Posted on 10/12/2018 11:11:42 PM PDT by cba123
Donald Trump’s tariffs on China are going great, the US president assured the world yesterday. ”Their economy has gone down very substantially,” Trump said on Fox & Friends.
The numbers tell a different story. In September, Americans bought $34 billion more worth of Chinese goods than they sold, according to data from China published this morning. That’s the biggest monthly trade surplus the Middle Kingdom has ever run with the US.
Please see link, for full article.
(Excerpt) Read more at google.com.vn ...
China will do whatever it takes to maintain export levels — until the internal suffering causes civil unrest.
Quite right. Economies are like the ecology -- one can alter the environment, but can't change the rules by which it operates. The Chinese are rats on a whieel, and have to keep the yuan value stable against the US dollar in order to maintain the trade surplus. They've been buying so little from us, the list of things they won't buy (directly) is pathetically small, and they'll wind up buying it for higher prices via middlemen somewhere along the line, because they only buy food and other things they can't quite produce enough of, and for the most part we're the only producer large enough to supply whatever it is (soybeans for instance).
Federal Reserve raises rates?? TRY COMPETITION !
Trump simply can print red seal U.S. Dollar Notes.
COMPETITION in money supply, what a novel idea.
Do it, President Trump, do it!!
Print red seal US Dollars !!
The ecology in which Chairman Xi operates has him depending on the support of Party members and Army officers. Their support requires that they continue to make money in China’s semi-feudalistic system. In order to ensure that his important supporters continue to make enough money to want to support him, the common people on the bottom will find themselves being less prosperous.
That makes for a dangerous situation. The point where a society is most in danger of revolution, is when people had some hope of a better life, and then see that hope taken away.
Trump has one more big thing he can do to the Chinese, and it will need to wait until after the election, after a few necessary Supreme Court decisions
He can deny visas to China.
No more China H1Bs. No more Chinese Elites coming to give birth and get American citizen kids. No more American escape hatch in case things go sour there.
The first Trump tarriff against China were imposed in January 2018 on two categories — solar panels and washing machines. On March 1 he imposed steel and aluminum tariffs globally so China was included in those tariffs. On July 6 he imposed tariffs on 800 categories of goods imported from China.
The transit time from a Chinese factory to a US distribution center using the most common water and land routes is about 30 days. Lead times for purchasing product from China runs 60 to 120 days depending on the product category.
It takes time for tariffs or any kind of economic sanctions to work. The author of the article speaks to the data for one month, September 2018. The goods received in the US in September from the 800 categories affected by the tariffs announced on July 1 were already in the pipeline in July so the September 2018 imports were not impacted by the tariffs imposed in July. Undoubtedly many importers listened to Trumps rhetoric and increased orders in the first half of 2018 in order to beat the expected tariffs, particularly retailers who place Christmas holiday season orders in the first half of the year. It is the first quarter 2019 data that will begin to give a true picture of the tariff bite.
It has been reported that in the short term the decline of the Chinese currency against the dollar has been greater than the impact of many of the tariffs imposed. The economic impact of the tariffs on US importers is zero when currency depreciation exceeds the amount of the tariff. However, the US Treasury will benefit from the tariffs collected.
It is possible some Chinese exporters will cut prices to fully or partially offset the impact of tariffs. Someone who runs a Chinese factory realizing a margin of 30-50% would have a strong incentive to reduce prices by 10-20% if faced with a choice of shutting down the factory or lowering prices to offset tariffs. In addition, factories will squeeze their raw materials suppliers downstream who also want to stay in business.
Finally, the Chinese government is notorious for subsidizing exports in order to keep factories open and people employed, or to drive competitors out of business segments they target. I worked in a targeted industry in the 1990’s. Chinese factories were receiving a 15% rebate from the Chinese government on every item exported plus zero interest 20 year loans for factory expansion. At the same time US politicians, academics, and US trade representatives were blaming excessive labor costs and inept US management for my company’s inability to compete. The truth was, without the benefit of Chinese government incentives and stolen intellectual property, my Chinese competitors would not have been competitive.
The purposeful transfer of entire industries and supply chains from the US to China has taken nearly 30 years to accomplish. We have been in a trade war for 30 years and the US has abandoned many battles without a shot fired. Trump is now fighting back. One month’s data does not indicate the battle is lost or Trump’s strategy will not work over time.
If the Chinese didn’t believe the tariffs would be effective over time, they wouldn’t be opposing them so strongly. Unfortunately too many politicians, corporate executives, journalists, and academics have an economic interest in the continued gutting of the US economy.
The pigs who have been enjoying the trough for decades are beginning to squeal loudly. That is a good sign.
It IS the reason. I see it daily in my work. Companies are becoming aware they need to set up new supply lines, but that simply can not happen overnight. In the meantime, they are pushing forward shipments from China to avoid the 10% duty already in place, and the 25% duty coming at year end.
Another “hockey-stick” opp for the libturd losers to exploit!
Actually it is “experts at economics”, which are a huge part of the problem.
Just saying.
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