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Capitalism: Begun the Trade War has
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  • Today I directed the United States Trade Representative (USTR) to proceed with placing additional tariffs on roughly $200 billion of imports from China. The tariffs will take effect on September 24, 2018, and be set at a level of 10 percent until the end of the year. On January 1, the tariffs will rise to 25 percent. Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.

    Will look nice. Phase three will be required in around next week.

    Also US citizens need to prepare to widespread inflation with following items shortages as is only the start of the war.

  • China said on Tuesday that it has no choice but to retaliate against new U.S. trade tariffs, raising the risk that President Donald Trump could soon impose duties on virtually all of the Chinese goods that America buys.

    As expected.

    “China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does does not give the impression of sincerity or goodwill,”

    Unfortunately, talks time has passed.

  • Kishore Mahbubani, former president of the United Nations Security Council

    KM: I spoke to one of the leading trade economists of the world when I was in Harvard University in February this year. He said to me: “Kishore, Donald Trump doesn’t understand the basics of trade economics. He thinks like a businessman: a deficit is a loss, a surplus is a profit.” That’s rubbish. All countries live by the theory of international trade: even if you have deficit you’re benefiting because you’re buying a product at lower cost from somebody who can make it cheaper and better. If you do an objective audit and put all the factors in America is actually one of the biggest beneficiaries of the current trading order. It has a surplus in services, it doesn’t measure that. More importantly, the U.S. dollar is the global reserve currency. That means that Chinese workers have to work hard 24 hours a day to manufacture things to sell to America. How does America pay for that? It prints dollars. Come on, you’re having a very good trade! You print dollars, you’re getting hard workers’ products. America’s benefiting. Most sophisticated Americans know that America is benefiting enormously from the current system. And therefore the one dangerous thing that Donald Trump is doing is that he’s giving the rest of the world an incentive to move away from the U.S. dollar. And if the rest of the world moves away from the U.S. dollar the impact on America will be disastrous because you can no longer print dollars to buy products.

    KM: Here I actually have some good news for you. The good news is that the rest of the world will carry on with the WTO with or without the U.S. Just a few days ago I had a conversation with Mr. Pascal Lamy, the former head of the WTO for many years. He said: “Kishore, the WTO can carry on without the United States, and the United States surprisingly will pay a price if it leaves the WTO.”

    https://www.rt.com/shows/sophieco/438588-global-economy-united-nations/

  • During a conference Wednesday in Alibaba's hometown of Hangzhou, Ma reiterated his pessimism on the Sino-American trade war. "It will not end in a few months, or even a few years," he said. "People should mentally prepare for a lengthy battle that will last for 20 years."

    Nice

  • Consumer prices hikes coming to US

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  • ... China's Exporters Could Soon Ditch The US

    Former Chinese central bank governor Zhou Xiaochuan suggested on Wednesday that the direct impact on China of the trade war with the US "appears limited," though it could quickly prompt China’s top exporters to pivot away from US markets.

    The costs of protectionism could hit the US the hardest, as Chinese firms are expected to withdraw from US markets and expand into other global economies:"I think it will force China to look at many other markets. So it’s not necessarily a good thing for the United States," he said.

    https://www.zerohedge.com/news/2018-09-20/chinas-exporters-could-soon-ditch-us-market-signals-ex-central-bank-official


    Two weeks ago, Walmart asked the Trump administration to walk back its plan to put tariffs on Christmas lights, shampoo, dog food, luggage, mattresses, handbags, backpacks, vacuum cleaners, bicycles, cooking grills, cable cords and air conditioners.

    In a letter to US Trade Representative Robert Lighthizer, the company said expanded tariffs on Chinese imports would hurt its customers, its suppliers and the US economy. "The immediate impact will be to raise prices on consumers and tax American business and manufacturers," Walmart said.

    https://money.cnn.com/2018/09/19/news/companies/walmart-tariffs-trump-china/index.html

  • One of the reasons of trade war start:

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    Now most margins are hidden inside highly integrated chips.

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  • How it affects PC market

  • With its new trade deal, Canada surrenders sovereignty ...

    So first, Clause 32. It's long-winded and uses code language, but basically, it says that if Canada wants a trade deal with China, it has to notify the Americans about any negotiations, and tell them the substance of those negotiations, and submit the text of any deal, "including any annexes and side instruments" in advance, for American scrutiny, and then, like a puppy, await Washington's verdict.

