Why they fight: US and China brawl over high technology

TU Curmudgeon said:

From the Associated Press

Why they fight: US and China brawl over high technology
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WASHINGTON (AP) — To understand why the United States and China stand on the brink of a trade war, consider the near-death experience of American Superconductor Corp.

The company, known as AMSC and based in Massachusetts, was reeling after a Chinese partner stole its technology — the electronic brains that run wind turbines. The loss was devastating: AMSC’s stock shed $1 billion in value, and the company cut 700 jobs, more than half its workforce.


“Attempted corporate homicide” is what CEO Daniel McGahn called it. In January, its Chinese partner, Sinovel Wind Group, was convicted in a U.S. court of stealing AMSC’s trade secrets.


To the Trump administration, Sinovel’s predatory practices are hardly isolated. Beijing, it charges, is orchestrating a brass-knuckles campaign to supplant U.S. technological dominance and over the next few decades make Chinese companies global leaders in such fields as robotics and electric vehicles.

COMMENT:-

The fight is on two levels:

1. "Existing" technology; and
2. "Future" technology.

The battle will be won or lost on "Level 2" (as the last paragraph of the extract makes clear). If the Chinese DO manage to supplant the US as "the font of all major new developments" then is the US going to be able to deal with being "Number 2"?

PS - Responses along the lines of "The Chinese will never be able to supplant the US in any field whatsoever because America is peopled by Americans and China isn't." are dodging the question (which is generally a tacit admission that the honest answer is going to be one that the respondent doesn't want to hear).
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Hilarious tome.
All this about China stealing our technology.
Our big companies all have people stealing theirs!

MTAtech said:

Peter Navarro, is Swampy's trade czar. How did Navarro become Trump's Trade Czar? The story of Navarro’s rise tells you a lot about the nature of the Trump administration -- a place that rewards sycophants who tell the boss what he wants to hear.

First, how was Navarro recruited? According to reporting in Vanity Fair by Sarah Ellison, now at The Washington Post, during the campaign Trump told Jared Kushner to find some research supporting his protectionist trade views. Kushner responded by going on Amazon, where he found a book titled "Death by China." So he cold-called Navarro, one of the book’s authors, who became the campaign’s first economic adviser.

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So...you are grousing about "how they chose Navarro"?? Okay...whatever.

Navarro has an economics Ph.D. but holds views very much at odds with the mainstream. Now, the mainstream isn’t always right. But giving heterodox views a hearing only works if the people seeking advice are themselves open-minded thinkers, willing to put in the hard work of understanding opposing views and assessing the evidence. If this sounds to you like a description of Donald Trump, you might want to seek professional help.

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Ahhh...he holds views at odds with the mainstream. Tell you what...the mainstream hasn't done so good for the US for over 30 years. Yeah...time for someone who holds a different view, don't you think? Someone like Trump...and Navarro?

Nah...let's stick with the mainstream that has screwed us over for so long. That's the better way. :roll:

In fact, Navarro’s non-mainstream views mainly seem to involve basic conceptual and factual errors, which undercuts Mycroft's contention that Navarro is all about facts. One of these errors, which bears directly on the Trump-Europe spat, is a complete misunderstanding of the trade effects of value-added taxes (VATs), which the U.S. doesn’t have but play a large role in most European countries’ revenue.

In Navarro’s misunderstanding of the tariffs, expressed in a campaign white paper, VATs give European companies a huge, unfair trade advantage. U.S. products sold in Europe have to pay VAT -- for example, they must pay a 19% tax if sold in Germany. This, says the white paper, is the same as an import tariff. Meanwhile, German producers pay no VAT on goods they sell in America; this, the paper says, is just like an export subsidy. I’m pretty sure that’s what Trump means when he talks about "horrific" tariffs.

But what Navarro misses is the fact that when German producers sell to German consumers, they also pay that 19% tax. And when U.S. producers sell to U.S. consumers, they, like German producers, don’t face any VAT. So the tax doesn’t tilt the playing field at all, in either market. So, a VAT has nothing to do with competitive advantage; it’s basically a sales tax -- a tax on German consumers.

Yeah, the guy who is Trump's Trade Czar misunderstand a basic piece about trade.

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Makes no difference to the US if German citizens have to pay the VAT. That's their problem. But it DOES make a difference to the US when we have to pay the VAT when we export to Germany and they don't when they export to the US. That gives them a government subsidized competitive advantage. So yes...it IS basically a tariff. Trump understands this. Navarro understands this. Evidently, you don't.

Mycroft said:

Makes no difference to the US if German citizens have to pay the VAT. That's their problem. But it DOES make a difference to the US when we have to pay the VAT when we export to Germany and they don't when they export to the US. That gives them a government subsidized competitive advantage. So yes...it IS basically a tariff. Trump understands this. Navarro understands this. Evidently, you don't.

