Trump and China - What Should America Do?

How does America deal with China? It depends on how you perceive the country. Or on how you chose to portray the country, whatever your actual views on the politically communist and economically mercantilist state might be. Both Victor Davis Hanson and Jim Geraghty at National Review had a few thoughts on this over this past week. They’re worth considering.

A lot of seemingly smart people are quite skilled at convincing themselves that giving oppressive regimes more of what they want will somehow make them behave better. In 2001, when the International Olympic Committee contemplating selecting Beijing as a host city for the summer Olympic Games, they concluded that picking Beijing would force the country to improve the country's human-rights record, because surely Beijing's rulers would change their ways with the international spotlight on them. But China did not change as the Olympics approached or after; by some measures, their control of the media and press only grew tighter.

As the U.S. and China traded more decade by decade, the Chinese threat to U.S. national security has grown instead of shrunk. They continue to expand their military and make it way more technologically advanced, often using stolen intellectual property. The Pentagon has concluded Beijing "is going forward with a plan to dominate the world in AI [artificial intelligence] in the 2025 to 2030 time frame." They want to control the world's 5G network and sell technology that they can use to collect data and feed it to their intelligence apparatus. Basically, if your phone or computer or tablet is made in China, there's a good chance there's some sort of backdoor that allows the Chinese government to poke around. - Jim Geraghty in the National Review

Now there seems to be a view among China experts (who used to called Sinologists back a few years ago) that this is all because of President Xi and if he would just ease up or better yet resign someday soon, China could resume it's path towards democracy. It's not stated out loud because of how ridiculous it sounds in the face of the evidence since the Tiananmen Square massacre in June of 1989. But it's hanging around like a desperate thought, in the background.

We now have a million or more Uyghur Muslims in internment camps in Western China in what has become the 21st century's gulag with an invasive tech-based government presence across all of China that makes the blinking TV sets in 1984 seem even more archaic and quaint than already was the case. And they do it all in collaboration with organizations like Google (who do a sick little tango with them of engaging in the development of ever-more invasive algorithms - hey guys we can make even more revenue with this! - and then backpedaling when word leaks out) as well as other enterprises, especially European ones.

Why? Because a billion consumers etc. etc. Despite the fact that it is not overwhelmingly easy for foreign companies to make money in China without giving away - witting or unwittingly - their intellectual property. Which resurfaces in Chinese companies that go on to dominate the landscape. Victor Davis Hanson writes about the ever-changing contextualization used by mainstream media and globalists to justify China's political, economic, and military campaigns:

China was exempted from criticism over serial copyright and patent infringement, dumping, and espionage. Western elites assumed that these improprieties were just speed bumps on the eventual Chinese freeway to liberalism. Supposedly the richer China got, the more progressive it would become. Huge trade deficits or military technological appropriation were small prices to pay for an evolving billion-person Palo Alto or Upper West Side.

After a time, the now-worrisome huge trade deficits and Chinese cheating were further contextualized as "our fault." The Tom Friedman school of journalism chided our clumsy republican government as lacking Chinese authoritarian efficiency that could by fiat connect new planned utopias by high-speed rail and power them with solar-panel farms. The Wall Street-investor version of this school saw flabby, pampered Americans getting their just deserts as more productive and deserving Chinese workers outhustled and outproduced us. In such tough-love sermonizing, the more Michigan or Pennsylvania rusted, the quicker culpable Americans would either emulate China or die. China of course again agreed.

Hanson goes on to make a troubling comparison. China in the early 21st century is engaged in a series of strategic campaigns that are similar to Imperial Japan's policies early in the 20th century. While this does not necessarily mean some new Pearl Harbor, the possibility of armed conflict - perhaps a contained incident perhaps a situation that escalates into something far more dangerous - is now a statistically significant, if hopefully minor, possibility.

The more likely outcome is a continued capitulation on the part of nations large and small around the world to China's demands. So, in this context, is Trump wrong to impose tariffs and engage in an escalating trade war? Globalists will say there are costs on the consumer (to say nothing of companies with significant investments in China) that will result from a full-blown trade war between American and China.

They're absolutely right. You will almost surely pay more for various things you need as a result of the measures and counter measures.

Should that be the principal criterion in evaluating the strategies to use against China? The fact that supply chains are global, and companies will have to raise prices? It's a reasonable question to ask at the very least. And even within the economic aspects of the relationship, precisely because we have a global integrated system, it may be easier than is thought to adapt to China's counter measures and to Trump's tariffs. Costly? Yes, of course. Depression-inducing global destruction? Maybe not folks. At least not economically speaking.

Trump has taken on the status quo on China and naturally done so by using the type of confrontational, nationalistic language that globalists hate. But he was right to take them on. His tactics may help solve this or may flounder. That's to be seen. But as in much else, he has again taken on the shibboleths of the elites when no one else even considered doing so, because they were too busy imagining their speaking fees after leaving office.

This confrontation with China was inevitable. Now Trump has to try and manage the relationship through a tricky and treacherous phase. God help us all if it goes badly wrong but the alternative to this would be to make sure your kids are fluent in Mandarin or Cantonese.

Which many in the elites around the world are in fact already doing.

Posted by Keeley at May 16, 2019 2:29 PM
Comments
Comment #443512

China has very severe problems managing their huge and restless population.

Would anyone in the United States trade places with China?

Modern China is a creature of our making. China can be undone.

Posted by: Royal Flush at May 16, 2019 4:51 PM
Comment #443513

The U.S.A. should hang tough.

Even Chuck Schumer encouraged Trump to hang tough on the trade negotiations with China.
Free Trade cannot work with nations (such as China) that cheat, abuse laborers, steal technology, export dangerous products, disallow or place high tariffs on most (or all) imports from other nations.

