Tarriffs/Trade War

Irvinecommuter said:
morekaos said:
Like commitments to reduce greenhouse gasses after 2030?  Now thats funny!
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No..see there is an actual written treaty about that and China already outline and set out programs to reduce greenhouse gas emissions.

It is also in China's interest to be a leader in greenhouse/green energy rather than pretend that fossil fuel in the future of the court.
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It wasn't a treaty it was non-enforceable guidelines that China didn't have to lead in...they didn't have to do a thing till 2030 while the rest of the fools had their economies hobbled and pillaged. 
 
The screws are tightening...

China's economy grew 6.6% in 2018, the lowest pace in 28 years
China on Monday announced that its official economic growth came in at 6.6 percent in 2018 ? the slowest pace since 1990.
That full-year figure matched expectations from analysts polled by Reuters.
Fourth-quarter GDP growth also matched expectations, coming in at 6.4 percent on-year from 6.5 percent in the third quarter.

https://www.cnbc.com/2019/01/21/china-2018-gdp-china-reports-economic-growth-for-fourth-quarter-year.html

Trump bucked orthodoxy on China, and it just might work

Successive teams of U.S. trade officials have created an elaborate, process-heavy alphabet soup of institutional fora that aim to address the problems, which include local content preferences, forced intellectual property (IP) transfers and a weak and corrupt legal framework especially at the sub-central level.

This lengthy dialogue has proven ineffective in achieving any strategically meaningful change in Chinese practices. Many Chinese commitments remain pending; the history of these meetings largely is a history of unfulfilled promises. Especially noteworthy is the consistent lack of enforcement of agreements reached in these meetings.

The current U.S.-China trade dialogue has a good chance of breaking with this long-standing pattern of failure.

More importantly, Trump has broken with previous U.S. administrations and deployed the only leverage that matters to an export-oriented country like China: the credible threat of loss of market access.

The unprecedented willingness to do this provides U.S. Trade Representative Robert Lighthizer a huge, game-changing advantage over his predecessors. As we have seen, even the credible threat of loss of market access has a major impact on the export-driven Chinese economy and Chinese negotiators? attitudes.

China knows that there is no real substitute for the American market. So in exchange for these asks, the predictable Chinese demand is straightforward: continued access to the U.S. market on commercially competitive terms.

Given that China is probably the greatest U.S. trade policy challenge, substantial progress would be an enormous achievement. Already, Trump?s trade policies are a bright spot in public perception of his administration.

A favorable deal on China would further burnish the president?s positive track record, putting pressure on Democrats to respond with a new and appealing trade policy of their own.

https://thehill.com/opinion/finance/425870-trump-bucked-orthodoxy-on-china-and-it-just-might-work
 
morekaos said:
The screws are tightening...

China's economy grew 6.6% in 2018, the lowest pace in 28 years
China on Monday announced that its official economic growth came in at 6.6 percent in 2018 ? the slowest pace since 1990.
That full-year figure matched expectations from analysts polled by Reuters.
Fourth-quarter GDP growth also matched expectations, coming in at 6.4 percent on-year from 6.5 percent in the third quarter.

https://www.cnbc.com/2019/01/21/china-2018-gdp-china-reports-economic-growth-for-fourth-quarter-year.html
Click to expand...

Seriously...you are a financial adviser?  China has been on a downshift economically since 2010 (10.6, 9.5, 7.9, 7.8, 7.3, 6.9, 6.7, and 6.8 ).  The 6.6 was in line with experts expectations and largely due to China's new rules on speculative trading/investing and environment.  Also, China has stopped a lot of the infrastructure spending it was doing during the great recession.  Slowing GDP is to be expected for a maturing economy like China

As one expert noted in your article:

"The official GDP figures have been too stable in recent years to be a good guide to China's economic performance," said Julian Evans-Pritchard, senior China economist at Capital Economics, a research house.