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It's astounding that you don't understand either. German's have no export or import advantage with respect to the VAT. Let me explain:

German firms sell to Germany - German consumers pay the VAT.
American firms sell to Germany - German consumers pay the VAT.
Conclusion: No difference

German firms sell to America- American consumers pay no VAT.
American firms sell to Americans - American consumers pay no VAT.
Conclusion: No difference

MTAtech said:

It's astounding that you don't understand either. German's have no export or import advantage with respect to the VAT. Let me explain:

German firms sell to Germany - German consumers pay the VAT.
American firms sell to Germany - German consumers pay the VAT.
Conclusion: No difference

German firms sell to America- American consumers pay no VAT.
American firms sell to Americans - American consumers pay no VAT.
Conclusion: No difference

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When you combine high tariffs on American good with the VAT...conclusion...competitive disadvantage for the Americans.

When you combine low tariffs on German good with no VAT...conclusion...competitive advantage for the Germans.

No amount of lipstick will make that pig look pretty.

Lord Tammerlain said:

How much money has the US sent to Canada for Canada's military?

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How much money does Canada spend trying to make sure that the democracies of the world are kept safe and sound and making sure that any attacks, even Nuclear, on them would be met with MAD?

Hypothetical said:

How much money does Canada spend trying to make sure that the democracies of the world are kept safe and sound and making sure that any attacks, even Nuclear, on them would be met with MAD?

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That failed to answer the question,

You said Canada would have to finance its own military, indicating the US was doing it? What is the dollar amount that the US used to finance the Canadian military

Lord Tammerlain said:

That failed to answer the question,

You said Canada would have to finance its own military, indicating the US was doing it? What is the dollar amount that the US used to finance the Canadian military

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the question you asked misses the point. Perhaps I worded it a bit incorrectly, but if you guys are ready to step up to the COMPLETE self determination plate, then good luck staring down would be global oppressors with your current Military.

Hypothetical said:

How much money does Canada spend trying to make sure that the democracies of the world are kept safe and sound and making sure that any attacks, even Nuclear, on them would be met with MAD?

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Adjusted for population size, Canada spends around US$189,000,000,000 (going to around US$327,000,000,000 in 2025) on defence.

Since Canada spends almost none of that on on propping up governments run by thugs, thieves, or other non-democratic governments, that probably means that Canada spends about the same amount - per capita - on "trying to make sure that the democracies of the world are kept safe" as does the US.

As far as any ACTUAL threats to Canada are concerned, Canada probably doesn't spend enough to ensure that the only country in the world that has the logistical capacity to actually invade and conquer Canada doesn't so so. But those Americans tend to over react when they see people pointing guns at them, don't they?

PS - When talking about defence spending, you should realize that the 2% of GDP spending limit was agreed to as a target for 2024. For Mr. Trump to complain, in 2018 that the 2024 amount is not being spent makes as much sense as the finance company repossessing your car in June 2018 because you haven't made your December 2018 payment yet does. Unfortunately that concept is beyond the reasoning capacity of Mr. Trump and many of his supporters.

Mycroft said:

When you combine high tariffs on American good with the VAT...conclusion...competitive disadvantage for the Americans.

When you combine low tariffs on German good with no VAT...conclusion...competitive advantage for the Germans.

No amount of lipstick will make that pig look pretty.

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Clearly, logic and mathematics makes no impact on you. You spew nonsense. If Germans pay the same VAT, which is a sales tax, whether the product is American or German, how are American products at a disadvantage?

TU Curmudgeon said:

Since Canada spends almost none of that on on propping up governments run by thugs, thieves, or other non-democratic governments, that probably means that Canada spends about the same amount - per capita - on "trying to make sure that the democracies of the world are kept safe" as does the US.

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Like i said before, we aren't perfect, believe me I wish we could cure the corruption prevalent in our politics. that said we are 1000's of times better than having Communist China or Russia as the world's dominant superpower. People not being able to understand that baffles me. you do realize that Russia has a nuclear weapon for every capital and major city in the major democracies and they are still pointed at them correct? or do you think they keep 4500 nuclear warheads on hand just so they can spit shine them and remember days gone by?

As far as any ACTUAL threats to Canada are concerned, Canada probably doesn't spend enough to ensure that the only country in the world that has the logistical capacity to actually invade and conquer Canada doesn't so so. But those Americans tend to over react when they see people pointing guns at them, don't they?

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interesting statement... how does one over react when people point guns at them?

Hypothetical said:

Like i said before, we aren't perfect, believe me I wish we could cure the corruption prevalent in our politics.

