Author: reedak

Trump’s trade war hurting US economy   [Copy link] 中文

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Post time 2018-8-9 00:16:58 |Display all floors
8.  Zachary Karabell is a WIRED contributor.  He is the head of Global Strategies Envestnet and president of River Twice Research.  The following are excerpts from his June 27, 2018 article headlined "Trump's Trade War Won't Hurt China. It Could Hurt Tech In the US".

(Begin excerpts)
...For starters, China’s tech investment footprint in the US is remarkably small. The value of China tech investments was $9.9 in billion 2015. That rose by some estimates to more than $15 billion in 2016, and then dipped to $13 billion in 2017; last year’s number would have been much smaller without an $8 billion investment in Uber by Tencent, in conjunction with Japan’s SoftBank. The number of deals has fallen as well, to 165 last year from 188 in 2015, and has plunged in 2018 so far. The biggest reasons: The Chinese government has clamped down on easy credit that fueled these deals, and Chinese companies have grown wary of investing in industries that might come under the Washington spotlight....

Much as with immigration, the Trump administration is touting aggressive policies on an issue where the trends already have reversed course. Chinese direct investment is, in relative terms, small; limiting it will have minimal impact on US startups and growth companies (though it’s possible that one of those companies would have become a unicorn of the 2020s). Limiting such investment will also have minimal impact on the domestic Chinese economy. It will, however, cast an even greater pall over future economic ties, further propelling China to seek investments elsewhere.

As for restrictions on US technology exports to China, those too are a pinprick. First, the US government has been selectively trying to contain exports of technology it sees as vital or sensitive for many years. Under Obama, chipmakers such as Intel and Nvidia were not allowed to sell certain types of chips with military, supercomputer, or security applications. More to the point, US technology companies don’t export that much to China. Even by a generous definition of technology that includes aircraft parts, US technology exports to China amounted to less than $30 billion in 2017, out of total trade with China in goods and services in excess of $700 billion.

Most of what US tech companies sell to China does not show up as US exports because the products aren’t made in the United States. Hence an iPhone, which is nominally an American product that sells well in China, isn’t actually an American export to China because the phones are mostly assembled in … China.

As a result, restricting what American tech companies can sell to China doesn’t ultimately prevent many of those companies from selling to China, because of their global supply chains. In addition, there’s a good chance the restrictions would lead to unintended consequences: Faced with uncertain crackdowns on their exports from the US, American tech companies could shift more production overseas, rather than risk restrictions on their outbound American-made goods.

So here, as elsewhere, we have what appears to be forceful action designed to punish China and “restore” American competitiveness. The actual dollar amounts, however, are tiny, and the number of companies that will be meaningfully impacted is small. China is spending heavily on AI research, as well as on cybersecurity and robotics. Preventing Chinese companies from investing a few million here and there on American startups might make it harder for said startups to raise money, but it changes the competitive balance going forward hardly at all.

As symbols, though, these moves send a message that the US increasingly is not open for business. They signal to companies around the world that they would be better off looking for alliances and arrangements not subject to unpredictable American tariffs or investment restrictions. Denying foreign firms and countries access to US capital and US markets 20, 30, or 40 years ago would have represented a nearly insurmountable challenge. Faced with such measures, most countries and companies would have and did accommodate American demands. That is not the world we inhabit today.

With limited tools and unlimited words, the Trump administration cannot significantly alter US-China trade today. But it can, and has, soured the climate for future economic bonds. In the short term, the economic harm could be quite limited. It’s the longer-term challenges that should be of greater concern. If Trump’s policies make the US a less desirable place to invest, if they channel ever more global activity away from America, the damage will accrue steadily. Like the frog as the water gets hotter and hotter, it may not feel like much year by year, and when the damage finally hits home, it may be too late. We have time, but it’s not infinite.  (End excerpts)

Source:  wireddotcom
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Post time 2018-8-10 10:38:58 |Display all floors
9.  Terry Miller is the Mark Kolokotrones fellow and director of the Center for International Trade and Economics at The Heritage Foundation.  He previously served as US ambassador to the United Nations Economic Council and deputy assistant secretary at the US Department of State.

