The Trump Presidency – 2016

[Edward64]

Originally Posted by Atocep

Trump's Former Chief Economic Adviser Says China Trade War Has Backfired: 'Everyone Loses'

Got to think positive and believe. Play Stellaris vs Civ 6

Hopefully 2 bullies go mano-mano and we'll see what happens.

I'm thinking there are 2 basic camps here.

1) China is not really an economic threat or China may be a threat but don't care
2) China is an economic threat and we should do what we can to stop/blunt them and willing to undergo pain (admittedly some more than others)

I'm more of #2.

Fortune article that for some reason doesn't link properly:

In a poll released by the American Chamber of Commerce (AmCham) and its counterpart in Shanghai last month, roughly 40% of 250 surveyed firms said they were “considering or have relocated manufacturing facilities outside of China.” In a similar AmCham survey last September, only 30% said they were considering partial relocation. However, the exit can’t all be chalked up to the trade war.

“Businesses moving supply chains out of China long predates the current trade dispute,” says Hannah Anderson, global market strategist at J.P. Morgan Asset Management. “Higher tariffs might have accelerated some of those plans that were already in place, which is certainly something that I’m seeing and hearing when I talk to CEOs, but very few companies hadn’t thought that far ahead already.”

Rising labor costs have been driving factory emigration from China since long before Washington’s tariffs were a factor. Minimum hourly wages in the major factory hubs of Guangdong province rose from Rmb4.12 in 2008 to Rmb14.4 ($2.00) last year. Manufacturers, particularly low value-added ones like textile factories, have sought even cheaper labor in Southeast Asian countries, like Vietnam and Malaysia.

https://www.scmp.com/economy/china-e...ing-china-just

Even as Trump and Chinese President Xi Jinping meet this week to discuss trade tensions, companies in the US and China aren’t waiting to see if they call a detente.

Companies with thousands of factories in China are now racing to relocate out of the mainland, which seemed the only practical solution to avoid losses from higher tariffs that could be in effect in a little more than a month.
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Trump’s trade war is the result of building frustration with China’s practice of forcing US companies to hand over valuable technology and intellectual property to do business there.

Some of Trump’s most hawkish advisers, and even the president himself, view the struggle as a long-term fight against China’s ascent as an economic power.

“If your conclusion is that China taking over all of our technology and the future of our children is a stupid fight, then you are right, we should capitulate,” US trade representative Robert Lighthizer fired back during a heated Senate hearing earlier this year.

[Edward64]

Another article.

FWIW, let me clearly say I support Trump's confrontation with China. However, I acknowledge it may not result in a "win". But better than doing nothing.

For those that say TPP would have worked better, possibly but remember that Bernie and Hillary were against it also.

Bloomberg - Are you a robot?

So what has been the effect of the U.S.’s shift toward protectionism? So far, the evidence suggests economic gains remain elusive. If the trade war has won anything, it’s only in the more nebulous spheres of geopolitics and ideology.
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One thing the tariffs have done is to raise prices for U.S. consumers. Multiple economic studies have concluded that essentially all of the increased revenue from the tariffs, such as it is, has come out of Americans’ pockets.

So in economic terms, Trump’s trade war has been a loss on every front. But as my Bloomberg Opinion colleague Tyler Cowen points out, trade wars also are about geopolitical dominance and national security. Though U.S. consumers have borne the monetary cost of the tariffs, they may have hurt China even more. China’s growth, which had already slowed since the early 2010s, shows recent signs of further slowing. Manufacturing investment in that country is down sharply since the trade war started in mid-2018:
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In parallel with Trump’s tariffs, the U.S. has been waging a different sort of trade war against China aimed at reducing Chinese dominance in cutting-edge technology industries. The weapons in this second trade war include restrictions on the export of key technology products to Chinese companies and limitations on Chinese investment in the U.S. tech industry. The swift and devastating impact of export restrictions on China’s Huawei Technologies Co. shows the effectiveness of these weapons.
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In the long term, the trade war’s most important impact may be ideological. A psychological dam has broken, and what used to be a comfortable elite consensus in favor of free trade is swinging strongly in the opposite direction. On the left, presidential candidate Elizabeth Warren now champions a weaker dollar and expanded government assistance to U.S. exporters, as well as a much cagier attitude toward future trade deals. On the right, intellectuals are warming to the idea of government intervention on behalf of key industries.

