Trade War II—"Trade wars are good, and easy to win"
August 5, 2019 7:48 PM Subscribe
China is letting the yuan weaken and boycotting U.S. crops in retaliation to the Trump administration's latest round of tariffs (despite its July statement that it would not respond with competitive currency devaluation to Trump's tweets about its monetary policy). In consequence, the Dow has tumbled nearly 770 points at close today, and overnight trading in stock futures indicates the Dow is now set to fall 630 points on Tuesday, as markets are bracing for a surge in volatility. A Cowen FG analyst describes China’s central bank's decision to let the yuan fall to a more-than-10-year low against the dollar, "on a scale of 1-10, it’s an 11". Morgan Stanley predicts that if the situation escalates, a global economic recession will come in the next nine months.
Last week, in a tense Oval Office meeting, Mnuchin and U.S. Trade Representative Robert Lighthizer had briefed Trump about their talks in Shanghai with their unshakeable Chinese counterparts, but Trump resisted their advice to give Beijing advance notice of his intent to slap a new 10% tariff on $300 billion in Chinese goods and instead surprised them with a tweet. In response to China's newest retaliatory moves, US Treasury Secretary Mnuchin, "under the auspices of President Trump", has now declared China a currency manipulator. While the administration has been looking for ways to expand penalties for currency manipulation, Trump took to tweeting at the Fed to devalue the dollar in retaliation, "It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!"
China's suspension of purchases of U.S. agricultural products comes just days after the White House claimed that China had committed to increased purchases. This retaliation adds to farmer's woes in a year of rising farm bankruptcies and high uncertainty due to weather, tariffs, and falling commodity prices. The USDA has announced details of trade aid round two in which $14.5 billion in direct payments to farmers will be made and $1.4 billion in surplus commodities will be purchased by the US government.
Trump may have declared a War on Christmas as the new tariffs will impose a 10 percent tax on Chinese-made consumer electronics, toys, and clothes will hit just as Christmas shipments loom.
Meanwhile, China’s treasuries hoard are seen as the next line in the sand after yuan’s drop. If China does not bid on US securities at this week's debt auctions, that could be an indication it is planning to unload even more of its holdings in the next phase of the trade war.
Previously in the megathreads: We Have Always Been at Trade War with China.
With the Decommissioning of the Megathreads, we're collaborating on topical uspolitics/potus45-related FPPs, and draft posts can be found on the MeFi Wiki. Thanks to peedro/i.forgot.my.password, and zachlipton for helping to create this thread.
Last week, in a tense Oval Office meeting, Mnuchin and U.S. Trade Representative Robert Lighthizer had briefed Trump about their talks in Shanghai with their unshakeable Chinese counterparts, but Trump resisted their advice to give Beijing advance notice of his intent to slap a new 10% tariff on $300 billion in Chinese goods and instead surprised them with a tweet. In response to China's newest retaliatory moves, US Treasury Secretary Mnuchin, "under the auspices of President Trump", has now declared China a currency manipulator. While the administration has been looking for ways to expand penalties for currency manipulation, Trump took to tweeting at the Fed to devalue the dollar in retaliation, "It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!"
China's suspension of purchases of U.S. agricultural products comes just days after the White House claimed that China had committed to increased purchases. This retaliation adds to farmer's woes in a year of rising farm bankruptcies and high uncertainty due to weather, tariffs, and falling commodity prices. The USDA has announced details of trade aid round two in which $14.5 billion in direct payments to farmers will be made and $1.4 billion in surplus commodities will be purchased by the US government.
Trump may have declared a War on Christmas as the new tariffs will impose a 10 percent tax on Chinese-made consumer electronics, toys, and clothes will hit just as Christmas shipments loom.
Meanwhile, China’s treasuries hoard are seen as the next line in the sand after yuan’s drop. If China does not bid on US securities at this week's debt auctions, that could be an indication it is planning to unload even more of its holdings in the next phase of the trade war.
Previously in the megathreads: We Have Always Been at Trade War with China.
With the Decommissioning of the Megathreads, we're collaborating on topical uspolitics/potus45-related FPPs, and draft posts can be found on the MeFi Wiki. Thanks to peedro/i.forgot.my.password, and zachlipton for helping to create this thread.
On a personal note I decided Friday was the perfect time to take the plunge and invest in my first stocks.
posted by ODiV at 8:11 PM on August 5, 2019 [20 favorites]
posted by ODiV at 8:11 PM on August 5, 2019 [20 favorites]
Shoulda sold my Ford stock; flyover country is gonna get it good and hard, as the man said...
posted by Heywood Mogroot III at 8:11 PM on August 5, 2019 [2 favorites]
posted by Heywood Mogroot III at 8:11 PM on August 5, 2019 [2 favorites]
as for the Chinese treasuries thing, there's https://ticdata.treasury.gov/Publish/mfh.txt which lists the official ownership of US Treasury issues, showing that foreign states have only picked up 10% of last year's new debt issues.
Sadly, the internet archive only goes back to 2015, but you can see then that China and Japan each held ~$1.2B in issues, showing they've been on a buyer's strike for a while.
But foreigners printing their currency, converting it to USD, and buying USTs is a very direct way of inflating their currency, weakening it against others.
posted by Heywood Mogroot III at 8:18 PM on August 5, 2019 [2 favorites]
Sadly, the internet archive only goes back to 2015, but you can see then that China and Japan each held ~$1.2B in issues, showing they've been on a buyer's strike for a while.
But foreigners printing their currency, converting it to USD, and buying USTs is a very direct way of inflating their currency, weakening it against others.
posted by Heywood Mogroot III at 8:18 PM on August 5, 2019 [2 favorites]
I kind of wonder if dems all selling stocks would do more for our candidates than donations ever could.
posted by BrotherCaine at 8:19 PM on August 5, 2019 [1 favorite]
posted by BrotherCaine at 8:19 PM on August 5, 2019 [1 favorite]
Certainly a 21st century version of a General Strike -- tens of millions of us not buying anything new or not needed -- would send the economy into a tailspin right quick.
posted by Heywood Mogroot III at 8:21 PM on August 5, 2019 [11 favorites]
posted by Heywood Mogroot III at 8:21 PM on August 5, 2019 [11 favorites]
And they laugh at me in stock club when I advocate for the Team Sell Everything and Stuff It Under a Mattress position.
posted by fifteen schnitzengruben is my limit at 8:22 PM on August 5, 2019 [6 favorites]
posted by fifteen schnitzengruben is my limit at 8:22 PM on August 5, 2019 [6 favorites]
https://fred.stlouisfed.org/series/DEXCHUS is a useful graph of the yuan/USD exchange rate, showing that the yuan weakening since 2013 has all been a tempest in a teacup.
You can't understand what happened 1995-2005 without knowing about the 1994 devaluation. But nobody does know about that, of course.
posted by Heywood Mogroot III at 8:26 PM on August 5, 2019 [10 favorites]
You can't understand what happened 1995-2005 without knowing about the 1994 devaluation. But nobody does know about that, of course.
posted by Heywood Mogroot III at 8:26 PM on August 5, 2019 [10 favorites]
Can someone explain the treasuries thing? I read the article, but I don't know what the implications of selling the treasury bonds would be.
If China retaliates by dumping its stock of US treasury bonds—it's been gradually reducing its US securities holdings in the past several years, but it still owns a hoard of $1.1 trillion worth—that could drastically decrease their value and make it harder for the US government to issue debt just when it's running a historically high deficit. That Bloomberg article points out, however, that this could also have the effect of strengthen the yuan rather than simply another retaliatory move. And the Chinese central bank just set its yuan midpoint at stronger than the magic 7 per dollar, so it looks like they may be taking a cautious approach to responding to Trump in spite of everything.
https://fred.stlouisfed.org/series/DEXCHUS is a useful graph of the yuan/USD exchange rate, showing that the weakening since 2013 has all been a tempest in a teacup.
Paul Krugman argues that China was indeed a currency manipulator in 2010-11 and that its manipulation was keeping the yuan up, not down. They've since been gradually letting market forces determine its value more, although today's actions are a more pronounced approach in the context of Trump's trade war.
posted by Doktor Zed at 8:33 PM on August 5, 2019 [6 favorites]
If China retaliates by dumping its stock of US treasury bonds—it's been gradually reducing its US securities holdings in the past several years, but it still owns a hoard of $1.1 trillion worth—that could drastically decrease their value and make it harder for the US government to issue debt just when it's running a historically high deficit. That Bloomberg article points out, however, that this could also have the effect of strengthen the yuan rather than simply another retaliatory move. And the Chinese central bank just set its yuan midpoint at stronger than the magic 7 per dollar, so it looks like they may be taking a cautious approach to responding to Trump in spite of everything.
https://fred.stlouisfed.org/series/DEXCHUS is a useful graph of the yuan/USD exchange rate, showing that the weakening since 2013 has all been a tempest in a teacup.
Paul Krugman argues that China was indeed a currency manipulator in 2010-11 and that its manipulation was keeping the yuan up, not down. They've since been gradually letting market forces determine its value more, although today's actions are a more pronounced approach in the context of Trump's trade war.
posted by Doktor Zed at 8:33 PM on August 5, 2019 [6 favorites]
Trump's negotiating strategy has always been
- pretend you are rich, pay on credit
- stiff the contractors, say they should just be glad to work with you
- threaten with legal action, make up shit
- renege on deals and make random outlandish demands
- rinse and repeat until you pay 25 cents on the dollar for the contractor to wash their hands of you
China is finally calling him on his bullshit. Trump was a fool to play bully with the one country that can punch back. You can only burn one bridge with China; it's not one of a thousand roofing companies.
posted by benzenedream at 8:44 PM on August 5, 2019 [94 favorites]
- pretend you are rich, pay on credit
- stiff the contractors, say they should just be glad to work with you
- threaten with legal action, make up shit
- renege on deals and make random outlandish demands
- rinse and repeat until you pay 25 cents on the dollar for the contractor to wash their hands of you
China is finally calling him on his bullshit. Trump was a fool to play bully with the one country that can punch back. You can only burn one bridge with China; it's not one of a thousand roofing companies.
posted by benzenedream at 8:44 PM on August 5, 2019 [94 favorites]
It speaks poorly of our ruling class that this nincompoop is the first president to take on China. Reagan on up to the present was happy as long as the corporate sector was happy with the proverbial quarterly report. Industrial policy? Medium to long term state security? Welfare of the people? The state hasn't cared in a long time, and it got worse after the USSR died.
In other words, the corporate sector has run the state since at least the mid 70s.
posted by MillMan at 8:57 PM on August 5, 2019 [8 favorites]
In other words, the corporate sector has run the state since at least the mid 70s.
posted by MillMan at 8:57 PM on August 5, 2019 [8 favorites]
(This is tangential to the trade war, but interesting. Why is China purchasing so much of the world’s soybean crops?)
China’s hunger for soybeans is a window into an encroaching environmental crisis: How China’s desperate efforts to source soybeans from all over the world is explained by the country’s fear of running out of water.
posted by Auden at 9:00 PM on August 5, 2019 [17 favorites]
China’s hunger for soybeans is a window into an encroaching environmental crisis: How China’s desperate efforts to source soybeans from all over the world is explained by the country’s fear of running out of water.
posted by Auden at 9:00 PM on August 5, 2019 [17 favorites]
This whole currency manipulation accusation thing is garbage anyway. The US ran a 3.5 trillion dollars QE program which resulted in the devaluation of the USD, but it's called manipulation when Europe does it.
Speaking at the ECB’s annual symposium in Sintra, Portugal, Mr Draghi said the bank could launch a fresh expansion of its €2.6tn quantitative easing programme if the inflation outlook failed to improve.
Mr Trump hit out at Mr Draghi’s remarks, suggesting that Europe was engaging in currency manipulation. “Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA,” the US president wrote on Twitter. “They have been getting away with this for years, along with China and others.”
If Central Banks going about their business of controlling inflation and unemployment is called currency manipulation then everyone is a manipulator. If Central Banks having a targeted band they want their currency to trade at is manipulation, then everyone is a manipulator.
posted by xdvesper at 9:10 PM on August 5, 2019 [31 favorites]
Speaking at the ECB’s annual symposium in Sintra, Portugal, Mr Draghi said the bank could launch a fresh expansion of its €2.6tn quantitative easing programme if the inflation outlook failed to improve.
Mr Trump hit out at Mr Draghi’s remarks, suggesting that Europe was engaging in currency manipulation. “Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA,” the US president wrote on Twitter. “They have been getting away with this for years, along with China and others.”
If Central Banks going about their business of controlling inflation and unemployment is called currency manipulation then everyone is a manipulator. If Central Banks having a targeted band they want their currency to trade at is manipulation, then everyone is a manipulator.
posted by xdvesper at 9:10 PM on August 5, 2019 [31 favorites]
China's solution to global warming destroying their ability to grow soybeans is to build a train transport for soybean trade through the Amazon rainforest. :-(
posted by xammerboy at 9:20 PM on August 5, 2019 [11 favorites]
posted by xammerboy at 9:20 PM on August 5, 2019 [11 favorites]
And yet China refuses to buy Canadian soybean because we (unwisely) arrested a Huawei executive at the United States' request.
posted by Yowser at 9:41 PM on August 5, 2019 [2 favorites]
posted by Yowser at 9:41 PM on August 5, 2019 [2 favorites]
Can someone explain this to me like I'm five?
posted by xammerboy at 10:40 PM on August 5, 2019 [7 favorites]
posted by xammerboy at 10:40 PM on August 5, 2019 [7 favorites]
If this unfolds like the rest of Trump’s foreign policy, sometime in the next few months he’ll capitulate in the trade wars while declaring victory, at which point the markets will rebound because the Trump-made crisis is averted, at which point Trump will claim credit for the market rebound by having solved the problem that he, himself created. And the MAGAhats will eat it up with a spoon.
posted by darkstar at 10:41 PM on August 5, 2019 [58 favorites]
posted by darkstar at 10:41 PM on August 5, 2019 [58 favorites]
And in the meantime there's going to be a lot of economic pain for people, and a lot of those people will keep supporting Trump anyway because it hurts someone else more.
posted by Ray Walston, Luck Dragon at 10:49 PM on August 5, 2019 [16 favorites]
posted by Ray Walston, Luck Dragon at 10:49 PM on August 5, 2019 [16 favorites]
The thing that’s really rich about all of this is that tariffs are a kind of tax. So the leader of the GOP is engaging in (1) interventionist economic policy to (2) manipulate markets by (3) imposing a tariff tax that will (4) kill farming and other jobs, which is mitigated by (5) establishing special government welfare programs for the people harmed by the policy.
