China Can't Win Trade War With USA

[Andylusion]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

If you have a trade surplus, you don't have any leverage to use tariffs against the other country. And the bigger the trade surplus, the less leverage (or trade war power) you have. In China's case, their surplus isn't big, it is gigantic.

China exports 6 times as much $tuff to the US, as vice versa. So this is like 2 people puttting up money for something. One puts up $10, the other $60. The $60 guy has a lot more to lose.
Making things worse for China, the threat of prices rising when US businesses leave China and return to America, has diminished almost entirely. There's a long list of economic reasons or that. Some of them I remember teaching to college kids 40 years ago. Other reasons have come about since that time, buy they're all piled up right now.

So why, in such a precarious position, does China go head to head with Trump on trade ? I think it's because they're (slimly) hoping that political pressures in the US will dissuade Trump from waging this war. But Trump has put a lot of political capital into the idea of restoring an equitable trade balance, thereby bringing manufacturing jobs back to the US, and making America great again. This is the cornerstone of his presidency. It's not on the table for negotiation with Democrats or anybody else.

Looking at this objectively, China can bluster, and bluff, but she doesn't have a prayer in this thing. China may register a few hits along the way, but Trump is pitching a shutout here, and I suspect the battle will be brief.

You are crazy.

Out of all goods exported by China, only 19% of their entire export market goes to the US. Out of all imports, only 10% come from the US.

If they completely banned all US trade, they would fine.

Further.... you are saying some crazy things.

You said they export 6 times as much stuff, as they import from the US.

Money is paper. Goods.... are the actually things of value.

That's like you giving me food and water and products, and I give you paper... and you think you are better off. You are not better off... I have stuff.... you have paper. I am better off, BY FAR, than you are.

If the two of us are on separate deserted islands, and I have a life time supply of everything I would want, and you have a $100 trillion dollars.... I'm going to live, and you are going to starve to death with your piles of paper.

You have paper..... I have stuff. In economic terms, stuff is what has value. Money, is just paper.... in fact, the only value money has, is what STUFF you can get with the money. Well if we cut off trade with china, you will not be able to get as much stuff with your money. So in reality, the value of the money goes DOWN when you engage in a trade war.

Nothing you are saying here, makes any sense.

 

[Andylusion]

No, we are not at war with China. Congress has given presidents the power to impose tariffs for reasons of war and national security. A number of presidents have used that power even though there was no real danger to national security. Trump is just following suit.

Is there any real danger to the US in what China is doing? To answer that let's look at Trump's beef with China.

First, there's currency manipulation. Donald Trump named China a currency manipulator in his first days in the White House. There’s only one problem; it’s not true anymore. China, the world’s second-biggest economy behind the United States, hasn’t been pushing down its currency to benefit Chinese exporters in years. And even if it were, the law targeting manipulators requires the U.S. spend a year negotiating a solution before it can retaliate. The fact is, for the past couple of years China has been intervening in markets to prop up its currency, the yuan, not push it lower.

Donald Trump has attacked China over and over in regard to theft of intellectual property rights which has been going on for 3 decades. It certainly not any more of a danger to the security of the US now than it was 10 or 20 years ago. In fact it's probably a lot less due to new in Chinese regulation in 2015 to protect intellectual property rights of both national and international businesses which went into effect last year.

Although Trump is right to pursue a solution; slapping tariffs on a $100 billion worth of Chinese exports until China cries “uncle” and agrees to enforce IP protections will never work. It actually has a far higher likelihood of backfiring than succeeding. No country likes to be told what to do, and they especially don't like to be told in public and that goes double for the Chinese. IP has been a source of embarrassment for the government for years. They have dug their heels in denying it exist for years when faced with threats from the US. This has led to new regulations that most business in China believe will work.

Trump wants to fight tough as usually when what is needed is fighting smart by doing what actually works. IP in the video markets in China is half what it was 10 years ago because US companies have worked with Chinese companies and the government through the state dept to negotiation contracts with distributors in exchange for protection of property rights.