I pretty much knew the above but the last paragraph was new to me. Hadn't really thought about that and only time will tell how it will work out.

[JPhillips]

And Will Hurd announced he will not seek re-election.

[miami_fan]

U.S. preparing to withdraw thousands of troops from Afghanistan in initial deal with Taliban

1.It is acceptable now to negotiate and make deals with the Taliban?

2. I thought that withdrawal of troops in Afghanistan before we "won the war" was a betrayal to those that fought and/or died in Afghanistan. That is no longer the case?

smh

[JPhillips]

Originally Posted by Edward64

Another article.

FWIW, let me clearly say I support Trump's confrontation with China. However, I acknowledge it may not result in a "win". But better than doing nothing.

I don't understand this at all. It's quite possible both sides lose, that's where we're headed at the moment. Why would that be better than the old status quo?

And a new "consensus" against free trade would be a disaster.

[Edward64]

Originally Posted by JPhillips

I don't understand this at all. It's quite possible both sides lose, that's where we're headed at the moment. Why would that be better than the old status quo?

Yes, both sides could lose. But one side will lose more than the other.

Its better than the old status quo because we were losing the status quo. Why not stop, blunt or reverse that trend?

[JPhillips]

If we're poorer than we would have been, how is that better, regardless of what happens to China?

[Atocep]

Originally Posted by Edward64

Yes, both sides could lose. But one side will lose more than the other.

Its better than the old status quo because we were losing the status quo. Why not stop, blunt or reverse that trend?

Right now it's trending toward us being the side that loses more.

Regardless of which side loses more though, if we're inflicting self harm in the process what are we gaining? People losing their homes and businesses so that China's economy isn't growing as fast?

The fact that we're doing damage to ourselves and pushing forward on this in the hope that at some point a miracle happens and we can spin this is as a win is a recipe for disaster.

[Edward64]

Originally Posted by JPhillips

If we're poorer than we would have been, how is that better, regardless of what happens to China?

Not sure I understand?

Using zero sum as an example, there is a pie. If China takes more of the pie, there is less of the pie for the US.

No, I don't believe its a pure zero sum game. But hopefully that illustrates why "what happens to/in China" matters to the US.

[Atocep]

Originally Posted by Edward64

Not sure I understand?

Using zero sum as an example, there is a pie. If China takes more of the pie, there is less of the pie for the US.

No, I don't believe its a pure zero sum game. But hopefully that illustrates why "what happens to/in China" matters to the US.

We're both losing. That means less of the pie for china, less of the pie for us, and more of the pie for Mexico, South America, and South Korea among others.

[Edward64]

Originally Posted by Atocep

We're both losing. That means less of the pie for china, less of the pie for us, and more of the pie for Mexico, South America, and South Korea among others.

Let’s focus on the big one, China.

Sure let help the other smaller economies and we’ll worry about them if they become a big threat.

The question is: can we win or can we lose less than China relatively speaking e.g. China is losing 1 slice vs us losing .5.

[Edward64]

Originally Posted by Atocep

Right now it's trending toward us being the side that loses more.

Regardless of which side loses more though, if we're inflicting self harm in the process what are we gaining? People losing their homes and businesses so that China's economy isn't growing as fast?

The fact that we're doing damage to ourselves and pushing forward on this in the hope that at some point a miracle happens and we can spin this is as a win is a recipe for disaster.

I would like to read your source. I’m thinking it’s too early to tell.

Re: self harm, what economic or trade policy doesn’t do some self harm to a certain portion of the population?

[JPhillips]

As Atocep pointed out, your reasoning assumes the pie is only divided by two parties and that the pie is fixed in size. Neither of those assumptions are correct. We can both get richer, while everyone else gets richer, too. We can both get poorer, while everyone else gets poorer, too. Choosing to follow a policy that hurts us, but maybe hurts China more seems crazy to me.

