The Chinese are almost out of options. About the only card they have left to play is all those T Bills they’re holding. And they’ve been disposing of those steadily over the last few years. Or so I understand.
President Trump holds almost all the cards here. They’re looking for a way to cry Uncle that still saves them face.
L
The Chinese made agreements, then they BACKED OUT of like seven different agreements.
No.
Trump, we do not need agreements with people like this. For real.
Bring US production home.
I think Trump is smart enough to allow them to save face somehow. Trump almost always demands far more than he expects to receive leaving plenty of room to accommodate his adversary so that both sides feel like they got something even as Trump met his expectation.
I also think Trump has assembled the best team around him that I have seen in my lifetime for an administration. Most of the big players on the financial side are like him - very wealthy. They are also older. In the past, administrations of either party have been chock full of people using public service to set themselves up for future high dollar jobs in the financial industry. These guys are working for us and don’t need the money or a future promise of a job. It makes a huge difference!
One has to wonder how much all of this Russia nonsense and the Mueller investigation has hurt Trump in negotiating. In that sense, he (and we) have truly been robbed to borrow a phrase from Levin, of his full Presidency for two years. China is likely watching the 2020 election closely trying to read the tea leaves because it is highly doubtful any other “politician” from either party would hold this line.
Agree - they are running out of runway for their part. One of their big hopes has been that the Mueller investigation would derail Trump or that they could build enough public pressure in the US to force Trump to back off.
All of those things have failed and they likely have too much time before the 2020 election to prevent serious damage.
My guess, they negotiate better terms, but immediately betray their agreement if and when a Democrat or GOPe President gets into office.
And, as I’m sure Trump understands, for the nation of China, “losing” face is worse than losing life, especially when you have an abundant supply of lives that can be “lost”.
“About the only card they have left to play is all those T Bills they’re holding. And they’ve been disposing of those steadily over the last few years.”
They bought those T Bills as part of their currency manipulation, which helped depress the Yuan vs the USD. BTW, that option isn’t as available to them now that their debt is 250% or so of their GDP.
Have you noticed how flat the US bond yield curve is now? The global appetite for US debt is strong (other alternatives are not as attractive). The Chinese could sell their bonds and they would be snapped up by the market without much change to our rates. The Yuan would then increase in value, harming them.
I can only note how the article paints the Chinese
as being studied, deliberate, careful, etc, etc, etc.
Whereas the tariffs are not painted in those terms.
The Americans have some very nice watches, high end, very nice.
The Chinese have the time.
THAT SAID, this doesn't mean that we cannot have a good and functioning trade relationship with them. It just means that any trade deal we have has to somehow account for their natural dishonesty.
The solution: mechanisms to make sure they are not cheating and to amend the books when they are caught. Audits, investigations, examinations, reviews, analyses, dissections...
There is a secondary problem which arises due to a cultural difference.
The China culture is, due to communism, dishonest. But it is, due to longstanding Chinese history, an honor-based culture. "Saving face" ranks very high in cultural importance.
Yes, I know that is strange and self contradictory, but it is what it is.
The solution here is to make sure that the Chinese understand that the audits are not insults to their honesty but compliments to their cleverness (this flatters both their Chinese need for honor but still corrects for their communistic opportunism--er, cheating).
We watch them closely (audits, examinations, etc.) because of cultural differences.
They save face...we save a deal.
Interesting the Norks are cranking up, again.