"But for what it's worth, the headline breakdown suggests that service sector activity strengthened slightly last quarter," he added
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China will just boost stimulus spending in 2019 if it believes a slowdown is coming.  Something that the US should have done instead of stupid tax cuts.

I mean..didn't you say the same thing about Trump's "unorthodox" strategies as to North Korea?  Clearly that's working out great.
 
That coupled with a tanking stock and bond market sure look healthy.  Like your half full optimism but a consistently shrinking economy is not a desired trend. 
 
morekaos said:
That coupled with a tanking stock and bond market sure look healthy.  Like your half full optimism but a consistently shrinking economy is not a desired trend. 
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What?  Chinese stock and bond markets are a total fascade and front.  They don't care about either one...it's just a way for investors to dump money domestically. 

Because the government manipulates interest rates, it?s impossible to measure the risks in China?s debt market.

This makes rating a company?s value a near impossible feat. That?s pretty problematic, since that?s the cornerstone of any stock market.

On top of that, all of the listed companies are controlled by the government in one way or another. They are either state-owned enterprises (SOEs), or they are private enterprises that have loans with government-controlled interest rates.

This implies that purchasing Chinese mainland shares is essentially betting on government impulses, rather than on a company?s performance.

This situation will likely continue for a while, unless companies will become privatized in the most ?capitalist? meaning.
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https://www.forbes.com/sites/peterp...ck-market-just-another-knockoff/#638b3e97497a
 
Can the chest thumpers explain why is the market here (SPX) dumping today on News that Chinese delegation was told not to come for pre talks ...
 
If you want to look at how China is really doing , watch European , especially German equities .

Economic numbers are massaged as we all know .  But unlike the US , equity market in China is not the best proxy for risk appetite . It is the property market . I would be most concerned if the property markets collapsed meaningfully in tier 1 cities .
 
In America we fudge (massage?) the numbers in plain sight.  Like excluding certain categories of people/workers from unemployment figures and calling them "insignificant".  And when we need to show reduction in military procurement cost for warships and warplanes, the cost of the engine is mysteriously missing from the estimate.  Thankfully they haven't excluded the air frame cost.

In China their own leadership called GDP data "man made" and unreliable.  Li Keqiang's own words, not mine.
 
momopi said:
In America we fudge (massage?) the numbers in plain sight.  Like excluding certain categories of people/workers from unemployment figures and calling them "insignificant".  And when we need to show reduction in military procurement cost for warships and warplanes, the cost of the engine is mysteriously missing from the estimate.  Thankfully they haven't excluded the air frame cost.

In China their own leadership called GDP data "man made" and unreliable.  Li Keqiang's own words, not mine.
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Yup because they don't care about actual numbers, they just care that the populous is content.  Notice that they have been pushing up on the anti-Taiwan talk recently, which is basically their go to distraction whenever the news cycle is bad. 

People in the rest of the world doesn't understand that people in China don't get the news and information we have...the Great Wall of China only works on the internet.  90% of the population basically gets what the government wants them to get.  Honestly, most of them don't care.  There is a great purge of Uyghur Muslims and localized unrest in China currently...but most Chinese don't know (or care). 

This is why the US cannot win a trade war against China....for US it's about economics..for China/CCP, it's about survival.

 
Found this article regarding the trade war:
https://zeihan.com/my-way-or-the-huawei/

Some background:



Back in the 1960s, the American government started collaborating with the U.K. government on a global monitoring system known as Echelon, a sort of semi-public codename for the series of satellites, towers, fiber optic taps, server farms and software backdoors that span the planet. Echelon soon expanded to include the Anglophone allies of Canada, Australia and New Zealand, becoming the core of what is known today as the Five Eyes intelligence alliance. Echelon?s original raison d?etre was to battle the Soviets, and in time it found new life in the Global War on Terror. According to informed scuttlebutt, if a communication is transmitted using electrons, Echelon sees it.



