China's Xi vows to cut auto tariffs, better intellectual property protection, eases Trade War fears.

Did China just blink...and did Trump win? I report, you decide:

BEIJING (AP) — Investors and China watchers welcomed President Xi Jinping's pledge Tuesday to open his country's market wider to foreign competition, hoping it will ease a trade dispute with Washington that has unsettled financial markets and could jeopardize a global economic expansion.

Xi's vow to cut Chinese auto tariffs, allow more competition in banking and better protect intellectual property calmed investors who have been on edge since the world's two biggest economies last week announced plans to slap tariffs on $50 billion worth of each other's products.

Stock markets rallied worldwide on optimism for relief from what has become the most high-stakes trade confrontation since World War II. The Dow Jones industrial average was up more than 400 points in early afternoon trading.

"This is a promising signal that there can be a path forward to address (America's) concerns without a full-on trade war emerging," said Stephen Ezell, vice president of global innovation policy at the Information Technology & Innovation Foundation, a think tank that has criticized both China's aggressive trade practices and President Donald Trump's confrontational response to them.

https://www.apnews.com/45e28f10baa2460fb17a0b101c366067

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Huge win. Big implications for the economy, jobs, everything.

He's also on the verge of beating North Korea and ISIS.

but did you hear about that porn star Trump banged 12 years ago? Because that's whats really important.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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Loose prediction: the stock market drops by ~400 points tomorrow.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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It's a step in the right direction.

What makes this really important is this move by China shows us that Trump is on the right track and that his efforts are bearing fruit. The fact is, China had no incentive to make these moves until Trump came along.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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China didn't think a trade war was worth the cost. They are the grown up's now.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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It’s always easy to claim a victory when the war never had any defined objectives. What are we gaining with relief on car import tariffs when the big American automakers manufacture their vehicles in China?

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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If it turns out that way I am happy to give Donald Trump credit for it.
I still hate the guy but credit where credit is due.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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Maybe, we'll have to see how it turns out. Trying to get China to adhere to Intellectual Property would be huge, but I don't trust that they would even if they say so.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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Nope. It's a feint. Anyone who thinks this is a victory is not paying attention.

As the article noted, past pledges to open markets never turned into action.

There was no discussion of dropping retaliatory tariffs, or dropping the joint venture requirement, or the WTO case. Auto tariffs are largely moot anyway, as mst "foreign" cars sold to the Chinese market are manufactured in China anyway.

I would not be surprised if Trump et al declare victory anyway, since they are all about surface over substance, and are desperate for a win.

When a man points a gun at your face and demands your money, you give him your money. That doesn't mean the man's tactics were a good thing.....



Of course, as has been pointed out, this is more like a man points a gun at your face and demands your money, you promise to deliver it to him next year.....

Visbek said:

Nope. It's a feint. Anyone who thinks this is a victory is not paying attention.

As the article noted, past pledges to open markets never turned into action.

There was no discussion of dropping retaliatory tariffs, or dropping the joint venture requirement, or the WTO case. Auto tariffs are largely moot anyway, as mst "foreign" cars sold to the Chinese market are manufactured in China anyway.

I would not be surprised if Trump et al declare victory anyway, since they are all about surface over substance, and are desperate for a win.

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The reason GM chose to put together a Buick factory IN China was due to long standing tariffs on US cars built here.
Chinese people love Buicks, so GM decided that the only intelligent thing to do was build them over there.

And that is why I doubt China will REALLY ACTUALLY drop their tariffs in a meaningful way.
If they do however, GM will have to decide if they can sell off their factory, or if it's even worth doing so, or if they can just keep building Buicks over there anyway.
But if the Chinese really DO get rid of their US auto tariffs, OTHER US automakers will not hesitate to try chipping away at the Chinese Buick dominance and they'll try to start shipping their product, to which I've no doubt GM will cry foul.

Moot said:

China didn't think a trade war was worth the cost. They are the grown up's now.

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So youre admitting it was unfair before and they were taking advantage of us, but wanna see things get better.

Roadvirus said:

Did China just blink...and did Trump win? I report, you decide:

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Time and time and time again Trump proves he knows what he is doing.

Checkerboard Strangler said:

The reason GM chose to put together a Buick factory IN China was due to long standing tariffs on US cars built here.
Chinese people love Buicks, so GM decided that the only intelligent thing to do was build them over there.

And that is why I doubt China will REALLY ACTUALLY drop their tariffs in a meaningful way.
If they do however, GM will have to decide if they can sell off their factory, or if it's even worth doing so, or if they can just keep building Buicks over there anyway.
But if the Chinese really DO get rid of their US auto tariffs, OTHER US automakers will not hesitate to try chipping away at the Chinese Buick dominance and they'll try to start shipping their product, to which I've no doubt GM will cry foul.

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The only cars it would make sense to export to China would be luxury cars and top trim level trucks. China has a tax on cars depending on engine size. Over 2 L and it gets a heavy tax. So even german lux cars in China often just have a 2 L engine not a 3 L v6 or larger as seen in US markets.