It’s an incredible microcosm of Republican hypocrisy, wrapped up in a single GOP economic initiative.
posted by darkstar at 10:50 PM on August 5, 2019 [55 favorites]
It’s an incredible microcosm of Republican hypocrisy, wrapped up in a single GOP economic initiative.
posted by darkstar at 10:50 PM on August 5, 2019 [55 favorites]
I live in NZ and manufacture some open source hardware in China and sell it worldwide, I sell in US$ but most of my customers are elsewhere. If this keeps up it's mostly good for me, at some point I'll probably have to pay this extra duty on stuff I send to the US ... when that happens I won't change my base prices, I'll just start charging American customers more to cover the extra they are costing me.
My point here is to explain how Trump's tariffs get paid by Americans, not by the Chinese (or me)
posted by mbo at 10:51 PM on August 5, 2019 [38 favorites]
My point here is to explain how Trump's tariffs get paid by Americans, not by the Chinese (or me)
posted by mbo at 10:51 PM on August 5, 2019 [38 favorites]
The thing that’s really rich about all of this is that tariffs are a kind of tax. So the leader of the GOP is engaging in (1) interventionist economic policy to (2) manipulate markets by (3) imposing a tariff tax that will (4) kill farming and other jobs, which is mitigated by (5) establishing special government welfare programs for the people harmed by the policy.
Not to abuse the edit window, but the next time a Republican crows about being the party of:
1. Small government
2. Free markets
3. Low taxes
4. Job creation, and
5. Anti-welfare policy
This trade war with China provides an adequate rebuttal to every one of those myths.
posted by darkstar at 10:56 PM on August 5, 2019 [33 favorites]
Not to abuse the edit window, but the next time a Republican crows about being the party of:
1. Small government
2. Free markets
3. Low taxes
4. Job creation, and
5. Anti-welfare policy
This trade war with China provides an adequate rebuttal to every one of those myths.
posted by darkstar at 10:56 PM on August 5, 2019 [33 favorites]
My point here is to say that I’m genuinely stunned that anybody could be so stupid as to believe that China pays the tariff.
...and then I remember that I know four soybean farmers who voted for Trump and do not presently regret it despite their losses, and suddenly I’m not so stunned.
posted by aramaic at 10:58 PM on August 5, 2019 [22 favorites]
...and then I remember that I know four soybean farmers who voted for Trump and do not presently regret it despite their losses, and suddenly I’m not so stunned.
posted by aramaic at 10:58 PM on August 5, 2019 [22 favorites]
I assume that somebody in Trumpland is making serious grift off of this trade war. It's always about the grift.
posted by Joey Michaels at 11:35 PM on August 5, 2019 [14 favorites]
posted by Joey Michaels at 11:35 PM on August 5, 2019 [14 favorites]
On the bright side, if China's aim is to devalue, they won't be dumping their treasuries and a depressed stock market is usually paired with more interest in bonds.
Also QE doesn't necessarily have an impact on exchange rates. Without real demand to back it up, it (the money) may as well not exist.
posted by wierdo at 11:53 PM on August 5, 2019 [1 favorite]
Also QE doesn't necessarily have an impact on exchange rates. Without real demand to back it up, it (the money) may as well not exist.
posted by wierdo at 11:53 PM on August 5, 2019 [1 favorite]
I have always enjoyed the irony that China has been supporting the US dollar over the past few decades by purchasing USD government debt.
The long game is that demographics are probably only going to give China about two decades to get to the top of the pile and cement its position. And China has been assessing which regions have the best potential for economic growth - hence the overtures into Africa and strengthening ties to India. Demographics says that the 21st Century is the Indian century rather than the Chinese century, but if China can get its position in place, it will try and be the strong partner to India.
My bet is that the relationship between China and India will play out a bit like the UK and the US in the 20th century - the disarray post Civil War in the US allowed the UK to dominate, but over time the sheer rate of progress in the US reversed that domination. Unfortunately there is no spare Atlantic ocean between China and India so things could become quite tense.
posted by Barbara Spitzer at 12:51 AM on August 6, 2019 [4 favorites]
The long game is that demographics are probably only going to give China about two decades to get to the top of the pile and cement its position. And China has been assessing which regions have the best potential for economic growth - hence the overtures into Africa and strengthening ties to India. Demographics says that the 21st Century is the Indian century rather than the Chinese century, but if China can get its position in place, it will try and be the strong partner to India.
My bet is that the relationship between China and India will play out a bit like the UK and the US in the 20th century - the disarray post Civil War in the US allowed the UK to dominate, but over time the sheer rate of progress in the US reversed that domination. Unfortunately there is no spare Atlantic ocean between China and India so things could become quite tense.
posted by Barbara Spitzer at 12:51 AM on August 6, 2019 [4 favorites]
China is playing the long game; not the Twitter game.
They've been doing it for 20+ years
Devalue the Yuan -- and they ensure that their goods remain affordable to U.S. consumers. This counters the tariffs.
Refuse to buy our crops -- and they ensure that U.S. farmers need more taxpayer-funded free handouts.
As the second-largest world economy, this tips the scale.
posted by Ostara at 1:01 AM on August 6, 2019 [9 favorites]
They've been doing it for 20+ years
Devalue the Yuan -- and they ensure that their goods remain affordable to U.S. consumers. This counters the tariffs.
Refuse to buy our crops -- and they ensure that U.S. farmers need more taxpayer-funded free handouts.
As the second-largest world economy, this tips the scale.
posted by Ostara at 1:01 AM on August 6, 2019 [9 favorites]
strengthening ties to India
India or Pakistan? Wasn't China planning to build an Indian Ocean port in Gwadar, including secured freight rail corridors running through Balochistan? Or has India made them a better offer?
posted by acb at 2:53 AM on August 6, 2019
India or Pakistan? Wasn't China planning to build an Indian Ocean port in Gwadar, including secured freight rail corridors running through Balochistan? Or has India made them a better offer?
posted by acb at 2:53 AM on August 6, 2019
I'd be mostly in agreement with Barbara Spitzer's analysis if it weren't fairly clear that China is having a hard time translating their investments in Africa into the sort of influence they expect that investment to get them.
The common explanation, which I don't entirely buy, is that the years of inward focus has left them unprepared to successfully exert soft power outside their immediate sphere and that the US in particular and the West in general are better at it thanks to a greater level of multiculturalism in the west. I don't really buy the explanation, but the phenomenon is very real, at least for the moment.
posted by wierdo at 2:56 AM on August 6, 2019 [4 favorites]
The common explanation, which I don't entirely buy, is that the years of inward focus has left them unprepared to successfully exert soft power outside their immediate sphere and that the US in particular and the West in general are better at it thanks to a greater level of multiculturalism in the west. I don't really buy the explanation, but the phenomenon is very real, at least for the moment.
posted by wierdo at 2:56 AM on August 6, 2019 [4 favorites]
Wouldn't that be centuries of inward focus, i.e., since the emperor ordered the burning of China's fleet in the 15th century?
posted by acb at 3:04 AM on August 6, 2019 [2 favorites]
posted by acb at 3:04 AM on August 6, 2019 [2 favorites]
At my local supermarket in Germany, they put up a sign in one of the aisles:
"Your beloved American Style peanut butter is not available! We're having big problems getting X and Y brands of peanut butter. Try our store brand crunchy style instead."
I wondered if the tarifs had something to do with it and yes, it seems there are EU retaliatory tariffs of 25% on peanut butter in effect, so it's possible.
Rough times.
posted by romanb at 3:06 AM on August 6, 2019 [5 favorites]
"Your beloved American Style peanut butter is not available! We're having big problems getting X and Y brands of peanut butter. Try our store brand crunchy style instead."
I wondered if the tarifs had something to do with it and yes, it seems there are EU retaliatory tariffs of 25% on peanut butter in effect, so it's possible.
Rough times.
posted by romanb at 3:06 AM on August 6, 2019 [5 favorites]
I cannot attribute any of the trade war to a well thought out strategy because, well, Trump doesn't really seem to have any form of real strategy.
However, if we as a nation do value human rights, environmental protection, safe work conditions, and (broadly speaking) fair-use of intellectual property - then we really should not be doing business with China.
The vast majority of the manufacturing will never come back to the US, and I suspect that this is one area where TrumpCo actually understands the truth of that. My thinking is that the goal is not so much a return of manufacturing to the US (though if that happens, it's a plus), but more broadly speaking to deprive China of the intellectual property, manufacturing, and revenue that has come from running an essentially communist-mercantilist economy.
posted by tgrundke at 3:33 AM on August 6, 2019 [4 favorites]
However, if we as a nation do value human rights, environmental protection, safe work conditions, and (broadly speaking) fair-use of intellectual property - then we really should not be doing business with China.
The vast majority of the manufacturing will never come back to the US, and I suspect that this is one area where TrumpCo actually understands the truth of that. My thinking is that the goal is not so much a return of manufacturing to the US (though if that happens, it's a plus), but more broadly speaking to deprive China of the intellectual property, manufacturing, and revenue that has come from running an essentially communist-mercantilist economy.
posted by tgrundke at 3:33 AM on August 6, 2019 [4 favorites]
In other trading news, the EU has signed free trade agreements with Japan and Mercosur, making the second and first largest FTAs worldwide.
posted by romanb at 4:14 AM on August 6, 2019 [4 favorites]
posted by romanb at 4:14 AM on August 6, 2019 [4 favorites]
On a personal note I decided Friday was the perfect time to take the plunge and invest in my first stocks.
If it makes you feel any better, I was pretty sure in February 2017 that the market was due to crash any day now and cashed out all the shares I'd earned from my company. Had I waited two years, the share price nearly tripled. Sigh.
I cannot attribute any of the trade war to a well thought out strategy because, well, Trump doesn't really seem to have any form of real strategy.
If you take the view that Trump is trying to "win" against China and strengthen the U.S. economy, then what he does isn't making sense.
On the other hand, if you take the view that Trump is a white supremacist wanna-be dictator backed by the super-rich who would ultimately benefit from a sharp recession... it makes a lot of sense.
posted by jzb at 4:24 AM on August 6, 2019 [10 favorites]
If it makes you feel any better, I was pretty sure in February 2017 that the market was due to crash any day now and cashed out all the shares I'd earned from my company. Had I waited two years, the share price nearly tripled. Sigh.
I cannot attribute any of the trade war to a well thought out strategy because, well, Trump doesn't really seem to have any form of real strategy.
If you take the view that Trump is trying to "win" against China and strengthen the U.S. economy, then what he does isn't making sense.
On the other hand, if you take the view that Trump is a white supremacist wanna-be dictator backed by the super-rich who would ultimately benefit from a sharp recession... it makes a lot of sense.
posted by jzb at 4:24 AM on August 6, 2019 [10 favorites]
I'm as anti-Trump as anybody, but I've witnessed the destruction of American factory labor since China became a full member of the WTO. I know it's hard to get the cat back in the bag in this globalized economy but I have mixed feelings about this trade war. I wish the current US leadership wasn't so incompetent.
I was washing my sleeping bag, Slumberjack brand purchased in mid to late 90s, after a recent camping trip and noticed it was made in the USA. Sigh...
posted by LoveHam at 4:29 AM on August 6, 2019 [5 favorites]
I was washing my sleeping bag, Slumberjack brand purchased in mid to late 90s, after a recent camping trip and noticed it was made in the USA. Sigh...
posted by LoveHam at 4:29 AM on August 6, 2019 [5 favorites]
china has had a 'managed' (similar to singapore's) currency for a while, whether it sets its midpoint trading range a bit above or below 7 seems mostly symbolic?
treasury recently put more (baby) teeth into the currency manipulator designation -- and tweaked its definition -- but it still doesn't mean much. the IMF probably won't be sympathetic?
plus, china has been intervening to prop up the yuan, not weaken it. letting it fall would be less manipulative?
they could of course be trying to completely offset tariff effects (for US buyers), which would be more manipulative? (but not any less than US tariffs?)* besides bilateral tariffs mostly just work to reroute trade, like through vietnam?
this might have greater ramifications -- competitive devaluations -- but since most of the rest of the world has (relatively) free floating currencies, the big emerging market crises of the late 90s that china's 1994 (massive!) devaluation set off, which Heywood Mogroot III mentioned, probably wouldn't repeat.
competitive devaluations would cause rest-of-world money printing to buy dollars, which might invert the treasury yield curve further, potentially causing recession as credit dries up.
however, because global capital markets and US rates are higher (and dollar stronger), it would take a lot for credit** to completely dry up. plus all major central banks, including the fed, would likely step in at that point providing liquidity for possibly less than free.
maybe that is what markets are seeing/trying to induce? (also much speculation this is trump's 'fed play' to get it cutting rates more)
another rumor: trump is trying to wrap up a trade deal sooner rather than later, worried china wants to wait it out, harming his reelection chances.
side question, china and others are apparently buying iranian oil, defying US sanctions, will there be more serious repercussions?
russia is also working on its dollar workaround.
more likely, the bigger issue is china's closed capital account and how much of its financial system runs through its banks (or, increasingly, alibaba and tencent) vs. foreign multinationals -- and who can tax/control them.*** (arguably, if china frees its capital account, you might expect widespread capital flight -- making vancouver, bay area, sydney, etc. real estate pricier? or not, if it flowed to other areas/assets -- but it could also sink the CCP, at least its current form)
like, when would you expect to see HK's currency peg move to the yuan?
