"The two big trading partners reportedly are negotiating to improve U.S. access to Chinese markets. The Wall Street Journal reported that the U.S. and China have 'quietly started negotiating' and that U.S. Treasury Secretary Steven Mnuchin is considering a trip to Beijing for talks," NPR reports.
Uh oh. Cue the hundred year night.
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So much winning.
So the Chinese are motivated to accept better trade terms, the markets responded favorably, and NPR put the whole story together as if Trump had nothing to do with it?
Oh right, three mentions of "the Trump Administration," without noting Gary Cohn resigned because he so vehemently disagreed with the Donald over this move.
Wait, there is something about Trump: "President Trump on Thursday signed a temporary exemption — until May 1 — from the steel and aluminum tariffs for Argentina, Australia, Brazil, South Korea, Canada, Mexico and the European Union."
That makes it look to the uninitiated that the administration put up tariffs and Trump lowered them.
The US naturally has the upper hand in trade negotiations because we buy a lot more of their stuff than they do of ours, but count me as skeptical that there will be a significant reduction in the trade deficit, say 50% reduction over the next three years. Such a reduction would hurt the economy in the short term and no politician is likely to agree to that.
This seems like it should have been foreseeable. The U.S. imposes tariffs, which would hurt the Chinese, so they naturally respond by coming to the table and negotiating a deal.
But our betters told us the opposite, so how can this be?
I get our betters do not like President Trump. Heck, I'm not sure I like him that much, either. But it always seemed the threat of a trade war was going to hurt China more than the U.S. so what we needed was a real, credible threat.
Trump gave us that. And the Chinese, on paper, capitulated.
The US naturally has the upper hand in trade negotiations because we buy a lot more of their stuff than they do of ours,
I must have missed this very basic point in all the news articles about how steel tariffs would only lead to economic catastrophe because Paul Krugman's charts and graphs from David Ricardo said it was a bad idea.
But it always seemed the threat of a trade war was going to hurt China more than the U.S. so what we needed was a real, credible threat.
The biggest fear of the Chinese leaders is a trade war leading to massive unemployment in China. Now that workers have come off the farms and into the cities, they must keep the jobs or face social unrest.
To not know this is to not know China.
What Kevin said. With a workforce of say 600 million, what happens when unemployment goes from 4% to 8%? 25 million nervous hungry idle people. Most pretty young and lacking previous experience with a down market. Not much of a safety net.
And one Supreme Leader, expected to make it all work again.
Pass the popcorn.
ARM: "The US naturally has the upper hand in trade negotiations because we buy a lot more of their stuff than they do of ours,..."
Lol
I LOVE all the "after the fact" rationalizations for why the things the "elites" tell us must hapoen end up not hapening....
Heres an idea: instead of preemptively capitulaing in trade deals, why dont we..... (wait for it)....leverage our advantages!!!
Trump is no genius regarding trade.
Its just that the "elites" are so friggin stupid as regards protecting Americas interests.
"To not know this is to not know China."
Nonsense!
ARM knows everything about China. How coukd he not? He reads the NYT and Thomas Friedman!
What else is even necessary for an "educated" person to do?
Correlation is not causation!!!!!!
Except when we're in power........
It seems like just last week some lunatic touted a 425 point drop as evidence of Trump's failures - ignoring the thousands in gains since his election. Selective memory is so important to those whose ideas are awful.
Its just that the "elites" are so friggin stupid as regards protecting Americas interests.
Why do you assume this? They don't advance our interests because they don't believe that's their role, it's not because they're stupid.
Reagan played the same games with Japan in his time.
I don't know how much good it did.
But IIRC the wailing and gnashing was a fraction of this.
Reagan Warns Japanese
Lesson: Never, ever send an economist to negotiate a trade deal? (Unless he can append a game theory model to a general equilibrium model.)
Never.
Ever.
Ever.
