The New China – US Trade War : A Matter of Survival

[Y_Participant 4591]

743 roadmaster wrote:

I suspect that China is already in talks looking to make a deal. South Korea did early on and is in prime trading position. The US being the land of profits.
I also suspect that the smoke screen China is putting up now(tariffs on US items) is just that, Unlike China where the government gets a part of the action of people investing into China,…in the US it is all business. China can come in and make steel and aluminum here and have it counted as native. Who is going to say different when Bethlehem steel gets a new business partner.

The situation is not as straightforward as US vs China – it is actually US companies quartered in Asia (not just China) who are selling the goods on the American markets and making the profits. China is a factory floor.

This trade arrangement is for the benefit of both countries regardless of politicisation. It is not possible for the US to get these low-paying jobs back without the rest of US society paying for them, including the US corporations that paid for the investments.

How can the tariffs be then justified? Are Americans willing to continue to pay for other dead-end trades that will otherwise die off, move offshore or be replaced with automation and AI – as is happening now?

I am not a globalist or protectionist but a realist – certain things need to be accepted as relevant and what is not should be laid to rest.

As for technology control – this is not the same as a patent control. Once technology is developed commercially it is only a matter of time until it is adopted generically elsewhere. Washington is enacting knowledge control – which is a very different thing.

Will this same kind of control extend to individuals? Will your knowledge be controlled by the government as well one day – to save US jobs?

A lot of the things said by Washington on the economy and on trade issues don’t make sense. But I do not expect them to be.

[Y_Participant 4591]

KevinStyles wrote:

Doesn’t china hold most of our debt? I mean all they ahve to do is call in all those debts and bankrupt the USA and our credit rating will take a huge s~~~ and our dollar will become like a Peso

No – not really. China holds about 3 trillion. But there is no problem with this. It is not understood generally that the Federal Reserve can order the US banks like JP Morgan Chase and Goldman Sachs to pick up the slack if China sells off gradually.

The problem is dumping. If China dumps a large portion of treasuries overnight (when no one is looking) on the secondary bond markets then by the next day in the US bond market would have a short-term bloodbath before a bond rally can be organised.

The consequence of higher bond yields from short-selling of treasuries is a possible stock market crash, similar to what happened in a limited way in February 2018.

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