---
*which the WTO could decide? except WTO judges are dwindling and trump has blocked appointments, leading to an 'appeals crisis' that the EU and canada are trying to work around :P
**of which there are giant pools now, much (shadowy) nonbank, seeking a home -- to the highest bidder! (and/or preservation ;)
***also the other (potentially) 'big news' yesterday is the fed is going ahead with its plan to challenge private sector payments systems btw
posted by kliuless at 4:44 AM on August 6, 2019 [4 favorites]
treasury recently put more (baby) teeth into the currency manipulator designation -- and tweaked its definition -- but it still doesn't mean much. the IMF probably won't be sympathetic?
plus, china has been intervening to prop up the yuan, not weaken it. letting it fall would be less manipulative?
they could of course be trying to completely offset tariff effects (for US buyers), which would be more manipulative? (but not any less than US tariffs?)* besides bilateral tariffs mostly just work to reroute trade, like through vietnam?
this might have greater ramifications -- competitive devaluations -- but since most of the rest of the world has (relatively) free floating currencies, the big emerging market crises of the late 90s that china's 1994 (massive!) devaluation set off, which Heywood Mogroot III mentioned, probably wouldn't repeat.
competitive devaluations would cause rest-of-world money printing to buy dollars, which might invert the treasury yield curve further, potentially causing recession as credit dries up.
however, because global capital markets and US rates are higher (and dollar stronger), it would take a lot for credit** to completely dry up. plus all major central banks, including the fed, would likely step in at that point providing liquidity for possibly less than free.
maybe that is what markets are seeing/trying to induce? (also much speculation this is trump's 'fed play' to get it cutting rates more)
another rumor: trump is trying to wrap up a trade deal sooner rather than later, worried china wants to wait it out, harming his reelection chances.
side question, china and others are apparently buying iranian oil, defying US sanctions, will there be more serious repercussions?
russia is also working on its dollar workaround.
more likely, the bigger issue is china's closed capital account and how much of its financial system runs through its banks (or, increasingly, alibaba and tencent) vs. foreign multinationals -- and who can tax/control them.*** (arguably, if china frees its capital account, you might expect widespread capital flight -- making vancouver, bay area, sydney, etc. real estate pricier? or not, if it flowed to other areas/assets -- but it could also sink the CCP, at least its current form)
like, when would you expect to see HK's currency peg move to the yuan?
---
*which the WTO could decide? except WTO judges are dwindling and trump has blocked appointments, leading to an 'appeals crisis' that the EU and canada are trying to work around :P
**of which there are giant pools now, much (shadowy) nonbank, seeking a home -- to the highest bidder! (and/or preservation ;)
***also the other (potentially) 'big news' yesterday is the fed is going ahead with its plan to challenge private sector payments systems btw
posted by kliuless at 4:44 AM on August 6, 2019 [4 favorites]
Can someone explain this to me like I'm five?
Short version: Remember the hit your retirement savings took during W's recession? Like that, only possibly much worse.
posted by Thorzdad at 5:23 AM on August 6, 2019 [3 favorites]
Short version: Remember the hit your retirement savings took during W's recession? Like that, only possibly much worse.
posted by Thorzdad at 5:23 AM on August 6, 2019 [3 favorites]
I assume that somebody in Trumpland is making serious grift off of this trade war. It's always about the grift.
If there isn't insider trading happening prior to every one of these big, market-moving announcements, I'll eat not just my hat but yours also. I don't know if anyone will ever try to investigate, or if it is even possible to investigate after the fact, but it is certainly happening.
posted by Dip Flash at 5:24 AM on August 6, 2019 [16 favorites]
If there isn't insider trading happening prior to every one of these big, market-moving announcements, I'll eat not just my hat but yours also. I don't know if anyone will ever try to investigate, or if it is even possible to investigate after the fact, but it is certainly happening.
posted by Dip Flash at 5:24 AM on August 6, 2019 [16 favorites]
not content with destroying the republic and environment, the smoothbrained president now turns his gnatlike attention towards the economy...
posted by entropicamericana at 6:27 AM on August 6, 2019
posted by entropicamericana at 6:27 AM on August 6, 2019
Remember the hit your retirement savings took during W's recession?
What's a "retirement savings"?
posted by davros42 at 6:39 AM on August 6, 2019 [43 favorites]
What's a "retirement savings"?
posted by davros42 at 6:39 AM on August 6, 2019 [43 favorites]
Can someone explain this to me like I'm five?
It's one of the few economic actions that Donald Trump seems to understand.
posted by ZeusHumms at 6:40 AM on August 6, 2019
It's one of the few economic actions that Donald Trump seems to understand.
posted by ZeusHumms at 6:40 AM on August 6, 2019
I'm with Millman - feels like we're all just catching up to the fact that China is not a trustworthy trading partner. Of course, Trump is not conducting this trade war effectively, but his lizard brain is particularly attuned to instances where he's not getting his cut.
Here's a west wing from 2002. Oh how naive we were... I wonder if anyone actually believed that human rights would result from exporting manufacturing jobs, infrastructure, and IP. The washington consensus got the free trade strategy dead wrong. Stick around for the latent sexism at the end of the clip!
In my opinion, the rise of Trump is partly due the the craven failure of the U.S. elites on both sides to create a vision for the future beyond the advancement of their class. The 20-year process of selling out to China is a piece of this. The failure to advance a fiscal policy beyond middle east war-building is another.
Think about what we could have done if we had a long-term plan for developing stable, legitimate democracies globally, instead of short-term new labor supply markets.
posted by The Ted at 6:47 AM on August 6, 2019 [14 favorites]
Here's a west wing from 2002. Oh how naive we were... I wonder if anyone actually believed that human rights would result from exporting manufacturing jobs, infrastructure, and IP. The washington consensus got the free trade strategy dead wrong. Stick around for the latent sexism at the end of the clip!
In my opinion, the rise of Trump is partly due the the craven failure of the U.S. elites on both sides to create a vision for the future beyond the advancement of their class. The 20-year process of selling out to China is a piece of this. The failure to advance a fiscal policy beyond middle east war-building is another.
Think about what we could have done if we had a long-term plan for developing stable, legitimate democracies globally, instead of short-term new labor supply markets.
posted by The Ted at 6:47 AM on August 6, 2019 [14 favorites]
Wait, there’s a long term??
posted by Huffy Puffy at 6:53 AM on August 6, 2019 [4 favorites]
posted by Huffy Puffy at 6:53 AM on August 6, 2019 [4 favorites]
I'm in Iowa and our farmers are in for another shit year after one of the worst starts to farming. So many crops will rot in storage for lack of a place to sell them. Then there will be a huge bailout. I wrote a script for a pork council earlier this year touting what they'd done in the previous year and getting a huge fucking bailout of 550m+ I think was part of it.
Just toss money at them to keep them happy while you fuck everything up.
posted by OnTheLastCastle at 6:59 AM on August 6, 2019 [3 favorites]
Just toss money at them to keep them happy while you fuck everything up.
posted by OnTheLastCastle at 6:59 AM on August 6, 2019 [3 favorites]
Wait, there’s a long term??
well not any more there's not
posted by entropicamericana at 6:59 AM on August 6, 2019 [10 favorites]
well not any more there's not
posted by entropicamericana at 6:59 AM on August 6, 2019 [10 favorites]
A big recession landing in the middle of the election campaign would be a great opportunity for Trump and the Republicans to blame it on whoever would make the most politically expedient scapegoat(s).
posted by The Card Cheat at 6:59 AM on August 6, 2019 [1 favorite]
posted by The Card Cheat at 6:59 AM on August 6, 2019 [1 favorite]
I'm not sure how you swing immigrants made farmers unable to sell their soybeans and pork.
posted by OnTheLastCastle at 7:00 AM on August 6, 2019 [3 favorites]
posted by OnTheLastCastle at 7:00 AM on August 6, 2019 [3 favorites]
Trump could tell those farmers that *throws dart at map of world* Mauritania was responsible for their ills and they'd find a way to believe it.
posted by The Card Cheat at 7:04 AM on August 6, 2019 [13 favorites]
posted by The Card Cheat at 7:04 AM on August 6, 2019 [13 favorites]
The Ted: "feels like we're all just catching up to the fact that China is not a trustworthy trading partner"
Like we're any better?
posted by schmod at 7:11 AM on August 6, 2019 [11 favorites]
Like we're any better?
posted by schmod at 7:11 AM on August 6, 2019 [11 favorites]
how do i make money off of shorting the united states
posted by Reclusive Novelist Thomas Pynchon at 7:13 AM on August 6, 2019 [26 favorites]
posted by Reclusive Novelist Thomas Pynchon at 7:13 AM on August 6, 2019 [26 favorites]
Get elected president.
posted by peeedro at 7:16 AM on August 6, 2019 [47 favorites]
posted by peeedro at 7:16 AM on August 6, 2019 [47 favorites]
The thing that’s really rich about all of this is that tariffs are a kind of tax. So the leader of the GOP is engaging in (1) interventionist economic policy to (2) manipulate markets by (3) imposing a tariff tax that will (4) kill farming and other jobs, which is mitigated by (5) establishing special government welfare programs for the people harmed by the policy.
It’s an incredible microcosm of Republican hypocrisy, wrapped up in a single GOP economic initiative.
I know the Frank Wilhoit quote gets posted all the time here, but for this thread, it needs a slight adjustment:
It’s an incredible microcosm of Republican hypocrisy, wrapped up in a single GOP economic initiative.
I know the Frank Wilhoit quote gets posted all the time here, but for this thread, it needs a slight adjustment:
Conservatism consists of exactly one proposition …There must be in-groups whom theposted by gwint at 7:16 AM on August 6, 2019 [12 favorites]laweconomy protects but does not bind, alongside out-groups whom thelaweconomy binds but does not protect.
how do i make money off of shorting the united states
No Mr. Trump, you're not supposed to type it there...
posted by traveler_ at 7:16 AM on August 6, 2019 [9 favorites]
No Mr. Trump, you're not supposed to type it there...
posted by traveler_ at 7:16 AM on August 6, 2019 [9 favorites]
also btw...
-Small group of America's big farms gets bulk of Trump bailout funds
-Rich farmers, not mom-and-pop farms, will collect most of Trump's tariff bailout
posted by kliuless at 7:22 AM on August 6, 2019 [11 favorites]
-Small group of America's big farms gets bulk of Trump bailout funds
-Rich farmers, not mom-and-pop farms, will collect most of Trump's tariff bailout
posted by kliuless at 7:22 AM on August 6, 2019 [11 favorites]
A right wing populist/authoritarian movement always requires an external enemy as well as an internal enemy. China is the obvious choice for external enemy. They're not white, they don't speak English, and they legitimately do enough awful stuff that any opposition to Trump's insane trade wars is going to be muted by acknowledgement of the legitimately awful stuff the PRC is doing.
As for grift, while I wouldn't be surprised if someone was trying to make bank off this, I don't think that's the real purpose. Trump may not be smart enough to realize it, but his handlers are, and they know he needs an external enemy for his mob to hate on.
Further, this trade war is highly beneficial to long term Republican goals. Remember that their objective, openly stated by many of their leaders and thinkers, is the total destruction of the modern US Federal government and one method they've chosen for achieving that goal is to bankrupt the government thus forcing it to collapse. "Drown it in the bathtub" as Grover Norquist once infamously said.
The Republicans also utterly hate and loathe urban areas, which are the most economically productive parts of the country. Engaging in massive wealth transfer from cities to rural populations, for example by subsidizing "family farmers" bankrupted by a trade war, helps impoverish the cities and make conditions there worse. That achieves the dual purpose of punishing their perceived enemies (those evil city slickers) and they can also hope it will drive some population out of the cities and into rural areas thus bolstering future Republican electoral chances.
Remember, the flight from New Orleans post Katrina was seen by Republicans as a major victory. They believed (rightly) that by having the urban, more liberal, voters dispersed their political power increased.
If as part of their project of bankrupting the American government the Republicans can also bankrupt several cities they'll count that as a bonus.
A massively disruptive and hideously expensive trade war with China is a win/win from the Republican POV. Never forget their goal is higher debt and higher deficit, if they can accomplish that via bloated military spending they'll do that, if they can accomplish that via trade war they'll do that. If they can use a trade war to justify increased military spending they'll do that.
Remember that the Republicans are still promoting the lie that under Obama the US military was ruined and needs massive funding to be "rebuilt". They'll point to Chinese aggression as need for even more military spending and paint any Democrat who objects as a traitor who wants China to crush us.
posted by sotonohito at 7:30 AM on August 6, 2019 [26 favorites]
As for grift, while I wouldn't be surprised if someone was trying to make bank off this, I don't think that's the real purpose. Trump may not be smart enough to realize it, but his handlers are, and they know he needs an external enemy for his mob to hate on.
Further, this trade war is highly beneficial to long term Republican goals. Remember that their objective, openly stated by many of their leaders and thinkers, is the total destruction of the modern US Federal government and one method they've chosen for achieving that goal is to bankrupt the government thus forcing it to collapse. "Drown it in the bathtub" as Grover Norquist once infamously said.
The Republicans also utterly hate and loathe urban areas, which are the most economically productive parts of the country. Engaging in massive wealth transfer from cities to rural populations, for example by subsidizing "family farmers" bankrupted by a trade war, helps impoverish the cities and make conditions there worse. That achieves the dual purpose of punishing their perceived enemies (those evil city slickers) and they can also hope it will drive some population out of the cities and into rural areas thus bolstering future Republican electoral chances.
Remember, the flight from New Orleans post Katrina was seen by Republicans as a major victory. They believed (rightly) that by having the urban, more liberal, voters dispersed their political power increased.
If as part of their project of bankrupting the American government the Republicans can also bankrupt several cities they'll count that as a bonus.
A massively disruptive and hideously expensive trade war with China is a win/win from the Republican POV. Never forget their goal is higher debt and higher deficit, if they can accomplish that via bloated military spending they'll do that, if they can accomplish that via trade war they'll do that. If they can use a trade war to justify increased military spending they'll do that.
Remember that the Republicans are still promoting the lie that under Obama the US military was ruined and needs massive funding to be "rebuilt". They'll point to Chinese aggression as need for even more military spending and paint any Democrat who objects as a traitor who wants China to crush us.
posted by sotonohito at 7:30 AM on August 6, 2019 [26 favorites]
Trump is increasingly relying on himself — not his aides — in trade war with China (Damian Paletta, WaPo)
President Trump is increasingly acting based on his own intuition and analysis and not the advice of aides in the increasingly fraught trade war with China, five people briefed on the actions said, shattering a more cautious process that had yielded few positive results so far.posted by Johnny Wallflower at 7:53 AM on August 6, 2019 [2 favorites]
The Treasury Department’s formal announcement that it had labeled China a “currency manipulator” came six hours after President Trump did it himself, on social media, the latest example of how Trump is determining his own next steps. The people describing the White House process spoke on the condition of anonymity because they were not authorized to speak publicly.