In any serious trade war with China (this was just a small scuffle), China gets wrecked, the US gets bruised, and Vietnam, Thailand and the other Asian mini-Tigers prosper.
Of course, if China's economy gets wrecked, they may lash out in other ways that we won't like. So we don't want to knock them down, but it's ok to give a little nudge like this now and then.
28 years of Presidents educated at Harvard and Yale. I guess they don't teach basic business negotiation there any more. Just pure macro-economic theory. That's why Clinton, Bushes and Obama would never stoop to pick up a hundred dollar bill on the sidewalk.
Abject apologies, I was guessing at size of China's workforce. Wikipedia says about 800 million as of 2013. So a 1% rise in unemployment is almost 10 million people with too much time on their hands, in a country where I imagine it is uncommon and possibly humiliating not to be gainfully employed. Perhaps frustration and anger might soon follow.
Poor, poor Inga. She was rooting so hard for a continued DOW downturn. She was giddy last week. It was the capper to a very good anti-Trump week. She has to be stricken today.
To be fair, its been a poor month for US stocks, and it still is.
And for that matter all major foreign markets.
TBD what else is going on.
We have told China for years: stop stealing our stuff (intellectual property).
They say "OK" and keep doing it anyway because they think we're idiots.
So we're actually trying to give an incentive to them to, you know, actually do something.
They're reacting. We'll see how much. But it's better than the old way of talking, smiling and getting screwed over that's been the approach for decades.
Next: get them to stop sending over synthetic opioids. As in, actively stop it.
I suspect serious concerns about US political risk are keeping markets suppressed.
When you negotiate with the Chinese, just expect that they're lying, cheating bastards. They know they are, & they live their lives accordingly. The Trump administration just had the gumption to forcefully but privately tell them to stop being such lying, cheating bastards with us.
Seriously, they are lying bastards. The economic figures the government releases are trusted by no one, including other government agencies. There are just too many reasons for local & provincial leadership to cook the numbers, so they do.
The Chinese are such lying bastards that they adulterate baby formula & babies die from it! Do you know what Chinese tourists do when they visit 1st World countries? They bring a big suitcase & stuff it with infant formula to bring back for family use or to sell to the neighbors. I shop at local Chinese groceries & the canned meat products for Chinese specialties all have in big letters on the side MADE IN USA or MADE IN CANADA so that you know you're getting pig & not saw dust.
When the government gets pressed about these issues, they plead they can't control everything, the country's too big, yadda, yadda. But they sure seem to track & shut down every Falun Gong congregation or house Christian Church they can. I guess the baby poisoners drop better coin into the hands of government officials than do believers.
This reckoning has been waaaay too long in coming.
Rick: "Why do you assume this? They don't advance our interests because they don't believe that's their role, it's not because they're stupid."
Embrace the power of "and".
ARM knows everything about China. How coukd he not? He reads the NYT and Thomas Friedman!
What else is even necessary for an "educated" person to do?
I don't know what he said previously, but he seemed to know this fact today. I suspect the NYT editors and Thomas Friedman would know it too, yet decided to go anti-Trump in their comments in the hope that individual investors would read their words and cause stocks to fall.
I imagine many of them did sell, only to lose again to the hedge fund managers buying on the dip.
We will not be surprised when these same managers put their money into the NYT's preferred candidates as a "thank you".
buwaya: "I suspect serious concerns about US political risk are keeping markets suppressed."
And those concerns are well placed, given how the lefties/"elites"/LLR's et al are hurtling towards 3rd world policies designed to create a nationwide Mexico City environment.
Winning!!!
YoungHegelian: I shop at local Chinese groceries & the canned meat products for Chinese specialties all have in big letters on the side MADE IN USA or MADE IN CANADA so that you know you're getting pig & not saw dust.
What's to stop a Chinese factory from printing "made in USA" on the cans?
What's to stop a Chinese factory from printing "made in USA" on the cans?
