oldephartte (oldephartte) wrote,
oldephartte
oldephartte

Quora : Is Trump winning trade war with China ?

Why do we get one article saying Trump is losing and another one saying he is winning the trade war? Could someone tell us the Truth with a capital T on what's happening as of now with the trade war between USA and China?

Paul Sutton
Paul Sutton, Stock Trader, electrical engineer

Truth? When all this started out, President Trump claimed we had a balance of trade imbalance with China of $800 Billion. Then he changed it to a trade imbalance of $550 Billion, and there he stuck with his pronouncement.

Truth? The US imported some $550 Billion from China, and exported some $150 Billion to China. You can see where Trump got his erroneous numbers. The actual imbalance was about $350 Billion. But, $800 Billion sounds a lot scarier, right? Plays well to the base?

Trump imposed a 10% tariff on some $200 Billion worth of Chinese imports. “To not respond in kind would be impolite” responded China.

But China went a step further. They cancelled orders for every American good, produced, grown, or raised, in America, and shifted their purchases to “other producers.” They now get their soy, beef, pork, and so on from Argentina, Brazil, Australia, Africa, and so on. One presumes they can also get manufactured goods from other countries eager to trade with them.

That’s $150 Billion worth of exports to China that were wiped out. As a result, we have a glut of farm products in the US. You may have noticed that steaks have been on sale at unheard of prices recently. I don’t buy a lot of soy, but I’ll assume that the bottom of that market is also spongy.

And China hasn’t even broken a sweat. Ford, and GM, both manufacture and sell more vehicles in China than they do in the US. Starbucks, McDonald’s and every fast-food company you care to think of have stores in China. Apple makes iPhones in China. I’m no expert, but I’ll assume that most large US manufacturers have a presence in China. Suppose China simply responds to Trump’s 25% tariff on all things Chinese on 1/1/2019 by slapping a tax of 10% on all goods made in, or by US companies selling into or manufacturing within and selling in China? Instant chaos, and economic calamity.

You do see where this could go, don’t you? And Trump says we’re winning? The man is insane. As someone on CNBC put it, “China is playing Go while the US is setting up a checkerboard. I’ve noted that “China is playing a strategic game while trump is playing at a tactical one.” Even if Trump could win a battle, he cannot win this war.

China has four times the US population; in the next four to six years, it will have the globe’s largest GDP. How do you counter that? You don’t if you have any sense. What does Trump think he’s going to do, turn China into a vassal state to the US? That’s not going to happen. If you want to know what kind of war China is playing, read “The Ancient Art of War,” and what you’ll find is that Chinese goals are generations down the road, and they will win, not by fighting a war, but by not fighting at all, overtly, that is.

Winning? Trump probably thought he was winning up until he had to file for bankruptcy each of the six times he had to file. The man doesn’t know when he’s lost, and worse, cannot add two and two to see the eventual outcome of his own misdeeds, which explains why he’s had to file bankruptcy so many times. He doesn’t get it. He thinks he should win because he’s Donald Trump and doesn’t seem to understand that the rules also apply to him. He will not win this trade war because he cannot win it against a larger population with a higher potential GDP. He may think he’s making an early strike that will cripple China, but it will backfire.

And, as if any proof is needed, the stock market has swung into a slide that is a direct consequence of the trade war. Many, many corporations noted in their Q3 reports that they were concerned about rising prices as a consequence of the trade war, and Wall Street is responding to that news. This does not end well. Anyone with a brain would know that this is the time to be sucking up to China to get a larger toehold into their economy against its future growth and consumption. Instead, Trump has cut exports to China to almost nothing. How is that winning? It isn’t.

“Rather blind than stupid” pretty much describes Trump’s appeal. This will not work out well in the end. We will be the worse for it.

Tags: trade 'negotiations', trump
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