They said White House officials were now expecting a long, drawn-out battle with Chinese leaders, even though Trump is acutely tuned in to stock market fluctuations. But Trump is convinced that the Chinese economy is suffering more than the U.S. economy from the conflict. And he has felt validated that his hardball threats in other circumstances, including a recent tangle with Mexico over border security, seemed to get at least some results, even if they scared investors in the short term, said the people familiar with the matter.
This has left aides, many of whom have preferred for the president to be more patient, to scramble to complete directives issued by Trump. Stocks have been plunging as Trump and China have escalated the trade conflict.
I wonder if anyone actually believed that human rights would result from exporting manufacturing jobs, infrastructure, and IP.
Hindsight is always 20/20. And the model actually worked in other East Asian countries like South Korea and Taiwan (of course, the major lifting and reform was done by the people in those countries so I'm not going to pat the US on the back either). It now looks like China is probably not on the same trajectory and whatever modest advances in rule of law and other rights that happened after it opened up are definitely being rolled back. But I'm also pretty sure that isolation and deliberately keeping China weak is not good either, for China or the world.
posted by FJT at 8:16 AM on August 6, 2019 [4 favorites]
Hindsight is always 20/20. And the model actually worked in other East Asian countries like South Korea and Taiwan (of course, the major lifting and reform was done by the people in those countries so I'm not going to pat the US on the back either). It now looks like China is probably not on the same trajectory and whatever modest advances in rule of law and other rights that happened after it opened up are definitely being rolled back. But I'm also pretty sure that isolation and deliberately keeping China weak is not good either, for China or the world.
posted by FJT at 8:16 AM on August 6, 2019 [4 favorites]
President Trump is increasingly acting based on his own intuition...
I hate foreshadowing.
posted by Mogur at 8:24 AM on August 6, 2019 [4 favorites]
I hate foreshadowing.
posted by Mogur at 8:24 AM on August 6, 2019 [4 favorites]
It speaks poorly of our ruling class that this nincompoop is the first president to take on China.
The Cheeto is getting into a drag out with China because of xenophobic racism and not any grand or half witted plan to effect humanitarian change in China.
posted by Mitheral at 8:37 AM on August 6, 2019 [9 favorites]
The Cheeto is getting into a drag out with China because of xenophobic racism and not any grand or half witted plan to effect humanitarian change in China.
posted by Mitheral at 8:37 AM on August 6, 2019 [9 favorites]
But I'm also pretty sure that isolation and deliberately keeping China weak is not good either, for China or the world.
Marx himself had immense respect for Capitalism's power as a tool of human progress. Millions have been lifted out of poverty in China since they opened their economy in the 1970s. The Obama-era moves toward constraining China without (and pushing greater human and legal rights within) via stronger, more transparent international institutions might have borne out, given more time. Trump's undoing of all that emboldens isolationists and thugs worldwide.
posted by notyou at 8:38 AM on August 6, 2019 [11 favorites]
Marx himself had immense respect for Capitalism's power as a tool of human progress. Millions have been lifted out of poverty in China since they opened their economy in the 1970s. The Obama-era moves toward constraining China without (and pushing greater human and legal rights within) via stronger, more transparent international institutions might have borne out, given more time. Trump's undoing of all that emboldens isolationists and thugs worldwide.
posted by notyou at 8:38 AM on August 6, 2019 [11 favorites]
Barak Ravid of Israel's Channel 13 News, writing for Axios: Scoop: Israel Scrambles to Avoid Trump Blowback Over Chinese Investments
posted by Doktor Zed at 9:02 AM on August 6, 2019 [1 favorite]
Officials from Israel's Foreign Ministry warned in a classified Cabinet meeting last month that if the Israeli government doesn’t create a strong monitoring mechanism on Chinese investments, it could lead to a harsh confrontation with the Trump administration, 2 ministers who attended the meeting tell me.Other US allies will no doubt have had similar meetings to discuss how they can respond to Trump's trade war without getting caught up in it.
The Foreign Ministry warning, which came on July 24, led Prime Minister Benjamin Netanyahu to postpone a vote on forming such a mechanism that was apparently too weak. Chinese investments in Israel have become the main source of tension with the Trump administration over the last 2 years.[…]
Ministers who attended the meeting tell me the Foreign Ministry recommended that any monitoring mechanism on Chinese investments be tough enough that the U.S. would feel its concerns were taken into consideration. They said the alternative was to risk confrontation with the Trump administration. That warning led to a postponement of the vote.
posted by Doktor Zed at 9:02 AM on August 6, 2019 [1 favorite]
China has put the breaks on their currency initiative and the stock market is bouncing back.
posted by rednikki at 9:22 AM on August 6, 2019
posted by rednikki at 9:22 AM on August 6, 2019
how do i make money off of shorting the united states
Buy foreign currency you expect to go up in value relative to the USD. If you *really* want to short it, borrow in USD, buy more foreign currency.
The bet here is that in 3-6 months, the dollar has gone down in value, and you can buy more dollars and there's your profit.
This is pretty risky, though, because other people are thinking it too, so the price of currency isn't just based on how valuable it is today, but where people think it'll be.
posted by explosion at 10:24 AM on August 6, 2019
Buy foreign currency you expect to go up in value relative to the USD. If you *really* want to short it, borrow in USD, buy more foreign currency.
The bet here is that in 3-6 months, the dollar has gone down in value, and you can buy more dollars and there's your profit.
This is pretty risky, though, because other people are thinking it too, so the price of currency isn't just based on how valuable it is today, but where people think it'll be.
posted by explosion at 10:24 AM on August 6, 2019
The FT's Alan Beattie has posted a Twitter thread about the Trump administration's move to declare China a currency manipulator:
posted by Doktor Zed at 11:57 AM on August 6, 2019 [8 favorites]
There’s a reason the US hasn’t called China a currency manipulator since the 1990s. It carries almost no sanction and thus merely makes you look angry and weak. So naturally Donald Trump went there. Me: [Donald Trump Sets a Toothless Dog Loose on China {paywalled}] … Also a quick thread on trade and currencies. 1/nAs for Trump's dubious claim his tariffs don't hurt US consumers because that China is paying them with devalued yuan, Economist US editor Soumaya Keynes points out that it's inconsistent to argue simultaneously that tariffs don't hurt because of currency devaluations and that currency devaluations are themselves unfair.
There are almost no binding rules to stop govts manipulating fx, despite vast effort by the Bush II and Obama admins to turn the IMF into a global currency sheriff and the G20 into its posse. (The US did have a reasonable case at the time, but failed to carry the day.) 2/n
It’s v hard to measure fx misalignment like a conventional trade distortion (subsidies/dumping), as there is no definitive methodology. The IMF thinks China’s real exchange rate is about fair value but could be +8.5% to -11.5% out. Really.3/n
In any case the Trump admin has given up on pretending it is measuring a misalignment and simply argues that China is manipulating its currency if it fails to intervene to keep it at a level prescribed by the US Treasury secretary of the day. Which is, you know, ambitious. 4/n
Where to from here? Well, adopting the #banterheuristic rule from British politics (the next thing to happen will be the funniest thing to happen), I guess we proceed to the US intervening to buy the RMB and sell the dollar, while Beijing protests. 5/n
And when they come to write this period of economic history, they will recall how the world trading system was torn apart by the governments of the world’s two largest economies aggressively lending to each other as a hostile act, and even Brexit won’t seem that odd. 6/6
posted by Doktor Zed at 11:57 AM on August 6, 2019 [8 favorites]
China has put the breaks on their currency initiative and the stock market is bouncing back.
Can anyone explain why news items like this are framed this way? from the link:
The S&P and the Nasdaq are on track for their first positive performance in seven days, snapping their longest losing streaks since last fall. If Dow ends higher, it will be the first day in six in the black.
I mean, when you say "bouncing back" id think "made up for the weeks worth of losses" but really it just means "stopped losing".
posted by Exceptional_Hubris at 12:14 PM on August 6, 2019 [5 favorites]
Can anyone explain why news items like this are framed this way? from the link:
The S&P and the Nasdaq are on track for their first positive performance in seven days, snapping their longest losing streaks since last fall. If Dow ends higher, it will be the first day in six in the black.
I mean, when you say "bouncing back" id think "made up for the weeks worth of losses" but really it just means "stopped losing".
posted by Exceptional_Hubris at 12:14 PM on August 6, 2019 [5 favorites]
I mean, when you say "bouncing back" id think "made up for the weeks worth of losses" but really it just means "stopped losing".
If you are going to use "weeks" as your metrics, the Nasdaq is still up. There aren't weeks worth of losses to bounce back from. Until the losing streak you mention, the Nasdaq and S&P 500 were at their highest level in history
To clarify further, that losing streak is the 6 days mentioned.
posted by sideshow at 12:29 PM on August 6, 2019
If you are going to use "weeks" as your metrics, the Nasdaq is still up. There aren't weeks worth of losses to bounce back from. Until the losing streak you mention, the Nasdaq and S&P 500 were at their highest level in history
To clarify further, that losing streak is the 6 days mentioned.
posted by sideshow at 12:29 PM on August 6, 2019
Ummm...soooo...
I'll put this little thing from Kaiser Kuo of supchina, danwei.org, Sinica, and Tang Dynasty fame: Why do Chinese people like their government?
It covers
Part 1 - The values gap: The historical contingency of liberal Western thought and institutions
Part 2 - The view through China’s window: Liberal hegemonism in U.S. foreign policy
Part 3 - The Anglophone media narrative on China and sources of bias
from a very pro-democracy standpoint from someone who knows the score and isn't afraid to speak in detailed nuance about it.
Personally, I don't have much to add, except that
China has put the breaks on their currency initiative and the stock market is bouncing back.
posted by rednikki at 1:22 AM on August 7 [+] [!]
the people running China aren't stupid at all. They're playing Trump's game right back at him and
If this unfolds like the rest of Trump’s foreign policy, sometime in the next few months he’ll capitulate in the trade wars while declaring victory, at which point the markets will rebound because the Trump-made crisis is averted, at which point Trump will claim credit for the market rebound by having solved the problem that he, himself created. And the MAGAhats will eat it up with a spoon.
posted by darkstar at 2:41 PM on August 6 [42 favorites +] [!]
giving him a freebie. Whatever else you wanna say, they got game, and that gives them a lot of street cred domestically. It makes Trump's tactics seem like juvenile bluffing.
posted by saysthis at 12:39 PM on August 6, 2019 [11 favorites]
I'll put this little thing from Kaiser Kuo of supchina, danwei.org, Sinica, and Tang Dynasty fame: Why do Chinese people like their government?
It covers
Part 1 - The values gap: The historical contingency of liberal Western thought and institutions
Part 2 - The view through China’s window: Liberal hegemonism in U.S. foreign policy
Part 3 - The Anglophone media narrative on China and sources of bias
from a very pro-democracy standpoint from someone who knows the score and isn't afraid to speak in detailed nuance about it.
Personally, I don't have much to add, except that
China has put the breaks on their currency initiative and the stock market is bouncing back.
posted by rednikki at 1:22 AM on August 7 [+] [!]
the people running China aren't stupid at all. They're playing Trump's game right back at him and
If this unfolds like the rest of Trump’s foreign policy, sometime in the next few months he’ll capitulate in the trade wars while declaring victory, at which point the markets will rebound because the Trump-made crisis is averted, at which point Trump will claim credit for the market rebound by having solved the problem that he, himself created. And the MAGAhats will eat it up with a spoon.
posted by darkstar at 2:41 PM on August 6 [42 favorites +] [!]
giving him a freebie. Whatever else you wanna say, they got game, and that gives them a lot of street cred domestically. It makes Trump's tactics seem like juvenile bluffing.
posted by saysthis at 12:39 PM on August 6, 2019 [11 favorites]
Why do Chinese people like their government?
It's so weird to me how Americans* seem to think "if I had been born in any other society or culture throughout human history, I would have the exact same political beliefs and values as I currently have, because they are Obviously The Most Correct." Like, no. If you got hit by a bus tomorrow and were reincarnated in China, you would almost certainly not grow up to advocate for the American system of government as a clearly superior alternative to the Chinese system of government, nor would you be a product of brainwashing for failing to do so.
A relative of mine who taught Revolutionary War history once told me that if he'd been around in the 1770s, he would definitely have been a British loyalist. This really blew my young mind, because he certainly wasn't going around saying we should rejoin the British Empire as 21st century America - but what he meant was, in a different time and place, with the knowledge and life circumstances available to him in that context, he would be a different political animal.
*Probably other people do this too but, hey, I mostly know Americans
posted by showbiz_liz at 2:27 PM on August 6, 2019 [30 favorites]
It's so weird to me how Americans* seem to think "if I had been born in any other society or culture throughout human history, I would have the exact same political beliefs and values as I currently have, because they are Obviously The Most Correct." Like, no. If you got hit by a bus tomorrow and were reincarnated in China, you would almost certainly not grow up to advocate for the American system of government as a clearly superior alternative to the Chinese system of government, nor would you be a product of brainwashing for failing to do so.
A relative of mine who taught Revolutionary War history once told me that if he'd been around in the 1770s, he would definitely have been a British loyalist. This really blew my young mind, because he certainly wasn't going around saying we should rejoin the British Empire as 21st century America - but what he meant was, in a different time and place, with the knowledge and life circumstances available to him in that context, he would be a different political animal.
*Probably other people do this too but, hey, I mostly know Americans
posted by showbiz_liz at 2:27 PM on August 6, 2019 [30 favorites]
However, if we as a nation do value human rights, environmental protection, safe work conditions, and (broadly speaking) fair-use of intellectual property - then we really should not be doing business with China.
Mostly true but remember the United States is a massively worse carbon polluter than China on a per capita basis and has been for probably about a hundred years. China isn't even in the top 10 of per capita polluters.
Most of the top 10 carbon polluters are Western (Canada, Australia, Germany, etc) or extremely Western friendly nations like Japan, Saudi Arabia and South Korea.