Or at least it used to. Telecoms have evolved radically in the past half century. Even before the recent fascination of all parties with encryption, the simple fact the United States is no longer the middleman in all telecoms traffic means Echelon is more a tool of yesterday than today, much less tomorrow. Regardless, the ability to scan, read or listen for key words remains essential to America?s tech-heavy intelligence gathering networks.



Enter the Chinese, who found themselves behind the Americans by several decades, and that before considering China lacks the alliance system to create anything of Echelon?s depth or scale. Beijing?s bid to catch up is Huawei, a massive telecoms firm which produces everything from the fiber optic cables and telecoms towers of the physical internet to the phones and computers needed to connect.



While the internet is an infamously unorganized mass of connections, the modern network has central exchange points where the tributaries of information coming from all over the world become torrential flows. Such ?core? systems are what Huawei is after. Control the cores and a spy is wired into everything that passes through it.



Huawei?s corporate strategy ? which is to say, the strategy of China?s intelligence services ? is to grant massive discounts on the installation of a network?s less critical bits on the condition that Huawei can also install and maintain the cores.



Beyond the not-so-minor technical fact that there are people beyond China who understand how the internet works and so might object to handing over all their communications on principle, the plan has an amusing political flaw. Like nearly all of China?s tech industry, Huawei is not technologically self-sufficient. It remains heavily dependent upon tech imports from none other than the United States. Which is the second reason why I?ve never taken the Huawei talk all that seriously: The Chinese not only expect the world to pay them to monitor global communications, they expect the Americans to enable the scheme.



At first the Americans didn?t take the Huawei plan all that seriously, mostly because it was a seriously stupid plan. Then Huawei had some success using heavy subsidies to convince some countries to install their gear. That generated a diplomatic reaction in Washington. American bureaucrats started warning countries not simply of the dangers they seemed willingly oblivious to, but that any country who used Huawei in their cores could kiss any intelligence sharing with the Americans good-bye.



That was enough to shut Huawei out of New Zealand and Australia outright. (The Brits got cute and accepted Huawei gear for their system?s edges, but not their cores, a smug near-miss which undoubtedly infuriated the Chinese to no end.)



But three things have changed that have sparked stronger action out of the Americans.



First, the transition from fourth- to fifth-generation cellular technology blurs the line between core and non-core systems. Huawei penetration into any part of a cellular system now generates complications and vulnerabilities.



Second, despite the risk of communications exposure, enough countries have decided to proceed with Chinese equipment that the Americans can no longer just let it roll. In particular, China?s targeting of Five Eyes members ? most notably Canada ? has snapped the Americans to attention.



Third, after seventy years of expressly keeping economic and strategic issues separate in American foreign policy, a more standard intermingling is now occurring ? and that puts everything Chinese in the Americans? crosshairs.



Bilateral trade talks with China more or less collapsed last week. I can?t say I?m shocked. At the talks? onset the Americans laid out a series of non-negotiable demands including an end to cybertheft, an end to forced tech transfer, an end to the hyper-subsidization of Chinese industry, an end to functional prohibitions on American firms? access to the Chinese market, granting the Americans the right to impose any investigation at any time on any issue without any consultation complete with the ability to impose any desired punishment on any Chinese economic sector.



The fact the Chinese even began talks with those swords hanging over them indicates just how weak the Chinese knew their hand was. China exports over four times as many goods to the American market as vice versa and China is completely dependent upon American global security commitments for access to raw materials, energy and end markets. There is no modern China without active American involvement.



Last week it became apparent to the lead American trade negotiator ? one Robert Lighthizer ? that the Chinese were backing off what commitments he had previously convinced them to make. It was Lighthizer?s recommendation to Donald Trump that American tariffs on China be more than doubled May 10. He then put an even bigger set of tariffs in the pipeline to be applied within a few weeks.