Our trade agreements are pretty specific on that point. However, they have been known to ship things through Canada to the US to avoid putting Made in China on them.
"This reckoning has been waaaay too long in coming." So true. Not just with China, but with N. Korea. And Nato.
The world has changed dramatically in the past year. The Palestinians are being called out for offering nothing but death and violence.Israel and the Saudis are talking, and meeting on a number of problems-Like Iran, and Palastine. Kim decided to stop testing and threatening. In the past, the US sent him money when he blackmailed us. Not now.
China has an economy that is very very fragile. Engaging in a trade war would be suicidal for them, and perhaps for the USA as well. But showing that we are fed up, and want to trade, fair trade, has had a huge effect on them. Being willing and able to use power, has prevented (so far) the need to actually use it.
Although Putin did get his behind handed to him, by Mattis, in Syria recently.
DJT has made a huge difference, in a short amount of time. The change is good, and long over due.
Drago humor:
We should've known communism would fail.
There were a lot of red flags.
@JohnAA,
What's to stop a Chinese factory from printing "made in USA" on the cans?
I'm sure it happens & that informed Chinese shoppers are alert to exactly this scam.
"We should've known communism would fail. There were a lot of red flags."
I can't believe that one was sitting right there and I never picked it up.
It's not my joke, so don't be too hard on yourself.
ARM: "It's not my joke, so don't be too hard on yourself"
I know, but still, I should have latched onto it long before now.
I have been remiss.
There's nothing about Trump's relationship with Stormy Daniels that will cause me to regret my vote or to not vote for him next time. Nonetheless, I read all about it. If I didn't have prurient interest, I wouldn't have any interest at all......If Trump screws this trade war stuff up with China and the stock market tanks, then I will definitely re-evaluate my past and future support of him. Nonetheless, I skip over items about tariffs and technology transfers. Financial interests lack prurience........No sane man would look to Trump for moral guidance on how to navigate morality and sex, but I would look to Trump to negotiate a pretty good trade deal. This is not an area where I would have much forgiveness, but I'd enjoy reading about a few more pornstar and Playmate romps.
#FakeNews Associated Press reports:
"Dow industrials surge 670 points, their best gain since August 2015, erasing nearly half the ground they lost last week."
Except the AP anti-Trump/pro-Obama #FakeNews is wrong. The August 2015 gain was 619.2 points. Today's gain was 669.4 points and the highest since 2008. This is better than any day under Obama (but #FakeNews AP has to hide this).
Markets go up. Markets go down. They will do both in the future. A 7% correction isn't new. I do expect a period of volitility for awhile though.
The big news is not that Trump is doing this or that. It is that he is clearing a path for common sense to rule for a few of our national interests. These ideas he is touting are not new ones, but President Trump is unique in his ability to bring them to the light of day. The Dems will fight him every step of way hoping to keep power for power's sake. Like ARM, they are not serious people. If he is successful they will be out of power for a generation and we will be able to apply common sense solutions (even painful ones) to our real internal problems. This is my hope.
A common sense revolution led by a madman.
Inga and ARM fantasized:
The markets dropped by 50%. Mueller found another key witness. Impeachment and conviction are near.
Hallelujah!
Ritmo could not be reached for comment. Maybe he took his meds.
While all the China/US kerfuffle has going on it appears that Rocket Man Kim has taken his private train to China. Coincidence?
While everyone has been spun up over stormy and Russians:
The USS Jimmy Carter made 2 combat patrols in the Pacific. The Carter is a covert submarine designed for special missions such as insertion and extraction of navy seals, uuv drones and more. Twice in 2017 they returned to homeport flying the jolly roger. This is only flown by subs on return from a successful combat patrol
Last fall the noko nuclear facility was destroyed, killing 200 nuke scientists engineers and technicians. Supposedly this was by an earthquake.
Afterward kim started talking to the sokos. Also agreed to meet with president trump in a reversal of long noko policy.