If you want to take a stance on carbon pollution you shouldn't buy anything from a developed economy.
posted by srboisvert at 2:31 PM on August 6, 2019 [9 favorites]
Mostly true but remember the United States is a massively worse carbon polluter than China on a per capita basis and has been for probably about a hundred years. China isn't even in the top 10 of per capita polluters.
Most of the top 10 carbon polluters are Western (Canada, Australia, Germany, etc) or extremely Western friendly nations like Japan, Saudi Arabia and South Korea.
If you want to take a stance on carbon pollution you shouldn't buy anything from a developed economy.
posted by srboisvert at 2:31 PM on August 6, 2019 [9 favorites]
Trump is increasingly relying on himself — not his aides — in trade war with China (Damian Paletta, WaPo)
Paul Krugman responds:
posted by Doktor Zed at 2:42 PM on August 6, 2019 [7 favorites]
Paul Krugman responds:
So Trump does think China is just like Mexico, and can be bullied into concessions 1/WaPo: The Cracks In Trump’s Trade War Are Expanding
Worth keeping some numbers in mind. Chinese exports to the US ~ 4% of GDP. Because they contain a lot of imported content, value-added in these exports not much more than 2% of Chinese GDP. 2/
China has shown itself very capable of providing fiscal and monetary stimulus when it wants, even if there are some troubling long-run consequences. So it can easily — easily — offset the negative demand effect of Trump's trade war 3/
Some sectors and regions will be hit hard, but Xi doesn't need to win the electoral college. Trump's confidence that he can "win" a trade war basically rests on ignorance and innumeracy 4/
"We’re learning that maybe China has a higher pain threshold than we thought here,” said [Stephen] Moore, who advised Trump’s 2016 campaign and was briefly his pick to serve on the Federal Reserve earlier this year. “They don’t seem to care that this is having extreme negative effects on their economy. It’s kind of a mutually assured destruction game right now.”Reuters: Trump Dismisses Trade War Fears; China Warns of Market Chaos
Larry Kudlow, the president’s chief economic adviser, was asked about reports of internal dissension Monday, and he would neither confirm nor deny them.
“I would never talk about internal discussions,” Kudlow said on CNBC. “I read a lot of stuff in the papers. I don’t have any comment on that.”
Meanwhile Daniel Clifton, who was considered for a top job under Kudlow last year, said Trump may be sacrificing the 2020 election by risking an economic slowdown. Clifton, an expert on melding economic policy, forecasts and electoral politics, cited forward-looking inflation indicators.
“Trump is trading away his reelection,” Clifton told CNBC, adding: “He’s digging in against the advice of all of his advisers.”
Chinese state media had warned that Beijing could use its dominant position as a rare earths exporter to the United States as leverage in the trade dispute. The materials are used in everything from iPhones to military equipment.Incidentally, the Dow closed up 311 points, or less than half of yesterday's losses.
Shares in some of China’s rare earth-related firms surged on Tuesday amid speculation the sector could be the next front in the trade war.
posted by Doktor Zed at 2:42 PM on August 6, 2019 [7 favorites]
China isn't even in the top 10 of per capita polluters.
Well, neither is the US.
(According to that data from EDGAR, the US is #16 in per capita CO2 emissions)
Which is not to say the US is doing great or anything. But the top 10 per capita are not who I would have expected.
By total emissions, China is #1 and the US is #2.
posted by thefoxgod at 3:31 PM on August 6, 2019 [4 favorites]
Well, neither is the US.
(According to that data from EDGAR, the US is #16 in per capita CO2 emissions)
Which is not to say the US is doing great or anything. But the top 10 per capita are not who I would have expected.
By total emissions, China is #1 and the US is #2.
posted by thefoxgod at 3:31 PM on August 6, 2019 [4 favorites]
I'll put this little thing from Kaiser Kuo of supchina[]: Why do Chinese people like their government?
That was a really fascinating take on the situation, thanks for posting it.
posted by Joey Buttafoucault at 6:46 PM on August 6, 2019 [3 favorites]
That was a really fascinating take on the situation, thanks for posting it.
posted by Joey Buttafoucault at 6:46 PM on August 6, 2019 [3 favorites]
There’s a revealing puzzle in the China tariffs.
Larry Summers, former Secretary of the Treasury for President Clinton, posits that the market is over-reacting to the tariff war, because they see longer term issues related to a general adversarial relationship between China and the U.S.
This makes some sense to me. A lot of the investment in the market came from the belief in the tremendous opportunity China presented, both as market and as a source of labor. If investors begin to believe that's no longer in the cards, this seriously alters their vision of the future.
Now that that the future synergy between China and the U.S. markets is going away, what narrative is left to drive speculation? The return of American manufacturing? No one is going to buy into that.
posted by xammerboy at 7:51 PM on August 6, 2019 [3 favorites]
Larry Summers, former Secretary of the Treasury for President Clinton, posits that the market is over-reacting to the tariff war, because they see longer term issues related to a general adversarial relationship between China and the U.S.
This makes some sense to me. A lot of the investment in the market came from the belief in the tremendous opportunity China presented, both as market and as a source of labor. If investors begin to believe that's no longer in the cards, this seriously alters their vision of the future.
Now that that the future synergy between China and the U.S. markets is going away, what narrative is left to drive speculation? The return of American manufacturing? No one is going to buy into that.
posted by xammerboy at 7:51 PM on August 6, 2019 [3 favorites]
I'm sure Krugman is entirely correct that Trump has little idea how to conduct a trade war with more than a modicum of understanding regarding what the various economic levers are, but:
Xi doesn't need to win the electoral college. Trump's confidence that he can "win" a trade war basically rests on ignorance and innumeracy
The problem is we have vast supplies of ignorance and innumeracy. In fact, the Republican constituency alone may be an effectively unlimited supply, with additional unmapped reserves among undecided/swing voters.
Trump doesn't have to win the trade war in order to win at the box office. He only has to bring enough people to believe he won, and his supporters already want to do far more than they want to accurately assess what has happened, even assuming some portion might know how. Or he can say it was someone else's fault or evil plot, and even more evidence that his constituency needs him in order to fight the threat. Blood in the streets, physical or market-metaphorical, may help him with some as much as it hurts him with others.
Xi/China may not face democratic accountability of any kind, it may have totalitarian controls on press, but it turns out those are marginal features when enough of an electorate is willing to buy into its own deception. And we already know the Republican party is enthusiastic about several forms of voter suppression, visibly up to and including tacit cooperation in leaving vulnerabilities unaddressed, sandbagging counterintelligence operations, and why would anyone assume they'd stop there?
I'm not saying this as a "the electoral fight is hopeless." Maybe concrete trade issues will move some people at the margins, I don't know, maybe in combination with everything else we can do it will be enough to get Trump out of the white house AND Republicans out of the Senate and fight hard from there. Mostly just saying any "surely this economic trade war will be what does them in" is something that seems as likely vain as most other "surely this."
posted by wildblueyonder at 1:11 AM on August 7, 2019 [3 favorites]
Xi doesn't need to win the electoral college. Trump's confidence that he can "win" a trade war basically rests on ignorance and innumeracy
The problem is we have vast supplies of ignorance and innumeracy. In fact, the Republican constituency alone may be an effectively unlimited supply, with additional unmapped reserves among undecided/swing voters.
Trump doesn't have to win the trade war in order to win at the box office. He only has to bring enough people to believe he won, and his supporters already want to do far more than they want to accurately assess what has happened, even assuming some portion might know how. Or he can say it was someone else's fault or evil plot, and even more evidence that his constituency needs him in order to fight the threat. Blood in the streets, physical or market-metaphorical, may help him with some as much as it hurts him with others.
Xi/China may not face democratic accountability of any kind, it may have totalitarian controls on press, but it turns out those are marginal features when enough of an electorate is willing to buy into its own deception. And we already know the Republican party is enthusiastic about several forms of voter suppression, visibly up to and including tacit cooperation in leaving vulnerabilities unaddressed, sandbagging counterintelligence operations, and why would anyone assume they'd stop there?
I'm not saying this as a "the electoral fight is hopeless." Maybe concrete trade issues will move some people at the margins, I don't know, maybe in combination with everything else we can do it will be enough to get Trump out of the white house AND Republicans out of the Senate and fight hard from there. Mostly just saying any "surely this economic trade war will be what does them in" is something that seems as likely vain as most other "surely this."
posted by wildblueyonder at 1:11 AM on August 7, 2019 [3 favorites]
This is a question I've been asking myself: Does the influx of money into the hands of the very rich mean that investments are much less likely to see downturns? That is, does that money need to be invested somewhere, so that while real estate is overpriced, stocks are overpriced, they are going to stay overpriced because there is no real place to move all of that additional money?
Yes, I realize that there are other options: Treasury bonds if you are willing to take a very low return, risky investments, gold (which has shot up recently). But is really likely that the uber-wealthy are going to pull out of the stock market or real estate in great numbers?
posted by dances_with_sneetches at 6:01 AM on August 7, 2019 [1 favorite]
Yes, I realize that there are other options: Treasury bonds if you are willing to take a very low return, risky investments, gold (which has shot up recently). But is really likely that the uber-wealthy are going to pull out of the stock market or real estate in great numbers?
posted by dances_with_sneetches at 6:01 AM on August 7, 2019 [1 favorite]
On the topic of China and why Chinese are (largely) OK with their system, if anyone is interested in an academic look at how China defines "democracy", the book Chinese Democracy by Andrew J Nathan (professor of PolySci at Columbia, specialist in China) is a bit older, but has an excellent analysis of things. He's firmly in the "China is a democracy just different from ours" camp as opposed to the "China is not a democracy" camp and makes an excellent case for that conclusion.
More recently he's written China's Search For Security, which I think is essential reading for any American trying to understand the PRC's policies and actions. It was written in 2012, so pre-Trump and therefore his conclusion that the US can successfully manage its relationship with China is no longer valid, but the background it provides is excellent.
I will note that many in China tend to see presidents like Trump as evidence that the idea of liberal democracy has fundamental flaws that produce unacceptable instability and chaos. Right now the single biggest argument in China for supporting their system is that the American system produced Trump and the chaos he's brought.
One thing Americans should keep in mind is that while heavily censored from a political standpoint, China does have news services with decent international coverage, and since America remains the 500 pound gorilla of world politics many people in China tend to keep at least a bit of attention on what's happening over here.
posted by sotonohito at 7:21 AM on August 7, 2019 [10 favorites]
More recently he's written China's Search For Security, which I think is essential reading for any American trying to understand the PRC's policies and actions. It was written in 2012, so pre-Trump and therefore his conclusion that the US can successfully manage its relationship with China is no longer valid, but the background it provides is excellent.
I will note that many in China tend to see presidents like Trump as evidence that the idea of liberal democracy has fundamental flaws that produce unacceptable instability and chaos. Right now the single biggest argument in China for supporting their system is that the American system produced Trump and the chaos he's brought.
One thing Americans should keep in mind is that while heavily censored from a political standpoint, China does have news services with decent international coverage, and since America remains the 500 pound gorilla of world politics many people in China tend to keep at least a bit of attention on what's happening over here.
posted by sotonohito at 7:21 AM on August 7, 2019 [10 favorites]
I'll also add this on the topic of Xi, the CCP, and stability.
To a large extent the people of China are willing to trade political freedom for security and economic growth. But if that growth stops things will get a lot more difficult for the CCP, and Xi is painfully aware of this.
I think he's got less to lose in the trade war that Trump started than Trump does. But his ability to absorb economic harm is not limitless and if it does start having any significant impact on China's ability to keep its GDP growing, he's going to have to do something or risk a loss of popular support.
This is one reason why China's Belt and Road Initiative is so critical to the stability of the PRC. If they can broaden their trade base so their foreign trade is less America focused they can afford more political separation from America.
Right now the US is China's biggest trading partner, but China isn't nearly as dependent on US trade as it might be. Only about 19% of China's exports go to the USA, it'd hurt to lose all of that, but not nearly as badly as it would have even ten years ago. Going forward expect to see that number shrinking as China broadens trade with other nations, especially East Asian and African nations.
posted by sotonohito at 7:35 AM on August 7, 2019 [5 favorites]
To a large extent the people of China are willing to trade political freedom for security and economic growth. But if that growth stops things will get a lot more difficult for the CCP, and Xi is painfully aware of this.
I think he's got less to lose in the trade war that Trump started than Trump does. But his ability to absorb economic harm is not limitless and if it does start having any significant impact on China's ability to keep its GDP growing, he's going to have to do something or risk a loss of popular support.
This is one reason why China's Belt and Road Initiative is so critical to the stability of the PRC. If they can broaden their trade base so their foreign trade is less America focused they can afford more political separation from America.
Right now the US is China's biggest trading partner, but China isn't nearly as dependent on US trade as it might be. Only about 19% of China's exports go to the USA, it'd hurt to lose all of that, but not nearly as badly as it would have even ten years ago. Going forward expect to see that number shrinking as China broadens trade with other nations, especially East Asian and African nations.
posted by sotonohito at 7:35 AM on August 7, 2019 [5 favorites]
That is, does that money need to be invested somewhere, so that while real estate is overpriced, stocks are overpriced, they are going to stay overpriced because there is no real place to move all of that additional money?
The money will slosh and churn seeking diminishing returns across every conceivable asset class, gaining leverage as it goes along, until finally some thread somewhere unravels and the whole thing goes whoosh. See 2008.
It's illth.
posted by notyou at 7:37 AM on August 7, 2019 [8 favorites]
The money will slosh and churn seeking diminishing returns across every conceivable asset class, gaining leverage as it goes along, until finally some thread somewhere unravels and the whole thing goes whoosh. See 2008.
It's illth.
posted by notyou at 7:37 AM on August 7, 2019 [8 favorites]
Heard a discussion on NPR that made a good point. The state of the Chinese economy is a mystery. When Trump talks about the economy, you know he's lying. You know what the lie is, and people generally know the truth. When Xi lies, you know he's lying, but you have no idea what the truth is. How badly is the Chinese economy hurt by tariffs? Who knows? All you know for sure is the economy is not doing as well as Xi says.
posted by xammerboy at 8:42 PM on August 7, 2019 [4 favorites]
posted by xammerboy at 8:42 PM on August 7, 2019 [4 favorites]
The state of the Chinese economy was at one time fairly opaque since it was basically a black box to us. Not so much these days now that there are satellites in orbit whose main use is to keep an eye on the comings and goings of people and things anywhere on Earth that the financial types have any interest in. Combined with the necessarily public actions China takes externally, there is much less room for obfuscation than there used to be.