So, yes what Trump is doing is complete bull shit. Currency manipulation is no longer a problem and China is solving the IP problem but needs smart negotiations on the part of the US not strong arm tactics. What Trump is really doing is trying to appeal to his base who hate the fact that China can produce cheaper quality goods which has hurt US manufacturing. These people don't give a damn about IP and I doubt they understand currency manipulation. They just want see the Donald give China a knockout punch.

Many words. None on target. The tariffs have to do with China's exports to the US, and the connection to US businesses having moved there, and are the exporters.

The tariffs make it uneconomical for them to continue in China, and exporting to the US. Their solution ? Move back to the US. Trump's campaign pledge. And he's delivering. Ho hum.

So what about that link I requested ?

He hasn't deliveries anything due to tariffs. They haven't even gone into effect and may not. However, I noticed his approval ratings in 3 red states are down after China took aim at pork and soybean imports from the US, Idaho and Tennessee were down 6 points and Iowa down 9 points.

You honesty think companies are going to move back to the US because of temporary tariffs that could disappear overnight. That's nuts.

No company is going to move to the US over a tariff, even if it was not temporary.

If the US engages in a real trade war, then other countries are going to tariff products coming from the US.

The US might be the single large market, as a country. But from the perspective of the world, the US is only one part of the world.

Apple computer makes more money outside the US, than inside the US.

So lets just think about that rationally.....

Apple can build Iphones inside the US, and not be able to export them because of a trade war where all the other countries have put in heavy tariffs on US goods....

Or they can make Iphones outside the US and sell to the entire world, and the rich people of the US willing to pay the tariff can buy those phones here.

Where would Apple build their Iphones? In the US, so they can only be sold in the US market, or outside the US to sell to the 8 Billion people of the rest of the world?

Obviously, Apple will make their phones outside the US. It's a larger market. They already make more money outside the US, than inside.

 

[Flopper]

No, we are not at war with China. Congress has given presidents the power to impose tariffs for reasons of war and national security. A number of presidents have used that power even though there was no real danger to national security. Trump is just following suit.

Is there any real danger to the US in what China is doing? To answer that let's look at Trump's beef with China.

First, there's currency manipulation. Donald Trump named China a currency manipulator in his first days in the White House. There’s only one problem; it’s not true anymore. China, the world’s second-biggest economy behind the United States, hasn’t been pushing down its currency to benefit Chinese exporters in years. And even if it were, the law targeting manipulators requires the U.S. spend a year negotiating a solution before it can retaliate. The fact is, for the past couple of years China has been intervening in markets to prop up its currency, the yuan, not push it lower.

Donald Trump has attacked China over and over in regard to theft of intellectual property rights which has been going on for 3 decades. It certainly not any more of a danger to the security of the US now than it was 10 or 20 years ago. In fact it's probably a lot less due to new in Chinese regulation in 2015 to protect intellectual property rights of both national and international businesses which went into effect last year.

Although Trump is right to pursue a solution; slapping tariffs on a $100 billion worth of Chinese exports until China cries “uncle” and agrees to enforce IP protections will never work. It actually has a far higher likelihood of backfiring than succeeding. No country likes to be told what to do, and they especially don't like to be told in public and that goes double for the Chinese. IP has been a source of embarrassment for the government for years. They have dug their heels in denying it exist for years when faced with threats from the US. This has led to new regulations that most business in China believe will work.

Trump wants to fight tough as usually when what is needed is fighting smart by doing what actually works. IP in the video markets in China is half what it was 10 years ago because US companies have worked with Chinese companies and the government through the state dept to negotiation contracts with distributors in exchange for protection of property rights.