The Americans? Huawei announcement has the feel of Lighthizer?s work: he likes to throw the odd sharp elbow and knows his boss is particularly fond of bold, direct, splashy actions that cut to the heart of the issue.



That issue is pretty straightforward. The Americans may be done managing the world, but that doesn?t mean they are going to help someone else do it ? especially someone who doesn?t have a ghost of a chance of pulling off such a feat without deep and active American collaboration. Better instead to put China in its place.



The Chinese, understandably, have proven less than enthusiastic about accepting that message.



So the Americans decided it is easier to simply end China?s global surveillance ambitions by killing Huawei?s international position outright. It isn?t very subtle, and if it doesn?t generate the desired Chinese cave-in in the trade talks it makes me wonder what Lighthizer will take aim at next. I?ve got lots of ideas.



I?m certain Lighthizer has more.


----------------------------------------------------------------------


It looks like we're going to be in the 25% tariff for awhile.  Prepare accordingly.

 
zubs said:
Found this article regarding the trade war:
https://zeihan.com/my-way-or-the-huawei/

Some background:



Back in the 1960s, the American government started collaborating with the U.K. government on a global monitoring system known as Echelon, a sort of semi-public codename for the series of satellites, towers, fiber optic taps, server farms and software backdoors that span the planet. Echelon soon expanded to include the Anglophone allies of Canada, Australia and New Zealand, becoming the core of what is known today as the Five Eyes intelligence alliance. Echelon?s original raison d?etre was to battle the Soviets, and in time it found new life in the Global War on Terror. According to informed scuttlebutt, if a communication is transmitted using electrons, Echelon sees it.



Or at least it used to. Telecoms have evolved radically in the past half century. Even before the recent fascination of all parties with encryption, the simple fact the United States is no longer the middleman in all telecoms traffic means Echelon is more a tool of yesterday than today, much less tomorrow. Regardless, the ability to scan, read or listen for key words remains essential to America?s tech-heavy intelligence gathering networks.



Enter the Chinese, who found themselves behind the Americans by several decades, and that before considering China lacks the alliance system to create anything of Echelon?s depth or scale. Beijing?s bid to catch up is Huawei, a massive telecoms firm which produces everything from the fiber optic cables and telecoms towers of the physical internet to the phones and computers needed to connect.



While the internet is an infamously unorganized mass of connections, the modern network has central exchange points where the tributaries of information coming from all over the world become torrential flows. Such ?core? systems are what Huawei is after. Control the cores and a spy is wired into everything that passes through it.



Huawei?s corporate strategy ? which is to say, the strategy of China?s intelligence services ? is to grant massive discounts on the installation of a network?s less critical bits on the condition that Huawei can also install and maintain the cores.



Beyond the not-so-minor technical fact that there are people beyond China who understand how the internet works and so might object to handing over all their communications on principle, the plan has an amusing political flaw. Like nearly all of China?s tech industry, Huawei is not technologically self-sufficient. It remains heavily dependent upon tech imports from none other than the United States. Which is the second reason why I?ve never taken the Huawei talk all that seriously: The Chinese not only expect the world to pay them to monitor global communications, they expect the Americans to enable the scheme.



At first the Americans didn?t take the Huawei plan all that seriously, mostly because it was a seriously stupid plan. Then Huawei had some success using heavy subsidies to convince some countries to install their gear. That generated a diplomatic reaction in Washington. American bureaucrats started warning countries not simply of the dangers they seemed willingly oblivious to, but that any country who used Huawei in their cores could kiss any intelligence sharing with the Americans good-bye.



That was enough to shut Huawei out of New Zealand and Australia outright. (The Brits got cute and accepted Huawei gear for their system?s edges, but not their cores, a smug near-miss which undoubtedly infuriated the Chinese to no end.)



But three things have changed that have sparked stronger action out of the Americans.



First, the transition from fourth- to fifth-generation cellular technology blurs the line between core and non-core systems. Huawei penetration into any part of a cellular system now generates complications and vulnerabilities.



