Posted on 05/06/2019 1:21:11 PM PDT by Innovative
A Chinese delegation will travel to the United States for trade talks this week after President Donald Trump’s latest tariff threat, according to sources familiar with the matter.
Trump reignites the trade war with Beijing on Sunday, raising doubts about whether the Chinese team will come to Washington to try to strike a trade deal as planned.
Stock markets initially plunge following Trump’s tariff threat but recover throughout Monday.
(Excerpt) Read more at cnbc.com ...
Winners make jokes, losers say “Deal!”
More about the market:
Dow makes stunning comeback, recovering nearly all of 471-point plunge on hope trade deal not dead
https://www.cnbc.com/2019/05/05/traders-brace-for-sharp-sell-off-on-trumps-tariff-threat.html
I swear, someone in Trump’s family must be making a fortune in the stock market on this nonsense. LOL.
Damn right....Kinda like....What the hell do you want from us....fair trade??
You don’t think the brokers on the floor are making money??
[I swear, someone in Trump’s family must be making a fortune in the stock market on this nonsense. LOL.]
This is going to hurt me more than it hurts you......Oh,no,it’s not. The Chinese Hang Seng index is now down today more than triple the US Dow index on a percentage basis. Trump’s tariff war with China reminds me of Reagan ratcheting up military spending in a military buildup with the USSR expressly to propel the demise of their ailing economy into bankruptcy. It hurts until the other guy dies. Then we hold a party at the funeral, shed a few false tears and run out to collect the dividends. Unfortunately we are going to have to pay $1.25 rather than $1.00 for that can opener we could have bought from China while we are waiting for the funeral hearse to drag their economic carcass away. A small price to pay to get rid of a parasitic competitor/enemy.They need us. We definitely don’t need them and I genuinely hope He gets rid of the entire trade relationship
“I swear, someone in Trump’s family must be making a fortune in the stock market on this nonsense. LOL.”
Anyone can with some smarts and a little luck. I added to my portfolio at the open and am glad I did.
Just a little, mind you. And I didn’t sell.
“Unfortunately we are going to have to pay $1.25 rather than $1.00 for that can opener we could have bought from China while we are waiting for the funeral hearse to drag their economic carcass away. A small price to pay to get rid of a parasitic competitor/enemy.”
The problem is the American companies see the 25% tariff as a excuse to raise their prices on the same items. Consumers wind up paying inflated prices when the tariffs come off.
disagree. the tarriffs are all on the origninal producers and not on the middlemen with whom the US do business. So the 10 percent tarriffs so far have caused almost zero price increases. The chinese have absorbed the tarriffs and taken lower profits to keep market share.
Shanghai stock market down 5.5% today.
Black Monday for them, normal daily variation for us.
“The problem is the American companies see the 25% tariff as a excuse to raise their prices on the same items. Consumers wind up paying inflated prices when the tariffs come off.”
That effect is when tariffs are placed on imports generally. These are just on China. Lots of other low cost producers around the world can replace them at comparable prices.
“The problem is the American companies see the 25% tariff as a excuse to raise their prices on the same items. Consumers wind up paying inflated prices when the tariffs come off.”
You are right but only to a point. Remember American multi national companies manufacturing in China and exporting to the US have to compete with other companies making the same product outside of China who are not burdened by the 25% tariff because they are manufacturing outside of China. Eventually as Trump ratchets up tariffs on China those companies will have to move their facilities to other low wage nations like Cambodia or India not burdened by the tax to compete. I really think that this is Trump’s end game to get American manufacturers out of China so the Chinese can no longer steal their technology and also create massive job losses in China, I personally hope he raises tariffs to the sky to get them out of there. China knows they have no leverage and will fold to him at every turn.
The bottom line is American consumers take it up the *** on prices with tariffs.
Not really.
At the 10% tariff most American companies are pushing their Chinese to absorb or share it. At 25% there is no way Chinese suppliers can absorb it, the tariff would be added to the cost of the product and you would see inflationary price increases. The USA consumer will be paying for MOST if not all of this.
Your “lots of other low cost producers...” comment reflects a very naive opinion of the reality of managing supply chain. Right now, China is the world’s factory, not because of low labor, but because they have the raw material and factory infrastructure to feed the buyers of the world. India, Vietnam, etc...just cannot compete.
You are correct.
“Your “lots of other low cost producers...” comment reflects a very naive opinion of the reality of managing supply chain.”
You are being naive.
There are advantages to having the whole suite of capabilities, but that is not a permanent condition. That supply chain was shifted from the USA to China. It can, and will change again. It already is.
Hundreds of major companies are now in the process of moving their production out of China, and the supporting supply chain and infrastructure is developing at those new locations, as it is beginning to wither in China.
Labor costs and real estate in China have risen markedly over the last two decades. The cost of intellectual property theft has skyrocketed in China - it is virtually certain to occur there. Foreign Direct Investment in Chinese manufacturing began drying up years before President Trump’s election because of these and other factors.
Do you think that the rest of the world is uniformly incapable or unconcerned about developing their own economies, with integrated supply chain efficiencies? Quite the contrary - competition is fierce. If anything, the path to doing so is clearer now than when China set out to develop theirs. Not only are competing countries aggressively pursuing this, but manufacturing giants eager to leave China have been assisting them - sometimes able to write their own laws and regulations for the accommodating new Countries to use. US led International Development Agencies, like the World Bank, can drop in a set of best practices, and have been financing the needed infrastructure developments. It is the development opportunity of a generation, and a rush is on to get the biggest possible slice.
India, Thailand, Indonesia and Vietnam are well down the road to take large chunks of sophisticated manufacturing business from China. Korea and Japan are pulling a significant amount of their Chinese production back home with big investments in robots. Mainland Chinese producers themselves have been increasingly off-shoring their own low cost production to Myanmar, Ethiopia, Bangladesh and elsewhere for several years.
The trade deals that the Trump Administration renegotiated with all of our major trading partners outside of China - Mexico, Canada, the EU, Japan and Korea; went so quickly precisely because we were dividing up China’s piece of the pie among us. There is a global consensus among developed economies to shift the supply chain out of China, because of their lawless lying, cheating and stealing; as well as the frightening aggressiveness they have exhibited on so many fronts. China has collected many enemies with its behavior, whereas its allies consist mainly of North Korea.
“Lots of other low cost producers” are already shipping competitive products, at competitive prices. US consumers have seen very low price inflation, relative to historical norms so far in this process (the first $30 billion/year of new tariffs). The President himself tweeted yesterday (5 May), “The Tariffs paid to the USA have had little impact on product cost”. The shift out of China will speed up now with these larger tariffs, but broad preparations have been underway for years. It has been very well planned and managed by this Administration.
We will just have to see how much the new tariffs result in new costs to American consumers. The worst case - a dollar for dollar transfer of the tariff cost directly to the consumer - would be $30 billion dollars a year over a $20 trillion dollar economy. That would be equivalent to the price of gas going up 20 cents a gallon. So far though, the rise in prices to American consumers has been only pennies on the dollar of new tariffs - lost in the noise of of other factors.
The replacement of suppliers has been proceeding smoothly and efficiently. It has been basically transparent to Western consumers.
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