So, yes what Trump is doing is complete bull shit. Currency manipulation is no longer a problem and China is solving the IP problem but needs smart negotiations on the part of the US not strong arm tactics. What Trump is really doing is trying to appeal to his base who hate the fact that China can produce cheaper quality goods which has hurt US manufacturing. These people don't give a damn about IP and I doubt they understand currency manipulation. They just want see the Donald give China a knockout punch.

Many words. None on target. The tariffs have to do with China's exports to the US, and the connection to US businesses having moved there, and are the exporters.

The tariffs make it uneconomical for them to continue in China, and exporting to the US. Their solution ? Move back to the US. Trump's campaign pledge. And he's delivering. Ho hum.

So what about that link I requested ?

He hasn't deliveries anything due to tariffs. They haven't even gone into effect and may not. However, I noticed his approval ratings in 3 red states are down after China took aim at pork and soybean imports from the US, Idaho and Tennessee were down 6 points and Iowa down 9 points.

You honesty think companies are going to move back to the US because of temporary tariffs that could disappear overnight. That's nuts.

No company is going to move to the US over a tariff, even if it was not temporary.

If the US engages in a real trade war, then other countries are going to tariff products coming from the US.

The US might be the single large market, as a country. But from the perspective of the world, the US is only one part of the world.

Apple computer makes more money outside the US, than inside the US.

So lets just think about that rationally.....

Apple can build Iphones inside the US, and not be able to export them because of a trade war where all the other countries have put in heavy tariffs on US goods....

Or they can make Iphones outside the US and sell to the entire world, and the rich people of the US willing to pay the tariff can buy those phones here.

Where would Apple build their Iphones? In the US, so they can only be sold in the US market, or outside the US to sell to the 8 Billion people of the rest of the world?

Obviously, Apple will make their phones outside the US. It's a larger market. They already make more money outside the US, than inside.

Anything that is very labor intensive and is easily transported will be built outside the US. The cost of labor in the US relative to most of the world is high and that's not likely to change anytime soon. Tariffs are always counterproductive. They drive up prices, provide government support for companies that operate inefficiently, and instead of a country producing the products it produces best, it produces in accordance with goverment policy.

 

[Supposn]

... This is why Pat Buchanan once said if we have trade war, bring it on, we'll eat their lunch. WE are holding the high cards - our massive and wealthy MARKET. ...

Protectionist, when Patrick Buchanan was speaking of USA marketplaces' great mass and wealth, some national pacts of desirable marketplaces were being formed or had already been established. Their growth reduces the comparative global supremacy of our nation's marketplaces. I believe that policies dependent upon “gunboat diplomacy” or the great bullying smaller nations are now much less effective.

I'm not particularly upset when other nations' or pacts' of nations favor their own entities. I regret that USA's global trade policies are not consistent; we too often do not favor our own and/or too often favor foreign rather than our own nation's entities.

Wikipedia's “Import Certificates” article describes a proposed unilateral policy that does not differentiate among foreign nations' and pacts. It would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods in a manner that would increase USA's GDP and numbers of jobs more than otherwise. The policy of most favored nation does not prohibit favoring your own nation's entities. That's how Import Certificate policy behaves.

Respectfully, Supposn

 

[Toddsterpatriot]

... This is why Pat Buchanan once said if we have trade war, bring it on, we'll eat their lunch. WE are holding the high cards - our massive and wealthy MARKET. ...

Protectionist, when Patrick Buchanan was speaking of USA marketplaces' great mass and wealth, some national pacts of desirable marketplaces were being formed or had already been established. Their growth reduces the comparative global supremacy of our nation's marketplaces. I believe that policies dependent upon “gunboat diplomacy” or the great bullying smaller nations are now much less effective.

I'm not particularly upset when other nations' or pacts' of nations favor their own entities. I regret that USA's global trade policies are not consistent; we too often do not favor our own and/or too often favor foreign rather than our own nation's entities.