The following are excerpts from the March 22, 2018 article by opinion contributor Terry Miller under the headline "Exaggerating our China trade problem will hurt Americans".

(Begin excerpts)
President Trump has announced tariffs on $60 billion worth of Chinese imports, the latest action in a series of policy measures aimed at changing Chinese economic practices that the administration believes are harming American businesses. Based on their reactions, few American businesses welcome the move. Chamber of Commerce president Tom Donohue, recently warned that “tariffs could lead to a destructive trade war with serious consequences for U.S. economic growth and job creation.”

The problem with tariffs is that they aren’t paid by Chinese businesses or the Chinese government. Instead, American consumers and businesses foot the bill. The administration’s hope is that the higher prices paid by Americans will reduce their demand for Chinese goods and thus hurt the Chinese manufacturers. That’s a little like cutting off your foot in order to hurt the shoemaker.

...The business community’s negative reaction to the proposed tariffs and other restrictions is significant. It tells us that a great many American producers find that our current trade and investment relationship with China actually works well for them.

...American businesses are neither dupes nor victims in the process. They enter into trading and investment relationships with Chinese commercial entities when it is profitable to do so. When there is no gain, there is no trade.

President Trump has railed against the U.S. trade deficit with China, arguing that Beijing is taking advantage of us. But in any voluntary economic trade, and all of our trade with China is voluntary on our part, we are taking advantage of them as well. That is the nature of free trade: Both parties to the transaction benefit. Both sides have an advantage. The administration seems focused on those businesses facing competition from Chinese products, and they are certainly deserving of consideration.

But many other Americans are benefitting significantly from their economic relationships with the Chinese. Our exporters benefit from access to the Chinese market. Our manufacturers benefit from the imported Chinese goods they use in their manufacturing processes. American workers benefit from jobs created because of Chinese investment. American consumers benefit from lower cost Chinese products. All of these Americans are equally deserving of consideration.

It is the nature of our capitalist economy to let the market determine prices and production levels. When the government interferes with that process, through tariffs or other trade restrictions, it tilts the playing field in favor of some Americans and against others. Such favoritism is deeply offensive to the American sense of fairness and justice.

...We must avoid the trap of restricting our own economy, and thus becoming more like them.

The United States benefits from more trade rather than less. It always has and always will. There is no doubt that China can be a tough adversary for American dealmakers. But Americans are tough negotiators as well. The administration would do well to remember that fact as it inserts itself and its own judgments into economic relationships that American businesses and consumers have already decided are in their own best interests.  (End excerpts)

Source:  thehilldotcom
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Post time 2018-8-10 13:27:49 |Display all floors
This post was edited by pnp at 2018-8-10 13:29

A South Carolina TV plant, Element,  is closing down, victim of Trump's tariff war with China.  It claimed that the tariff makes it too costly to import parts from China, its only source!
BMW is closing down a US plant and moving production to Thailand for the same reason!

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Post time 2018-8-11 04:16:14 |Display all floors
10.  Eric Boehlert is a veteran progressive writer for Media Matters and Salon.  The following are excerpts from his April 9, 2018 article headlined "Trump to farmers: My trade war has to hurt you ‘for the country’".

(Begin excerpts)
Suggesting it’s their patriotic duty to take an economic hit for America, Trump on Monday conceded U.S. farmers will likely be hurt by the White House’s unfolding trade war with China.

But he stressed that farmers shouldn’t worry if their livelihoods dwindle because he promises to make it up to them.

“They want to hit the farmers because they think it hits me — I wouldn’t say that’s nice,” Trump said of China. “But I’ll tell you, our farmers are great patriots. These are great patriots. They understand that they’re doing this for the country,” he added.

“We’ll make it up to them. And in the end, they’re going to be much stronger than they are now.”

In just one week, Trump has already flip-flopped from his irrational claim that “trade wars are good, and easy to win.”

What’s obvious is that Trump’s base is going to pay the biggest price for his reckless tariff rhetoric.

“Many of the farmers who helped propel Donald Trump to the presidency fear becoming pawns in his escalating trade war with China, which threatens markets for soybeans, corn and other lifeblood crops in the Upper Midwest,” the Washington Post reported on Monday....

Suddenly, billions of dollars of pork exports are at risk, as well as thousands of jobs attached to that industry.