[Edward64]

Originally Posted by JPhillips

As Atocep pointed out, your reasoning assumes the pie is only divided by two parties and that the pie is fixed in size. Neither of those assumptions are correct. We can both get richer, while everyone else gets richer, too. We can both get poorer, while everyone else gets poorer, too. Choosing to follow a policy that hurts us, but maybe hurts China more seems crazy to me.

The zero sum pie example was just illustrative as I mentioned in my above post. I used it because I didn’t understand your comment and thought a simplified example would help.

See my other post on ‘hurts us’.

[JPhillips]

Trump tonight said that AIDS and childhood cancer will be cured shortly. That should be a big boost to the re-election campaign.

[JPhillips]

Originally Posted by Edward64

The zero sum pie example was just illustrative as I mentioned in my above post. I used it because I didn’t understand your comment and thought a simplified example would help.

See my other post on ‘hurts us’.

If China takes more and the pie gets bigger so that we also take more, we don't lose. We don't worry about France getting richer or Germany getting richer, why do we care if China gets richer? If we're growing, the outcome for China doesn't matter.

There are specific issues that I think should be pursued, IMO we're being shamefully negligent not fighting to end the Uighur concentration camps, but it's a losing game to base winning on whether or not China has less than they did previously.

[RainMaker]

Originally Posted by Edward64

Using zero sum as an example, there is a pie. If China takes more of the pie, there is less of the pie for the US.

This is not how it works. Global economics is not a zero-sum game.

Why dump capitalism for mercantilism when we have so much evidence showing the impact on economies?

[Edward64]

Originally Posted by RainMaker

This is not how it works. Global economics is not a zero-sum game.

Why dump capitalism for mercantilism when we have so much evidence showing the impact on economies?

I understand, please reread #18280 and how I qualified my statement.

[JPhillips]

Originally Posted by Edward64

I understand, please reread #18280 and how I qualified my statement.

But you stated that when China gets more, we get less. That's not accurate and the current trade war illustrates that. China has gotten poorer relative to how things were going before the trade war, but the U.S. has also gotten poorer relative to where things were going.

[Atocep]

Originally Posted by Edward64

I would like to read your source. I’m thinking it’s too early to tell.

Re: self harm, what economic or trade policy doesn’t do some self harm to a certain portion of the population?

Straight from the article I posted above:

"I don't really think it's hitting the Chinese economy. I think the Chinese economy is driven by credit and credit availability," Cohn, who believes in free trade and is opposed to the Trump administration's protectionism, told BBC News.

"Credit and credit availability is determined by the central government. The central government owns the credit availability mechanism and network in China, and they can turn credit on and they can turn credit off.

"I think the trade war with the United States was a very convenient excuse for the Chinese to slow down their economy when they needed to slow down an overheated economy where prices, and real estate prices, and everything were getting out of hand."

Originally Posted by Edward64

Re: self harm, what economic or trade policy doesn’t do some self harm to a certain portion of the population?

This is like saying stubbing your toe and cutting your leg off are the same thing.

[bbgunn]

It’s kind of like saying, “Let me put my eye out so that China gets two limbs amputated.” Is hurting China worth that?

[RainMaker]

Also we're losing pretty bad in this trade war. It's just not as evident because we're subsidizing it with debt.

[Thomkal]

Originally Posted by JPhillips

Trump tonight said that AIDS and childhood cancer will be cured shortly. That should be a big boost to the re-election campaign.

Of course he cut funding to both areas earlier this year and is perhaps the most anti-science President we've ever had, but I keep forgetting he's a God.

[thesloppy]

I have a high-school friend who is a particle physicist and runs a particle collider, and he and his wife (who is also a particle physicist) left to go teach in the UK a long time ago because of GOP policies cutting grants and school/research funding during the Bush years. Ironic considering all the 'concern' about bringing in quality foreigners when their policies are actively driving out bright American minds.

[Edward64]

Originally Posted by Atocep

Straight from the article I posted above:

I'll stick with my articles as its got more facts whereas your article is more opinion. I'm not saying yours is wrong (e.g. trending the US is losing), it may very well be right but also note my article said its not just about trade/economy, its also about "geopolitical dominance and national security".

What I'm saying is it's too soon to tell overall who is trending winning vs losing.

Originally Posted by Atocep

This is like saying stubbing your toe and cutting your leg off are the same thing.

