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Forbes: Gordon Chan: What's Next For U.S.-China Trade After Collapse Of Talks

chuckiechan

chuckiechan

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https://www.forbes.com/sites/gordon...a-trade-after-collapse-of-talks/#1db0a8ae3868

The U.S.-China Comprehensive Economic Dialogue, held Wednesday, ended in silence, with almost no effort by the American side to lipstick the pig. That’s significant progress in American thinking about China.

The Washington-insider Nelson Report noted on Wednesday that the U.S. side, only a half hour after the beginning of the one-day Dialogue, canceled the post-meeting press conference. The Chinese side canceled its presser soon thereafter.

The U.S. put out a short statement, breaking the practice of the two previous administrations of issuing joint ones with China.

In the past, American administrations, after testy get-togethers with Chinese negotiators, tried to maintain the appearance of close cooperation. Now, however, there is a new attitude in the White House, perhaps with decades-long consequences.

[snip]

The calculation in Beijing, apparently, was that the U.S., as in the past, would accept vague promises, “empty declarations of progress” as Clyde Prestowitz of the Economic Strategy Institute characterized them in the Nelson Report.

Trump officials, however, said “enough.” The Dialogue “ended at an apparent impasse,” Jacob Parker of the U.S.-China Business Council told Reuters. Beijing gave no ground on the issue that had come to symbolize, in the U.S. and in Europe, Chinese trade predation, the subsidization of steel and the deliberate maintenance of overcapacity in the sector. Moreover, Chinese officials did not, to American disappointment, agree to market-opening measures.

Beijing, by being so intransigent, miscalculated. “The administration seems unwilling to settle for further symbolic, cosmetic victories in terms of access to China’s markets and is pressing for more specific and time-bound commitments from China about opening up its markets to U.S. exporters and investors,” said Eswar Prasad of CornellUniversity to Reuters. The Chinese found Trump, he said, to be “no pushover.”

[snip]

As a result, the trade relationship looks like it will sour fast. Ross on the 27th will brief the House Ways & Means Committee on his agency’s Section 232 investigations into steel and aluminum imports, and special tariffs, justified on national security grounds, will almost certainly follow. When asked about the imposition of tariffs, Trump said this on the 18th: “Could happen.”
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In short, the Chinese are used to getting cosmetic agreements with the USA and completely ignoring them since it has had zero respect for Americans leaders. Now the USA is going to get tough with Xi, who is up for Communist party election or what ever they call it.

Its about time.
 
I'll be the first to say I have no idea how this will play out.

On a U.S. consumer economy so highly dependent upon Chinese goods, a tariff will act as a consumer tax, including adding inflationary pressure and decreasing purchasing power.

My fear here, is America's poor, working, and middle class will suffer.
 
Chomsky said:
I'll be the first to say I have no idea how this will play out.

On a U.S. consumer economy so highly dependent upon Chinese goods, a tariff will act as a consumer tax, including adding inflationary pressure and decreasing purchasing power.

My fear here, is America's poor, working, and middle class will suffer.
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What's unfortunate is "a U.S. consumer economy highly dependent on Chinese goods."

That is what our economic policy should be striving to change...dependence on sweat shop cheap goods and other overseas production, especially from China.

Production should stay here, even if it's automated because then at least the techs and engineers will be American employed.
 
chuckiechan said:
https://www.forbes.com/sites/gordon...a-trade-after-collapse-of-talks/#1db0a8ae3868



In short, the Chinese are used to getting cosmetic agreements with the USA and completely ignoring them since it has had zero respect for Americans leaders. Now the USA is going to get tough with Xi, who is up for Communist party election or what ever they call it.

Its about time.
Click to expand...

The US has the upper hand here. The Chinese need us more than we need them. This little stunt is just posturing. They'll come back to the table.
 
Chomsky said:
I'll be the first to say I have no idea how this will play out.

On a U.S. consumer economy so highly dependent upon Chinese goods, a tariff will act as a consumer tax, including adding inflationary pressure and decreasing purchasing power.

My fear here, is America's poor, working, and middle class will suffer.
Click to expand...

Fair point, do you feel the same way about Corporate taxes acting as a consumer tax?
 
Chomsky said:
I'll be the first to say I have no idea how this will play out.

On a U.S. consumer economy so highly dependent upon Chinese goods, a tariff will act as a consumer tax, including adding inflationary pressure and decreasing purchasing power.

My fear here, is America's poor, working, and middle class will suffer.
Click to expand...

I don't foresee an embargo on Chinese goods, but other countries can fill the gap in consumer goods. The big issues are about "dumping" - aluminum, steel, etc. but the biggest issue is China pretends we don't know they are boasting North Korea's missile technology. Our issues with China transcend trade and "is that a great deal or what?"

We don't need a trading partner who works with a country who promises to anialate us, not to mention them having the power to neuter the threat in an afternoon.
 
chuckiechan said:
I don't foresee an embargo on Chinese goods, but other countries can fill the gap in consumer goods. The big issues are about "dumping" - aluminum, steel, etc. but the biggest issue is China pretends we don't know they are boasting North Korea's missile technology. Our issues with China transcend trade and "is that a great deal or what?"

We don't need a trading partner who works with a country who promises to anialate us, not to mention them having the power to neuter the threat in an afternoon.
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While the bolded is true, how do we walk away from China if the don't desist?
 
AliHajiSheik said:
Fair point, do you feel the same way about Corporate taxes acting as a consumer tax?
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Actually, yes - only too a point though.

As always, a balance has to be found between revenue generation and taxes.

Our effective corp tax rates are a little below the OECD overage, so I wouldn't want them lowered and would prefer a slight blip up to generate more revenue. I'd prefer to cut middle-class taxes a bit to get money into the hands of the consumer and ease their tax burden.
 
Chomsky said:
Actually, yes - only too a point though.

As always, a balance has to be found between revenue generation and taxes.

Our effective corp tax rates are a little below the OECD overage, so I wouldn't want them lowered and would prefer a slight blip up to generate more revenue. I'd prefer to cut middle-class taxes a bit to get money into the hands of the consumer and ease their tax burden.
Click to expand...

Perhaps that same point could apply to tariffs but they could be targeted lightly but effectively. I'm unclear the distinction you are making between revenue generation and taxes.
 
Chomsky said:
While the bolded is true, how do we walk away from China if the don't desist?
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All the laws, agreements, codicils, etc are in the boilerplate of the agreement. It's standard stuff. We have had weak leaders who naively believe China will do the right thing. Trump had promised to hold China accountable and it looks like he is going to do just that.

It was hoped that China would be a responsible world player, instead of a bully settling scores. Good luck with that until the communist party falls.
 
do you not not see a trend America has pissed a lot of countries and trade blocks with their protectionist antics do you not think they will respond in kind ... the US is dependent on the greenback continuing being the reserve currency ... China holds $1.2 trillion in US debt bonds and Russia around $100 billion ... America's beef with China is because China is selling it's US debt bonds ... imagine the problem the US Dollar would incur if China and Russia dumped their combined $1.3 trillion US debt bonds on the market at the same time dumping the dollar as reserve currency and using gold to back their own currencies ... the US dollar crumbles the US economy crumbles
 
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