Second, despite the risk of communications exposure, enough countries have decided to proceed with Chinese equipment that the Americans can no longer just let it roll. In particular, China?s targeting of Five Eyes members ? most notably Canada ? has snapped the Americans to attention.



Third, after seventy years of expressly keeping economic and strategic issues separate in American foreign policy, a more standard intermingling is now occurring ? and that puts everything Chinese in the Americans? crosshairs.



Bilateral trade talks with China more or less collapsed last week. I can?t say I?m shocked. At the talks? onset the Americans laid out a series of non-negotiable demands including an end to cybertheft, an end to forced tech transfer, an end to the hyper-subsidization of Chinese industry, an end to functional prohibitions on American firms? access to the Chinese market, granting the Americans the right to impose any investigation at any time on any issue without any consultation complete with the ability to impose any desired punishment on any Chinese economic sector.



The fact the Chinese even began talks with those swords hanging over them indicates just how weak the Chinese knew their hand was. China exports over four times as many goods to the American market as vice versa and China is completely dependent upon American global security commitments for access to raw materials, energy and end markets. There is no modern China without active American involvement.



Last week it became apparent to the lead American trade negotiator ? one Robert Lighthizer ? that the Chinese were backing off what commitments he had previously convinced them to make. It was Lighthizer?s recommendation to Donald Trump that American tariffs on China be more than doubled May 10. He then put an even bigger set of tariffs in the pipeline to be applied within a few weeks.



The Americans? Huawei announcement has the feel of Lighthizer?s work: he likes to throw the odd sharp elbow and knows his boss is particularly fond of bold, direct, splashy actions that cut to the heart of the issue.



That issue is pretty straightforward. The Americans may be done managing the world, but that doesn?t mean they are going to help someone else do it ? especially someone who doesn?t have a ghost of a chance of pulling off such a feat without deep and active American collaboration. Better instead to put China in its place.



The Chinese, understandably, have proven less than enthusiastic about accepting that message.



So the Americans decided it is easier to simply end China?s global surveillance ambitions by killing Huawei?s international position outright. It isn?t very subtle, and if it doesn?t generate the desired Chinese cave-in in the trade talks it makes me wonder what Lighthizer will take aim at next. I?ve got lots of ideas.



I?m certain Lighthizer has more.


----------------------------------------------------------------------


It looks like we're going to be in the 25% tariff for awhile.  Prepare accordingly.
Click to expand...

Actually, a very interesting read. After all this, I wonder why US, lighten the stance with Huawei recently, so the 25 %!somehow skirt  some of Huawei entities ? Again, US desires is to be in control of the trade talk but the PRC, are not easy to bend. I do expect a long drag.
 
AVGO Broadcom went from $300 to $255.94 on after the Hua Wei announcment.
Perhaps the semi conductor chip lobby is pushing back.
 
China is already in recession but it is getting buried in the news...the pressure on them is tremendous...they will break.

Chinese factory activity contracts more than expected, official data show

China?s National Bureau of Statistics released official manufacturing PMI for the month of May, which fell to 49.4 from 50.1 in April. Analysts polled by Reuters had expected the indicator to drop to 49.9 in May.
For China, the PMI is among economic indicators that investors globally watch closely for signs of trouble amid domestic headwinds and the ongoing U.S.-China trade dispute.

The official manufacturing Purchasing Managers? Index (PMI) for May came in at 49.4, lower than the 49.9 economists polled by Reuters had forecast. April?s reading was 50.1.

PMI readings above 50 indicate expansion, while those below that signal contraction.
[url]https://www.cnbc.com/2019/05/31/china-economy-official-manufacturing-pmi-for-may.html[/url]

Your boys are goin down Danny....
https://youtu.be/cv7r_JaeaMc

https://youtu.be/cv7r_JaeaMc
 
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