“It’s going to hurt American farmers, no doubt about it,” a 43-year-old dairy farmer announced at a recent Wisconsin town hall. “We were already looking at depressed prices for corn and soybeans before this. There’s no sector that’s showing good numbers.

A stinging editorial in the Quad City Times in Iowa declared that voters had been “conned” by Trump on trade. “Eight of the country’s top 10 soybean producers voted for Trump in 2016.”

Now he’s rewarding those farmers by demanding that they take a massive hit for him. And he’s offering nothing but empty promises in return.  (End excerpts)

Source:  sharebluedotcom
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Post time 2018-8-11 11:42:37 |Display all floors
11.  Damian Paletta is White House economic policy reporter for The Washington Post.  Before joining The Post, he covered the White House for the Wall Street Journal.

Honors & Awards: Scripps Howard Raymond Clapper Award, 2011 Sigma Delta Chi award for Washington correspondence, 2011

The following are excerpts from Damian Paletta's April 11, 2018 article headlined "Trump considers Depression-era program to bail out farmers caught in his trade war with China".

(Begin excerpts)
President Trump is considering a Depression-era program to help bail out American farmers hurt by the trade dispute with China, two people familiar with the process said.

Trump’s aides are looking at ways to use the Commodity Credit Corporation, a division of the Agriculture Department that was created in 1933 to offer a financial backstop for farmers.

But while the White House is considering the idea as a way to protect farmers if China slaps tariffs on U.S. agricultural products, some GOP lawmakers have told the administration that the approach will not work. The program, the lawmakers say, will not be able to provide the needed relief to farmers, and using it will further inflame trade tensions with China.

The CCC can borrow up to $30 billion from the Treasury Department and extend that money to farm groups. If U.S. farmers see orders from China plummet because both countries create new layers of tariffs on imports, the White House wants to set up a bailout program for the U.S. agriculture industry....

Some lawmakers are telling the White House not to pursue this approach. They are still trying to persuade Trump to stop short of engaging in a trade war with China, as Beijing has threatened to impose tariffs on U.S. agriculture products.

“CCC is used for emergency items,” said Senate Agriculture Committee Chairman Pat Roberts (R-Kan.). “I know it has been misused in the past. I’ve seen that up front.”

He said he has told the White House that the best approach is to ensure farmers have a market to sell their products into, not a financial incentive for the products to sit idle.

“It’s not that I’m diametrically opposed to it to the degree that I’d say no. I’m just saying I don’t know how we implement this, I don’t know what kind of cockamamie scheme that we could come up with that would be fair, that would be at least somewhat responsible,” Roberts said....

Sen. Joni Ernst (R-Iowa) has also raised warnings about the administration’s approach, saying any changes should ensure farmers maintain high levels of production and should not be designed to provide artificial subsidies.

“Farmers want to be productive,” she said. “They want their goods and commodities going to new and developing markets.”

....U.S. farmers exported $21 billion in goods to China in 2016, and they fear a major disruption if Beijing slaps tariffs on pork, soybeans, fruit and other products.

This has led to a panic from farmers, who are leaning on lawmakers such as Roberts to intervene before their orders plummet.

The threat has already led to wild gyrations in commodity prices, particularly for soybeans.  (End excerpts)

Source:  washingtonpostdotcom
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Post time 2018-8-11 11:43:51 |Display all floors
This post was edited by pnp at 2018-8-11 11:44

A ship carrying soya beans is now achored outside China, having missed the deadline to avoid China's retaliatory tariffs!  They either pay millions in tariffs or see their soya beans rot!  That is the price US farmers are paying for supporting Trump, serves them right!!

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Post time 2018-8-11 12:28:21 |Display all floors
pnp Post time: 2018-8-11 11:43
A ship carrying soya beans is now achored outside China, having missed the deadline to avoid China's ...

Rats and cockroaches will be having a good time this year (perhaps even till Tuesday, November 3, 2020) feasting on rotten soybeans and other US agricultural products.  They will tell Donald Trump:  "We never expect you to become our dearest and greatest friend."
Donald Trump's infamous Hitler-style rabble-rousing chants:  "Lock her up!  Lock her up!"

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