Economy The U.S-China Trade War: China said it would impose retaliatory tariffs on $75 billion in U.S. goods

LOL I’ll assume the >>>>>> to mean a good thing about my economic posts.

Yeah economics can’t be a science like stem, and the biggest error economics makes is when it dives into model and formulas and ends up blurring that fact. Economics is about how people USE resources, so at the end of the day it’s a social science and deeply intertwined with politics and psychology.

Zeihan is an interesting dude, seems like he is pretty good at describing the present but some of his predictions seems kinda “static”, like results of unalterable demographic dominos falling down. Systems have a way of bending before the worst happens.

Yes, Sir.
 
Following In US Footsteps, Germany Targets Chinese Investments

WASHINGTON -- Protectionist noise from Germany is growing louder, as Berlin plans to crack down on Chinese investments, by significantly lowering the threshold for intervening in takeovers.

Chancellor Angela Merkel’s government, like the Trump administration, is taking steps to expand its ability to block foreign deals deemed as threats to national security. Germany’s economy minister, Peter Altmaier, told the newspaper Die Welt that lowering the threshold was necessary in order to monitor “more acquisitions in sensitive sectors of the economy.”

Berlin can currently veto the sale of at least 25 percent of a German company’s equity to an investor outside of the European Union. The government now wants to reduce that threshold to 15 percent.

“We want to be able to take a much closer look at companies in the defense sector and in critical infrastructures, and certain other civilian technologies that are relevant to security, such as IT security,” Altmaier said

LOL, pre-Pacific WW2 all over again. Asian country invades neighbors, deems it righteous. US slams the door on them economically, other Western nations follow suit. Now I'm waiting for when the Chinese blow up and perform another Pearl Harbor.
 
Are we really trying to frame a domestic manufacturing resurgence as a bad thing here? The US runs a fairly brutal capitalist economic system that favors upward predistribution (a very big concern of mine) but that isn't what this necessariliy is, it's just the inevitability of technological advancement that has always existed in the sector. It's actually pretty amazing that 37% of the industrialists polled by PwC speculated they would actually require more people to do jobs - skilled or otherwise - even in the face of increasing automation. Not all of the reshoring has been skilled labor.

Why U.S. Manufacturers Are Turning Their Attention to Reshoring

Reshoring Gains Traction In U.S. Manufacturing: Bringing Jobs Back They Outsourced Decades Ago To Low-Cost Countries — A Move Called Reshoring.

And Intel is actually one of the better corporations in existence in terms of their investment in the US, R&D intensity and local community presence, not to mention arguably the most indispensable American tech firm even to this day given how invaluable semiconductors are to cutting edge technology.

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It's ironic to see AMD on that list. For background, they licensed their IP to China.

Unless quantum computing comes to the market in the next five years, no, they won't. Architectural shifts only occur a 1x-2x a decade. Server chips aren't purchased with a short-term timeframe in mind, either. They are intended to be ran into the ground.

Furthermore, the market in 5 years doesn't bear on today, and contributes nothing to the winner today. There is no single greater example here than Intel vs. AMD. AMD embraced the better long-term strategy, but it didn't matter, because they got destroyed in the short term, and they're still trying to catch up.

It's another sign of China's power, but it isn't nefarious. AMD literally says it isn't selling the IP to China. They only allow them to manufacture these for the internal Chinese market. Basically, AMD scored a fat profit that they desperately needed in 2016 by farming out manufacturing to China. Normally, we manufacture the CPUs here in the States. This is one of the last things in tech that we still actually manufacture. It's one of our greatest and most valuable intellectual properties as Americans.

We ship the CPUs over, and they then assemble them in laptops or desktops with all of the cheaper, less sophisticated components they already manufacture. This is NOT good. Most of the really valuable IP from us, South Korea, and elsewhere tends to get manufactured in Taiwan.

The really scary thing is that they have basically given China the blueprint despite that they didn't "sell" them it. I'm sure we're all confident China won't abuse that. They now have that IP in their hands; just like they have always wanted with their authoritarian partnering schemes. They let us do business so long as we share secrets. Now they have one of the most valuable secrets in the world, and can reverse engineer it to better understand it. It won't be long before they're churning out Chinese CPUs that are as good as our best stuff, or so close it doesn't really matter in terms of effective market dominance for sales, and they won't have to pay us a dime.

We are getting cut out. Thanks, AMD.
http://forums.sherdog.com/threads/a...e-being-made-in-china.3794585/#post-142788957
 
LOL, pre-Pacific WW2 all over again. Asian country invades neighbors, deems it righteous. US slams the door on them economically, other Western nations follow suit. Now I'm waiting for when the Chinese blow up and perform another Pearl Harbor.

China largely has the United States of America to thank for facilitating their rise, going all the way back to the period you reference when it removed the regional menace that was Imperial Japan. Look at how they show their appreciation.

