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What is really going on with china trade talks?
Posted on 5/6/19 at 3:07 am
Posted on 5/6/19 at 3:07 am
The US says they are optimistic a deal will close this week. chini says not so fast. Then rocket man suddenly sends off three missiles. Then Trump, rather than threatening NK sends a tweet about what a great economic future they can have? Then immediately announces he is taking existing tariffs to 25% and throwing another 350 billion into the fray.
Overnight Shanghai market dropped over 5.5% and Hong Kong more than 3, and chini is saying they may not attend the last meeting scheduled for Wednesday, if that happens the additional tariffs will kick in Friday.
I think its an issue with the enforcement of IP theft. Trump has stopped chini students from advanced studies in the US universities in sensitive areas. He has blocked the sale of any sensitive companies. He has also gotten them to agree to the ending of JVs with tech transfer in chini, but thats just a small piece of the theft, the majority is still out there. We did not have US military joint ventures in chini yet their aircraft carriers, new fighter jets, and missile tech are all scaringly similar to ours, wonder how that happened?
He wants unilateral punishment immediately for theft not going through some toothless WTO or UN council, and it scares them to death. And why shouldnt it. Their economy is closer to 10 trillion and probably now growing at most 3%. They are stealing 400 billion a year, you take that away and that is one scary proposal.
So what to do? Show them what their world looks like with 600 billion in trade with tariffs. And its not just us, the EU is just waiting, as usual, for the US to show them the way and they will also demand reforms.
With what Trump has proposed, the dollar value of the tariffs moves from 32.5 billion to 150 billion on paper, there are a lot of loopholes still). In the words of Gordon Solie, thats one devastating blow to the solar plexus.
They will bend or the tariffs will be put in place, Trump aint bluffing.
Overnight Shanghai market dropped over 5.5% and Hong Kong more than 3, and chini is saying they may not attend the last meeting scheduled for Wednesday, if that happens the additional tariffs will kick in Friday.
I think its an issue with the enforcement of IP theft. Trump has stopped chini students from advanced studies in the US universities in sensitive areas. He has blocked the sale of any sensitive companies. He has also gotten them to agree to the ending of JVs with tech transfer in chini, but thats just a small piece of the theft, the majority is still out there. We did not have US military joint ventures in chini yet their aircraft carriers, new fighter jets, and missile tech are all scaringly similar to ours, wonder how that happened?
He wants unilateral punishment immediately for theft not going through some toothless WTO or UN council, and it scares them to death. And why shouldnt it. Their economy is closer to 10 trillion and probably now growing at most 3%. They are stealing 400 billion a year, you take that away and that is one scary proposal.
So what to do? Show them what their world looks like with 600 billion in trade with tariffs. And its not just us, the EU is just waiting, as usual, for the US to show them the way and they will also demand reforms.
With what Trump has proposed, the dollar value of the tariffs moves from 32.5 billion to 150 billion on paper, there are a lot of loopholes still). In the words of Gordon Solie, thats one devastating blow to the solar plexus.
They will bend or the tariffs will be put in place, Trump aint bluffing.
3
Posted on 5/6/19 at 4:01 am to trinidadtiger
quote:
What is really going on with china trade talks?
futures down minus 500 at 5am estPosted on 5/6/19 at 4:22 am to skinny domino
I see the renminbi offshore dropped 1.3% as well, many anticipating Xi will let it float rather than controlling it in a certain range.
The scary thing there is the impact it will have on the domestic market, there is already a lot of unrest in chini, this will just spook what little consumer spending there was back under the mattress. And also increase their borrowing cost, all those belt and road projects are in USdollars, with debt at 300% of GDP the last thing you need is a rate hike on the notes.
The chinese floated the equivalent of a 12% increase in loans, vs the total of last year, in the first quarter of the year, and reduced the reserve rates of banks for the fifth time in a year, and reduced VAT tax. You dont do all that if the economy is growing at 6%.
Nearly quintupling the tariff amount is gonna leave a mark, and I say again Trump aint bluffing.
Update, they just announced they will reduce the reserve rate for small and medium banks mid May , floating another 42 billion US into the money supply.
The scary thing there is the impact it will have on the domestic market, there is already a lot of unrest in chini, this will just spook what little consumer spending there was back under the mattress. And also increase their borrowing cost, all those belt and road projects are in USdollars, with debt at 300% of GDP the last thing you need is a rate hike on the notes.
The chinese floated the equivalent of a 12% increase in loans, vs the total of last year, in the first quarter of the year, and reduced the reserve rates of banks for the fifth time in a year, and reduced VAT tax. You dont do all that if the economy is growing at 6%.
Nearly quintupling the tariff amount is gonna leave a mark, and I say again Trump aint bluffing.
Update, they just announced they will reduce the reserve rate for small and medium banks mid May , floating another 42 billion US into the money supply.
This post was edited on 5/6/19 at 4:33 am
Posted on 5/6/19 at 7:22 am to trinidadtiger
Has anyone seen IBchinaman lately? A little worried about him being on a ledge on a high building somewhere.
Posted on 5/6/19 at 7:28 am to trinidadtiger
Doesn't take a genius to hear about the return of rocketman and realize we don't have a China deal yet.
We might never have a deal with China, and just end up divorced from them.
We might never have a deal with China, and just end up divorced from them.
Posted on 5/6/19 at 7:28 am to trinidadtiger
I just keep wondering when the shoe will drop. The credit crunch in China is 1000% worse than it was here in 08. They dont have mark to market to worry about but I feel like all those bills will come due eventually. Whats going to happen when the folks in the interior of China realize the paychecks arent coming through?
Also, where is Lighthizer in all of this? Haven't heard much which makes me think he's telling Trump to go for the kill.
Also, where is Lighthizer in all of this? Haven't heard much which makes me think he's telling Trump to go for the kill.
Posted on 5/6/19 at 7:32 am to Mid Iowa Tiger
quote:were not that lucky. He’s still here spewing his propaganda about how we should just grab our ankles and take it from the tiny dick chicoms
as anyone seen IBchinaman lately? A little worried about him being on a ledge on a high building somewhere.
Posted on 5/6/19 at 7:34 am to UnitedFruitCompany
When you are the world's largest economy and the global reserve currency, you flex your muscles to stay on top.
Plenty of other 3rd world countries to take over China's business if they don't bend the knee.
Plenty of other 3rd world countries to take over China's business if they don't bend the knee.
Posted on 5/6/19 at 7:47 am to trinidadtiger
China gets backed into a corner and offloads US debt. This finally causes legislators to view the debt in a different light. Less government spending; more personal responsibility. My three and a half cents worth.
Your post is solid.
Your post is solid.
This post was edited on 5/6/19 at 7:55 am
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