Companies that moved their operations to China are foolish.
China is stealing their technology, and ignoring patents.
Those companies and other nations are teaching their competition (i.e. China) to kick their butts.
How smart is that?

Also, much of the stuff from China is crap and dangerous. Many thousands of recalls, and total number of recalled items made in China are in the many tens of millions.
A Canadian study published in September 2007 showed that while 95% of product recalls from 1988 to 2007 were from China.

I was slightly injured by a ladder in 2012 that fialed, and a step-stool that failed in 2018. And I was taking a medication (Losartan) in 2018 that was made in China, which was recalled for containing dangerous toxic contaminants, so I don’t know what damage that caused. My brother’s dog was killed by dog treats from China.
It’s crazy to be buying so much dangerous crap from China.
Who needs a war, when China can simply destroy other nations, who are stupid enough to keep buying their dangerous crap? The U.S.A. imported $539 Billion from China in 2018, but China only imported $120.3 Billion (less than one fourth) from the U.S.A.

All that China has to do is to adopt true free-trade policies (such as almost NO tariffs by the U.S.A. or China), and stop preventing imports being exported from the U.S.A. via huge tariffs.
It’s rich indeed that China doesn’t like tariffs, when they are the biggest perpetrator of unfair tariffs.

Perhaps the tariffs collected by the U.S.A. can be used to temporarily subsidize some producers in the U.S.A., and help them find new markets?

Posted by: d.a.n at May 16, 2019 5:00 PM
Comment #443581

Socialized wealth protection for the rich is Trumps answer to the problems caused by his tariff war with China. Anyone surprised?

Posted by: j2t2 at May 18, 2019 9:35 AM
Comment #443585
j2t2 wrote: Socialized wealth protection for the rich is Trumps answer to the problems caused by his tariff war with China. Anyone surprised?
Yes.
Only U.S. owned companies and farmers should receive any subsidies, and the subsidies should only be temporary.

As for the tariffs on China, it is the right thing to do, because China cheats, steals, and prevents other nations’ exports from being imported into China (which is not free trade).

Also, much of the stuff from China is crap and dangerous. Many thousands of recalls, and total number of recalled items made in China are in the many tens of millions.
A Canadian study published in September 2007 showed that while 95% of product recalls from 1988 to 2007 were from China.

Posted by: d.a.n at May 18, 2019 2:02 PM
Comment #443590
As for the tariffs on China, it is the right thing to do, because China cheats, steals, and prevents other nations’ exports from being imported into China (which is not free trade).

It remains to be seen whether or not the tariffs really do anything but cause the American people to pay the bill. As I understand it it isn’t China that pays the tariffs it is the importer that pays the tariffs. Same in China, it isn’t the US government that pays the tariffs it is the importer.

Also, much of the stuff from China is crap and dangerous.

So charging higher tariffs on these things only causes us to pay more for the inferior products.Unless of course you think we have the capability and the corporate will to set up factories in this country that could produce higher quality goods.

Anyway we slice it making the American people pay higher costs because Trump has started a tariff war with China only hurts the American people. Not to mention this tax on the American people is a regressive tax.

Posted by: j2t2 at May 18, 2019 7:50 PM
Comment #443594

The hole point of tariffs are to protect and foster domestic production. Even if we paid the same it would be worth having it produced in our own country, what ever the product.

It’s not like we have to buy from China. We can make it here, and trust it.

Posted by: Weary Willie at May 18, 2019 10:20 PM
Comment #443595
j2t2 wrote: It remains to be seen whether or not the tariffs really do anything but cause the American people to pay the bill. As I understand it it isn’t China that pays the tariffs it is the importer that pays the tariffs. Same in China, it isn’t the US government that pays the tariffs it is the importer.
Sometimes, the exporter will pay the tariff, or negotiate lower prices, if they want the sale badly enough.
Otherwise, the buyer is expected to pay the tariff.
IF some buyers choose to pay the tariffs, it will drive up prices in the U.S.A.
However, that lead to more job creation in the U.S., IF U.S. companies can produce the products in the U.S. for less.

Decades of cheap junk from China has gutted many industries in the U.S.A., and other nations.
China has also stolen the technology from many companies that brilliantly decided to move their operations to China (where the labor and goods are very cheap).

However, IF China chooses to continue cheating, stealing, and imposing high tariffs on imports of other nations’ exports, then China will be cutting off their nose to spite their own face, because China has MUCH more to lose than the U.S., since:

  • (1) The U.S.A. imported $539 Billion from China in 2018 (much of which is low-quality junk, dangerous, and even deadly);
  • (2)but China only imported $120 Billion from the U.S.A. (only about one-fifth of what the U.S.A. imported from China).
It may cause prices to rise temporarily in both countries, but it could also lead to more job creation in the U.S.A., but less job creation in China.
Also, it could be good for other nations too.
It’s understandable why nations may want to protect certain industries that may impact national security (e.g. steel, aluminum, energy, certain technology, etc.), but other than a few areas, truly free markets should have NO tariffs.
However, for nations that cheat, steal, and put heavy tariffs on other nation’s exports (such as China), they deserve heavy tariffs on their exports to other nations.

Farmers (or foreign owned farms) should not receive government subsidies for products being exported from the U.S.A., because that’s welfare.
However, subsidies may be necessary from time-to-time to ensure that enough food is produced to feed and supply our own nation.

j2t2 wrote: Anyway we slice it making the American people pay higher costs because Trump has started a tariff war with China only hurts the American people. Not to mention this tax on the American people is a regressive tax.
I disagree.
The U.S.A. is already losing in many ways.
China has MUCH more to lose.
The U.S.A. might temporarily pay more for some products, but the U.S.A. will be better off in the long run.
The current losses do not factor in the cost of China’s continue cheating, stealing, and imposing high tariffs imports of exports from other nations.
The U.S.A. would probably have more jobs and production if it were not high tariffs imposed by other nations on imports of U.S. exports.