A perfect measure cannot be achieved, of course, but that is not necessary to determine general trends in economic activity. Near real time global satellite imaging available to private entities has transformed the world in ways few fully understand in a few short years.
posted by wierdo at 11:20 AM on August 8, 2019 [1 favorite]
A perfect measure cannot be achieved, of course, but that is not necessary to determine general trends in economic activity. Near real time global satellite imaging available to private entities has transformed the world in ways few fully understand in a few short years.
posted by wierdo at 11:20 AM on August 8, 2019 [1 favorite]
Reuters: Treasuries-Recession fears pummel U.S. 30-year yields to near record low “U.S. Treasury yields tumbled onWednesday, with 30-year yields nearing record lows, on growing fears over a global economic downturn and bets the Federal Reserve would have to pick up its pace of interest rate cuts to counter growing recession risks.”
Reuters: Foreigners pare buying at U.S. bond sales in late July “Overseas investors reduced their purchases at U.S. Treasury auctions in late July even as U.S. yields remain the highest among the developed economies and a quarter of the world’s bonds are offering negative yields. The reduction coincides with speculation about whether China may cut its Treasury holdings in retaliation for tariffs on its exports to the United States.”
posted by Doktor Zed at 9:13 PM on August 8, 2019 [1 favorite]
Reuters: Foreigners pare buying at U.S. bond sales in late July “Overseas investors reduced their purchases at U.S. Treasury auctions in late July even as U.S. yields remain the highest among the developed economies and a quarter of the world’s bonds are offering negative yields. The reduction coincides with speculation about whether China may cut its Treasury holdings in retaliation for tariffs on its exports to the United States.”
posted by Doktor Zed at 9:13 PM on August 8, 2019 [1 favorite]
Bloomberg: Trump Says It’s ‘Fine’ If September China Talks Are Canceled
President Donald Trump said talks with China planned for next month could be called off after the trade war between the world’s biggest economies abruptly escalated in recent days.Bloomberg has more from another front of the trade war: U.S. Holds Off on Huawei Licenses as China Halts Crop-Buying
“We’ll see whether or not we keep our meeting in September,” Trump said as he left the White House Friday for a fundraiser in the Hamptons. “If we do, that’s fine. If we don’t, that’s fine.”
The president also tamped down speculation that the U.S. would intervene in currency markets to devalue the dollar. When asked whether he’d take such action, he replied: “No, we don’t have to.” Yet he added lower interest rates from the Federal Reserve -- a move the president is pressing for -- would have the same effect.[…]
Inside the White House, hawks have been pushing for a direct Treasury intervention in currency markets by pointing to a slowdown in U.S. manufacturing, which many economists have blamed on tariffs imposed by Trump and uncertainty surrounding his trade war with China.
The White House is holding off on a decision about licenses for U.S. companies to restart business with Huawei Technologies Co. after Beijing said it was halting purchases of U.S. farming goods, according to people familiar with the matter.posted by Doktor Zed at 12:20 PM on August 9, 2019 [2 favorites]
Commerce Secretary Wilbur Ross, whose department has vetted the applications to resume sales, said last week he’s received 50 requests and that a decision on them was pending. American businesses require a special license to supply goods to Huawei after the U.S. added the Chinese telecommunications giant to a trade blacklist in May over national-security concerns.
WaPo: 9 in 10 counties that voted for Trump have received subsidies to fight the trade war. About $7.6 billion of the $8.4 billion went to counties that voted for Trump. About $700 million went to Clinton counties.
posted by peeedro at 12:20 PM on August 12, 2019 [8 favorites]
posted by peeedro at 12:20 PM on August 12, 2019 [8 favorites]
posted by kliuless :
-Small group of America's big farms gets bulk of Trump bailout funds
-Rich farmers, not mom-and-pop farms, will collect most of Trump's tariff bailout
Please note, from this article in 2017, a passle of Congresscritters split 15 million in farm bailouts between them. There's 28 BILLION dollars on the table this time. You can bet your sweet bippy that congress isn't going to do anything to stop this gravy train pouring dollars into their laps.
Meanwhile, real farmers are selling their land, because they're not getting bailed out, but the agribusinesses and Congressmen sure are.
posted by SecretAgentSockpuppet at 11:20 PM on August 12, 2019 [5 favorites]
-Small group of America's big farms gets bulk of Trump bailout funds
-Rich farmers, not mom-and-pop farms, will collect most of Trump's tariff bailout
Please note, from this article in 2017, a passle of Congresscritters split 15 million in farm bailouts between them. There's 28 BILLION dollars on the table this time. You can bet your sweet bippy that congress isn't going to do anything to stop this gravy train pouring dollars into their laps.
Meanwhile, real farmers are selling their land, because they're not getting bailed out, but the agribusinesses and Congressmen sure are.
posted by SecretAgentSockpuppet at 11:20 PM on August 12, 2019 [5 favorites]
Trump blinks.
The WaPo’s Aaron Blake reports:
The WaPo’s Aaron Blake reports:
BREAKING: Trump admin is removing some items from new China tariffs.posted by Doktor Zed at 7:03 AM on August 13, 2019 [3 favorites]
Also delaying others until Dec. 15.
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/august/ustr-announces-next-steps-proposed
The newly delayed China tariffs include "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing."
So, lots of big-ticket items.
And in minutes the Dow has risen 500. The stock market hates this trade war. If Trump capitulated completely tomorrow, the Dow would hit 30,000.
posted by dances_with_sneetches at 7:30 AM on August 13, 2019
posted by dances_with_sneetches at 7:30 AM on August 13, 2019
That's why he'll try to hold off on capitulating until October 2020.
posted by contraption at 7:56 AM on August 13, 2019 [7 favorites]
posted by contraption at 7:56 AM on August 13, 2019 [7 favorites]
> The newly delayed China tariffs include "cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing."
I predicted that the shit would really hit the fan when the upper middle class realized that their brand-new iPhones were going to cost an extra $150 due to the tariffs, but I didn't realize that the administration would give them a specific carve-out, along with other Christmas shopping items. Too bad for the Trump-voting farm states, I guess.
posted by RedOrGreen at 2:32 PM on August 13, 2019 [2 favorites]
I predicted that the shit would really hit the fan when the upper middle class realized that their brand-new iPhones were going to cost an extra $150 due to the tariffs, but I didn't realize that the administration would give them a specific carve-out, along with other Christmas shopping items. Too bad for the Trump-voting farm states, I guess.
posted by RedOrGreen at 2:32 PM on August 13, 2019 [2 favorites]
While some portions of the yield curve have inverted in the last few months, today the main yield curve indicator inverted, spooking investors.
posted by a snickering nuthatch at 7:33 AM on August 14, 2019 [5 favorites]
posted by a snickering nuthatch at 7:33 AM on August 14, 2019 [5 favorites]
WaPo: Stocks Losses Deepen as a Key Recession Warning Surfaces
Paul Krugman is pessimistic: "Objectively, the economic problems are nowhere near as serious as 2008, or even 2001. But we're being led by the gang that couldn't think straight[.] No contingency planning except to lean on the Fed (which probably couldn't come to the rescue in time for election anyway), and total inability to conceptualize the problem"
posted by Doktor Zed at 1:03 PM on August 14, 2019 [1 favorite]
On Wednesday, the U.S. stock market tumbled after a reliable predictor of looming recessions flashed for the first time since the 2008 financial crisis. The Dow Jones industrial average fell more than 700 points, or nearly 3 percent, in the afternoon and has lost close to 7 percent in the past three weeks.And of course Team Trump has no idea what to do:
Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting. Argentina’s stock market fell nearly 50 percent in recent days, and growth in China has slowed.[…]
Wednesday’s sharp selloff was caused by an unusual development in the bond market, called an “inverted yield curve,” that often foreshadows a recession.
For the first time since the run-up to the Great Recession, the yields – or returns – on short-term U.S. bonds eclipsed those of long-term bonds. Normally, the government needs to pay out higher rates to attract investors for its long-term bonds. But with so many losing confidence in the near-term prospects of the economy and rushing to buy longer-term bonds, the U.S. government now is paying more to attract buyers to its 2-year bond than its 10-year note.
This phenomenon, which suggests investor faith in the economy is faltering, has preceded every recession in the past 50 years.
It’s the latest in a string of worrisome news about the U.S. economy. The government is expected to spend roughly $1 trillion more than it brings in through revenue this year, creating a ballooning deficit. Business investment has begun to contract -- largely due to the uncertainty surrounding President Trump’s trade war -- and manufacturing jobs have begun to slide. The big hiring and investment announcements that piled up at the beginning of the Trump administration have ceased, as have the announcements of bonuses and pay increases that came after a tax cut law was passed in 2017.@realDonaldTrump, of course, lashed out at his favorite economic targets, China and the Fed: "We are winning, big time, against China. Companies & jobs are fleeing. Prices to us have not gone up, and in some cases, have come down. China is not our problem, though Hong Kong is not helping. Our problem is with the Fed. Raised too much & too fast. Now too slow to cut.... Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve. Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back."
Several White House officials have become concerned that the economy is weakening faster than expected, but they are not working on proactive plans to try and change its course. The Treasury Department has had an exodus of senior advisors in recent months, and the White House just replaced its chairman of the Council of Economic Advisers.
Instead of rolling out new policies, Trump and other top aides have escalated their attacks on the Federal Reserve, trying to pin much of the U.S.’s problems on what Trump alleges is elevated interest rates that are strangling growth.
Paul Krugman is pessimistic: "Objectively, the economic problems are nowhere near as serious as 2008, or even 2001. But we're being led by the gang that couldn't think straight[.] No contingency planning except to lean on the Fed (which probably couldn't come to the rescue in time for election anyway), and total inability to conceptualize the problem"
posted by Doktor Zed at 1:03 PM on August 14, 2019 [1 favorite]
Dow Tanks 800 Points In Worst Day of 2019 After Bond Market Sends Recession Warning
Which translates to an over 1,000-point drop since it opened on the 5th and China started flexing its monetary policy and boycott powers.
posted by Doktor Zed at 1:43 PM on August 14, 2019 [3 favorites]
Which translates to an over 1,000-point drop since it opened on the 5th and China started flexing its monetary policy and boycott powers.
posted by Doktor Zed at 1:43 PM on August 14, 2019 [3 favorites]
Neil Irwin writes for the NYT that the economic slowdown may be global (and not only a function of the trade war), and economist Brad Setser agrees.
posted by a snickering nuthatch at 2:53 PM on August 14, 2019 [1 favorite]
posted by a snickering nuthatch at 2:53 PM on August 14, 2019 [1 favorite]
Trump pressured Mnuchin to label China ‘currency manipulator’, a move he had previously resisted (WaPo)
President Trump personally pressed Treasury Secretary Steven Mnuchin to label China as a “currency manipulator” two weeks ago, a move Mnuchin had previously resisted, three people with direct knowledge of the push said.posted by peeedro at 12:29 PM on August 15, 2019 [1 favorite]
The pressure from Trump revealed a more forceful West Wing role in the highly controversial decision. Mnuchin had repeatedly refused to designate China as a currency manipulator because China’s currency moves didn’t meet the Treasury’s established criteria for that action.
[...]
One of the people with knowledge of Trump’s pressure on Mnuchin said the White House wanted China labeled as a currency manipulator so that it prod Chinese officials back to the negotiating table. This has proven unsuccessful so far. Instead, it has inflamed tensions between the two countries.
Meanwhile, in case anyone forgot about Trump's ongoing tradewar with Europe, NYMag asks its readers: Are You Ready for the Cheesepocalypse? "[T]he Trump administration has proposed a battery of tariffs on imports from the E.U. Earlier this summer, the list was expanded to include products like Scotch whiskey and olive oil. The category that would really be hurt is cheese, with a nearly 100 percent tariff on most types of European cheese. That means a hunk of Gruyère that might typically cost $20 could jump up to $40, just in time for the holidays."
posted by Doktor Zed at 8:20 AM on August 16, 2019 [3 favorites]
posted by Doktor Zed at 8:20 AM on August 16, 2019 [3 favorites]
Meanwhile, Team Trump is trying to put on a brave face in public about the US economy, despite the rattling that Trump's trade wars are causing, Trump Whisperer Phil Rucker writes in the WaPo: Trump, Banking On Strong Economy To Win Reelection, Frets Over A Possible Downturn
posted by Doktor Zed at 10:08 AM on August 16, 2019 [7 favorites]
Privately, however, the president has sounded anxious and apprehensive. From his golf club in New Jersey, where he is vacationing this week, Trump has called a number of business leaders and financial executives to sound them out — and they have provided him a decidedly mixed analysis, according to two people familiar with the discussions who spoke on the condition of anonymity because the conversations were confidential.Paul Krugman, in the NYT: From Trump Boom to Trump Gloom "[T]he administration’s only plan if things go wrong seems to be to blame the Fed, whose chairman was selected by … Donald Trump. To be fair, it’s now clear that the Fed was wrong to raise short-term rates last year. But it’s important to realize that the Fed’s mistake was, essentially, that it placed too much faith in Trumpist economic policies. If the tax cut had actually produced the promised boom, if the trade war hadn’t put a drag on growth, we wouldn’t have an inverted yield curve; remember, the Fed didn’t cause the plunge in long-term rates, which is what inverted the curve. And the Trump boom wasn’t supposed to be so fragile that a small rise in rates would ruin it."
Trump has a somewhat conspiratorial view, telling some confidants that he distrusts statistics he sees reported in the news media and that he suspects many economists and other forecasters are presenting biased data to thwart his reelection, according to one Republican close to the administration who was briefed on some of the conversations.
“He’s rattled,” this Republican said. “He thinks that all the people that do this economic forecasting are a bunch of establishment weenies — elites who don’t know anything about the real economy and they’re against Trump."