For mass market cars making them in China saves a significant amount in costs (shipping and manufacturing). So at this point even lowering tariffs would not see many US made cars being sold in China. Which is the worlds largest auto market in the world.

Ikari said:

Maybe, we'll have to see how it turns out. Trying to get China to adhere to Intellectual Property would be huge, but I don't trust that they would even if they say so.

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Gotta agree with you there. When it comes to IP stuff, i'd trust China as much as i'd trust a Saint Bernard in a Stephen King movie.

Lord Tammerlain said:

The only cars it would make sense to export to China would be luxury cars and top trim level trucks. China has a tax on cars depending on engine size. Over 2 L and it gets a heavy tax. So even german lux cars in China often just have a 2 L engine not a 3 L v6 or larger as seen in US markets.

For mass market cars making them in China saves a significant amount in costs (shipping and manufacturing). So at this point even lowering tariffs would not see many US made cars being sold in China. Which is the worlds largest auto market in the world.

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There are more than enough Chinese people who would like to own a few of the models that are well known over here but not over there.
It's not even the slightest problem for US automakers to create a China only option engine package for some of the popular models.
Take the newest recently reintroduced Ford Ranger pickup, which has a boosted 2.3 liter inline four cylinder engine that offers 300 horsepower.
The Ranger is NOT a top trim level truck, it's the mid-size offering.
Changing the EcoBoost 2300 cc four cylinder to a 2000 cc engine is just a matter of switching to a smaller cylinder bore.
Fiat-Chrysler did it with the 3.6 liter Pentastar V6 when Maserati wanted to use it in their Ghibli sedans.
Suddenly the venerable 3.6 L Pentastar was a 3.0 L but it got twin turbos, so instead of 290 HP it was suddenly squeezing out 430 HP.
Thus the same engine used in the Pacifica minivan is now under the hood of a luxury Italian supercar.

So, it's not a problem for Ford, just as an example, to send a 2.0L version of their very nice Ranger pickup truck to China.
Hell, they might even give it a stiffer turbo to make up for the smaller displacement, or they might just leave it as is and the Ranger in China will only have maybe 260 HP instead, still pretty impressive.

And remember, that EcoBoost 2300 four banger from Ford has its roots in what started out in the early 1970's as a 2.0 L PINTO engine to begin with.
As bad as the Pinto was, people admired the engine because it was gutsy and reliable.

Checkerboard Strangler said:

There are more than enough Chinese people who would like to own a few of the models that are well known over here but not over there.
It's not even the slightest problem for US automakers to create a China only option engine package for some of the popular models.
Take the newest recently reintroduced Ford Ranger pickup, which has a boosted 2.3 liter inline four cylinder engine that offers 300 horsepower.
The Ranger is NOT a top trim level truck, it's the mid-size offering.
Changing the EcoBoost 2300 cc four cylinder to a 2000 cc engine is just a matter of switching to a smaller cylinder bore.
Fiat-Chrysler did it with the 3.6 liter Pentastar V6 when Maserati wanted to use it in their Ghibli sedans.
Suddenly the venerable 3.6 L Pentastar was a 3.0 L but it got twin turbos, so instead of 290 HP it was suddenly squeezing out 430 HP.
Thus the same engine used in the Pacifica minivan is now under the hood of a luxury Italian supercar.

So, it's not a problem for Ford, just as an example, to send a 2.0L version of their very nice Ranger pickup truck to China.
Hell, they might even give it a stiffer turbo to make up for the smaller displacement, or they might just leave it as is and the Ranger in China will only have maybe 260 HP instead, still pretty impressive.

And remember, that EcoBoost 2300 four banger from Ford has its roots in what started out in the early 1970's as a 2.0 L PINTO engine to begin with.
As bad as the Pinto was, people admired the engine because it was gutsy and reliable.

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The new Ranger pickup for the US market is based on the international model already made in Thailand. Any Ranger to be sold in China would be made in Thailand or in China. It would have to compete with Great Wall Motors models which are sold in Australia among other brands.

The only US built models that would be profitable would be premium or specialty models. The mustang, the Raptor, Lincolns and Caddies. Most Ford's Chevy,s and Buicks would cost to much to compete. Upper middle class and the wealthy have moved from Buick to German cars(at least on the east coast not sure about central or western China).

Overall the US would be at best be able to export 100 000 vehicles to China a year.

China on the other hand if it is not hit with restrictions and large tariffs on auto exports will in less than 10 years jbe exporting a few hundred thousand to the US. If i recall correctly only two models are currently exported to the US. The Buick Envision and one extended wheelbase Volvo Suv.

Lord Tammerlain said:

The new Ranger pickup for the US market is based on the international model already made in Thailand.