This response is to my:

Re: self harm, what economic or trade policy doesn’t do some self harm to a certain portion of the population?

I'm not really sure how this example is relevant to my counter that any economic policy is sure to hurt a certain population of people. Can't make everyone happy. Care to elaborate?

[Edward64]

Originally Posted by bbgunn

It’s kind of like saying, “Let me put my eye out so that China gets two limbs amputated.” Is hurting China worth that?

How about this analogy ...

A new bully comes into town and is beating up the former bully (who, admittedly, isn't all innocent himself but not sure that is relevant). The new bully uses a shotgun with birdshot (can hurt but not lethal) and steal food, water, money, and high-end stuff from the former bully's house.

The former bully hasn't been doing much other than verbal complaints but now has decided to buy a shotgun with birdshot also. The 2 bullies are now shooting each other with birdshot and it does hurt.

There's a bunch of neighbors in the cul-de-sac waiting to see who ultimately wins or backs down. They are important because whoever wins will get invited to neighborhood parties, get baked pies, get the pretty daughter etc.

Should the 2 bullies calm down and live peacefully? Sure. But its hard to do when the new bully is pushing around and stealing stuff from the former bully.

Is it worth it for the former bully to fight back. Yes because he wants the stealing to stop and wants the baked pies and pretty daughter.

[Edward64]

Originally Posted by JPhillips

But you stated that when China gets more, we get less. That's not accurate and the current trade war illustrates that. China has gotten poorer relative to how things were going before the trade war, but the U.S. has also gotten poorer relative to where things were going.

I am saying that when China gets more, the US will get less relatively speaking (e.g. as a % of the pie which we all agree is growing some).

In your example, I think you are saying both are growing bigger relative to where each individually were before. This is obviously important.

However, it is also important who is growing faster or losing less relative to each other because there is an advantage to being the big dog in the neighborhood and getting the baked pies and pretty daughter.

[RainMaker]

What concession do you want from China? One that is worth hurting our economy and running up our deficit.

[Edward64]

Originally Posted by RainMaker

Also we're losing pretty bad in this trade war. It's just not as evident because we're subsidizing it with debt.

Possibly.

I hold out hope that Trump's trade strategy continues to encourage manufacturing to move out of China into other lower cost countries, puts pressure on China's stock market (still way below its high vs the US stock market doing very well), pops the real estate bubble, and ultimately causes a Japanese like lost decade (or two).

On the other hand, China could still continue to cook the books and hold out (e.g. they practically have a Premier for life) until there is a more less confrontational President in the White House in 1.5 years.

[Edward64]

Originally Posted by RainMaker

What concession do you want from China?

Good question. Just came back from a torturous travel day. I'll put some thought (vs just winging it and/or writing up some corny "baked pies" and "pretty daughter" analogy) and come up with comprehensive response later.

Originally Posted by RainMaker

One that is worth hurting our economy and running up our deficit.

Thinking long term, strategically (e.g. factoring in "geopolitical dominance and national security"), absolutely worth hurting our economy now assuming we "win". If we lose this fight, then obviously not worth it.

I am not sure how this trade war/tariffs is running up our deficit? Do you mean deficit or trade deficit?

[RainMaker]

Why do you wish ill on other people? Why is it so important to see another country's economy fail and their people hurt by it? So much so you'd be willing to hurt your own country to see it happen. Seems a bit sadistic.

[Edward64]

Originally Posted by RainMaker

Why do you wish ill on other people? Why is it so important to see another country's economy fail and their people hurt by it? So much so you'd be willing to hurt your own country to see it happen. Seems a bit sadistic.

Do you believe China wishes ill on us?

[RainMaker]

Originally Posted by Edward64

Do you believe China wishes ill on us?

No, we're their biggest trade partner.

[RainMaker]

Originally Posted by Edward64

Thinking long term, strategically (e.g. factoring in "geopolitical dominance and national security"), absolutely worth hurting our economy now assuming we "win". If we lose this fight, then obviously not worth it.

I am not sure how this trade war/tariffs is running up our deficit? Do you mean deficit or trade deficit?

This isn't a video game where one side wins and the other loses. It's just not how economics works. If it's about national security, you want to have a good trade. You don't start a war with a country your economy is intertwined with.