    If the Americans don't like the deal – and it's a safe bet the Americans aren't going to like any deal that binds Canada to a rival economic giant – Canada will be summarily excluded from the new version of NAFTA, which will revert, at America's whim, to a bilateral deal with Mexico.

    https://www.cbc.ca/news/opinion/canada-usmca-1.4845494

  • China exports to US increase despite trade war

    Exports from China increased by 14.5 percent year-on-year to USD 226.69 billion in September 2018, after a 9.8% rise in July, beating market consensus of 8.9%. It was the fastest growth in outbound shipments since February, due to strengthening global demand and despite intense trade tensions with the US.

    https://tradingeconomics.com/china/exports

    https://www.reuters.com/article/us-usa-economy-tradefigures/u-s-trade-deficit-surges-to-five-month-high-as-exports-fall-idUSKCN1LL1ME

    =============

    Larry Kudlow accuses China of refusing to engage on trade

    Mr Trump has demanded sweeping changes to Chinese economic policy, including a reduction in their bilateral trade deficit, and a clampdown on practices such as industrial subsidies, and forced technology transfer. But so far these have been met with resistance by Chinese officials, who judge them as unrealistic and contrary to their interests.

    “We gave them a detailed list of asks, regarding technology for example, [which] basically hasn’t changed for five or six months. The problem with the story is that they don’t respond. Nothing. Nada,” Mr Kudlow said.

    https://www.ft.com/content/2b5df818-d574-11e8-a854-33d6f82e62f8?fbclid=IwAR33E5EfegeK9uYLsCcCPOKck0tSIYnwBJwFl0dVLJDkA5JeAynNaBWa8SQ

  • @jleo

    Exports increase is very easy to understand.

    As it is just companies making piles of stuff.

  • Bloomberg reported that the U.S. is preparing to announce by early December tariffs on all remaining Chinese imports if next month's talks between presidents Donald Trump and Xi Jinping fail to ease the trade war.

    Nice

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    Owning iPhone becoming not cool in China. In 2019 we could see first round of massive closures of Apple shops, few other countries can follow.

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  • Nearly 180 American firms have signed up for the first China International Import Expo (CIIE) scheduled for Nov. 5-10 in Shanghai despite the on-going tariffs dispute between the world's two largest economies.

    The event, focusing exclusively on imported goods and services, will showcase 3,000 companies from over 130 countries and regions. Among them, the U.S. firms will cover fields such as high-end manufacturing, intelligent equipment, agricultural products, culture and sports.

    China is expected to import 10 trillion U.S. dollars worth of goods and services in the next five years, according to China's Ministry of Commerce. For example, by 2025, the size of the smart logistics will exceed 1 trillion yuan (143.8 billion U.S. dollars), according to the China Federation of Logistics and Purchasing.''

    http://www.china.org.cn/business/2018-11/02/content_69689814.htm

    PROMO VIDEO

  • Iran is back in the game

    China is also seeking waivers, although it remained unclear on Monday what volumes, if any, it would be allowed to purchase. The Chinese Foreign Ministry reiterated its objections to sanctions, but would not directly say whether China had been granted an exemption.

    Secretary of State Michael Pompeo is scheduled to announce the list of eight countries that will get temporary waivers to keep importing Iranian oil at 8:30 a.m. Washington time on Monday. Japan, India and South Korea are among the countries expected to receive a waiver.

    China, India, and South Korea are the first, second, and third-largest importers of Iranian crude; Japan is sixth.

  • Vice President Mike Pence said that President Trump's administration won't back down from its ongoing trade dispute with China, claiming that if it takes a cold war to get a new deal done, "then so be it."

    Trump wants to secure a new deal that would stop Chinese manufacturers from stealing U.S. intellectual property, thwart the counterfeiting of U.S. goods, and halt other practices that undercut U.S. economic interests, such as currency manipulation.

    Really? What is "intellectual property" exactly, bullshit patents that prevent progress?

    Most fun thing that this guys just celebrated 100 years WW I - and it is inevitable results that follow after such policies.

  • And all preparations are going on fast

    Merkel calls for a 'real, true' European army

  • Didn't US companies reverse engineer Japanese cars, German washing machines, foreign fighter jets etc. to copy their designs? Even US food companies reverse engineer other US companies food products to produce similar products. Check the food section of Walmart, Costco etc. There's even a US company that makes exact copies of brand name cleaning products.