Wikipedia's “Import Certificates” article describes a proposed unilateral policy that does not differentiate among foreign nations' and pacts. It would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods in a manner that would increase USA's GDP and numbers of jobs more than otherwise. The policy of most favored nation does not prohibit favoring your own nation's entities. That's how Import Certificate policy behaves.

Respectfully, Supposn

It would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods in a manner that would increase USA's GDP and numbers of jobs more than otherwise.

Let's do it!!

Who cares if it reduces our standard of living?

 

[Supposn]

It would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods in a manner that would increase USA's GDP and numbers of jobs more than otherwise.

Let's do it!!

Who cares if it reduces our standard of living?

ToddsterPatriot fears USA's increased production of products, and jobs, and those jobs' wages greater purchasing powers more than otherwise would somehow reduce our standard of living.
Respectfully, Supposn

 

[Toddsterpatriot]

It would significantly reduce, if not entirely eliminate USA's chronic annual trade deficits of goods in a manner that would increase USA's GDP and numbers of jobs more than otherwise.

Let's do it!!

Who cares if it reduces our standard of living?

ToddsterPatriot fears USA's increased production of products, and jobs, and those jobs' wages greater purchasing powers more than otherwise would somehow reduce our standard of living.
Respectfully, Supposn

Supposn wants Americans to buy fewer, more expensive goods.
But at least foreigners will pay lower prices for our stuff.

 

[eagle1462010]

China’s massive military shake-up

 

[MarathonMike]

Trade wars are a lose-lose proposition. That is why there will not be one.

 

[Supposn]

... UNTIL we can bring manufacturing back to the USA....which could take 5 to 10 years.....

...As for manufacturing here, it takes about ONE MONTH to [restore] and be functioning. ...

Protectionist, USA's manufacturing industries will not be revived in a single month.
.
I do not concur with those accusing president Franklin Roosevelt for having caused (what they may still be describing as “Roosevelt's”) war, but FDR did see how world politics were then progressing and he did what was politically feasible to induce our preparation for the war that he (I believe correctly), suspected might have been (by then) unavoidable.
.
[In 1938 such substantial increased production wasn't seriously considered. I suppose, (I have not searched for statistics), prior or during 1943, (two years after Pearl Harbor), the USA was outproducing the axis's war production which had a substantial time lead over the USA.]
.
Only after the December 7, 1941, (Pearl Harbor day attack) that preceded our declaration of war, did the USA fully politically commit to war-time economy regardless of costs. I do not conceive the USA making such a great commitment during any time of peace.
.
I disagree with the extreme evaluations of USA's industrial capabilities and/or the feasibility of extent that we can be motivated to act for our best social and economic interests; (i.e. I absolutely disagree with Care4All's overly pessimistic and your overly optimistic evaluations).

Due to USA's present policy, our consumers and enterprises are behaving as they should for obtaining their most advantageous purchasing values; but we're importing more than we export. Consequentially for more than a half-century, the USA has consistently experienced annual great trade deficits of goods. Annual trade deficits are always net detrimental to their nation's GDP and drag upon their numbers of jobs.
.
If USA adopts the trade policy described within Wikipedia's “Import Certificates” article, our entities continuing to act in their own bests interests would also be acting in their best interests AND to our nation's net economic and social benefits. USA's annual GDP, numbers of jobs and those jobs purchasing powers would be more than otherwise.
.
This could not be achieved in a few months, but its benefits would be apparent well prior to 4 years after enactment.
.
Respectfully, Supposn

 

[Manonthestreet]

Exclusive: China seeks trade firewall with U.S. allies in rush of...
“China is showing confidence, but internally they appear quite concerned. They have apparently underestimated Trump’s resolve on trade,” the diplomat said, adding that Beijing is nervous about China’s major trading partners siding with Washington.

 

[gtopa1]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

If you have a trade surplus, you don't have any leverage to use tariffs against the other country. And the bigger the trade surplus, the less leverage (or trade war power) you have. In China's case, their surplus isn't big, it is gigantic.