Just think if the U.S.A. was spending $539+ Billion per year in the U.S.A., rather than in China for products from China (many of which are defective, dangerous, or deadly).
Consider what happened to Samsung, who outsourced their battery production for the batteries for their Galaxy NOTE 7 (in 2016), which cost Samsung billion$ in losses.
Consider how much of the stuff from China is low-quality and/or dangerous. Many thousands of recalls, and total number of recalled items made in China are in the many tens of millions.
A Canadian study published in September 2007 showed that while 95% of product recalls from 1988 to 2007 were from China.

IF China is going to impose high tariffis or reject imports of other nation’s exports, cheat and steal technology, ignore patents, pirate software, etc., etc., etc. then China should not be surprised when they get some of their own medicine.

Hopefully, the U.S.A. will hang tough (as Chuck Schumer stated). It’s the right thing to do, regardless of whether China changes their cheating and stealing ways, or not.

Weary Willie wrote: The hole point of tariffs are to protect and foster domestic production. Even if we paid the same it would be worth having it produced in our own country, what ever the product.
It’s not like we have to buy from China. We can make it here, and trust it.
I agree completely. There are only a few industries that may need some protection (for national security reasons).
Posted by: d.a.n at May 18, 2019 10:55 PM
Comment #443596

D.,you assume these same manufacturers that deserted America for cheaper labor and lax environmental laws will come running back to the US simply because of short term tariffs. Do we also have to force American workers to work for Chinese level wages and the rest of us wallow in pollution as the Chinese do ?

You paint a scenario that sounds “swell” D. but it isn’t the 20’s or the 50’s and corporate America isn’t loyal to the USA. To think $539b worth of jobs will come back to America because of tariffs on China is a bit much don’t you think? To think these same companies that engineer products here for production in China will be of higher quality causes me to think you have blinders on D..

Posted by: j2t2 at May 19, 2019 12:25 AM
Comment #443604

We complain about tariffs like it’s going to drive us into the poor house, but we don’t give a whit about the ever increasing tax called inflation brought to us by the Federal Reserve.

We put a tariff on ourselves outsourcing our money supply to a private, anonymous corporation that has it’s own best interests at heart. We allow it to print money the same way counterfeiters would, and make deals worldwide that we know nothing about.

We may have to fight trade wars with other countries, but we should also be fighting the war with the Fed by auditing it completely and opening up it’s operations to the light of day.

Posted by: Weary Willie at May 19, 2019 8:20 AM
Comment #443606

We also complain about tariffs taxes like it’s going to drive us into the poor house, but we don’t give a whit about the ever increasing tax called inflation brought to us by the Federal Reserve.

Posted by: j2t2 at May 19, 2019 9:20 AM
Comment #443608
j2t2 wrote: D., you assume these same manufacturers that deserted America for cheaper labor and lax environmental laws will come running back to the US simply because of short term tariffs.
Many will, when the playing field is level, and when companies realize that they are putting themselves out of business, when those companies’ technology is being pirated, copied, and stolen from them, and then replaced with China-owned corporations. That is, in the long run, those companies are shooting themselves in the foot. Especially when China has no respect for patents and fair trade.
j2t2 wrote: Do we also have to force American workers to work for Chinese level wages and the rest of us wallow in pollution as the Chinese do ?
No.
It is difficult to beat the low-labor costs in China (with 1.5 Billion people; 4.3 times that of the U.S.A.). Overall, some things will cost more, but there are many benefits of manufacturing at home. Especially when you consider that China is stealing technology and illegally ignoring patents.
Whenever a company out-sources a product to China, China ignores the patents, and in no time, there are numerous (cheaper) copies of that product on the market. Cheaper in every way (including quality).
j2t2 wrote: You paint a scenario that sounds “swell” D. but it isn’t the 20’s or the 50’s and corporate America isn’t loyal to the USA. To think $539b worth of jobs will come back to America because of tariffs on China is a bit much don’t you think?
No. But, is that a good reason to give up?
That’s no reason to allow China to continue to cheat and steal.
Tariffs are a good tool to incentivize China to stop that, or pay a heavy price. The U.S.A. can manufacture anything it needs, and while it may cost more, it’s a small price to pay, because of the many benefits of being a more self-sufficient nation. The main imports to China that are exported from the U.S.A. is agricultural products, including soybeans (which is the largest single export, which amounts to about $15 Billion per year; chicken-feed in the big scheme of things). Hence, the only thing that China could do in retaliation was to place tariffs on those agricultural products. Big deal, when China imports one-fifth as much from the U.S. as it exports to the U.S. Do the math. It may cause a little temporary pain in the U.S., but China will be hurting themselves MUCH worse. It’s their choice. No matter what happens, in the long run, the U.S.A. wins, because it will also actually lead to more job creation in the U.S.A., and new sources (an export opportunity for other nations too).
j2t2 wrote: To think these same companies that engineer products here for production in China will be of higher quality causes me to think you have blinders on D..
The quality can’t be worse. It won’t bring back all jobs, but that is no reason to allow China to continue to steal, cheat, and block imports into China from other nations.

Besides, much of the stuff from China is low-quality and/or dangerous. Many thousands of recalls, and total number of recalled items made in China are in the many tens of millions.
A Canadian study published in September 2007 showed that while 95% of product recalls from 1988 to 2007 were from China.
I was slightly injured by a ladder in 2012 that failed, and a step-stool that failed in 2018. And I was taking a medication (Losartan) in 2018 that was made in China, which was recalled for containing dangerous toxic contaminants. My brother’s dog was killed by dog treats from China.
It’s crazy to be buying so much dangerous crap from China.
Who needs a war, when China can simply destroy other nations, who are stupid enough to keep buying their cheap, dangerous crap?

