 

“Made in China 2025” does violate WTO strictures that forbid discrimination against fellow members. Many of the plan’s local-content and licensing requirements, rigged standards, homegrown technical regulations and market-distorting subsidies are designed to protect Chinese companies against foreign competition. Commercial and cyber-espionage, forced transfers of technology, and rampant intellectual property theft are all plainly illegal under WTO rules.

What this means, first of all, is that the WTO system is perfectly capable of holding China to account for many of its trade abuses. If a coalition of China’s trading partners, led by the U.S., were to bring a detailed complaint backed by facts before the body’s appellate court, they would almost certainly win. And China, which has respected adverse judgments in the past, could for the most part be expected to comply, in part because the alternative would entail expensive economic sanctions.

 

https://www.bloomberg.com/view/articles/2018-07-12/cheating-on-technology-isn-t-going-to-help-china-get-ahead

Maybe not in the case of China but how about Trumps tariffs against the EU, Canada and Mexico? Not much danger to national security there....

[bristolboy]

1 minute ago, ExpatOilWorker said:

Don't think so.

 

“Made in China 2025” does violate WTO strictures that forbid discrimination against fellow members. Many of the plan’s local-content and licensing requirements, rigged standards, homegrown technical regulations and market-distorting subsidies are designed to protect Chinese companies against foreign competition. Commercial and cyber-espionage, forced transfers of technology, and rampant intellectual property theft are all plainly illegal under WTO rules.

What this means, first of all, is that the WTO system is perfectly capable of holding China to account for many of its trade abuses. If a coalition of China’s trading partners, led by the U.S., were to bring a detailed complaint backed by facts before the body’s appellate court, they would almost certainly win. And China, which has respected adverse judgments in the past, could for the most part be expected to comply, in part because the alternative would entail expensive economic sanctions.

 

https://www.bloomberg.com/view/articles/2018-07-12/cheating-on-technology-isn-t-going-to-help-china-get-ahead

And the great thing about the WTO is how expeditiously it adjudicates complaints.

The rules-based system is in grave danger

https://www.economist.com/leaders/2018/03/08/the-rules-based-system-is-in-grave-danger

[Srikcir]

30 minutes ago, ExpatOilWorker said:

The result of China restricting rare earths to Japan, was that Japanese industries started to find alternatives.

 

It is a nonsense conversation anyway. China will never do it.

Apparently Forbes and the US disagree.

Trade War With China Exposes U.S. Mineral Import Problem

China currently produces more than 90% of the world’s supply of rare earth materials and obviously prioritizes its own domestic customers.

US import dependency [on rare earth metals from China] is a massive hole in the U.S. energy security apparatus that needs plugged immediately. The only U.S. rare earth mine Mountain Pass in California, went bankrupt in 2015 and was bought by a Chinese-led consortium last year.

https://www.forbes.com/sites/judeclemente/2018/07/11/trade-war-with-china-exposes-u-s-mineral-import-problem/#79b98a272104

The US on the other hand has almost zero access to Rare Earths.

The US rare earth vulnerability and mammoth battery supply disconnect

https://investorintel.com/sectors/technology-metals/technology-metals-intel/us-vulnerability-mammoth-battery-disconnect-rare-earth-supply/

 

[zydeco]

18 minutes ago, Srikcir said:

China currently produces more than 90% of the world’s supply of rare earth materials and obviously prioritizes its own domestic customers.

Despite the international hair-pulling over the constrained supplies, the rare earth quota crisis and its resolution has laid bare the vulnerability of China’s rare earths ‘monopoly’, as many have described it. After all, there is no shortage of proven rare earth deposits outside of China;

https://www.mining-technology.com/features/featurethe-false-monopoly-china-and-the-rare-earths-trade-4646712/

[ExpatOilWorker]

33 minutes ago, whatsupdoc said:

Maybe not in the case of China but how about Trumps tariffs against the EU, Canada and Mexico? Not much danger to national security there....

I totally agree, the trade dispute with close allies is silly and hopefully will peter out quickly.  

[bristolboy]

2 minutes ago, ExpatOilWorker said:

I totally agree, the trade dispute with close allies is silly and hopefully will peter out quickly.  

Is "silly" the strongest adjective you can come up with? How about "destructive"  or "self-defeating." Silly is a word used for trivialities. You think Trump's trade war against US allies is silly?