My thirty-seventh thread starter on trade

IB and Little Monster set the bar high for repetitive posting. And by darn I intend to raise that bar. If Mystic's not going to help me I'm doing it all on my own.

And lastly to all, it's been mentioned earlier in this thread(and in the innumerable others started by this same poster about tariffs), that they are being used largely as a bullying tactic not as an actual long term policy decision. And as such, they are so far having the desired results in at least sparking discussion and in the case of Mexico, them stepping up and acquiescing to some concessions.

China, I agree is a harder nut to crack, but as WC continues to point out, doing nothing gets us nowhere and just further in the hole, so doing something at least shakes up the establishment. And that's part of what I elected Trump to do. Originally Posted by eccielover

So, right, but is it all worth it? How much better would Trump have fared if he'd worked with Europe, Japan, and our other allies to make China play fair, instead of going after them with tariffs too?

The latest is that Trump says he's going to implement 10% tariffs on the remaining $300 billion a year in goods we import from China on September 1, 2019. His timing was great. There's no way Xi Jinping can back down right now, because of domestic political considerations. He's got his annual meeting with party leaders later this month, the 70th Anniversary of the Peoples Republic on October 1, mass demonstrations in Hong Kong, and the U.S. just announced an arms sale to Taiwan. If he makes a deal he looks weak, like he's being bullied by the USA, which he is.

So how did Trump come up with this? Steve Mnuchin, Larry Kudlow, and even Robert Lighthizer the trade hawk begged him not to do it. But Trump's gut and trade nut Peter Navarro won the day.

The Chinese currency, the Renminbi, dropped below 7 per dollar today, sending world markets into a tail spin. As I write this, the Dow is down 870 points, and NASDAQ is down 3.9%.

The Chinese have been propping up the value of their currency, through capital controls among other things. Right now it's difficult to impossible for Chinese people and businesses to buy foreign currencies and invest outside their country. Instead they have to keep their money in China, in Renminbi, which causes the currency to be stronger than it should be.

Apparently the Chinese government isn't going to be quite as aggressive in propping up the Renminbi, in reaction to Trump's escalation of the trade war. Actually, if they let their currency float, like we do ours, you could see the value fall to 7.5 to 8 per USD, helped along by capital flight out of China.

So what's Trump's reaction? Today he's accusing the Chinese of currency manipulation on Twitter, to weaken their currency and strengthen their exports. Well, he's right about manipulation, but they've been manipulating their currency to keep it stronger. This is what he wants. You can attribute the weakness in the Renminbi to one person, Donald J. Trump.

Right now Trump's trade policy is the biggest risk to the world and American economies. And if he keeps this crap up and continues to escalate, it may be the biggest risk to the Republicans losing the presidency and the Senate in 2020. The thing he's got going is a strong economy. If he loses that, Republicans are toast.

Nice article, Tiny. Thank You.

Thanks oeb, that's actually a Tiny original. This however, is from Bloomberg today, which is quoting Henrietta Treyz, Director of Economic Policy Research at Veda Partners:

Her conversations with Republicans point to the belief that "China's economy is on the brink of collapse," she said, with turmoil in Hong Kong "considered evidence of an organic domestic uprising that many believe the Chinese government cannot contain." Republicans may also believe Trump will "galvanize" his base behind him, while attracting "anti-trade and union Democrats in the Rust Belt as he takes on the mantle of a war time president going into 2020 by engaging in this trade war."

China on the brink of collapse? Talk about self delusion. China's economy is growing at 6.2% per year. Their exports to the USA are about 3% of their GDP. This and Hong Kong are going to bring down China's economy?

As to the rest, maybe the Republican politicians are right, as far as 2020 goes. George W. Bush drug us into a real war and got re-elected. Democrats supported him. Maybe Trump thinks he'll do the same with the trade war. But remember who came after George W. Bush-- Barrack Obama. And the current crop of top Democratic contenders, Biden excluded, make Obama look like a moderate.

If there is one thing the President has bi-partisan support on it is this...

If there is one thing the President has bi-partisan support on it is this.. Originally Posted by gfejunkie

That should tell you something, the President and Chuck Schumer are on the same side of this issue. If this leads to a recession, it's Republicans who will suffer the fallout.

