So if tariffs don’t work, then why is China doing it?
China loses in any trade war, they are far more dependent on our willingness to buy their crap.
Not only that, but we can direct our industries to sell within, and to open new markets abroad, and we will be just fine. China like you say has become dependent on us, and if they get mad then let them seek new markets in which they can play their games on (good luck with that one). No one is as dumb or greedy as we have been in the past in which sold us out. We could actually turn our industry within, and serve every state in our vast nation, and would probably come out with the very same results we have been getting with this over seas trade. No fear, and it's time we stand up again in this world.
what about our bonds?
If they dump the bonds they will hurt themselves as much as us.................it's a few trillion dollars...........
We would get a small bump in interest rates..........................and it would screw their own currency manipulation and lower their exports as well.
If they want to shoot themselves in the foot then........well yeah they'd could do it........but the damage is over rated.
Over rated??
Treasurys: Bond markets move because US depends on China as buyer
https://www.cnbc.com/.../treasurys-bond-markets-move-because-us-depends-on-china...
Jan 11, 2018 - China just reminded the United States that Beijing is its banker. ... On Thursday, the Chinese regulator soothed market worries when it said it was already diversifying its foreign exchange reserves, and its Treasury holdings are "market driven." ... Broadly, central banks are moving away ...
Author Examines Six Myths About U.S. Economy
Myth No. 1: China is bankrolling the U.S.
"Nearly all of our public debt is held by U.S. banks and by the American public. China holds around 10% of it and believe me they don't think they are doing us any favors by investing in Treasury bonds. Yet you read in the paper that you have to treat China with deference because they are such important holders of U.S. debt. How did China become the owner of so much U.S. debt? It's because Walmart bought a few hundred million dollars of things from China and had to pay them for it. So Walmart calls JP Morgan and puts those dollars in a China bank account run by JP Morgan in
New York. That money then gets invested in Treasury bonds. The money didn't disappear and go to China. The money is still in the U.S. economy. Foreigners own about $23 trillion of American assets, but Americans own about $20 trillion of foreign assets. If foreigners buy U.S. Treasurys, that is fine for the U.S. financial system as a whole. Regardless of the size of our trade deficit, which is a separate debate, it is still a myth that Asian countries are bankrolling the U.S. and that we need China to lend us money to pay for our government's obligations. Countries that sell more goods and services to the U.S. than they buy from the U.S. end up with trade surpluses in dollars which must be held in dollar assets. These countries can only do three things with those dollars: buy U.S. goods, buy U.S. assets like government bonds, or exchange those dollars for another currency."
Trump has no idea of whats at stake
One thing to understand about President Donald Trump’s
proposed new tariffs on China is that they are, in the first instance, a tax on U.S. producers and consumers. The revenue they’ll raise won’t come from China, but from the pockets of Americans who’ll have to pay more for Chinese goods.
Imposing this tax requires a strong justification, or at least an intelligible rationale. The Trump administration offers neither. It’s true that the U.S. has legitimate trade grievances with China, but there are much better ways of resolving them.
The White House says it will impose tariffs on $50 billion (
or maybe $60 billion) of China’s annual imports to the U.S. Not quite yet, though: Details will follow in 15 days, and there’ll be 30 days for comments before any tariffs take effect. At the same time, the Treasury has been given 60 days to come up with new restrictions on investment by Chinese firms in the U.S.
Maybe Trump hopes these threats will lead China to make trade concessions and he will not need to actually put these tariffs in place. Conceivably, it could work out that way: Premier Li Keqiang said this week China will
open its economy further, do more to protect intellectual property, and restrain its efforts to get foreign investors to transfer technology. If China follows through, that might be enough for Trump to declare victory and move on to his next adventure.
The danger is that Trump actually believes his own bombastic rhetoric about
winning a trade war -- that the time for talking is past, that China’s promises are worthless, and that the administration will keep raising taxes on U.S. producers and consumers until the trade deficit with China is eliminated. That would be a lunatic growth-killing plan even if China didn’t retaliate. If China did push back, and raised tariffs of its own against U.S. exports, the impact on both countries’ growth would be worse.
Even if it doesn’t come to that, the other great cost of Trump’s approach is the threat it poses to the rules-based system of liberal trade -- one designed and built over decades by none other than the U.S.
The president may be deluding himself that he can change China’s behavior merely by bullying. A far better plan would be to bind an increasingly powerful China into this system as a matter of mutual advantage. This is a multilateral effort, involving the European Union and Japan, and it would be made more difficult by the unilateral rule-bending (or -breaking) that the Trump administration is proposing. How wise is it, really, to tell China, “Do as you’re told: Might is right”?
does need to be addressed -- and the existing system provides ways to do so. Oddly enough, the Trump administration acknowledges as much; it announced this week that the U.S. would launch a new case at the World Trade Organization on China’s rules for licensing technology, and it has also relied on the expertise of CFIUS, the committee on foreign investment, to block deals on national-security grounds.
Starting a trade war, however, is another matter entirely. That’s a plan with a likelihood of high casualties for both sides. No one is arguing that Trump lacks the authority to prosecute such a war. But he, and the American public, should be aware of what’s at stake.
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