Will Trump's tariffs lead to a global trade war?

[sptrawler]

China is reviewing locations in the U.S. where President Xi Jinping would be willing to meet with Donald Trump to sign the first phase of a trade deal between the world’s two largest economies, people familiar with the plans said.

https://www.bloomberg.com/news/arti...i-as-progress-seen-on-trade?srnd=premium-asia

 

[sptrawler]

It looks as though Trumps tarrifs are getting some traction, it will be great for the World economy if a China trade deal is achieved.

https://www.bloomberg.com/news/arti...as-price-for-phase-one-deal?srnd=premium-asia

 

[sptrawler]

Obviously some aren't happy that China is coming to the table.

https://www.smh.com.au/business/the...end-trade-war-with-china-20191106-p537vp.html

You can always find a negative, if you try hard. IMO

 

[Knobby22]

Obviously some aren't happy that China is coming to the table.

https://www.smh.com.au/business/the...end-trade-war-with-china-20191106-p537vp.html

You can always find a negative, if you try hard. IMO

The trouble is that China is winning as per Alan Kohler on the ABC tonight and that article.
I don't think the deal will be that good for the USA.

 

[sptrawler]

The trouble is that China is winning as per Alan Kohler on the ABC tonight and that article.
I don't think the deal will be that good for the USA.

Any deal is better than what was happening IMO, China has been dumping on a global scale for years and no one has had the gonads to call them on it.
What was the alternative? do nothing and have every Countries manufacturing sent to the wall, by subsidised products from China.
It isn't a win/win situation, it is more of a try and slow down the wave, sort of process.
China has enough momentum, that its industrialization wont stop, but they have to be brought under some sort of global umbrella that respects other Countries rights to fair trade and intellectual property.
What has any other leader, other than Trump done about it?

 

[Jack Aubrey]

Any deal is better than what was happening IMO, China has been dumping on a global scale for years and no one has had the gonads to call them on it.
What was the alternative? do nothing and have every Countries manufacturing sent to the wall, by subsidised products from China.
It isn't a win/win situation, it is more of a try and slow down the wave, sort of process.
China has enough momentum, that its industrialization wont stop, but they have to be brought under some sort of global umbrella that respects other Countries rights to fair trade and intellectual property.
What has any other leader, other than Trump done about it?

I am not (yet) convinced Trump has actually DONE anything about the underlying problems of currency manipulation, IP theft, tariffs and dumping. We haven't seen any agreements yet, although I am encouraged by the current delay as that could mean that there are substantive issues involved, rather than just window-dressing.

This dispute has done a lot of damage to world trade (although it has probably been a slight net benefit to Australia so far). I'm not against Trump's disruptive tactics but I see him as a very "transactional" and short-term thinker* more concerned with the domestic political optics that any real and lasting reform. If he simply does a narrow US/China deal based on particular commodities (eg. allowing more US access to China's markets) he'll effectively be throwing other export countries, like us, under a bus.

The damage to the world trade system will take a long time to repair, particularly if other politicians believe that Trump has been "successful". Every tin-pot nationalist/populist/protectionist will see opportunities to pick trade fights with "foreigners" to bolster their credentials at home. That is always a short-term game.

* "thinker" may be the wrong word here, but you get my drift.

 

[SirRumpole]

It looks as though Trumps tarrifs are getting some traction, it will be great for the World economy if a China trade deal is achieved.

https://www.bloomberg.com/news/arti...as-price-for-phase-one-deal?srnd=premium-asia

It will be a deal between China and the US and everyone else will pick up the dregs.

 

[sptrawler]

I am not (yet) convinced Trump has actually DONE anything about the underlying problems of currency manipulation, IP theft, tariffs and dumping. We haven't seen any agreements yet, although I am encouraged by the current delay as that could mean that there are substantive issues involved, rather than just window-dressing.

This dispute has done a lot of damage to world trade (although it has probably been a slight net benefit to Australia so far). I'm not against Trump's disruptive tactics but I see him as a very "transactional" and short-term thinker* more concerned with the domestic political optics that any real and lasting reform. If he simply does a narrow US/China deal based on particular commodities (eg. allowing more US access to China's markets) he'll effectively be throwing other export countries, like us, under a bus.

The damage to the world trade system will take a long time to repair, particularly if other politicians believe that Trump has been "successful". Every tin-pot nationalist/populist/protectionist will see opportunities to pick trade fights with "foreigners" to bolster their credentials at home. That is always a short-term game.

* "thinker" may be the wrong word here, but you get my drift.

I agree with your sentiment, however I am a strong believer that the Lima accord has over reached its intention in the case of China, China has the manufacturing capability and political structure to send all first World Countries manufacturing broke.
It has increased the living standards for China, which is great, but there has to come a time where they cut back their growth to allow World industry balance to recover. That can either be done by agreement, or by increasing the value of China's currency, neither of which China wanted to do.
So in my opinion, Trump is trying to do what no other Country would be able to do and until him the U.S.A didn't have the stomach for.
It should be remembered that most of the big multi nationals are American and are making a lot of money from offshoring their manufacturing to China, they wont be happy with Trump and as can be seen by the media coverage they have a lot of leverage.
Anyway only my opinion and it's worth what it costs.

 

[sptrawler]

Correction to the previous post it should read Lima Agreement, not Lima Accord.
Too many meetings in Lima.