China exports 6 times as much $tuff to the US, as vice versa. So this is like 2 people puttting up money for something. One puts up $10, the other $60. The $60 guy has a lot more to lose.
Making things worse for China, the threat of prices rising when US businesses leave China and return to America, has diminished almost entirely. There's a long list of economic reasons or that. Some of them I remember teaching to college kids 40 years ago. Other reasons have come about since that time, buy they're all piled up right now.

So why, in such a precarious position, does China go head to head with Trump on trade ? I think it's because they're (slimly) hoping that political pressures in the US will dissuade Trump from waging this war. But Trump has put a lot of political capital into the idea of restoring an equitable trade balance, thereby bringing manufacturing jobs back to the US, and making America great again. This is the cornerstone of his presidency. It's not on the table for negotiation with Democrats or anybody else.

Looking at this objectively, China can bluster, and bluff, but she doesn't have a prayer in this thing. China may register a few hits along the way, but Trump is pitching a shutout here, and I suspect the battle will be brief.

Yes, the US can win the war but not without economic damage. When the big soybean farms in Iowa, Minnesota, Indiana, Nebraska, Ohio, Missouri, South Dakota, Arkansas, North Dakota & Kansas see millions of tons of soybean sales to China going to Australia, Trump supporters are going to be questioning just exactly how this makes America great.

China also holds another "Trump Card", North Korea. Chinese influence has been very critical to bringing NK to the table. China could just as easily turn that table upside down and make Trump look like fool for ignoring all of his advisers and meeting with Kim.

Trade wars are a lot easier to start than they are to end. One major reason is trade wars spread, not just to other products but other countries. For example, if Australia takes advantage of lower prices in china caused by excess steel and aluminium production due to the US tariffs, they may well switch there orders from the US to China thus creating pressure for the US to retaliate. The US can easily find themselves in a trade war far more extensive than just China.

The trade war with China needs end and end soon because the longer it goes on the harder it will be to stop because in a trade war government is picking industries to become winners and losers. Those industries can exert great influence on government.

China uses OUR iron ore AND coal to produce their steel. Plus we have our own steel which has been given strategic status; we could not possibly concern ourselves in any trade war thingy or remotely compensate China wrt losing the US market. We have laws against trade dumping.

Greg

 

[gtopa1]

China has been carefully fostering relationships with the other countries that Trump has been abusing.
Watch the TPP nations deal more with Chin now that the US has stepped aside.
Likewise the EU, Britain and Central and South America.
If he scraps the NAFTA deal where does he think Canada and Mexico's trade will shift to?

The USA!!! There will be stimulus for import replacement.

Greg

 

[Flopper]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

If you have a trade surplus, you don't have any leverage to use tariffs against the other country. And the bigger the trade surplus, the less leverage (or trade war power) you have. In China's case, their surplus isn't big, it is gigantic.

China exports 6 times as much $tuff to the US, as vice versa. So this is like 2 people puttting up money for something. One puts up $10, the other $60. The $60 guy has a lot more to lose.
Making things worse for China, the threat of prices rising when US businesses leave China and return to America, has diminished almost entirely. There's a long list of economic reasons or that. Some of them I remember teaching to college kids 40 years ago. Other reasons have come about since that time, buy they're all piled up right now.

So why, in such a precarious position, does China go head to head with Trump on trade ? I think it's because they're (slimly) hoping that political pressures in the US will dissuade Trump from waging this war. But Trump has put a lot of political capital into the idea of restoring an equitable trade balance, thereby bringing manufacturing jobs back to the US, and making America great again. This is the cornerstone of his presidency. It's not on the table for negotiation with Democrats or anybody else.

Looking at this objectively, China can bluster, and bluff, but she doesn't have a prayer in this thing. China may register a few hits along the way, but Trump is pitching a shutout here, and I suspect the battle will be brief.