As far as the crown jewel of all present and future technology, the European Union's semiconductor industry is actually incredibly weak, with a global market share on par with the likes of Taiwan at around 8%. The top three are the United States (51%), South Korea (17%) and Japan (12%).


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https://www.bloomberg.com/amp/news/...a-backed-bid-for-chipmaker-over-security-risk

President Donald Trump blocked a Chinese-backed investor from buying Lattice Semiconductor Corp., casting a cloud over Chinese deals seeking U.S. security clearance and spurring a call for fairness from Beijing.

It was just the fourth time in a quarter century that a U.S. president has ordered a foreign takeover of an American firm stopped on national-security concerns. Trump acted on the recommendation of a multi-agency panel, the White House and the Treasury Department said Wednesday. The spurned buyer, Canyon Bridge Capital Partners LLC, is a private-equity firm backed by a Chinese state-owned asset manager.

The Trump administration has maintained a tough stance against Chinese takeovers of American businesses even as it seeks China’s help to resolve the North Korean nuclear crisis. Other deals under review include MoneyGram International Inc.’s proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma. The government is also examining an agreement by Chinese conglomerate HNA Group Co. to buy a stake in SkyBridge Capital LLC.

https://www.reuters.com/article/us-...rras-sale-to-chinese-state-fund-idUSKCN1G703H

U.S. semiconductor testing company Xcerra Corp (XCRA.O) said on Thursday a U.S. national security panel had blocked its $580-million sale to a Chinese state-backed semiconductor investment fund, the latest such deal to be thwarted.

The acquisition of Xcerra by Hubei Xinyan was seen as a key test of the ability of Chinese firms to acquire U.S. technology assets, because the company does not make chips itself, but provides testing equipment used in making semiconductors.

The deal’s demise comes as the Committee on Foreign Investment in the United States (CFIUS) has become increasingly skeptical of Chinese acquisitions of U.S. companies following the inauguration of U.S. President Donald Trump a year ago.

https://www.bloomberg.com/amp/news/...age-with-broadcom-block-u-s-tech-not-for-sale

With his swift rejection of Broadcom Ltd.’s hostile takeover of Qualcomm Inc., President Donald Trump sent a clear signal to overseas investors: Any deal that could give China an edge in critical technology will be swatted down in the name of national security.

Although Broadcom is based in Singapore, China loomed large over the U.S. government’s fears about a foreign takeover of chipmaker Qualcomm. That’s because Qualcomm is locked in a head-to-head race with China’s Huawei Technologies Co. over which company will dominate the development of next-generation wireless technology.

"This decision hangs a huge ‘not-for-sale’ sign on just about every American semiconductor firm," said Scott Kennedy, who studies China’s economic policy at the Center for Strategic & International Studies in Washington. "A Chinese entity doesn’t need to be anywhere near a transaction now in semiconductors for the deal to be nixed."

Bloomberg: Why Can't China Make Semiconductors?

Almost from the start, though, central planning proved to be a serious impediment. Early government ideas included importing secondhand Japanese semiconductor lines that were outdated before they were even shipped. Expensive efforts to build a domestic industry from scratch in the 1990s faltered due to bureaucracy, delays and a lack of customers for the kind of chips China was making.

Another weakness was a lack of capital. For decades, labor-intensive industries -- such as assembling mobile phones -- were the route to riches in China, attracting investment from entrepreneurs and bureaucrats alike. Making semiconductors, by contrast, requires billions in up-front capital and can take a decade or more to see a return. In 2016, Intel Corp. alone spent $12.7 billion on R&D. Few if any Chinese companies have that capacity or the experience to make such an investment rationally. And central planners typically resist that kind of risky and far-sighted spending.

China seems to recognize this problem. Since 2000, it has shifted away from subsidizing semiconductor research and production, and toward making equity investments, in the hope that market forces could play a larger role. Yet funds continue to be misallocated: Over the past 18 months, there's been a spate of government-juiced overinvestment in semiconductor plants, many of which lack sufficient technology. Those that eventually open will likely contribute to a glut in memory chips, spelling financial trouble for the domestic industry.

But perhaps the biggest long-term challenge for China is technology acquisition. Though the government would like to develop an industry from the ground up, its best efforts are still one or two generations behind the U.S. A logical solution would be to buy technology from American companies or form partnerships with them. That's the route taken by cutting-edge firms in Japan, South Korea and Taiwan.

Yet China can't do the same. Its efforts to purchase American semiconductor companies (often at huge premiums) are regularly blocked for security reasons. Japan, South Korea and Taiwan have put Chinese acquisitions under similar scrutiny. By one accounting, China has made $34 billion in bids for U.S. semiconductor companies alone since 2015, yet completed only $4.4 billion in deals globally in that span.
 