Trump has relentlessly bludgeoned Fed Chair Jerome H. Powell over interest rates and has told aides and allies that he would be a scapegoat if the economy goes south.
The stock market has slumped in recent weeks because of a number of factors. The U.S.-China trade war has become increasingly acrimonious and is affecting both economies. Germany and the United Kingdom appear to be nearing a recession. Argentina’s stock market has crashed. Meanwhile, a key predictor of future recessions in the bond market — an inverted “yield curve” — was triggered this week, which spooked investors even more.
posted by Doktor Zed at 10:08 AM on August 16, 2019 [7 favorites]
Trade war: isn't this something that's known to have a negative effect on the economy? As in, everyone has seen this coming, right? Or are there people besides Trump who have been looking for a positive outcome here?
In most of the EU I think the me current state of politics is to keep quiet and hope all of this passes over soon. But. If Halloween comes and a no-deal Brexit happens, I think we may see some serious panic across the board. I'm not sure that we're ready to face what's coming with at least two of the major EU economies taking a big hit in trade.
It seems that not only did we not learn anything from the last recession, we became as a whole even more idiotic.
posted by romanb at 10:41 AM on August 16, 2019
In most of the EU I think the me current state of politics is to keep quiet and hope all of this passes over soon. But. If Halloween comes and a no-deal Brexit happens, I think we may see some serious panic across the board. I'm not sure that we're ready to face what's coming with at least two of the major EU economies taking a big hit in trade.
It seems that not only did we not learn anything from the last recession, we became as a whole even more idiotic.
posted by romanb at 10:41 AM on August 16, 2019
AP: Recession Signs Worry Trump Ahead of 2020
President Donald Trump is warning of an economic crash if he loses reelection, arguing that even voters who personally dislike him should base their ballots on the nation’s strong growth and low unemployment rate.posted by Doktor Zed at 4:42 PM on August 16, 2019 [2 favorites]
But privately, Trump is growing increasingly worried the economy won’t look so good come Election Day.
The financial markets signaled the possibility of a U.S. recession this week, sending a jolt of anxiety to investors, companies and consumers. That’s on top of concerns over Trump’s plans to impose punishing tariffs on goods from China and word from the United Kingdom and Germany that their economies are shrinking.[…]
Some of Trump’s closest advisers have urged him to lower the temperature of the trade dispute, fearing that further tariffs would only hurt American consumers and rattle the markets further. The president blinked once this week, delaying a set of tariffs in an effort to save Christmas sales.
Aides acknowledge it is unclear what steps the White House could take to stop a downturn. Trump’s 2017 tax cut proved so politically unpopular that many Republicans ran away from it during last year’s midterms. And a new stimulus spending program could spark intraparty fighting over big deficits.
Aaron Rupar, w/video: TRUMP: "The fake news, of which many of you are members, is trying to convince the public to have a recession. 'Let's have a recession!' ... I am the chosen one. Somebody had to do it. So I'm taking on China."
"The Chosen One" is losing it. He's trolling us, but he's losing it. The media are nevertheless falling all over themselves to report the "chosen one" remark instead of more substantive points, such as China raising its minimum wage (SCMP) or US tariffs on China potentially costing American households $1,000 per year (CNN).
posted by Doktor Zed at 11:45 AM on August 21, 2019 [4 favorites]
"The Chosen One" is losing it. He's trolling us, but he's losing it. The media are nevertheless falling all over themselves to report the "chosen one" remark instead of more substantive points, such as China raising its minimum wage (SCMP) or US tariffs on China potentially costing American households $1,000 per year (CNN).
posted by Doktor Zed at 11:45 AM on August 21, 2019 [4 favorites]
CNBC: Manufacturing Sector Contracts For the First Time In Nearly a Decade
posted by Doktor Zed at 1:03 PM on August 22, 2019 [4 favorites]
U.S. manufacturer growth slowed to the lowest level in almost 10 years in August, the latest sign that the trade war may be exacerbating the economic slowdown.Emphases added, because this can't be emphasized enough when Trump keeps claiming he's winning his tariff wars.
The U.S. manufacturing PMI (purchasing managers’ index) was 49.9 in August, down from 50.4 in July and below the neutral 50.0 threshold for the first time since September 2009, according to IHS Markit.
Any reading below 50 signals a contraction. The survey is an initial reading for the month of August. The final figure will be released Sept. 3.
Manufacturing had been one of the big winners during the Trump administration, but the tit-for-tat tariffs in the U.S.-China trade war have taken a big bite from the sector. U.S. manufacturing activity slowed to a nearly three-year low in July, based on data from the Institute for Supply Management.
posted by Doktor Zed at 1:03 PM on August 22, 2019 [4 favorites]
CBS: Trade War with China Projected to Cost U.S. Billions in Lost Tourism Dollars
The flow of visitors from the People's Republic coming to the U.S. has already diminished since the conflict erupted in early 2018, and continuing tensions are projected to result in 2 million fewer Chinese tourists through next year, according to a new estimate from Tourism Economics, an Oxford Economics company. Over two years, that adds up to $11 billion in lost spending.posted by Doktor Zed at 6:17 PM on August 22, 2019
The research firm estimates that a significant decrease in Chinese tourists last year resulted in a loss of roughly $2 billion in spending in the U.S. In 2019, nearly 650,000 fewer visits are expected—another $3.8 billion in foregone spending. While such dollar figures are a fraction of the $20 trillion U.S. economy, they are meaningful to local economies, especially for smaller businesses that cater to tourism and at a time economic growth is slowing.
Trade War Heats Up Again As China Sets Tariffs On $75 Billion In U.S. Goods, Autos: The first batch of tariffs will go into effect Sept. 1 and a second, on autos and auto parts, is due to go into effect Dec. 15. The tariffs range from 5% to 25%.
posted by peeedro at 7:07 AM on August 23, 2019
posted by peeedro at 7:07 AM on August 23, 2019
Make Michigan Rust Again.
posted by tivalasvegas at 8:25 AM on August 23, 2019
posted by tivalasvegas at 8:25 AM on August 23, 2019
Axios’s Jonathan Swan has the latest spin from Team Trump—blame China over Hong Kong and Taiwan rather than the administration’s failed negotiating tactics. Trump's China Bind
posted by Doktor Zed at 8:38 AM on August 23, 2019 [3 favorites]
Sources close to President Trump tell Axios that the White House is in a China bind: A trade deal with China is "tough to improbable" in this deteriorating environment, with escalating security tensions between Washington and Beijing.Meanwhile, Politico reports Trump team braces GOP donors for a potential ‘moderate and short’ recession; and CNBC reports Mike Pompeo tells business execs, economists that he thinks the China trade war could end by 2020 election.
Why it matters: The biggest tool Trump has to pump the economy and the markets is a trade deal with China. But if anything, senior administration officials have turned harder against China in recent weeks.
This has less to do with trade than it does with national security, according to senior administration officials and sources briefed on the president’s thinking[.]
posted by Doktor Zed at 8:38 AM on August 23, 2019 [3 favorites]
Mike Pompeo tells business execs, economists that he thinks the China trade war could end by 2020 election.
Which is pretty much the only thing he could tell the people he's trying to get to bankroll his boss's re-election. Not that it's a convincing argument AT ALL.
posted by Rykey at 9:45 AM on August 23, 2019 [3 favorites]
Which is pretty much the only thing he could tell the people he's trying to get to bankroll his boss's re-election. Not that it's a convincing argument AT ALL.
posted by Rykey at 9:45 AM on August 23, 2019 [3 favorites]
CNBC: Dow Plummets More Than 600 Points After Trump Orders US Manufacturers to Leave China
posted by Doktor Zed at 1:28 PM on August 23, 2019 [3 favorites]
Trump tweeted on Friday: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..your companies HOME and making your products in the USA.” However, it is not clear how much authority the president has on this front.[…]@realDonaldTrump's tweets were extra batshit today, beginning with complaints this morning that "Despite this the Fake News Media, together with their Partner, the Democrat Party, are working overtime to convince people that we are in, or will soon be going into, a Recession.", then later ranting against the Fed ("My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?") and Chinese Fentanyl. Bizarrely, he concluded with a bad joke about the stock market before it lost even more points: "The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!" If that was supposed to be a distraction, it only made him look dumber.
Earlier in the day, stocks teetered around the flatline after Federal Reserve Chairman Jerome Powell delivered a speech from an annual central banking symposium in Jackson Hole, Wyoming.
In it, he said the Fed will do what it can to sustain the current economic expansion. “Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent.”
He also noted there is no “rulebook” for the current U.S.-China trade war, adding that “fitting trade policy uncertainty into this framework is a new challenge.”[…]
The yield curve was flat on Friday. The spread between the 10-year Treasury yield and the 2-year rate inverted on Thursday after Fed members indicated a September rate cut was not a certainty, raising fears that the central bank would not be quick enough to save the economy from a recession.
posted by Doktor Zed at 1:28 PM on August 23, 2019 [3 favorites]
He obviously doesn't realize that looking ignorant in a prepared statement doesn't look very presidential. Which isn't something I've seen a press story reflect on lately. No stories about how he looked presidential doing so and so. His boosters have obviously given up.
The flow of visitors from the People's Republic coming to the U.S. has already diminished since the conflict erupted in early 2018, and continuing tensions are projected to result in 2 million fewer Chinese tourists through next year
Thanks Don, I just know a big chunk of those tourists are going to be coming to Canada instead.
posted by Mitheral at 2:17 PM on August 23, 2019 [2 favorites]
The flow of visitors from the People's Republic coming to the U.S. has already diminished since the conflict erupted in early 2018, and continuing tensions are projected to result in 2 million fewer Chinese tourists through next year
Thanks Don, I just know a big chunk of those tourists are going to be coming to Canada instead.
posted by Mitheral at 2:17 PM on August 23, 2019 [2 favorites]
At least Trump held off until after the close of the markets before tweeting his retaliatory tariffs against China’s from this morning:
posted by Doktor Zed at 2:43 PM on August 23, 2019 [5 favorites]
For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight....His profligate use of all caps and exclamation marks shows he means business, but his “thank you for your attention to this matter” closing shows he’s a businessman.
....Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer. As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very....
...unfair Trading Relationship. China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!). Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30%...
...Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!
posted by Doktor Zed at 2:43 PM on August 23, 2019 [5 favorites]
Those would be the tariffs his team had just convinced him to push back until after the Christmas holiday buying season right?
posted by Exceptional_Hubris at 2:47 PM on August 23, 2019 [4 favorites]
posted by Exceptional_Hubris at 2:47 PM on August 23, 2019 [4 favorites]
Honestly, who knows how Trump’s increased tariffs and business decrees to leave China are supposed to be implemented? They were thrown together this afternoon, the NYT reports (Trump Says He Will Raise Existing Tariffs on Chinese Goods to 30%):
On Friday afternoon, the president hastily assembled his top trade advisers at the White House — including Treasury Secretary Steven Mnuchin, who joined by telephone — to settle on a response. The president was not aware that China’s retaliation was coming and was angry about being blindsided, according to people familiar with the matter.The immediate reaction from the business community is naturally negative:
Mr. Trump’s tweets on Friday caught most of his advisers and staff by surprise, and prompted alarm. Some of Mr. Trump’s advisers privately expressed concern that the ferocity of Mr. Trump’s response could derail the negotiations permanently and could unsettle supporters during an election year.
Mr. Trump’s advisers believe he is being urged on by Peter Navarro, a trade adviser who has been the main proponent of continuing down an antagonistic path with China. Mr. Navarro tried to play down the escalation on Fox Business Network, saying Beijing’s response was to be expected and would only galvanize support in the United States for Mr. Trump’s tough approach to China.
Business groups reacted with deep concern and pushed back against the notion that American companies would sever ties with China at Mr. Trump’s request.posted by Doktor Zed at 3:02 PM on August 23, 2019 [5 favorites]
“U.S. companies have been ambassadors for positive changes to the Chinese economy that continue to benefit both our people,” said Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce. “While we share the president’s frustration, we believe that continued constructive engagement is the right way forward.”
Retailers, which are bracing for pain from Mr. Trump’s next round of tariffs, said the president’s demands would hurt, not help, American businesses and the economy.
“It is unrealistic for American retailers to move out of the world’s second largest economy, as 95 percent of the world’s consumers live outside our borders,” said David French, the senior vice president for government affairs at the National Retail Federation.
And farmers, who have borne the brunt of China’s retaliation, said Mr. Trump’s tactics were only making things worse.
“Every time Trump escalates his trade war, China calls his bluff – and why would we expect any differently this time around?” said Roger Johnson, president of the National Farmers Union. “It’s no surprise that farmers are again the target.”
Holy Hamilton.
Congress needs to reclaim its tariff authority ASAP. This is far too much unchecked power for one person.
posted by notyou at 3:26 PM on August 23, 2019 [11 favorites]
Congress needs to reclaim its tariff authority ASAP. This is far too much unchecked power for one person.
posted by notyou at 3:26 PM on August 23, 2019 [11 favorites]
Hey, isn't it like unconstitutional for the president to issue orders to American companies like this? Like, he doesn't have that power and they don't have to do what he says here. Right?
posted by Joey Michaels at 3:53 PM on August 23, 2019
posted by Joey Michaels at 3:53 PM on August 23, 2019
Eh, I'm no lawyer, but I don't think it's unconstitutional for the president to sputter idiotically on Twitter, unfortunately.
posted by Reverend John at 6:22 PM on August 23, 2019 [3 favorites]
posted by Reverend John at 6:22 PM on August 23, 2019 [3 favorites]
Is there a tariff that will cause all twitter servers to sponraneously explode?
posted by bz at 11:45 AM on August 24, 2019 [1 favorite]
posted by bz at 11:45 AM on August 24, 2019 [1 favorite]
So, the reports out of Biarritz from Trump and his team have been contradictory to say the least. Trump suggests 'second thoughts' about China tariff war, triggers confusion at G-7 summit (ABC)
CNBC's Eamon Javers: "Asked about the Chinese denials of new trade calls, despite President Trump’s statement, Trump implies the calls were with the vice premier of China. Sec. Mnuchin says: “There’s been communication going on.” President Trump chimes in: “at the highest level.” Pressed further about the calls with China that Trump said happened and the Chinese deny, Trump says he doesn’t want to talk about calls."