Posted by: d.a.n at May 19, 2019 9:44 AM
Comment #443609
Weary Willie wrote: We may have to fight trade wars with other countries, but we should also be fighting the war with the Fed by auditing it completely and opening up it’s operations to the light of day.
j2t2 wrote: We also complain about tariffs taxes like it’s going to drive us into the poor house, but we don’t give a whit about the ever increasing tax called inflation brought to us by the Federal Reserve.
We have more than enough taxes, and the tax system is regressive (i.e. taxes on wages are much higher than taxes on capital gains).
We don’t need more taxes, and the U.S. government already collects enough (about $3.4 Trillion in 2017).
What we need is spending cuts. Especially since the waste and fraud is in the hundreds of billions (possibly over $1 Trillion) per year. Medicare fraud and waste is about $70 Billion per year.

While incessant inflation is a huge problem, inflation in all other major nations is far worse, and that is why the U.S. Dollar is still the world reserve currency.

There is still a lot of room for improvement.
INFLATION(1914 to 2018):
+22.5%|=====================================================
+20.0%|==#==================================================
+17.5%|=##=============#====================================
+15.0%|=###============#====================================
+12.5%|=###============#================#===================
+10.0%|=###==========#=##============#==#===================
+07.5%|=###==========#=##============#=##===================
+05.0%|=###==========#=####=======##=####===##==============
+02.5%|=####======#==######=##########################=###=#
+00.0%|#####=====##=########################################
====Y|1 11 11 1 111 1 1 11 1 111 11 11 1 111 1 111 111 1 1 111 111 1 1122 2 2 22 2 22 2
====E|9 99 99 9 999 9 9 99 9 999 99 99 9 999 9 999 999 9 9 999 999 9 9900 0 0 00 0 00 0
====A|1 11 22 2 223 3 3 33 4 444 45 55 5 566 6 667 777 7 8 888 899 9 9900 0 0 01 1 11 1
====R|4 68 02 4 680 2 4 68 0 246 80 24 6 802 4 680 246 8 0 246 802 4 6802 4 6 80 2 46 8
-00.0%|====######==#=====#=#================================
-02.5%|====#=####==#=====#==================================
-05.0%|====#===##===========================================
-07.5%|====#===##===========================================
-10.0%|====#====#===========================================
-12.5%|====#================================================

1914: +01.00% Woodrow Wilson (WW1)
1915: +01.98% Woodrow Wilson (WW1)
1916: +12.62% Woodrow Wilson (WW1)
1917: +18.10% Woodrow Wilson (WW1)
1918: +20.44% Woodrow Wilson (WW1)
1919: +14.55% Woodrow Wilson
1920: +02.65% Woodrow Wilson
1921: -10.82% Warren G. Harding
1922: -02.31% Warren G. Harding
1923: +02.37% Warren G. Harding, Calvin Coolidge
1924: +00.00% Calvin Coolidge
1925: +03.47% Calvin Coolidge
1926: -01.12% Calvin Coolidge
1927: -02.26% Calvin Coolidge
1928: -01.16% Calvin Coolidge
1929: +00.58% Herbert Hoover (Great Depression)
1930: -06.40% Herbert Hoover (Great Depression)
1931: -09.32% Herbert Hoover (Great Depression)
1932: -10.27% Herbert Hoover (Great Depression)
1933: +00.76% Franklin D. Roosevelt (Great Depression)
1934: +01.52% Franklin D. Roosevelt (Great Depression)
1935: +02.99% Franklin D. Roosevelt (Great Depression)
1936: +01.45% Franklin D. Roosevelt (Great Depression)
1937: +02.86% Franklin D. Roosevelt (Great Depression)
1938: -02.78% Franklin D. Roosevelt (Great Depression)
1939: +00.00% Franklin D. Roosevelt (Great Depression)
1940: +00.71% Franklin D. Roosevelt
1941: +09.93% Franklin D. Roosevelt (WW2)
1942: +09.03% Franklin D. Roosevelt (WW2)
1943: +02.96% Franklin D. Roosevelt (WW2)
1944: +02.30% Franklin D. Roosevelt (WW2)
1945: +02.25% Franklin D. Roosevelt, Harry S. Truman (WW2)
1946: +18.13% Harry S. Truman
1947: +08.84% Harry S. Truman
1948: +02.99% Harry S. Truman
1949: -02.07% Harry S. Truman
1950: +05.93% Harry S. Truman
1951: +06.00% Harry S. Truman
1952: +00.75% Harry S. Truman
1953: +00.75% Dwight D. Eisenhower
1954: -00.74% Dwight D. Eisenhower
1955: +00.37% Dwight D. Eisenhower
1956: +02.99% Dwight D. Eisenhower
1957: +02.90% Dwight D. Eisenhower
1958: +01.76% Dwight D. Eisenhower
1959: +01.73% Dwight D. Eisenhower
1960: +01.36% Dwight D. Eisenhower
1961: +00.67% John F. Kennedy
1962: +01.33% John F. Kennedy
1963: +01.64% John F. Kennedy, Lyndon B. Jonson
1964: +00.97% Lyndon B. Jonson
1965: +01.92% Lyndon B. Jonson
1966: +03.46% Lyndon B. Jonson
1967: +03.04% Lyndon B. Jonson
1968: +04.72% Lyndon B. Jonson
1969: +06.20% Richard Nixon
1970: +05.57% Richard Nixon
1971: +03.27% Richard Nixon
1972: +03.41% Richard Nixon
1973: +08.71% Richard Nixon
1974: +12.34% Richard Nixon, Gerald Ford
1975: +06.94% Gerald Ford
1976: +04.86% Gerald Ford
1977: +06.70% Jimmy Carter
1978: +09.02% Jimmy Carter
1979: +13.29% Jimmy Carter
1980: +12.52% Jimmy Carter
1981: +08.92% Ronald Reagan
1982: +03.83% Ronald Reagan
1983: +03.79% Ronald Reagan
1984: +03.95% Ronald Reagan
1985: +03.80% Ronald Reagan
1986: +01.10% Ronald Reagan
1987: +04.43% Ronald Reagan
1988: +04.42% Ronald Reagan
1989: +04.65% George.H.W. Bush
1990: +06.11% George.H.W. Bush
1991: +03.06% George.H.W. Bush
1992: +02.90% George.H.W. Bush
1993: +02.75% Bill Clinton
1994: +02.67% Bill Clinton
1995: +02.54% Bill Clinton
1996: +03.32% Bill Clinton
1997: +01.70% Bill Clinton
1998: +01.61% Bill Clinton
1999: +02.68% Bill Clinton
2000: +03.39% Bill Clinton
2001: +01.55% George W. Bush
2002: +02.38% George W. Bush
2003: +01.88% George W. Bush
2004: +03.26% George W. Bush
2005: +03.42% George W. Bush
2006: +02.54% George W. Bush
2007: +04.08% George W. Bush
2008: +00.09% George W. Bush (recession)
2009: +02.72% Barack Obama
2010: +01.50% Barack Obama
2011: +02.96% Barack Obama
2012: +01.74% Barack Obama
2013: +02.13% Barack Obama
2014: +00.76% Barack Obama
2015: +00.73% Barack Obama
2016: +02.07% Barack Obama
2017: +02.11% Donald Trump
2018: +02.24% Donald Trump