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That would be a good place to start.

Hypothetical said:

that said we are 1000's of times better than having Communist China or Russia as the world's dominant superpower.

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Since they never have been, then it's really difficult to know how "well off" we would be if they were.

Russia isn't likely to make it anytime soon.

We'll see what happens when the PRC surpasses the US.

Hypothetical said:

People not being able to understand that baffles me.

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Possibly it's because those people have a somewhat deeper understanding, possibly not.

Hypothetical said:

you do realize that Russia has a nuclear weapon for every capital and major city in the major democracies and they are still pointed at them correct?

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Correct. As of 2014, the Russians had around 1,600 deployed nuclear warheads with another (approx) 6,400 in reserve) - for a total of around 8,000.

That VASTLY outnumbers the 1,920 deployed plus the 5,380 in reserve - for a total of 7,200 that the US had.

Hypothetical said:

or do you think they keep 4500 nuclear warheads on hand just so they can spit shine them and remember days gone by?

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I don't know, why not ask the US Defence Department, you're more likely to get an answer from them than from the Russians.

Oh yes, it is, of course, a given that not a single one of those American nuclear weapons is targeted at any major city in either Russia or China - right?

Hypothetical said:

interesting statement... how does one over react when people point guns at them?

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It's rather difficult to over react when people are actually pointing guns at you, over reacting when you "see" people pointing guns at you is something else again.

The US government seems to "see" a whole lot of people "pointing guns at them" (even if those people don't actually have any guns at all).

PS - Did you know that, given the existing geography, a military force capable of defending Canada from any attempt at invasion by a country that has the logistical capacity to actually attempt such an invasion would be quite capable of conducting a reasonably successful invasion of limited areas of the United States of America. Do you think that the government of the United States of America would stand still for either Canada or Mexico maintaining a military force which could be an actual threat to portions of the United States of America?

I don't.

MTAtech said:

Clearly, logic and mathematics makes no impact on you. You spew nonsense. If Germans pay the same VAT, which is a sales tax, whether the product is American or German, how are American products at a disadvantage?

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A VAT allows a country to have taxes high enough to encourage saving, while not applying them to exports (which wouldn't make sense).

I'm basically agreeing with you, I said that so I could point out there is a simple remedy, an American VAT. I imagine someone you are arguing wouldn't like that idea.

Trade wars are madness.

Trump needs cooperation from China to do anything with North Korea, and they are so very pissed at him. We're neck deep in the opposite of cooperation there.

Trump would need cooperation from Europe to get any traction against Iran. As you may have noticed, they're also pissed, and undermining his move against Iran.

You do need to manage trade, but this is nothing like that. And in the final analysis, you need to produce products and services people want to buy. Part of that is investing in new opportunities. While China was dumping a fortune into solar, Republicans were bickering over Solyndra. China stole our lunch. Again.

Republicans are addicted to failure.

Failure Junkies.

late said:

A VAT allows a country to have taxes high enough to encourage saving, while not applying them to exports (which wouldn't make sense).

I'm basically agreeing with you, I said that so I could point out there is a simple remedy, an American VAT. I imagine someone you are arguing wouldn't like that idea.

Trade wars are madness.

Trump needs cooperation from China to do anything with North Korea, and they are so very pissed at him. We're neck deep in the opposite of cooperation there.

Trump would need cooperation from Europe to get any traction against Iran. As you may have noticed, they're also pissed, and undermining his move against Iran.

You do need to manage trade, but this is nothing like that. And in the final analysis, you need to produce products and services people want to buy. Part of that is investing in new opportunities. While China was dumping a fortune into solar, Republicans were bickering over Solyndra. China stole our lunch. Again.

Republicans are addicted to failure.

Failure Junkies.

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A VAT is a sales tax that is imposed on a country's own consumers, without regard to the origin of the product.
A tariff is a tax that is imposed on a country's own consumers, but only imported products.
That's the difference. A country may try to discourage imports by imposing a tariff but a country doesn't try to discourage imports with a VAT, because the VAT applies to domestically produced goods.

Thus, Swampy contorting VATs and tariffs as if they're the same thing is another fine example of his ignorance that is hurting America.

MTAtech said:

A VAT is a sales tax that is imposed on a country's own consumers, without regard to the origin of the product.
A tariff is a tax that is imposed on a country's own consumers, but only imported products.
That's the difference. A country may try to discourage imports by imposing a tariff but a country doesn't try to discourage imports with a VAT, because the VAT applies to domestically produced goods.

Thus, Swampy contorting VATs and tariffs as if they're the same thing is another fine example of his ignorance that is hurting America.

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Good point.