CNN's Jim Acosta: "After initially saying Chinese officials called over the weekend to restart talks about trade, Trump was less specific when pressed by reporters for details on the calls: “I don’t want to talk about calls. We’ve had calls. We’ve had calls at the highest levels.”"
The Global Times's Hu Xijin: "Based on what I know, Chinese and US top negotiators didn't hold phone talks in recent days. The two sides have been keeping contact at technical level, it doesn't have significance that President Trump suggested. China didn't change its position. China won't cave to US pressure."
The Dow Jones, desperate for good news, opened higher initially this morning. We'll see how long that lasts.
posted by Doktor Zed at 6:51 AM on August 26, 2019 [1 favorite]
"Yeah, sure," Trump said when asked if he had second thoughts about his escalating trade war with China. "I have second thoughts about everything." [transcript]Trump later started off another round of confusion when asked about restarting trade negotiations with China:
The president's comments, over breakfast with new United Kingdom prime minister Boris Johnson, appeared to be the first time there were any hints of regret over the trade war with China. Soon after, he added that he wasn't planning on declaring a national emergency over China's retaliatory tariffs.
But then hours later, after news spread that Trump was backing off, White House press secretary Stephanie Grisham released a statement saying his words had been "misinterpreted."
"This morning in the bilat with the UK, the President was asked if he had “any second thought on escalating the trade war with China.' His answer has been greatly misinterpreted," Grisham said. "President Trump responded in the affirmative -- because he regrets not raising the tariffs higher."
CNBC's Eamon Javers: "Asked about the Chinese denials of new trade calls, despite President Trump’s statement, Trump implies the calls were with the vice premier of China. Sec. Mnuchin says: “There’s been communication going on.” President Trump chimes in: “at the highest level.” Pressed further about the calls with China that Trump said happened and the Chinese deny, Trump says he doesn’t want to talk about calls."
CNN's Jim Acosta: "After initially saying Chinese officials called over the weekend to restart talks about trade, Trump was less specific when pressed by reporters for details on the calls: “I don’t want to talk about calls. We’ve had calls. We’ve had calls at the highest levels.”"
The Global Times's Hu Xijin: "Based on what I know, Chinese and US top negotiators didn't hold phone talks in recent days. The two sides have been keeping contact at technical level, it doesn't have significance that President Trump suggested. China didn't change its position. China won't cave to US pressure."
The Dow Jones, desperate for good news, opened higher initially this morning. We'll see how long that lasts.
posted by Doktor Zed at 6:51 AM on August 26, 2019 [1 favorite]
CNN's Daniel Dale's been live-tweeting/fact-checking Trump's G7 press conference. While the whole thing is, predictably, off the rails (e.g. Iran, North Korea, the UK, climate change), here are his responses pertaining to China and his trade wars:
—Asked if he believes China is sincere about its conciliatory words from this morning, Trump said yes, "I think they want to make a deal very badly." He says China has taken a "hard hit."posted by Doktor Zed at 9:07 AM on August 26, 2019 [6 favorites]
—Trump says the US will have taken in $100 billion in China-tariff revenue. That will eventually be true if the tariffs remain, but it was $21 billion as of July. Trump then says prices haven't gone up; they have.
—Trump repeats his usual false claim that the US had never previously taken in "10 cents" from China. Aside from the fact that Americans pay the tariffs, the US has had tariffs on China for more than two centuries. China tariffs generated billions per year during the Obama era.
—Trump repeats his usual false claim that Iran was "given $150 billion" as part of the nuclear agreement. It was allowed to access less than $100 billion in its own frozen assets, experts say.
—Trump repeats his eternal false claim that the US has had a $500 billion trade deficit with China for "many many years." (It has never once been $500 billion.) He claims the Asian American unemployment rate is the lowest ever. It was lower at the end of the Obama administration.
—Trump claims China isn't actually saying there was no phone call (the foreign ministry said it was unaware of any calls) -- and he points to the non-call statement from China's vice premier. He says there were "numerous calls," with Mnuchin and others.
—Asked about his very divergent public comments on China, Trump says sorry, "It's the way I negotiate. It's done very well for me over the years. And it's doing even better for the country."
Politico: Republicans Grow Anxious About The Trump Economy—Trump's trade war with China could undermine GOP chances of holding the White House and Senate in 2020.
Republicans have sat patiently with President Donald Trump on his tariff roller-coaster ride with China. Now they’re starting to feel queasy.posted by Doktor Zed at 10:15 AM on August 29, 2019
Trump argues his escalating trade war will force China to the table for a deal. But his ever-rising tariffs — and his market-rattling tweets — are increasingly alarming the GOP.
“There’s no question that trade uncertainty is contributing to the slowdown,” said Sen. Pat Toomey (R-Pa.), a leading free-trader. “We’re in a very good place. The danger is: Where are we going to be a year from now if concerns about trade continue to be an irritant to growth?”
Asked about Toomey's comments on Fox News Radio Thursday morning, Trump responded: "What does Pat Toomey want me to do? Does he want me to say 'Let me put my hands up, China ... continue to rip us off?"
But particularly as the global economy cools, key Republicans say new levies on almost all Chinese goods threaten to step on the president’s good news story: A growing economy, rising wages and low unemployment. And that could have outsize effects on Republicans’ tough task of defending the Senate and the White House in 2020.[…]
The worry among free-traders is that China’s one-party system can wait out Trump and avoid political consequences. That’s something that the White House and Republicans simply can’t do with an election 14 months away.
“I give the president credit for confronting China on the very bad behavior they’ve engaged in. I’m not sure these are the best tactics,” Toomey said. “The Chinese have the capacity to hold out for a very long time.”
The worry among free-traders is that China’s one-party system can wait out Trump and avoid political consequences. That’s something that the White House and Republicans simply can’t do with an election 14 months away.
It's ok, Republicans are working towards a one party system here too.
posted by benzenedream at 11:01 AM on August 29, 2019 [5 favorites]
It's ok, Republicans are working towards a one party system here too.
posted by benzenedream at 11:01 AM on August 29, 2019 [5 favorites]
CNN: A rattled Trump scrambles for victories ahead of election
Washington
posted by Doktor Zed at 3:17 PM on August 29, 2019 [1 favorite]
Washington
President Donald Trump has become increasingly rattled over the potential of an economic downturn and is spinning to find victories to sell to voters.Emphasis added, because, well, this is not the usual way to conduct international trade negotiations.
He and his economic team, who are often at odds with one another, have been searching for ways to prevent market anxieties from spilling over into next year's presidential election, but have yet to agree on a solution. They have wavered between floating tax cuts to insisting they aren't considering tax cuts. They have feuded privately over which direction to take. They have contradicted each other publicly.
And Trump has insisted it's the Federal Reserve's fault, while his own aides have admitted much of it is because of his trade war with China. Trump refuses to give up on the tactic, saying it would make him look weak.[…]
Still, Trump flashed signs of optimism this week that the trade war could be resolved, saying he's received calls from Chinese officials saying they wanted to restart talks. Though Trump and Treasury Secretary Steven Mnuchin insisted there had been "communication," aides privately conceded the phone calls Trump described didn't happen they way he said they did.
Instead, two officials said Trump was eager to project optimism that might boost markets, and conflated comments from China's vice premier with direct communication from the Chinese.
The charged language coming out of the White House in recent weeks largely boils down to this, people say: The economy is flashing warning signs Trump didn't expect, his trade war with China is dragging on months longer than expected yet he refuses to give in and his chief promise to supporters -- that he would build a wall along the southern border -- has gone unfulfilled.
posted by Doktor Zed at 3:17 PM on August 29, 2019 [1 favorite]
AP: TVs to shoes: This Time Consumers Face Pain of Trump Tariffs
posted by Doktor Zed at 5:49 PM on August 30, 2019 [2 favorites]
President Donald Trump’s trade war with China, until now mainly an abstraction for American consumers, is about to hit home.Better get all your shopping done tomorrow!
Beginning Sunday, the U.S. government will begin collecting 15% tariffs on $112 billion in Chinese imports — items ranging from smartwatches and TVs to shoes, diapers, sporting goods and meat and dairy products. For the first time since Trump launched his trade war, American households face price increases because many U.S. companies say they’ll be forced to pass on to customers the higher prices they’ll pay on Chinese imports.[…]
American consumers have so far been spared the worst of it: The Trump administration had left most everyday household items off its tariff list (valued at $250 billion in Chinese products so far) and instead targeted industrial goods.
That’s about to change. “They’re on. They’re on,” Trump said Friday about the new tariffs that are set to kick in at 12:01 a.m. Sunday. Under the new schedule, 69% of the consumer goods Americans buy from China will face his import taxes, up from 29% now.
That isn’t all. Higher tariffs are set to kick in for another batch of Chinese products — $160 billion’ worth — on Dec. 15. By then, roughly 99% of made-in-China consumer goods imported to the United States will be taxed, according to calculations by Chad Bown of the Peterson Institute for International Economics.
Overall, Trump’s trade war will have raised the average tariff on Chinese imports from 3.1% in 2017, before the hostilities began, to 24.3%.
posted by Doktor Zed at 5:49 PM on August 30, 2019 [2 favorites]
It's ok, Republicans are working towards a one party system here too.
Well, luckily we have the democrats, who...*holds finger to earpiece* I'm hearing are having a hell of a vacation
posted by Ray Walston, Luck Dragon at 6:24 PM on August 30, 2019 [4 favorites]
Well, luckily we have the democrats, who...*holds finger to earpiece* I'm hearing are having a hell of a vacation
posted by Ray Walston, Luck Dragon at 6:24 PM on August 30, 2019 [4 favorites]
Axios: Despite Promises, Trump's Trade Deficits Are Only Growing
Meanwhile, CNBC reports: US Manufacturing Contracts For the First Time In Three Years Amid China Trade War
Among the U.S.'s 15 biggest trading partners, the trade balance has moved in the wrong direction for Trump in 10 of those countries between 2016 and 2018, while the aggregate trade deficit has jumped from $503 billion to $628B.(That first bullet point is some tendentious economic analysis there, which confirms Axios skews GOP in its reporting.)
While Trump can explain the deficit spike with China as a short-term sacrifice for long-term benefit, it doesn't account for the wider trend.[…]
Trump's tax cuts are as much to blame for the increase in the trade deficit as anything else, writes Axios Markets editor Dion Rabouin:
• More money in Americans' pockets leads to more consumption, often of Chinese-made goods.
• The tax cut helped boost the value of the dollar, which makes imports to the U.S. relatively cheaper.
Meanwhile, CNBC reports: US Manufacturing Contracts For the First Time In Three Years Amid China Trade War
A gauge of U.S. manufacturing from the Institute for Supply Management showed the sector contracted in August, its first decline since 2016.posted by Doktor Zed at 9:54 AM on September 3, 2019 [1 favorite]
The ISM U.S. manufacturing Purchasing Managers’ Index fell to 49.1% in August, the lowest reading in more than three years. Any reading below 50% signals a contraction.
The report raised fears of a recession and hit the stock market. The Dow Jones Industrial Average lost more than 300 points, extending losses following the morning release from ISM.[…]
The August contraction ended a 35-month expansion period where the PMI averaged 56.5%, according to ISM. Production and employment gauges also showed contraction in August for the first time after growth for almost three years, ISM data showed.
While Trump can explain the deficit spike with China as a short-term sacrifice for long-term benefit, it doesn't account for the wider trend.[…]
As soon as Trump was elected and other countries saw he was going to be driving "negotiations" in the same manner that bankrupted his businesses, they began long term plans to diversify away from the US as a trading partner. China has been the beneficiary of this for a while now. The USA will be feeling the consequences of electing a chronic liar and extortionist for a few decades.
posted by benzenedream at 10:55 AM on September 3, 2019 [4 favorites]
As soon as Trump was elected and other countries saw he was going to be driving "negotiations" in the same manner that bankrupted his businesses, they began long term plans to diversify away from the US as a trading partner. China has been the beneficiary of this for a while now. The USA will be feeling the consequences of electing a chronic liar and extortionist for a few decades.
posted by benzenedream at 10:55 AM on September 3, 2019 [4 favorites]
CNBC: Trump was so angry after China’s trade retaliation that he wanted to double tariffs
posted by Doktor Zed at 2:16 AM on September 4, 2019 [4 favorites]
President Donald Trump wanted to double tariff rates on Chinese goods last month after Beijing’s latest retaliation in a boiling trade war before settling on a smaller increase, three sources told CNBC.A perfectly rational response from a totally sane negotiator whom China respects for his “very, very large brain”.
The president was outraged after he learned Aug. 23 that China had formalized plans to slap duties on $75 billion in U.S. products in response to new tariffs from Washington on Sept. 1. His initial reaction, communicated to aides on a White House trade call held that day, was to suggest doubling existing tariffs, according to three people briefed on the matter.
Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer then enlisted multiple CEOs to call the president and warn him about the impact such a move would have on the stock market and the economy.
He settled on a 5% hike in tariff rates on about $550 billion in Chinese products, which he announced in an Aug. 23 tweet after the market close.
In the following days, both Mnuchin and White House press secretary Stephanie Grisham said Trump’s only regret was not raising tariffs higher.
posted by Doktor Zed at 2:16 AM on September 4, 2019 [4 favorites]
As long as most Americans keep thinking of tariffs as some mysterious thing that in a sort of nebulous way are bad for China but otherwise no big, rather than as the sales tax paid by Americans that they actually are, Trump will keep getting away with this.
posted by sotonohito at 6:37 AM on September 4, 2019 [4 favorites]
posted by sotonohito at 6:37 AM on September 4, 2019 [4 favorites]
If only there were some sort of... oppositional party? Who were trying to... get elected soon? Who had access to... some sort of giant, instantaneous messaging platform? Who could somehow leverage some... message to this effect?
posted by Rykey at 10:56 AM on September 4, 2019 [5 favorites]
posted by Rykey at 10:56 AM on September 4, 2019 [5 favorites]
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This thread has been archived and is closed to new comments
(Also, as someone who didn't participate in the Megathread, I'm liking these targeted posts. Thank you for your efforts.)
posted by hoyland at 8:09 PM on August 5, 2019 [9 favorites]