It's ironic to see AMD on that list. For background, they licensed their IP to China.

http://forums.sherdog.com/threads/a...e-being-made-in-china.3794585/#post-142788957

Yea, not good and could actually be worse although the copycats do hurt Intel's business in China's lucrative data center market. AMD maintains a majority stake in CHMT. THATIC owns a majority stake in Hygon, which licenses AMD's IP from CHMT. Hygon designs the chips, and CHMT manufactures them before sending back to Hygon for packaging, marketing, and sales.
 
Yep, that's right. Winning.

what do you get out of this trade war? what does any average american gain out of it? the fuck are you happy about exactly?

or will only banks/politicians profit from this as per usual?

this is a big boys game, and the rest of us are just here to watch and then get fucked over due to all the shitty self-centered moves these guys are making
 
what do you get out of this trade war? what does any average american gain out of it? the fuck are you happy about exactly?

or will only banks/politicians profit from this as per usual?

this is a big boys game, and the rest of us are just here to watch and then get fucked over due to all the shitty self-centered moves these guys are making
I can break it down to you, but you won't care. So... Winning!
 
I can break it down to you, but you won't care. So... Winning!

Clearly, given the nature of the question. I thought big, bad China was going to bust us up something horrible and we dare not mess with them! Now, it's what do we gain out of it? Nothing less than the future of the country. Folks should get behind theirs or fuck off, this transcends partisan politics and is much bigger than a mere 'trade war'.

https://www.nytimes.com/2017/08/15/opinion/china-us-intellectual-property-trump.html

Chinese companies, with the encouragement of official Chinese policy and often the active participation of government personnel, have been pillaging the intellectual property of American companies. All together, intellectual-property theft costs America up to $600 billion a year, the greatest transfer of wealth in history. China accounts for most of that loss.

Intellectual-property theft covers a wide spectrum: counterfeiting American fashion designs, pirating movies and video games, patent infringement and stealing proprietary technology and software. This assault saps economic growth, costs Americans jobs, weakens our military capability and undercuts a key American competitive advantage — innovation.

Chinese companies have stolen trade secrets from virtually every sector of the American economy: automobiles, auto tires, aviation, chemicals, consumer electronics, electronic trading, industrial software, biotech and pharmaceuticals. Last year U.S. Steel accused Chinese hackers of stealing trade secrets related to the production of lightweight steel, then turning them over to Chinese steel makers.

Perhaps most concerning, China has targeted the American defense industrial base. Chinese spies have gone after private defense contractors and subcontractors, national laboratories, public research universities, think tanks and the American government itself.

Chinese agents have gone after the United States’ most significant weapons, such as the F-35 Lightning, the Aegis Combat System and the Patriot missile system; illegally exported unmanned underwater vehicles and thermal-imaging cameras; and stolen documents related to the B-52 bomber, the Delta IV rocket, the F-15 fighter and even the Space Shuttle.


Yea, let's just continue taking it up the ass though.
 
Clearly, given the nature of the question. I thought big, bad China was going to bust us up something horrible and we dare not mess with them! Now, it's what do we gain out of it? Nothing less than the future of the country. Folks should get behind theirs or fuck off, this transcends partisan politics and is much bigger than a mere 'trade war'.

https://www.nytimes.com/2017/08/15/opinion/china-us-intellectual-property-trump.html

Chinese companies, with the encouragement of official Chinese policy and often the active participation of government personnel, have been pillaging the intellectual property of American companies. All together, intellectual-property theft costs America up to $600 billion a year, the greatest transfer of wealth in history. China accounts for most of that loss.

Intellectual-property theft covers a wide spectrum: counterfeiting American fashion designs, pirating movies and video games, patent infringement and stealing proprietary technology and software. This assault saps economic growth, costs Americans jobs, weakens our military capability and undercuts a key American competitive advantage — innovation.

Chinese companies have stolen trade secrets from virtually every sector of the American economy: automobiles, auto tires, aviation, chemicals, consumer electronics, electronic trading, industrial software, biotech and pharmaceuticals. Last year U.S. Steel accused Chinese hackers of stealing trade secrets related to the production of lightweight steel, then turning them over to Chinese steel makers.

Perhaps most concerning, China has targeted the American defense industrial base. Chinese spies have gone after private defense contractors and subcontractors, national laboratories, public research universities, think tanks and the American government itself.

Chinese agents have gone after the United States’ most significant weapons, such as the F-35 Lightning, the Aegis Combat System and the Patriot missile system; illegally exported unmanned underwater vehicles and thermal-imaging cameras; and stolen documents related to the B-52 bomber, the Delta IV rocket, the F-15 fighter and even the Space Shuttle.


