Posted on 01/28/2018 6:14:47 PM PST by cba123
One of the pillars of President Trump’s election campaign was fixing America’s yawning trade deficit with China. Indeed, he went so far as to call trade with Beijing as China’s “rape” of the US economy. Trump also railed against the “theft” of coveted manufacturing jobs from the American heartland. So it seemed like a trade war was an eventuality.
However, Trump didn’t address the trade imbalance with China in his first year in office. The deficit with China came in at a hefty $344 billion last year. That was only a smidge below President Obama's last year in office and an eye-watering 52% above the 2009 trade deficit.
In his first year, President Trump seemingly tamped down his rhetoric and set aside his campaign promises in order to get Beijing's help with North Korea's belligerent nuclear and missile programs. But the focus on North Korea is now fading and the trade deficit with China is once again coming into focus.
Indeed, President Trump just slapped 30% tariffs on solar panel imports. That's a direct shot at China because it is the world's top solar panel manufacturer and the largest exporter of goods to the United States. And this is likely just the start of many more trade actions that'll target Beijing.
(please see full article at the link)
(Excerpt) Read more at thefinancialcourier.com ...
Trump is standing up for us once again.
It is about darned time.
And a note. My information is that the deficit with China last year, was an all-time record high, trade deficit amount.
Not "only a smidge below Obama's last year in office".
Read that again, Mr. Author... I believe December still needs to be entered into your totals.
Well, there probably hasn’t been “Fair” Trade for a few decades.
We’ll see how the negotiation/accommodation goes...
Then there is this:
“Beijing can use its vast holdings of US government debt as a devastating weapon in a trade war. China is the largest holder of US government debt at $1.177 trillion.”
PRyno’s fault....
When I see a story like this, I have to wonder if it’s on the level or just more Trump bashing. Biased reporting has ruined journalism
“heading towards...”?
It’s been a pretty one-sided war for the last few decades.
We’re just starting to fight back, is all.
Al Basoglu:
Please see this link: It shows the bilateral trade balance between China and America.
It agrees with the number you quoted. 344 billion dollars. But please look closer..
I believe that total, is only through November. The actual bilateral trade balance will no doubt set a brand new record for this year.
(link to the current trade balance, currently through November)
https://www.census.gov/foreign-trade/balance/c5700.html
I wish them not one good thing in the future. Not one.
With a few exceptions, my industry can’t make a thing in the U.S. that American consumers would pay for nowadays, due to regulations pertaining to the materials used and the manufacturing processes. The owners still make a larger margin per unit buying from China despite the shipping charges and the cost of product replacement due to horrifying Chinese QC. They also prefer dealing with the fewer remaining drones who do clerical and logistics work to managing a production line. These guys all talk the good “proud American” game but they will not be broken of their Chinese buying habits.
The President is pedal to the metal on removing regulations; so far during his first term, his agencies have removed 22 regulations for each new one promulgated.
I think at some time, there will need to be a fundamental rejiggering of the values of the Yuan, and the Dollar.
BIGTIME.
The thing is, we need to address the fundamental questions of their market dominance first.
Like their demanding details about how things are made. Like their very protectionist trade policies. Their racially based immigration policies, and a lot of other issues.
We are looking at a reset button. At some point.
I say, let’s do it now.
America needs to be for America again.
China has been waging a one sided trade war against the USA for at least 30 years.
https://nationaleconomicseditorial.com/2016/12/03/chinas-trade-war-against-america/
Between 2000 and 2006, roughly 33% of Chinese exporters sold over 90% of their goods abroad—for context, only 0.7% of American exporters did the same.
How did they hit such unnaturally high numbers? Chinese export industries rewarded with preferential land-use policies, easier access to finance, or exemptions from various industrial or commercial taxes, in direct contravention to WTO rules.
All this highlights just how dedicated the Chinese are to preying upon Western markets.
China doesn’t fight fair: Chinese companies are free to compete in America, but American companies cannot compete in China.
But why should they?
Predatory trade is far more lucrative than free trade—I don’t care what you learned in your college economics class, your professor was wrong.
Theory always needs to take a backseat to reality.
The truth is that China got rich by taking advantage of American markets, by devaluing their currency, by practicing de facto mercantilism—all the things classical economists say can’t work.
Turns out, they were wrong.
China’s returned to its historical position as the world’s major trading nation, and they did it without liberal economics.
Here’s a word of warning: China’s trade paradigm with America is deliberately predatory, and all we’re doing by pursuing freer trade with them is pitting our companies against the power of their dictatorship.
Our companies are getting squashed like bugs, and it’s killing our free market—in trying to keep the American government out (by lowering tariffs), we’ve let China’s government in.
That’s a bad trade.
To protect our free market, we must fight fire with fire, and impose massive tariffs on Chinese products—otherwise we don’t have a chance.
At the end of the day, economic globalization isn’t always a good thing
Widely believed by parvenu novices like the writer of the article. Reflects a basic misunderstanding of how debt works at the macro level.
I completely agree.
100%
Very good post.
The debt needs to be rolled over, typically. Not being able to roll it over creates bankruptcies.
See the Yellowstone Club and Moonlight Basin.
I do not see a trade war with China on the horizon.
Especially this quote:
“Our companies are getting squashed like bugs, and it’s killing our free market—in trying to keep the American government out (by lowering tariffs), we’ve let China’s government in.”
That is a fact. That is 100% true. That is exactly the problem.
It is a big problem, and it is rapidly getting even bigger.
Even some on this website, are guilty of this.
Worrying about the American government. Ending up helping the Chinese communist government.
Bingo.
Well, well said. Exactly.
We are already in one and the US is losing.
This abject fear of China and total lack of confidence in America's ability to compete is nuts.
Look, the average US consumer buys 10x the amount of goods each year as the average Chinese consumer. Does it surprise anyone that we import more goods than they do? We consume more than they do!
Our companies are doing very well, thank you. If they're getting squashed why are people bidding up their stocks? Have you checked the performance of the stock market?
Seriously.
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