    Reverse engineering, also called back engineering, is the process by which a man-made object is deconstructed to reveal its designs, architecture, or to extract knowledge from the object; similar to scientific research, the only difference being that scientific research is about a natural phenomenon

    https://en.wikipedia.org/wiki/Reverse_engineering

    http://www.lastotallyawesome.com

    And... from history class ... there was Thomas Edison, who claimed to invent other people's inventions!

    ... when filmmaker Georges Méliès’s masterpiece “A Trip to the Moon” was spreading like wildfire throughout London, Edison obtained a copy from a shady theater owner. Edison then made numerous copies and took them back to America with him. He showed the pirated film across the USA and reaped huge amounts of money by showing the film, although Méliès didn’t get a cent from these showings. When Méliès finally arrived in America to show the film, at a great personal cost, everybody had already seen it. This caused Méliès an enormous financial loss that may have directly led to his infamous bankruptcy.

    https://www.historicmysteries.com/did-thomas-edison-steal-inventions/

  • Manufacturing logistics....

    Foxconn May Bring Chinese Workers To Its New Wisconsin Facility

    Back in the summer of 2017, to much fanfare President Donald Trump announced that Taiwanese electronics giant Foxconn, best known for making the iPhone, would build a new plant producing LCD panels in Wisconsin that will "bring thousands of jobs to the state." And while "ultimately" Foxconn intends to hire Americans, it appears to be resorting to Chinese workers in the interim. Why? It appears that the key hurdle is the tight labor market which is making recruiting a challenge. Unemployment in the state reached a record low earlier this year. At 3.0% in September, Wisconsin’s jobless rate is well below the national average, which hit 3.7% that month—itself a 49-year low.

    “It’s very difficult to find skilled labor in our market,” said Loretta Olson, who owns an Express Employment Professionals staffing office in Racine, Wis., near the planned plant. She also serves on the board of the Racine County Economic Development Corp., which worked to attract Foxconn to the area.

    Here the company has run into yet another hurdle, as some Chinese engineers have expressed reluctance to relocate to Wisconsin, which is less well-known to Chinese workers than U.S. tech hubs in California or New York. One engineer who declined to give his name said he wouldn’t want to move to a place he worried could be as cold as Harbin, a northern Chinese city known as “Ice City.” As a result, Chairman Gou is upset that few Chinese workers have volunteered to move to Wisconsin if called upon, the WSJ sources said.

    https://www.zerohedge.com/news/2018-11-06/foxconn-may-bring-chinese-workers-its-new-wisconsin-facility

    https://www.wsj.com/articles/foxconn-considers-bringing-chinese-personnel-to-wisconsin-as-u-s-labor-market-tightens-1541505600


    WISCONSIN’S $4.1 BILLION FOXCONN BOONDOGGLE

    Instead of a Generation 10.5 plant, which produces 10-foot by 11-foot panels for 75-inch TV screens, Foxconn would be building a Generation 6 plant that only produces 5-foot by 6-foot glass panels. A Gen 6 plant would require about a $2.5 billion investment, according to Bob O’Brien, a partner at Display Supply Chain Consultants, rather than the $10 billion Foxconn initially promised.

    Foxconn had hoped to have New York-based Corning build a factory nearby, as the large glass panels required for a Generation 10 plant cannot be transported long distances. But Corning officials made it clear they’d need a subsidy for as much as two-thirds of the cost of this facility, and officials within the Walker administration, suffering continuing criticism about the Foxconn subsidy, ruled out any more handouts. The Walker administration, it seems, had not checked to see if Foxconn could deliver on its promises without help.

    Just seven weeks later, in late August, the company announced the plans had changed yet again — far more radically. Woo told the Racine Journal Times that Foxconn would never add a Gen 10.5 plant to its Racine campus, despite past statements, because by the time it was built, the market would be glutted by other manufacturers in China.

    https://www.theverge.com/2018/10/29/18027032/foxconn-wisconsin-plant-jobs-deal-subsidy-governor-scott-walker

  • President Trump has told The Wall Street Journal he expects tariffs to be placed on all Chinese imports, including items like iPhones. This could boost the cost of an iPhone by 10 percent, a hike which Trump believes would not be a problem. “People could stand that very easily,” Trump told the Journal.

    Watch ruling class speak and how he thinks about oppressed people. In reality for cheaper smartphones hike can be around 30-35%, 25% due to fees and other to compensate lagging sales.

    China’s top priority for the summit is to try to persuade the US to not implement a planned tariff increase that’s set to kick in on January 1st, which would raise existing tariffs on $200 billion worth of Chinese goods to 25 percent. Trump says Beijing’s request to hold off on this increase is “highly unlikely.”