So, as a result (as of SEP-2018):

    A 2018 dollar has a loss of value of 43% since 2000, 85% since 1990, 733% since 1960).
  • A 2015 dollar is now worth only 94 cents.
  • A 2010 dollar is now worth only 87 cents.
  • A 2000 dollar is now worth only 70 cents.\__30% loss of value
  • A 1990 dollar is now worth only 54 cents./
  • A 1980 dollar is now worth only 34 cents.\__113% loss of value
  • A 1970 dollar is now worth only 16 cents./
  • A 1960 dollar is now worth only 12 cents.
  • A 1950 dollar is now worth only 10 cents.\__40% loss of value
  • A 1940 dollar is now worth only 06 cents./
  • A 1933 dollar is now worth only 05 cents.\__25% loss of value
  • A 1913 dollar is now worth only 04 cents./

The only silver lining is that there are no other major currencies that are more stable, or more widely used.

As of 2017, the U.$. Dollar accounted for about 63% of world reserve currencies; the next most used currency is the EURO, which accounts for 20%, and then all the rest around the world account for the remaining 17% (combined); the U.S. Dollar has never fallen below 61% over the last 15 years; the Chinese Renminbi accounts for 1.23% .

So, while the U.$. Dollar is like a hooker on crank cocaine, most other currencies are like a hooker with AIDs, and on crank cocaine.

Posted by: d.a.n at May 19, 2019 10:00 AM
Comment #443614

China is a trade bully.

China should have never been allowed to join the WTO. They agreed to satisfy its trading partners demands that it open its economy to international competition.

China has reneged on nearly all the agreements it made to join the WTO.

Read some of the conditions and tell us if you believe the Chinese lived up to them.

http://news.bbc.co.uk/2/hi/business/1702241.stm

Posted by: Royal Flush at May 19, 2019 3:13 PM
Comment #443616

Royal, thanks for the article, in which China stated the following:

“Just like every member of the WTO, China will have to deliver on its commitments, and we will be watching this very carefully,” Pascal Lamy, the EU trade commissioner, said. Earlier this month, he visited Beijing again as part of a trade delegation.”
“As long as our market is open to the outside, the more economic growth we have and the better or the world,” China’s trade negotiator Long Yongtu told reporters.
Obviously, China reneged on their promises.
China has stolen and cheated for far too long.
The U.S. should make it a policy to automatically impose reciprocal tariff rates on ALL nation’s exports that are imported into the U.S.

And high tariffs should also be imposed on nations that steal, cheat, violate patents, and make a habit of placing high tariffs on imports into their nation (i.e. exports from other nations). Especially in the case of China, since much of the stuff from China is low-quality and/or dangerous. Many thousands of recalls, and total number of recalled items made in China are in the many tens of millions. A Canadian study published in September 2007 showed that while 95% of product recalls from 1988 to 2007 were from China. Who needs a war, when China can simply destroy other nations, who are stupid enough to keep buying their dangerous crap?

Also, all previous administrations and Congresses should be called out for being so stupid.

Posted by: d.a.n at May 19, 2019 4:28 PM
Comment #443635
Many will, when the playing field is level, and when companies realize that they are putting themselves out of business, when those companies’ technology is being pirated, copied, and stolen from them, and then replaced with China-owned corporations.

Do you really believe these companies don’t know they are being used by China? Come on D., it’s been common knowledge for years. I am not against Trump trying to use tariffs as a hammer to force China into playing fair. But lets be realistic on what we expect as an outcome from the tariff war. The same companies you think are innocents that are being abused by China are the same companies that chose to give away their technology and such so they could get a foothold into the China market. To think these corporations will come back here and build factories and hire Americans at a decent wage is a but much.

Also, all previous administrations and Congresses should be called out for being so stupid.

Why blame them. The WTO is the entity that should be held responsible for not enforcing the agreements made by China. To think this tariff war is a done deal and successful means to accomplish this is a gamble. Previous administration used trade deals and the WTO because of the risk in starting a tariff war. Remember it was the companies greed that caused them to enter the Chinese market and their stupidity that allowed China to steal and cheat.

Posted by: j2t2 at May 20, 2019 11:42 AM
Comment #443644

Yes, the WTO is culpable too, but so is Congress and previous administrations that allowed the stealing and cheating by China.