Yes, the US can win the war but not without economic damage. When the big soybean farms in Iowa, Minnesota, Indiana, Nebraska, Ohio, Missouri, South Dakota, Arkansas, North Dakota & Kansas see millions of tons of soybean sales to China going to Australia, Trump supporters are going to be questioning just exactly how this makes America great.

China also holds another "Trump Card", North Korea. Chinese influence has been very critical to bringing NK to the table. China could just as easily turn that table upside down and make Trump look like fool for ignoring all of his advisers and meeting with Kim.

Trade wars are a lot easier to start than they are to end. One major reason is trade wars spread, not just to other products but other countries. For example, if Australia takes advantage of lower prices in china caused by excess steel and aluminium production due to the US tariffs, they may well switch there orders from the US to China thus creating pressure for the US to retaliate. The US can easily find themselves in a trade war far more extensive than just China.

The trade war with China needs end and end soon because the longer it goes on the harder it will be to stop because in a trade war government is picking industries to become winners and losers. Those industries can exert great influence on government.

China uses OUR iron ore AND coal to produce their steel. Plus we have our own steel which has been given strategic status; we could not possibly concern ourselves in any trade war thingy or remotely compensate China wrt losing the US market. We have laws against trade dumping.

Greg

Most of China's imported iron ore come from Australia and Brazil. Together these two countries produce 1.1 million tons of iron ore. China produces 375,000 tons. The US produces only a meager 47,000 tons. In fact, China produces 5 times as much coal as the US and 8 times as much iron ore.

 

[Pete7469]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

So...

You seem to contradict yourself here...

I agree on everything you said except that we are "in the initial stages of a trade war".

China has already acquiesced when they announced the relaxing of tariffs on cars.

China's Xi Jinping says tariffs on car imports will be cut this year

Why would China engage in a war you acknowledge they can't win?

 

[gtopa1]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

If you have a trade surplus, you don't have any leverage to use tariffs against the other country. And the bigger the trade surplus, the less leverage (or trade war power) you have. In China's case, their surplus isn't big, it is gigantic.

China exports 6 times as much $tuff to the US, as vice versa. So this is like 2 people puttting up money for something. One puts up $10, the other $60. The $60 guy has a lot more to lose.
Making things worse for China, the threat of prices rising when US businesses leave China and return to America, has diminished almost entirely. There's a long list of economic reasons or that. Some of them I remember teaching to college kids 40 years ago. Other reasons have come about since that time, buy they're all piled up right now.

So why, in such a precarious position, does China go head to head with Trump on trade ? I think it's because they're (slimly) hoping that political pressures in the US will dissuade Trump from waging this war. But Trump has put a lot of political capital into the idea of restoring an equitable trade balance, thereby bringing manufacturing jobs back to the US, and making America great again. This is the cornerstone of his presidency. It's not on the table for negotiation with Democrats or anybody else.

Looking at this objectively, China can bluster, and bluff, but she doesn't have a prayer in this thing. China may register a few hits along the way, but Trump is pitching a shutout here, and I suspect the battle will be brief.

Yes, the US can win the war but not without economic damage. When the big soybean farms in Iowa, Minnesota, Indiana, Nebraska, Ohio, Missouri, South Dakota, Arkansas, North Dakota & Kansas see millions of tons of soybean sales to China going to Australia, Trump supporters are going to be questioning just exactly how this makes America great.

China also holds another "Trump Card", North Korea. Chinese influence has been very critical to bringing NK to the table. China could just as easily turn that table upside down and make Trump look like fool for ignoring all of his advisers and meeting with Kim.

Trade wars are a lot easier to start than they are to end. One major reason is trade wars spread, not just to other products but other countries. For example, if Australia takes advantage of lower prices in china caused by excess steel and aluminium production due to the US tariffs, they may well switch there orders from the US to China thus creating pressure for the US to retaliate. The US can easily find themselves in a trade war far more extensive than just China.