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Oh CRAP, I thought they reopened the plant in Minnesota again.
So you are saying that ALL new Ford Rangers are ones which are only made in Thailand?
No wait, In 2018, North American-specification examples begin production in the United States at the Michigan Assembly Plant in Wayne, Michigan.
(Wikipedia)

But you're saying that it's smarter to just source from Thailand, and I am forced to agree.
I didn't know that the Thai plant was making trucks, I thought they only made the compacts and subcompacts.

Checkerboard Strangler said:

Oh CRAP, I thought they reopened the plant in Minnesota again.
So you are saying that ALL new Ford Rangers are ones which are only made in Thailand?
No wait, In 2018, North American-specification examples begin production in the United States at the Michigan Assembly Plant in Wayne, Michigan.
(Wikipedia)

But you're saying that it's smarter to just source from Thailand, and I am forced to agree.
I didn't know that the Thai plant was making trucks, I thought they only made the compacts and subcompacts.

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The US market Ranger will be built in the US it is also based on the asian market Ranger (frame has been modified among other thing). It is made in Thailand and Vietnam and a few other countries.

Making it in China would lower costs by $3 to 4 000 per vehicle based on my estimate. A difference that only a premium product could make up ie a Raptor or Mustang for Ford branded products

Lord Tammerlain said:

The US market Ranger will be built in the US it is also based on the asian market Ranger (frame has been modified among other thing). It is made in Thailand and Vietnam and a few other countries.

Making it in China would lower costs by $3 to 4 000 per vehicle based on my estimate. A difference that only a premium product could make up ie a Raptor or Mustang for Ford branded products

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My estimates do not even account for the cost difference in safety and environmental standard differences.

Lord Tammerlain said:

My estimates do not even account for the cost difference in safety and environmental standard differences.

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Sigh, we've been letting the unequal market go on for so long that we can't even export vehicles to China even if we wanted to, but I agree that it seems like we're going to do cartwheels to make it possible for them to export to us with little or no trouble.

The rest of the world moved on without American manufactured products a long long time ago.
And with the income inequality as it stands right now, there's not very much domestic market for US made products other than some cars and trucks.
I doubt we could figure out how to manufacture a really good 900 dollar 4K HDTV set over here, even if the factory was fully automated.

Checkerboard Strangler said:

Sigh, we've been letting the unequal market go on for so long that we can't even export vehicles to China even if we wanted to, but I agree that it seems like we're going to do cartwheels to make it possible for them to export to us with little or no trouble.

The rest of the world moved on without American manufactured products a long long time ago.
And with the income inequality as it stands right now, there's not very much domestic market for US made products other than some cars and trucks.
I doubt we could figure out how to manufacture a really good 900 dollar 4K HDTV set over here, even if the factory was fully automated.

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I'm afraid that some corrections are required here.

• Companies aren't doing cartwheels to receive exports. They're doing cartwheels to try and access the Chinese market.

• Most of the "unequal" market are because the cost of living in other nations is a fraction of the US. E.g. Labor costs of a Chinese worker are about 1/5 that of an American worker.

• The Chinese market, while numerically huge, can't afford to buy a huge amount of American goods and services. In fact, if they weren't working in factories making goods mostly for export, they couldn't afford to buy American gods at all.

• Despite this discrepancy, America still exported $130 billion in goods and services to China in 2017. That's not chicken scratch.

• Despite so much production moving abroad, the reality is that US manufacturing output is actually very high. Meaning that someone is buying billions and billions of American goods and services, and it's not all cars and trucks.



The difference is that manufacturers have spent decades automating everything they can, meaning that manufacturing employment has fallen, from around 50% in 1950, to 10% today.

• Electronics have mostly gone offshore not because American companies can't make them, but because the margins are incredibly thin, and everything the industry needs is now offshore. Fortunately, the lucrative parts -- designing and marketing them -- have stayed in the US.

I also have to ask... Why should anyone care? The whole point of trade is that all parties benefit by specializing their production. If Chinese companies are better at making TVs, and American companies are better at making movies, then it makes sense to build TVs in China and film movies in the US, and productivity on both sides will increase. Comparative advantage is pretty basic stuff.

Checkerboard Strangler said:

Sigh, we've been letting the unequal market go on for so long that we can't even export vehicles to China even if we wanted to, but I agree that it seems like we're going to do cartwheels to make it possible for them to export to us with little or no trouble.

The rest of the world moved on without American manufactured products a long long time ago.
And with the income inequality as it stands right now, there's not very much domestic market for US made products other than some cars and trucks.
I doubt we could figure out how to manufacture a really good 900 dollar 4K HDTV set over here, even if the factory was fully automated.

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The US had a chance to lead the world in solar energy...but US politicians wouldn't allow it and now China leads in the solar power industry leaving the US behind.

dirtpoorchris said:

So youre admitting it was unfair before and they were taking advantage of us, but wanna see things get better.

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None of those words are in his post.

Cardinal said:

Loose prediction: the stock market drops by ~400 points tomorrow.

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So it dropped 218 points. All things told, that prediction literally wasn't half bad.