Still, China cannot be allowed to steal and cheat anymore.
With the trade difference ($539 Billion versus $120 Billion) of $409 Billion, China will suffer the most, and it will be their own fault.
The U.S. should have a policy of imposing reciprocal tariffs. China imposes high tariffs, so why shouldn’t the U.S.?
To be honest, I don’t have a lot of sympathy for corporations that outsourced and moved all of there operations to China (and elsewhere).
Also, again, does the U.S. need cheap junk from China?
much of the stuff from China is low-quality and/or dangerous. Many thousands of recalls, and total number of recalled items made in China are in the many tens of millions. A Canadian study published in September 2007 showed that while 95% of product recalls from 1988 to 2007 were from China.
Who needs to start a conventional war, when China can simply destroy other nations, who are stupid enough to keep buying their dangerous crap?

Posted by: d.a.n at May 20, 2019 3:35 PM
Comment #443648

“Remember it was the companies greed that caused them to enter the Chinese market and their stupidity that allowed China to steal and cheat.”

Apparently our Pal j2t2 does not understand why companies from many nations wish to do business in other countries. So Sad.

The WTO made an agreement with China and companies all over the world relied upon these agreements. j2t2 now wants to blame the companies “greed”, rather than the Chinese reneging.

Posted by: Royal Flush at May 20, 2019 4:37 PM
Comment #443655

Yes, High corporate taxes (i.e. 35%) encouraged companies to leave the U.S.

Lowering the corporate taxes encouraged many to return to the U.S.

Lowering the corporate tax rate from 35% to 21% was common-sense, and necessary, because the global average is about 21%, and anything higher simply motivates companies to leave the U.S. The corporate tax cut has already helped many companies, and has brought back many companies and money to the U.S.
Many corporations, money, and jobs ARE returning to the U.S. due to the reduction of the corporate tax from 35% to 21% (closer to the global average of 20%):