Yea, let's just continue taking it up the ass though.
He won't care. Why?

hc-dip-trump-smile
 
China largely has the United States of America to thank for facilitating their rise, going all the way back to the period you reference when it removed the regional menace that was Imperial Japan. Look at how they show their appreciation.

Not sure if they are 'obliged' to be thankful. These commies dicktucked after the war with the Japs was going on a bit and left the nationalists (read: Taiwan) hanging. They came back after killing lots of peasants in their Long March (dunno why this shit is glorified, it killed many like the Bataan Death March, including women), and finding the Nationalists gutted, swept across the land and cornered the Nationalists enough to evacuate and prepare for siege at Formosa island. Bully the weak and fear the strong, as they say. The US bit back by blocking 'em from any legit representation at the UN till China had bad boo-boo with the Sovs.

Once these economic sanctions are felt even by the grassroots chinese, I'll bet they'll choose war, same with the Japs back then. Only by easing the pain using diversions like the internet and games could the CCP push back this event, but with the way the West is starting to gang up, dunno how long their shit is going to hold.
 
what do you get out of this trade war? what does any average american gain out of it? the fuck are you happy about exactly?

or will only banks/politicians profit from this as per usual?

this is a big boys game, and the rest of us are just here to watch and then get fucked over due to all the shitty self-centered moves these guys are making

As a rule, banks and politicians don’t want this trade war. The current trade paradigm is set up to benifit their classes/sectors disproportionately. In the short term there is likely to be some minimal pain felt by all. In the long term, correcting this trade malignancy is absolutely going to increase the competitiveness of American labor. I’ve previously described ITT how, in my own business, it already is.
 
As a rule, banks and politicians don’t want this trade war. The current trade paradigm is set up to benifit their classes/sectors disproportionately. In the short term there is likely to be some minimal pain felt by all. In the long term, correcting this trade malignancy is absolutely going to increase the competitiveness of American labor. I’ve previously described ITT how, in my own business, it already is.

It's kind of hard to believe that anyone who has read anything ITT would be vehemently opposed to confronting China on a multitude of issues, unless of course they already hold anti-American opinions and interests.
 
China’s New Trade Strategy: Threatening U.S. Companies
By Arthur Dong | August 13, 2018



Starting August 23, an additional $16 billion dollars of exports from China to the U.S. will be subject to a 25% tariff, as the trade war between the two nations continues unabated. In preparation for these tariffs, China signaled that it would impose an equivalent amount of tariffs on U.S. imports. With both sides far apart, China has searched for alternative strategies to force a resolution of the deteriorating trade situation.

Earlier this month, an article published in the People’s Daily, an official newspaper of China’s ruling Community Party, signaled China’s intention to weaponize American corporations operating in the country. Using strongly phrased language, the piece identifies Apple as a poster child of American success built on the backs of Chinese workers and Chinese consumer demand. The article urges Beijing to address this imbalance by demanding that Apple to share a greater portion of its profits with China.

Up to this point, China has been careful to avoid nationalist appeals in the ongoing trade debate. The People’s Daily article signals a significant change in sentiment. By threatening companies like Apple, Beijing can pressure them to vocally oppose the Trump administration’s aggressive trade actions against China and to push Washington to resolve the worsening trade conflict.

In the past, China has pulled the nationalist card in disputes with other nations such as South Korea and Japan. In China’s tightly controlled media environment, the slightest expression of unfairness in a news outlet can stir the passions of the crowd, resulting in boycotts, protests, and even violence against foreign entities. The article targeting Apple suggests that Chinese policymakers may sweep other American companies into the debate as tensions rise.

The list of companies that may be targeted next represent a wide swath of America’s corporate landscape, including industrials, health care, technology, automotive, entertainment and media, and consumer non-durables businesses. United Technologies, Caterpillar, General Electric, Johnson & Johnson, Microsoft, IBM, Disney, Cargill, General Motors, Ford, and Procter & Gamble all have significant production capacity and sales in China, making them vulnerable to Chinese efforts to weaponize their influence.

As it considers its next move, Beijing will have to proceed carefully. Escalating nationalist sentiment and enlisting American corporations to do its bidding can be a double-edged sword. If American companies feel they are no longer welcome in China, or subject to the winds of political expediency, they have the option of pulling out of China and building their supply chains elsewhere.

American companies heading for the exits would be a significant setback to China’s economy. As the saying goes: If you’re aiming at your rival, make sure you don’t shoot yourself in the foot.

Arthur Dong is a distinguished teaching professor of strategy and economics at Georgetown University’s McDonough School of Business.

http://fortune.com/2018/08/13/china-apple-trade-war-tariffs/
 
Repeat after me: There is always blowback.

Sometimes it takes a while, but there is always blowback. Especially when you don't see it coming. China has been playing this game for a long time, and profited handsomely, but now they are starting to pay.
 
Countdown to war started...
 
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