China blinked first - now the Dow is coming back up. Yay!

China blinked first - now the Dow is coming back up. Yay! Originally Posted by Austin Ellen

Up a whole 81 right now. And how much did the Dow lose yesterday after Trump levied new tariffs? 767 points.

Anything Schumer advocates - it is to exercise great caution.

There is a trap somewhere.

He is a Liar and Hater of the American People.

And? What are you trying to say? That Trump should not have put tariffs on China? Why yes, I hadn't thought of that. Let let China rule the global economy. Gotcha.

Up a whole 81 right now. And how much did the Dow lose yesterday after Trump levied new tariffs? 767 points. Originally Posted by SpeedRacerXXX

Anything Schumer advocates - it is to exercise great caution.

There is a trap somewhere.

He is a Liar and Hater of the American People. Originally Posted by oeb11

And foremost a Lover of Chuck Schumer. He'll basically say and do anything to get ahead. Carried interest is a good example. Until party politics made his position untenable, he was the foremost defender of the 15% tax rate on managers of private equity and hedge funds. Everybody else was paying 35% to 39.6%. This is because he was receiving massive campaign contributions from fund managers. While a 15% tax rate may be a good idea, government shouldn't play favorites.

Amen!

I learned a new word yesterday.

Be carefull Tiny. The opening post may be misconstrued as an ominous trend toward madness. Next thing you know we'll here about you raiding the Fed.

I hope you can find the humor in my opener. Not everybody has good sense. For the thirty-seventh time your mantra has been heard. It's good to have a forum.

We've agreed before that the fat cats on both sides of the aisle are controlling this country. I start my podium pounding from the bottom up. You champion your economic cause- and keep at it.



















Nice words.

Mi complementi.

And? What are you trying to say? That Trump should not have put tariffs on China? Why yes, I hadn't thought of that. Let let China rule the global economy. Gotcha. Originally Posted by Austin Ellen

Ellen, We're not arguing that the U.S. shouldn't take steps to get China to play fairly. Our argument is about the way it's being done. Tariffs on toys and clothes that will now be made in Vietnam instead of China don't help us, they just make products more expensive.

President Trump isn't cooperating with our allies to put pressure on China. Instead he's placing tariffs on our allies' goods too. As I've already mentioned, Chinese exports to the USA only account for 3% of their economy. If the Chinese stop buying our products and sell their own products to other people instead, we're losers too. We would stand a much better chance of actually accomplishing something if we had our allies working with us. Instead, by placing tariffs on everyone and opting out of the Trans Pacific Partnership (a trade agreement between countries bordering the Pacific Ocean that left out China), we're encouraging closer trade ties between China and other countries. By cutting off exports of U.S. semiconductors to China, we're getting the Chinese to climb the tech ladder faster than they would otherwise.

Trump's trade "strategy" is poorly thought out and self defeating.

Next thing you know we'll here about you raiding the Fed.

I hope you can find the humor in my opener. Originally Posted by eccieuser9500

I do find the humor. David Stockman already said everything that needs to be said about the Fed in your post the other day:

Originally Posted by eccieuser9500

And? What are you trying to say? That Trump should not have put tariffs on China? Why yes, I hadn't thought of that. Let let China rule the global economy. Gotcha. Originally Posted by Austin Ellen

Exactly right. You do realize that very few people, economists and those on his own staff, supported his use of tariffs in a trade war with China. We are in a lose-lose fight with China using tariffs. They can wait us out. We are paying billions to farmers in the form of subsidies because China is no longer purchasing food from them. I read an article yesterday that said if China wants Trump out of office in 2020, they will do nothing to settle the trade dispute until that time. The one plus for Trump at this point in time is the economy. If we are still in a trade war with China in November 2020, my opinion is voters will not be happy.

Trump’s Tariffs Could Ruin Christmas. Here’s How.

https://www.barrons.com/articles/her...na-51565082001

The Real Cost of Trump’s Trade Wars

Aug 6, 2019 DANIEL GROS

Economic analysis suggests that bilateral trade wars are unwinnable in an interconnected world. By firing his latest tariff salvo against China, US President Donald Trump has further raised the stakes in an increasingly damaging dispute – and America is likely to emerge as the bigger loser.

https://www.project-syndicate.org/co...l-gros-2019-08