Trade wars - shooting yourself in the foot.

[Tero]

Well the Syria war was unwinnable. Obama should have pulled out and let Putin place the dictator back in control. Waste of lives and our money.

The rest is all president stuff. Every president with his party ruling both houses would name all the judges.

[Tero]

Three Ways China Can Retaliate

Let the Yuan slide 25% negating the tariffs.
Further limit US firms ability to do deals in China
Halt Rare Earth Exports. Rare earths are 17 minerals used to make cell phones, hybrid cars, weapons, flat-screen TVs, magnets, mercury-vapor lights, and camera lenses.

https://moneymaven.io/mishtalk/economic ... PU3CQIFPAg

[Tero]

The Chinese and U.S. economies are likely to slow in 2019, giving President Donald Trump and Chinese President Xi Jinping no choice but to declare a truce in their ferocious trade battle, according to a top Wall Street strategist.

“I think personally that the trade war is coming to an end and there is really nothing Trump can do about it,” Jim Paulsen, chief investment strategist at The Leuthold Group, said in the latest edition of the POLITICO Money podcast. “If you have the United States and China both with very weak economies, the negotiation around trade just evaporates. Neither party has any negotiating power left. They both have to stop what they are doing.”

https://www.politico.com/story/2019/01/ ... ar-1077878

[rainbow]

With much fanfare, Trump will negotiate a deal with China:
"The best deal ever, folks"

...which will put the US in a weaker position than it was before he started his nonsense.

[Tero]

"n theory, Beijing could trigger a panic in bond markets by dumping some of the $1.1 trillion in US Treasuries that it owns.

By releasing a flood of US Treasuries, the price would collapse, sending yields (or interest rates) soaring and causing American borrowing costs to rocket.

But there are very good reasons why China is unlikely ever to pull the trigger. First, it may not have the desired effect. Second, it could backfire badly on its own economy."
https://amp.cnn.com/cnn/2019/08/07/busi ... index.html

[Sean Hayden]

The Chinese and U.S. economies are likely to slow in 2019, giving President Donald Trump and Chinese President Xi Jinping no choice but to declare a truce in their ferocious trade battle, according to a top Wall Street strategist.

“I think personally that the trade war is coming to an end and there is really nothing Trump can do about it,” Jim Paulsen, chief investment strategist at The Leuthold Group, said in the latest edition of the POLITICO Money podcast. “If you have the United States and China both with very weak economies, the negotiation around trade just evaporates. Neither party has any negotiating power left. They both have to stop what they are doing.”

https://www.politico.com/story/2019/01/ ... ar-1077878

He doesn't know Trump very well does he?

[Sean Hayden]

They say the costs have gone directly through to the consumer. But from what I've read so far they've gone to the importers. Instead of showing how consumers have paid, they show the impact tariffs have had on prices paid by importers with the assumption that this gives a clear picture of costs paid by consumers.

It doesn't help that data shows prices still being significantly lower than they have been in recent history.

But what is most surprising to me are the threats: lower wages or less increases to wages along with job losses.

Our wages have been dead forever. This is common knowledge. Job security is a joke.

Should we take these threats to mean that if the tariffs disappear our wages will start to increase? Or that the corporations will seek on their own to take a hit to profit margins if it means helping consumers or American workers?

--this is just fucking bizarre man

[Sean Hayden]

It doesn't help that data shows prices still being significantly lower than they have been in recent history.

This should say the increase in prices has not been greater than what we've seen recently.

The prices paid by importers has seen a significant jump since the new tariffs.

[Hermit]

They say the costs have gone directly through to the consumer. But from what I've read so far they've gone to the importers. Instead of showing how consumers have paid, they show the impact tariffs have had on prices paid by importers with the assumption that this gives a clear picture of costs paid by consumers.

It doesn't help that data shows prices still being significantly lower than they have been in recent history.

But what is most surprising to me are the threats: lower wages or less increases to wages along with job losses.

Our wages have been dead forever. This is common knowledge. Job security is a joke.

Should we take these threats to mean that if the tariffs disappear our wages will start to increase? Or that the corporations will seek on their own to take a hit to profit margins if it means helping consumers or American workers?