The trade war with China needs end and end soon because the longer it goes on the harder it will be to stop because in a trade war government is picking industries to become winners and losers. Those industries can exert great influence on government.

China uses OUR iron ore AND coal to produce their steel. Plus we have our own steel which has been given strategic status; we could not possibly concern ourselves in any trade war thingy or remotely compensate China wrt losing the US market. We have laws against trade dumping.

Greg

Most of China's imported iron ore come from Australia and Brazil. Together these two countries produce 1.1 million tons of iron ore. China produces 375,000 tons. The US produces only a meager 47,000 tons. In fact, China produces 5 times as much coal as the US and 8 times as much iron ore.

Iron mining in the United States produced 42.5 million metric tons of iron ore in 2015, worth US$3.8 billion. Iron ore was the third-highest-value metal mined in the United States, after gold and copper.[1] Iron ore was mined from nine active mines and three reclamation operations in Michigan, Minnesota, and Utah. Most of the iron ore was mined in northern Minnesota’s Mesabi Range. Net exports (exports minus imports) were 3.9 million tons. US iron ore made up 2.5 percent of the total mined worldwide in 2015. Employment as of 2014 was 5,750 in iron mines and iron ore treatment plants.[2]

I think you meant MILLIONS of tonnes.

Greg

 

[Flopper]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

If you have a trade surplus, you don't have any leverage to use tariffs against the other country. And the bigger the trade surplus, the less leverage (or trade war power) you have. In China's case, their surplus isn't big, it is gigantic.

China exports 6 times as much $tuff to the US, as vice versa. So this is like 2 people puttting up money for something. One puts up $10, the other $60. The $60 guy has a lot more to lose.
Making things worse for China, the threat of prices rising when US businesses leave China and return to America, has diminished almost entirely. There's a long list of economic reasons or that. Some of them I remember teaching to college kids 40 years ago. Other reasons have come about since that time, buy they're all piled up right now.

So why, in such a precarious position, does China go head to head with Trump on trade ? I think it's because they're (slimly) hoping that political pressures in the US will dissuade Trump from waging this war. But Trump has put a lot of political capital into the idea of restoring an equitable trade balance, thereby bringing manufacturing jobs back to the US, and making America great again. This is the cornerstone of his presidency. It's not on the table for negotiation with Democrats or anybody else.

Looking at this objectively, China can bluster, and bluff, but she doesn't have a prayer in this thing. China may register a few hits along the way, but Trump is pitching a shutout here, and I suspect the battle will be brief.

Yes, the US can win the war but not without economic damage. When the big soybean farms in Iowa, Minnesota, Indiana, Nebraska, Ohio, Missouri, South Dakota, Arkansas, North Dakota & Kansas see millions of tons of soybean sales to China going to Australia, Trump supporters are going to be questioning just exactly how this makes America great.

China also holds another "Trump Card", North Korea. Chinese influence has been very critical to bringing NK to the table. China could just as easily turn that table upside down and make Trump look like fool for ignoring all of his advisers and meeting with Kim.

Trade wars are a lot easier to start than they are to end. One major reason is trade wars spread, not just to other products but other countries. For example, if Australia takes advantage of lower prices in china caused by excess steel and aluminium production due to the US tariffs, they may well switch there orders from the US to China thus creating pressure for the US to retaliate. The US can easily find themselves in a trade war far more extensive than just China.

The trade war with China needs end and end soon because the longer it goes on the harder it will be to stop because in a trade war government is picking industries to become winners and losers. Those industries can exert great influence on government.

China uses OUR iron ore AND coal to produce their steel. Plus we have our own steel which has been given strategic status; we could not possibly concern ourselves in any trade war thingy or remotely compensate China wrt losing the US market. We have laws against trade dumping.

Greg

Most of China's imported iron ore come from Australia and Brazil. Together these two countries produce 1.1 million tons of iron ore. China produces 375,000 tons. The US produces only a meager 47,000 tons. In fact, China produces 5 times as much coal as the US and 8 times as much iron ore.