    And this is how objective economic interests always overcome idealistic thoughts. Actually US can't longer hold fees, and delays with them will mean full destruction of Apple and similar companies in the matter of 2-3 years.

    Next we'll see ever increasing measures to shut up the borders and water, as fees will introduce huge inceptive to find ways to pass goods using any way possible.

    Huge impact also will be on big US industry specializing at reexport of Chinese goods.

  • GM to close US and Canada factories

    General Motors, Cadillac sells more vehicles in China than anywhere else in the world with some special models of Cadillac being produced exclusively for the substantial Chinese market. Yet in the midst of the trade war, General Motors has taken the decision to close four factories in the United States and one in neighbouring Canada. According to further reports, Ford plans to cut potentially thousands of US jobs after the company lost one billion Dollars since the onset of the current trade war.

    https://eurasiafuture.com/2018/11/27/trumps-trade-war-backfires-as-general-motors-closes-four-us-factories/?fbclid=IwAR3KAHe1pbCNTV1p9fvpwqAxUNv3wuBUR59019F3rHQUNBL2StH-nSN8jsE

    The GM job cuts hurt Trump's campaign promise to bring back American auto jobs. But Barra isn't paying attention to the next election. She's taking steps to prepare GM for the future of transportation: driverless cars, electric vehicles and ride sharing. "It's for the long-term viability of the company," Acevedo said. "They are doubling down on what they perceive as the future so that they don't get left behind."

    While GM did not cite tariffs for the plant closure, Trump's trade crackdown has created problems for the auto industry. GM has said higher commodity prices and currency headwinds will cost the company $1 billion. GM's major commodity costs are steel and aluminum, both of which have climbed in price in response to Trump's tariffs.

    https://www.cnn.com/2018/11/27/business/gm-trump-subsidies/index.html

  • "The lessons of history are still there. In the last century, we had two world wars, And in between them, the Great Depression. I don’t think anybody should really try to have a repetition of history. These things should never happen again, so people have to act in a responsible way."

    China's ambassador to the United States Cui Tiankai

    This is called idealism. You can't solve different objective interests by asking to act responsibly.

  • In an interview with the WSJ, Trump said that if negotiations don’t work out, he would also put tariffs on the rest of Chinese imports that are currently not subject to duties. “If we don’t make a deal, then I’m going to put the $267 billion additional on,” at a tariff rate of either 10% or 25%, Trump told the WSJ.

    While Chinese officials have said their priority at the meeting between Trump and Xi was to convince the U.S. to suspend the planned Jan. 1 increase in tariffs on $200 billion in imports from China to 25%, from 10% currently, Trump said that the U.S. was unlikely to accede. And confirming that the US has no intention of easing its hard line stance, no matter what Larry Kudlow says, Trump made it clear that "the only deal would be China has to open up their country to competition from the United States. As far as other countries are concerned, that’s up to them."

    You cannot satisfy a vampire with pastries :)

  • @jleo

    Again, it is objective thing. If fees won't be imposed top US corporations will go down within 2-3 years, starting from Apple. As they are now being wiped out from Asian markets and if they won't protect US market it'll end bad. Same goes for Micron, Intel and more. China being extremely monopolistic capitalist empire is more efficient in open markets war.

    US also has high hopes, check

    Previously all peak coal events were cause for world wars.

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    And why UK was so great empire

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    China

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  • Well over an hour after "the most anticipated dinner between US and Chinese presidents in years" was over, Chinese state-run TV, CGTV reported that Trump and Xi had agreed to keep the US-Chinese trade war from escalating with a promise to temporarily halt the imposition of new tariff, effectively declaring a truce.

    Trump had agreed to leave tariffs on US products at a 10% rate after January 1 as China agreed to buy a substantial amount of products from the US.

    However, the trade war "truce" is only temporary: after 90 days, if a trade pact is not reached between the US and China, the tariffs will rise to 25% after all.

    China has agreed to start purchasing "very substantial" US agricultural, energy, industrial and other products "immediately" from the US to reduce the trade imbalance.

    How to interpret this properly - hike of inflation in US will be now blamed on China, while propaganda will keep making enemy from them.

    If someone not understand, each and every empire dominating in the world has huge deficits in trade, actually it is big benefit of such state. As allows you to save energy and resources for your own citizens and pay for goods using database numbers (aka get them for free).

    Trade war will continue sooner than 90 days after some new data will become available, like China interfering with democracy or such :-) You can't change materialistic demands and they lead to war, not some bad people.