  • Apple is bringing back $38 Billion back to the U.S. after the tax overhaul.
    - Source: www.forbes.com/sites/kellyphillipserb/2018/01/17/apple-says-it-will-bring-cash-back-to-us-pay-38-billion-in-repatriation-tax/#62baf5592222
  • Insulet Corp.; Total jobs reshored: 1,500 jobs; States benefiting: Massachusetts; Industry: Biotechnology; Headquarters: Billerica, Massachusetts; Insulet Corporation manufactures insulin delivery systems. In 2017 the company announced it would be moving the production of its flagship product — the Omnipod, a tubeless, waterproof insulin pump — from China to a new facility in Acton, Massachusetts. Insulet cited the area’s skilled workforce and rising labor costs in China as reasons for the move. If Insulet meets earnings expectations for the next several years, the new facility could employ as many as 1,500 workers by 2021.
  • Element Electronics; Total jobs reshored: 1,500; States benefiting: Michigan, South Carolina; Industry: Consumer electronics; Headquarters: Winnsboro, South Carolina; In 2012, South Carolina-based consumer electronics manufacturer Element Electronics opened a new flat screen television factory in Detroit. The decision was based on a need to consolidate the company’s supply chain, and made Element one of the only companies to manufacture televisions in the U.S. Element also reshored production from China to Winnsboro, South Carolina with an initial $7.5 million investment in a new plant that is projected to lead to the creation of 500 jobs. The TV manufacturer cited Walmart’s pledge to buy $250 billion of U.S.-made products from 2013 to 2023 as a primary reason to relocate operations to the United States.
  • Gentex; Total jobs reshored: 1,600 jobs; States benefiting: Michigan; Industry: Motor vehicle parts; Headquarters: Zeeland, Michigan; Over the last several years, mirror manufacturer Gentex closed its two plants in China and Mexico in an effort to centralize production in Zeeland, Michigan. While labor was less expensive overseas, the move to consolidate all stages of production in one location is likely to reduce transportation costs and the risk of manufacturing error. According to the Reshoring Initiative, the company’s reshoring efforts since 2010 amount to a total of 1,600 jobs for U.S. workers.
  • Amgen; Total jobs reshored: 1,600; States benefiting: Rhode Island, TBD; Industry: Pharmaceuticals; Headquarters: Thousand Oaks, California; In a January 2018 meeting with President Donald Trump, Amgen CEO Robert Bradway announced that the firm was planning to add 1,600 manufacturing jobs in the U.S. The announcement came several years after the biopharma company cut approximately 15% of its workforce and closed two U.S. manufacturing facilities in 2014 as part of major cost-saving efforts. Most recently, Amgen announced in February 2018 that it would invest $300 million in a new U.S. biologics plant that would employ approximately 300 workers upon completion. An April 2018 recent press release from the company named West Greenwich, Rhode Island, as the site of the new facility.
  • Merck & Co.; Total jobs reshored: 1,633 jobs; States benefiting: New Jersey, TBD; Industry: Pharmaceuticals; Headquarters: Kenilworth, New Jersey; In July 2017, the White House announced that Merck, along with pharmaceutical manufacturers Pfizer and Corning, have committed to making a joint investment of at least $4 billion in pharmaceutical glass manufacturing in the U.S. The partnership will focus on the manufacturing of advanced pharmaceutical glass packing, a technology used in the storage of injectable drugs, as well as vials and cartridges, and is projected to lead to the direct hiring of 4,000 U.S. employees across the three companies. Merck also recently reshored approximately 300 jobs as part of its efforts to consolidate its overseas operations in the U.S. The company relocated the headquarters of its animal health division from Boxmeer, the Netherlands to its campus in Summit, New Jersey in 2013 as part of a larger restructuring effort.
  • SolarCity; Total jobs reshored: 1,900; States benefiting: New York; Industry: Energy production & storage; Headquarters: San Mateo, California; In 2014, SolarCity announced a deal with the State of New York that commits the company to invest approximately $5 billion over the next 10 years in return for a $750 million construction subsidy that is projected to create at least 1,900 jobs. The investment is focused around the construction of a new facility in South Buffalo. Without major government subsidies, domestic manufacturing of solar panels has largely been prohibitively expensive, as U.S. labor costs were too high compared to other countries. While the project stalled for several years as SolarCity reevaluated its timeframe and was taken over by Tesla, solar roof tile production began at the new factory in December 2017.
  • Polaris Industries; Total jobs reshored: 2,000; States benefiting: Alabama; Industry: Transportation equipment; Headquarters: Deerfield, Illinois; In January 2015, automotive manufacturer Polaris Industries announced plans to build a $142 million off-road vehicle plant in Huntsville, Alabama that will create an estimated 2,000 manufacturing jobs in the area. The move was likely prompted by the generous tax breaks offered by state and local governments. Polaris is projected to receive approximately $80 million in tax breaks from the city of Huntsville and state of Alabama upon completion and staffing of the facility. The announcement comes several years after the company was criticized for downsizing its plant in Osceola, Wisconsin and building a new facility in Monterrey, Mexico for approximately $150 million.
  • Caterpillar; Total jobs reshored: 2,100; States benefiting: Georgia, Illinois, Indiana, Texas; Industry: Construction & farm machinery; Headquarters: Peoria, Illinois; According to the Reshoring Initiative, over the last several years construction equipment manufacturer Caterpillar has announced reshoring projects that will target facilities in Georgia, Illinois, Indiana, and Texas, and will add or retain an estimated 2,100 U.S. manufacturing jobs. In 2012, Caterpillar opened a new facility in Victoria, Texas with an initial investment of $200 million in an effort to shift production of its hydraulic excavators from Akashi, Japan to the U.S. In August 2015, Caterpillar announced plans to expand employment at its Victoria facility, moving its vocational truck manufacturing operations from Mexico to the Texas location.
  • Whirlpool; Total jobs reshored: 2,165; States benefiting: Ohio; Industry: Electronics, electrical equipment; Headquarters: Benton Harbor, Michigan; Since 2010, Whirlpool has announced several efforts to consolidate its overseas operations within the U.S. that will add up to an estimated 2,165 reshored jobs for domestic manufacturing workers. Most recently, in January 2018 Whirlpool announced it would be adding 200 full-time employees to its facility in Clyde, Ohio. The news came shortly after the Trump Administration announced safeguard tariffs on large imported residential washing machines, a move projected to reduce import competition from Whirlpool rivals Samsung Electronics and LG Electronics.
  • General Electric; Total jobs reshored: 2,656; States benefiting: Alabama, Arkansas, Illinois, Kentucky, North Carolina, New York, Ohio
    Industry: Industrial machinery; Headquarters: Boston, Massachusetts; Since 2010, General Electric has announced domestic capital investments that are projected to add approximately 2,700 jobs to the U.S. manufacturing workforce. Much of the reshoring efforts are based around Appliance Park, a newly renovated production facility in Louisville, Kentucky, and shifting the production of bottom-mounted refrigerators and front-load washing machines from China and Mexico to the U.S. According to GE, reasons for the move include lower transportation costs, a more qualified workforce, and significant tax incentives by state and local governments.
  • Dow Chemical; Total jobs reshored: 2,900; States benefiting: Louisiana, Michigan, Texas; Industry: Chemicals; Headquarters: Midland, Michigan; In March 2015, Dow Chemical announced plans to invest $6 billion in its manufacturing plants in Texas and Louisiana in an effort to capitalize on lower domestic natural gas prices. According to a Dow executive, the increase in U.S. fracking activity has created significant investment prospects for chemical producers in the United States that will pay off in the next several years. The Gulf Coast reshoring effort is largely focused on the production of ethylene, propylene, and chemical derivatives used in packaging. The company’s reshoring efforts announced over the past several years are projected to retain or add approximately 2,900 manufacturing jobs to the U.S.
  • Intel; Total jobs reshored: 4,000; States benefiting: Arizona, California, Oregon; Industry: Semiconductors & other electronic components; Headquarters: Santa Clara, California; In 2011, Intel announced plans to hire 4,000 U.S. workers and build a $5 billion microprocessor plant in Chandler, Arizona. Known as Fab 42, the plant will use the 7-nanometer production process and is projected to be the most advanced, high-volume microprocessor plant in the world. While the facility was completed in 2013, its opening was stalled for several years. In February 2017, however, Intel announced plans to open the facility with a total investment of $7 billion and the direct hiring of 3,000 high-tech, high-wage workers. The tech giant projects the plant will be completed in the next two to three years, and will indirectly lead to the creation of roughly 10,000 jobs throughout Arizona.
  • Ford; Total jobs reshored: 4,200; States benefiting: Indiana, Illinois, Ohio, Michigan, New York; Industry: Motor vehicles & parts; Headquarters: Dearborn, Michigan; In January 2017, Ford announced plans to cancel the $1.6 billion expansion of its Mexico production facility, instead opting to expand operations at its Flat Rock, Michigan facility with a $700 million investment projected to create 700 jobs. Similar reshoring efforts by the U.S. auto giant have been announced over the past eight years, targeting facilities in Indiana, Illinois, Ohio, New York, and other parts of Michigan and totaling an estimated 4,200 new jobs for the domestic workforce. Like General Motors and Fiat Chrysler, Ford’s announcements were made amid pressure from the current administration to reduce investment overseas and increase capital investments in the U.S. manufacturing sector. While some analysts speculate the reshoring efforts are a response to the Trump administration’s push for domestic job creation, Ford representatives have noted that they were based on an initiative to expand its truck and S.U.V. model offerings for U.S. consumers, which was previously agreed to in a labor contract with the United Automobile Workers union.
  • Boeing; Total jobs reshored: 7,725; States benefiting: Missouri, Montana, South Carolina; Industry: Aerospace & defense; Headquarters: Chicago, Illinois;
    Over the past several years, Boeing has rapidly expanded its U.S. workforce at various manufacturing plants throughout the East Coast. Boeing began operations at a new plant in Charleston, South Carolina in 2011 that manufactures 787 Dreamliner planes. Boeing also recently moved parts of its production of the new 777X plane from overseas to its St. Louis facility. The first 777X is projected to be completed by December 2019. According to the Reshoring Initiative, since 2010 Boeing has announced plans to reshore approximately 8,000 jobs, the most of any U.S. company other than General Motors and Apple.
  • General Motors; Total jobs reshored: 12,988; States benefiting: Michigan, New York, Tennessee, Texas; Industry: Motor vehicles & parts; Headquarters: Detroit, Michigan; Over the past several years, General Motors has made several announcements regarding various reshoring efforts that will boost employment at its plants in Michigan, New York, Tennessee, and Texas. The largest announcement came January 2017, when GM made public its plans to add or retain 7,000 jobs in the U.S. over the next few years. One of the major reshoring projects will be the shifting of approximately 600 jobs from an axle production plant in Mexico to a new facility in Arlington, Texas. GM’s reshoring efforts announced since 2010 amount to roughly 13,000 jobs, the most of any U.S. company other than Apple.
  • Apple; Total jobs reshored: 22,200 jobs; States benefiting: Texas, TBD; Industry: Computers, office equipment; Headquarters: Cupertino, California; In January 2018, Apple announced plans to invest over $30 billion in capital expenditures in the U.S. over the next five years. As part of the investment, Apple is increasing its commitment to its Advanced Manufacturing Fund — used to invest in U.S. manufacturing companies and boost the domestic manufacturing sector — from $1 billion to $5 billion. The move is projected to create over 20,000 new jobs at Apple’s existing campuses and at a new office location which has yet to be announced. Apple’s job creation announcement comes amid criticism aimed at the company for its outsourcing of manufacturing jobs to China, and accusations that it has dodged U.S. taxes by keeping some $250 billion overseas. A March 2017 press release from Apple claims the company supports some 4.8 million jobs in China, compared to 2.0 million in the U.S.
  • SoftBank $50 Billion
  • Exxon $20 Billion
  • Hyundai $3.1 Billion
  • Bayer AG $8 Billion
  • Toyota $600 Million
  • LG $250 Million
  • Also, certain industries are integral to the security of the U.S.A (i.e. steel, aluminum, minerals, energy, food, technology, etc.). Several companies are bringing business and money back to the U.S.A.
  • Many companies have also cited Walmart’s pledge to buy $250 billion of American-made products between 2013 and 2023 as a primary reason for shifting operations to the United States. The pledge has reduced some of the risk of relocating production to the United States and has helped companies such as Element Electronics, which won a contract with Walmart shortly after opening a small flat-screen television plant in Michigan, make the decision to reshore.
  • Source: www.tcpalm.com/story/money/business/2018/06/28/manufacturers-bringing-most-jobs-back-to-america/36438051/
There are good reasons to return to the U.S.A., now that the corporate tax was lowered from 35% to 21% (nearer to the global average of about 20% for corporate taxes). A corporate tax rate of 35% was one of the highest corporate taxes in the world, and it was driving corporations and jobs out of the U.S. for decades.
Also, now is a good time to deal with Cnina’s stealing and cheating.

