'We're at economic war ': China is playing with fire in Trump battle

Mary Cobb said:
But Trump does have a large amount of support in his trade war in the USA regardless of his stupid behavior
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If the US wants to reduce some of the unfair trade practices, it is now or never. Trump may not have a PhD in economics but he can add and subtract. Simple math says China cannot win this trade war:

1. They export >$500 B to the US, about 4.2% of their GDP (U$12 T). If they loses the $500B, it will reduce their GDP by 4.2%. When their domestic policy requires them to grow >6.8% in order to keep social peace within China, they simply cannot afford a 4.2% haircut.

2. The US export $130 B to China about 0.7% of GDP (U$ 19 T). US does not need more than 2% a yr growth to keep from sliding into recession and it is currently growing at >3%. Export to China is insignificant in the grand scheme of things.

3. The US can replace low tech imports from places like Vietnam, India, etc. who would kill to replace China and high tech imports from Taiwan, Japan Korea and Europe, etc. And AAPL's biggest supplier is already setting up manufacturing back in the US....

4. Some US chip technologies are critical to Chinese companies. Remember ZTE?

I think the stock markets in both countries already voted. :D
 
ironchef said:
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I think the stock markets in both countries already voted. :D
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Not really. So far China hasn't made threats to US companies in China yet. If tomorrow, China decides to charge US companies 30% tax operating in China, US stock market will lose half of its value, because US companies make almost a trillion dollars in revenue a year in China including export. US economy will be shocked into recession. Millions of jobs will be lost.


I don't think the trade war really hurt China much, but it hurts many other nations like Switzerland, Japan, France, South Korea, especially USA, UK, Germany, Sweden, Sudan, Thailand, Philippine, Congo.... much more though. Probably it will create a global recession.

It seems China makes $500B on exports. It is true if China make and design all of these, but they are not. Most of the total $500B is the components and raw material costs originated from other nations. They are being sent to China to turn into finished goods and then export to US.
China at best only makes a small marginal of that for labor fee.

For example, Apple iPhone is assembled in China. Its components are not made and designed in China. but they are sent from USA, Japan, South Korea and Europe to China to assembly and export. China only makes $9 to $10 per iPhone for its labor assembly fee. Other nations make the rest of the $1,000 phone pie. If you put the source into calculation, other nations run a big trade deficit with US, not China. They use China as the shield. That is why they don't united and stand against China. They know they would have to pay big.

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More sanctions on Russia.
So now Trump is attacking Russia, China, North Korea, Cuba and Iran with sanctions.
Also in the firing line are Mexico, Canada etc. Many more are hurting.
Could be over stretching things a bit. Expect a back lash.
A truly spineless Congress just lets him run amok.
 
hoffmanw said:
Not really. So far China hasn't made threats to US companies in China yet. If tomorrow, China decides to charge US companies 30% tax operating in China, US stock market will lose half of its value, because US companies make almost a trillion dollars in revenue a year in China including export. US economy will be shocked into recession. Millions of jobs will be lost.


I don't think the trade war really hurt China much, but it hurts many other nations like Switzerland, Japan, France, South Korea, especially USA, UK, Germany, Sweden, Sudan, Thailand, Philippine, Congo.... much more though. Probably it will create a global recession.

It seems China makes $500B on exports. It is true if China make and design all of these, but they are not. Most of the total $500B is the components and raw material costs originated from other nations. They are being sent to China to turn into finished goods and then export to US.
China at best only makes a small marginal of that for labor fee.

For example, Apple iPhone is assembled in China. Its components are not made and designed in China. but they are sent from USA, Japan, South Korea and Europe to China to assembly and export. China only makes $9 to $10 per iPhone for its labor assembly fee. Other nations make the rest of the $1,000 phone pie. If you put the source into calculation, other nations run a big trade deficit with US, not China. They use China as the shield. That is why they don't united and stand against China. They know they would have to pay big.

.
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Yes, you do make some very good points. But if you were the US President, how do you deal with trade imbalance and technology transfer with China?
 
ironchef said:
Yes, you do make some very good points. But if you were the US President, how do you deal with trade imbalance and technology transfer with China?
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Realistically study the problem if it is a problem?
 
I think you will find times have changed. No longer can the US act as the world's policeman.
China and others are well up in technology etc. and don't really need US patronage.
The US is trying it on with Iran too. OK so they are less developed but other countries will sell them what they need. Threatening anyone who trades with Iran is just living in a trumpo-land fantasy.
He will just get a 2 finger response from France and others.
 
Humpy said:
More sanctions on Russia.
So now Trump is attacking Russia, China, North Korea, Cuba and Iran with sanctions.
Also in the firing line are Mexico, Canada etc. Many more are hurting.
Could be over stretching things a bit. Expect a back lash.
A truly spineless Congress just lets him run amok.
More...

Trump is doing right.US is being exploit like a ho by the whole world.US Congress is a bunch of pussies.
 
Before talking about the likely winner of this trade war, , visit both China and US first rather than judge from what you read from newspapers. It's not going to be difficult to see who will win it in the long term. China is no match for U.S. yet. Well still miles away...just because south Africa exports most gold in the world, it doesn't mean they will likely to dominate the world's economy
 
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