Iron mining in the United States produced 42.5 million metric tons of iron ore in 2015, worth US$3.8 billion. Iron ore was the third-highest-value metal mined in the United States, after gold and copper.[1] Iron ore was mined from nine active mines and three reclamation operations in Michigan, Minnesota, and Utah. Most of the iron ore was mined in northern Minnesota’s Mesabi Range. Net exports (exports minus imports) were 3.9 million tons. US iron ore made up 2.5 percent of the total mined worldwide in 2015. Employment as of 2014 was 5,750 in iron mines and iron ore treatment plants.[2]

I think you meant MILLIONS of tonnes.

Greg

yes million of tons.
Australia produced 817,000,000 tons
Brazil produced 397,000,000 tons
China produced 375,000,000 tons
US produced 46,000,000 tons.

 

[gtopa1]

Despite claims to the contrary, we are in the initial stages of a trade war with China. But this is something that China simply can't win. In order to win a trade war, you have to either be even with the other country, or have a trade deficit with them. The one thing you can't have is a trade surplus.

So...

You seem to contradict yourself here...

I agree on everything you said except that we are "in the initial stages of a trade war".

China has already acquiesced when they announced the relaxing of tariffs on cars.

China's Xi Jinping says tariffs on car imports will be cut this year

Why would China engage in a war you acknowledge they can't win?

I don't think they will but one of the big ones is Intellectual Capital transfer; the Chinese will do all they can to stop the US enforcing Intellectual Property rules. I suspect the yanks will win that part too....but it may be bloody.

Greg

 

[Supposn]

China uses OUR iron ore AND coal to produce their steel. Plus we have our own steel which has been given strategic status; we could not possibly concern ourselves in any trade war thingy or remotely compensate China wrt losing the US market. We have laws against trade dumping.

Greg

GoToPa1, I had always supposed that the modern industrial nation of China, (a great land mass of raw materials), would not generally import USA iron ore across the entire Pacific Ocean. But Wikipedia reports 54% Iron ore was additionally separated and shipped to California as a greater concentration of 65% iron ore. There it was further concentrated into iron ore pellets and shipped to China.
Since 2014, this is, (as I had always supposed), no longer practiced; the Utah mines are effectively no longer operating.
[Refer to “Utah”
within https://en.wikipedia.org/wiki/Iron_mining_in_the_United_States#cite_note-5 ].

Respectfully, Supposn

 

[Supposn]

GoToPa1, annual trade deficits are always net detrimental to their nation's GDP; (this is fact rather than opinion).
I do not suppose you can find any credible economist that would state otherwise and I don't suppose any credible economists would argue with those contending whatever reduces GDP also generally drags upon that nation's numbers of jobs.

China has a positive balance of global trade; (i.e. it's a surplus rather than a trade deficit nation). I regret that the USA, (unlike China), doesn't prefer to import raw materials or tools that support to their own processing or manufacturing of finished products (when domestic sources are not economically feasible), and the proportion of our consumption that we do produce is not much larger. I regret our annual balances of global trade are negative.

Many years ago Newt Gingrich wrote of the USA exporting scrap cloth, and metal to Japan while they ship finished manufactured products to us. I agree with him and many of within otherwise differing political parties that regret USA being economically evolving as a colony to greater producing nations.

The question is not if we, the USA can regain our prior overwhelming status as the world's greatest producer of products, but rather should we continue to be a trade deficit nation in comparative declining rank among other nations' median standards of life? Some of the nations' behind us are decreasing the gap of our lead and the nations ahead of us are increasing their leads; (i.e. we ain't doing as well as we voters choose to believe).

I'm among the proponents of the policy described by Wikipedia's “Import Certificates” article. It is superior to tariffs and to pure free trade policies.

Respectfully, Supposn