Posted by: d.a.n at May 20, 2019 7:51 PM
Comment #443698

Oh please D., the effective tax rates actually paid by these corporations were much lower than the 21% average before any tax cuts by Trump. Now the bigger corporations don’t pay income taxes.

The real factors in off shoring were lower wages, less safety regulations and lax environmental laws.

Posted by: j2t2 at May 21, 2019 4:39 PM
Comment #443700

“Now the bigger corporations don’t pay income taxes.”

Our Pal j2t2 falls for every Liberal lie circulating on the planet. I hate to pick on this poor guy but; some unsuspecting child might believe this big lie.

Please direct us to the legislation, or IRS regulation that exempts any for-profit corporation from paying taxes.

Or, just slink away to lick your wounds.

Posted by: Royal Flush at May 21, 2019 5:18 PM
Comment #443730

Federal tax revenues hit all-time highs in 2018, and created more jobs, due to the tax cuts.

The federal government collected $205 billion in corporate income taxes.

Corporate income taxes are a hidden tax on consumers.

Many corporations pay not tax, because the have no profits, because they pay out any corporate profits to their employees (who then pay income taxes). Either way, the income is taxed.

Posted by: d.a.n at May 22, 2019 9:33 AM
Comment #443737
Corporate income taxes are a hidden tax on consumers.

So are tariffs.

Our Pal j2t2 falls for every Liberal lie circulating on the planet. I hate to pick on this poor guy but; some unsuspecting child might believe this big lie.

Royal you wouldn’t recognize a big lie any more than you can recognize the truth. Your foolish comment is easily disproved by many sources, this is but one.

Posted by: j2t2 at May 22, 2019 12:38 PM
Comment #443801

j2t2, the tariffs are temporary, until China stops stealing and cheating, or until new markets are found.

IF China wants to play hard ball, then that’s fine, because they will lose, since the U.S. buys $539 Billion per year from China, and China sells only $120 Billion per year (about one fifth).

j2t2, Do you want to let China continue to cheat and steal? What is your solution? More whining?

Posted by: d.a.n at May 23, 2019 2:28 PM
Comment #443803

CORRECTION: and China sells [buys] only $120 Billion per year (about one fifth).

Posted by: d.a.n at May 23, 2019 3:00 PM
Comment #443804

By the way, it would not be surprising IF China lowers some prices to account for some of the tariffs. They can do that, or lose uo to $539 Billion per year in sales.

Posted by: d.a.n at May 23, 2019 3:02 PM
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