Trade Truce by China and U.S. Gives Both Sides Political Breathing Room

NY Times ^ | Dec. 3, 2018 | Keith Bradsher and Alan Rappeport

[Innovative]

The agreement reached by President Trump and President Xi Jinping of China to effectively pause their trade war and work toward a pact appears to be aimed at giving the two leaders some political breathing room after an escalating fight has begun inflicting economic damage on both sides of the Pacific.

The temporary truce, forged over a working dinner on Saturday night in Buenos Aires, does little to resolve the deep differences between the two nations and is more a political agreement than a substantive one. Both sides immediately positioned the cease-fire as a domestic victory while staking out areas where they would not compromise.

[Innovative]

There is a long ways to go, but it's ab excellent, promising start.

[DIRTYSECRET]

No it doesn’t. It just kicks the can down the road.

[Paladin2]

Drumpf got their attention.

[Innovative]

Have a little faith. Trump knows what he is doing.

[poinq]

For a long time China was pointing guns at our companies and we did nothing. Trump pointed a gun back at them. And many of our companies acted like they were young pretty and scared kidnap victims on a ransom call. “Please send them money or they will kill me.” Trump just pointed a bigger gun. Then he did the Clint Eastwood move. He said he would put tariffs on Apple phones coming into the US from China. Its like saying to China (referring to our companies), “go ahead you kill them before I do.”

The reality is that the USA can and should put large tariffs on China. When they piss us off, we should raise them. It helps us in many ways. First it gives us a leash to yank when China acts badly. Second, it makes companies aware there is a price for making goods in China instead of other countries or even back home. Third, it starts paying back our national debt.

The reality is that the price of items we buy in stores is mostly fungible. Its often not associated with cost of a product. So, when we put tariffs on, China may lower the price. Our companies may get the product somewhere else, the companies may eat the price increase or the price may go up. And if the price does go up, we may buy less. So its not clear that the US tax payer will be greatly impacted. It is clear that our national debt is going up, and if we don’t want taxes to go up then tariffs may be one alternative.

If tariffs were so bad, every other country in the world would not have them on our products.

[Innovative]

Thanks for your excellent explanation.

[hinckley buzzard]

China needs us a lot more than we need them. China knows it. Trump knows it. Only East Coast geeks don’t understand that we are in the midst of negotiations, not some kind of stupid gunfight.

[trebb]

Must suck to want it all and want it now....

[central_va]

Very terrible start, a cave in to the Chicoms. A victory for Goldman Sachs wing of the Republican Party and a loss for the American worker. The tariff should be much higher that 10%. WHAT A JOKE.

[EQAndyBuzz]

“Very terrible start, a cave in to the Chicoms. A victory for Goldman Sachs wing of the Republican Party and a loss for the American worker. The tariff should be much higher that 10%. WHAT A JOKE.”

I guess the question is, “what did Trump want out of this temporary truce and did he get it?”

[enumerated]

“There is a long ways to go, but it’s ab excellent, promising start.”

I agree.

The ideal trade policy is even more elusive than the ideal domestic economic policy - and we all know how little consensus there is in that regard.

I think mankind will always struggle with the basic question of where to draw the line between the realm of the individual vs. the realm of the collective. Most of us dismiss the extreme individualism found in the animal kingdom - where the weak who can’t feed and protect themselves are soon eaten or starve. On the other hand, extreme collectivism has never succeeded anywhere, due to its lack of accountability to the realities of nature.

So, what amount of redistribution is fair? There is no consensus domestically, so why should we expect to find a consensus in international trade?

The result of this lack of consensus is that we have trading partners who use slave labor and otherwise deprive their own people of basic human rights - thereby achieving a labor cost and trade advantage over nation’s with “fair” labor laws.

Tariffs need to be imposed to correct such “unfairness”, but since there is no consensus on what is the “fair” balance between the realm of the individual vs. the realm of the collective, this will always be a political battle - both domestically, and vs. our trading partners.