 

[sptrawler]

Well it looks as though Trump has made progress.

https://www.abc.net.au/news/2019-11...street-record-highs/11684878?section=business

 

[sptrawler]

Or maybe not.

https://www.theage.com.au/business/...tariffs-on-chinese-goods-20191109-p538z2.html
From the article:
Trump has used tariffs on billions of dollars of Chinese goods as his primary weapon in the protracted trade war, which is aimed at forcing major changes in China's trade and industrial policies. The United States is demanding that China end the theft and forced transfer of American intellectual property and curb subsidies to state-owned enterprises, while granting US companies more access to China's markets. Trump also wants China to vastly increase its purchases of US farm products.

The "phase one" trade deal would largely address farm purchases, access to China's financial services market and improve copyright and trademark protections in China. More difficult technology transfer issues, subsidies and cybersecurity rules would be left to future negotiations.

White House trade adviser Peter Navarro, one of the Trump administration's loudest anti-China voices, lashed out at journalists on Friday in an e-mail, accusing them of being "played" by Chinese "propagandists" who were falsely stating that the two sides had agreed to cancel tariffs in phases.


Navarro complained that too many reports relied on anonymous sources and said only Trump and US Trade Representative Robert Lighthizer should be quoted on stories about the China trade negotiations.

 

[sptrawler]

It looks as though the trade war has had the desired effect on China's manufacturing, rather than reverse engineering other people's R & D they have started doing their own.
This trade war, could have a huge impact on technological progress, if both superpowers invest in R & D, progress will be accelerated on all technology fronts. IMO
I wonder if Trump will get any credit.

https://www.theage.com.au/business/...up-chinese-entrepreneurs-20200113-p53r3s.html

 

[sptrawler]

https://www.straitstimes.com/world/...on-chinese-imports-for-now-treasury-secretary
From the article:
The United States will maintain tariffs on Chinese goods until the completion of a second phase of a United States-China trade agreement, US Treasury Secretary Steven Mnuchin said on Tuesday (Jan 14), a day before the two sides are to sign an interim deal.

He also said that the Phase One deal will be fully enforceable, including a pledge by China to refrain from manipulating its currency.
China committed to purchase US$200 billion (S$270 billion) of additional US goods and services over the next two years under the agreement, he said, adding that US companies and farmers could reap further gains once structural reforms were tackled in a Phase Two agreement.
After the Phase 1 deal was reached last month, Washington agreed to suspend tariffs on US$160 billion (S$215 billion) in Chinese-made cellphones, laptop computers and other goods that were due to take effect on Dec 15, and to halve existing tariffs on US$120 billion of other goods to 7.5 per cent. It kept in place 25 per cent tariffs on US$250 billion of other Chinese goods.

 

[tinhat]

If the news is correct and the phase one trade deal is largely comprised of an agrarian socialist deal (Chinese guaranteed purchases of US farm commodities) to curry favour with US primary producers then that is not going to be good for Australian farmers, especially on-top of already difficult circumstances domestically with the drought and disruptions caused by the bushfire (climate) emergency.

I wonder if there is anything in the bilateral US-Australia trade deal that deals with such circumstances.

 

[sptrawler]

One would think that Australia will entwine its trade deals with like minded Countries, the problem I see at the moment, is the rising economies are overtaking the established economies, but the rising economies are not passing on the benefits to the masses.
That is a bit general, but it seems to be able to applied, to several emerging economies.

 

[Jack Aubrey]

One would think that Australia will entwine its trade deals with like minded Countries, the problem I see at the moment, is the rising economies are overtaking the established economies, but the rising economies are not passing on the benefits to the masses.
That is a bit general, but it seems to be able to applied, to several emerging economies.

Not sure about recent wealth distribution in developing countries but the last couple of decades have seen enormous growth in the middle class in both China and India. That growth has driven both property prices and the education industry in Australia. At the same time, the middle is being hollowed out in the US, UK and Europe and current policies would have the same effect longer-term here.

I'm sitting on the fence about the "Stage 1" trade deal. It does seem very much focused on "quid pro quo" deals on bilateral goods and services, rather than being rules based. Reported deals about currency manipulation and technology are promising. We'll have to see what emerges with the remaining phases, but I'm not sure the benefits of this stage would outweigh the costs incurred so far.

 

[sptrawler]

Not sure about recent wealth distribution in developing countries but the last couple of decades have seen enormous growth in the middle class in both China and India. That growth has driven both property prices and the education industry in Australia. At the same time, the middle is being hollowed out in the US, UK and Europe and current policies would have the same effect longer-term here.

I was more referring to any form of social welfare being developed in the Countries, the middle class is definitely increasing as can be seen by the amount of Indian and Chinese tourists when travelling O/S, however I'm yet to read anything regarding any form of social welfare system being enacted in these countries.

I'm sitting on the fence about the "Stage 1" trade deal. It does seem very much focused on "quid pro quo" deals on bilateral goods and services, rather than being rules based. Reported deals about currency manipulation and technology are promising. We'll have to see what emerges with the remaining phases, but I'm not sure the benefits of this stage would outweigh the costs incurred so far.

I agree with you, but it has to start somewhere, some progress is a lot further than where it was 5 years ago, China has had rampant growth which is great.
But that growth has to a certain degree, been at the cost of manufacturing in other Countries, there is no point in China making everyone else poor, who would then buy their gear?