--this is just fucking bizarre man

Most of the tariffs have not been activated yet. This will happen on Sept. 1 on one lot and Dec. 15 on the next. China also manipulates the exchange rate of the yen. A lower yen makes its exports cheaper and imports more expensive. Last year the Chinese bought around 235,000 cars that were made in the USA. I wonder how many they'll buy next year.

As for importers absorbing a 10% tariff, I don't think they have the margin to do that (with the exception of highway robbers like Apple Corp, which regularly creams 20 to 25% off the top), though they might trim their profit a little bit, at least in the short run.

[Sean Hayden]

The tariffs I looked at activated 2018. I should have made that clear.

[Sean Hayden]

The majority of "US cars" from companies like GM sold in China are also made in China.

I wonder if GM has been an exception to stagnant wages and lost jobs in the US?

[Hermit]

The tariffs I looked at activated 2018. I should have made that clear.

Those tariffs affected $US110 billion worth of Chinese goods at 10%. The shit had barely begun to hit the fan. If you're curious about the what is about to happen soon, read this exemplary story.

[Hermit]

The majority of "US cars" from companies like GM sold in China are also made in China.

Losers each way then, eh? The decrease of US-made cars that are exported to China will cause layoffs in the US, while Chinese "US cars" will cost more for US consumers to buy. Needless to say that the Chinese will suffer too. Nobody wins trade wars.

[Sean Hayden]

The tariffs I looked at activated 2018. I should have made that clear.

Those tariffs affected $US110 billion worth of Chinese goods at 10%. The shit had barely begun to hit the fan. If you're curious about the what is about to happen soon, read this exemplary story.

A report I've been reading mentions 6 waves of tariffs ranging from 10-50%.

China specific tariffs:

These early tariff waves were dwarfed in size by the tariffs that were applied to Chinese
imports that summer. The China-specific tariffs began in July and were rolled out in three waves.
The first tranche of 25 percent tariffs on 34 billion dollars of imports began in July (wave 4),
followed by a second tranche of 25 percent tariffs on another 16 billion dollars of Chinese imports
in August (wave 5). Finally, another tranche of 10 percent tariffs on an additional 200 billion
dollars of Chinese imports was imposed at the end of September (wave 6). The tariffs included in
this last wave were slated to rise in value by another 15 percentage points in January until President
Trump and President Xi announced a temporary truce in December at the G20 meeting.

In total,
nearly 283 billion dollars of imports—about 12 percent of total imports—were hit by duties.

http://blogs.cuit.columbia.edu/dew35/fi ... P13564.pdf

As for no one winning trade wars: I guess it might be true if by "trade war" you just mean tariffs, which is also how the paper above uses the term. But that seems superficial to me. This is easily seen by looking for the recommended alternatives to the "trade war", which include forming a coalition with western allies to counter China's efforts across a number of issues. --tomayto, tomahto?

--//--

But the real issue again is that when these tariffs go away should I expect to see wages begin to rise more in line with the demand for growing profit margins?

[Hermit]

A report I've been reading mentions 6 waves of tariffs ranging from 10-50%.

Affecting only about 12 percent of total imports, as you quoted the discussion paper mentioning. The shit has barely begun to hit the fan, though the paper you linked to has pointed out that the increased costs on the affected goods have been pretty much passed on to the consumer in toto.

As for no one winning trade wars: I guess it might be true if by "trade war" you just mean tariffs, which is also how the paper above uses the term. But that seems superficial to me. This is easily seen by looking for the recommended alternatives to the "trade war", which include forming a coalition with western allies to counter China's efforts across a number of issues. --tomayto, tomahto?

Yes, well, let's ignore trading blocks until we see some changes there. No need to complicate the discussion with constants.

But the real issue again is that when these tariffs go away should I expect to see wages begin to rise more in line with the demand for growing profit margins?

I expect the downward pressure on wages and employment rates to ease. Whether abolition of tariffs will result in an actual increase in wages or employment is another matter. The export of entire factories is a continuing trend. So is automation.

Please note that the discussion paper you quoted is very narrowly focussed on the effects tariffs have on the cost of consumer goods. Exchange rates and automation do not get a single mention. Wages are mentioned twice, but not in any context of where they might be trending. Employment is mentioined en passant.