Today he went to China.
Is he coming back?
Or did, perhaps, president trump just win the Korean War?
John Henry
"However, they have been known to ship things through Canada to the US to avoid putting Made in China on them."
That does not change the country of origin. If a product is made in China, and shipped through Canada, Mexico, or any other country before entering the US, the country of origin is still China. The country of origin would only change if the material shipped to Canada from China was used as a raw material in a product manufactured in Canada. Then the country of origin would be Canada. "Country of origin" always defines the point of manufacture or growth of a product when it is received by the "ultimate purchaser" of the product, that is the person or entity that is the final consumer in the United States. Country of origin has to be indicated on all shipping and customs documents and, if the product is packaged, on the package label, and cannot be removed or altered in any way. There can be substantial penalties to the importer for improperly identifying the country of origin as it can affect determination of import restrictions or the collection of duties.
Otoh, it could be more misdirection. Maybe the Carter just went out and steamed in circles for a month.
Then came back flying the jolly roger so people would think she had completed a combat mission.
And a tip to Reuters to make sure they got the photo.
John Henry
John: "Last fall the noko nuclear facility was destroyed, killing 200 nuke scientists engineers and technicians. Supposedly this was by an earthquake."
Of course it was.
Naturally.
Not China related but:
Today President Trump started building the wall. That big spending package contained money that coul only be used for a fence, not for a wall. Great glee and celebrations!
But, last year an agreement was reached th7the wall was national defense and DODmoneys coul be used. Crickets.
Also last week, the first commercial flight ever between Saudi arabia and Israel. Second flight ever. Air force one was the first last year.
And the Saudis, uae, Egypt(?) and Israel have a panel that is actively working on how to deal with Iran.
And President Trump threw 40 more Russians out of the us closing the Seattle consulate. After he closed the san Francisco consulate last year. If they paid money to get him elected, the ruskies should e demanding a refund.
Nope. Not tired of winning yet.
John Henry
An intriguing notion posited by a Robert littell novel in the late 80s, a nuclear explosion is triggered by bringing radio active material in proximity to a nuclear facility. Creating a chain reaction.
If you read between the lines of kirkpatricks nothingberger he is leaking hacked documents Qatar obtained from the uae
Furthermore the name Ali quahtani, a supposed casualty of prince salmans purge, may have just been a dangle the Iranians fed to local publication.
Bolivar,
I think it was Feyneman in one of his books told of a visit to oak ridge during the manhatten project.
He found purified uranium stored in a warehouse. It was fairly small quantity and safe. Then he found, in another warehouse separated by a concrete wall, another small safe quantity.
Separated by only the thickness of the wall, there was a large enough total quantity to go critical and blow up.
He quickly commandeered a forklift and moved it out of harm's way.
John Henry
John:
It's not just that Kim is talking peace. Last fall he was firing missiles over Japan and towards Hawaii every damned week. If I'm not mistaken, he hasn't fired one yet this year. Did the 'earthquake' destroy his physical ability to do so, or his emotional willingness to do so, or both? Whichever it was, Trump does seem (probably) to have totally defanged the NoKo threat. Unless something very weird and unlikely is happening, that alone should (but will not) win him the Nobel Peace Prize, and at least a bit of grudging appreciation from the Uniparty (also unlikely).
Here's an article from last july explaing how congress authorized, last year, building the wall with dod funds.
https://www.usnews.com/opinion/economic-intelligence/articles/2017-07-19/congress-slyly-diverts-pentagon-money-to-fund-donald-trumps-border-wall
John Henry
@John Henry
Since you mentioned Feynman I was an undergrad at Cornell in the 70's and people were still telling Feynman stories. Apparently he was quite the ladies man and had to leave Ithaca to avoid being lynched by a mob of angry husbands he'd cuckolded. He also figured out why the Challenger exploded, demonstrating his findings in dramatic fashion at the hearings investigating the disaster.
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