As for our deficit, we are handing out billions of welfare to the agricultural industry for this. Doesn't seem realistic to continue to cover for the losses in industries that are hurt by this through more debt.

[NobodyHere]

Originally Posted by RainMaker

Also we're losing pretty bad in this trade war. It's just not as evident because we're subsidizing it with debt.

We were running up the debt before the trade war.

[Edward64]

Originally Posted by RainMaker

No, we're their biggest trade partner.

It's not mutually exclusive.

"Wishes ill" is a nebulous phrase and I can see where it is subject to many different interpretations. It's not like Iran that wishes us ill but if you do not believe China is looking to dominate us economically, geopolitically, militarily etc. then that is the root of our differences. Without this common baseline belief, we are never going to agree much re: China.

This isn't a video game where one side wins and the other loses. It's just not how economics works. If it's about national security, you want to have a good trade. You don't start a war with a country your economy is intertwined with.

Maybe not a video game but it is about one side wins and the other loses. In economics, in geopolitical influence, in national security etc. over the long run.

As for our deficit, we are handing out billions of welfare to the agricultural industry for this. Doesn't seem realistic to continue to cover for the losses in industries that are hurt by this through more debt.

FWIW, its $8.4B through April 2019 for farmers so far. In 2018, we've raised $69B in revenue with the tariffs but hurt GDP. Don't know all the calculus and not sure what the conclusion is but thought it was interesting nos.

Is the short term loss and hit to the US economy worth it if we "win". Yes

Is the short term (and guess long-term also in this scenario) loss and hit to the US economy worth it if we don't "win". No

USDA Bailout for Impact of Trump’s Tariffs Goes to Biggest, Richest Farmers | EWG

EWG today released updated data on payments made through the first two rounds of the Market Facilitation Program, or MFP. Through April, total MFP payments for 2018-19 were $8.4 billion. The data was obtained from the USDA through a Freedom of Information Act request and has now been added to EWG’s online

https://taxfoundation.org/tariffs-trade/

Table 1: Impact of Trump Administration Imposed Tariffs
Source: Tax Foundation Taxes and Growth Model, April 2018
Tariff Revenue (Billions of 2018 Dollars)
$69.33
Long-run GDP
-0.20%
GDP (Billions of 2018 Dollars)
-$50.31
Wages
-0.13%
FTE Jobs
-155,878

[ISiddiqui]

There was a very good plan for dealing with China that didn't hurt the US economy as well (in fact would have helped it as free trade always does). It was called the Trans Pacific Partnership - creating a large Asian free trade zone that purposely excluded China.

Sent from my SM-G955U using Tapatalk

[ISiddiqui]

Originally Posted by Edward64

In 2018, we've raised $69B in revenue with the tariffs but hurt GDP.

Goes hand in hand. The people paying the tarriff revenue are US importers, who will pass that cost onto consumers. It's basically a tax on American companies who import certain items from China.

[QuikSand]

Narrator voice: this policy was in legislation, championed by Senator McCain, and signed into law by President Obama

I hate this man. I might hate even more that stuff like this is effective.

[JPhillips]

At least he made up for it by joking about Elijah Cummings' home being broken into.

[Edward64]

Originally Posted by ISiddiqui

There was a very good plan for dealing with China that didn't hurt the US economy as well (in fact would have helped it as free trade always does). It was called the Trans Pacific Partnership - creating a large Asian free trade zone that purposely excluded China.

I was all for it and do wish we gave it a chance. But it is what it is and we are where we are - its Trump's way or wait till 2021.

To be fair though, Bernie and Hillary did not support TPP either (Hillary more so for political reasons I think) so they thought it would hurt the US economy/competitiveness.

[JPhillips]

Or his love tweets to Kim this morning.

[ISiddiqui]

Originally Posted by Edward64

I was all for it and do wish we gave it a chance. But it is what it is and we are where we are - its Trump's way or wait till 2021.

To be fair though, Bernie and Hillary did not support TPP either (Hillary more so for political reasons I think) so they thought it would hurt the US economy/competitiveness.

Who cares what Bernie or Hillary thought about it? Neither of them would have engaged in a trade war with China, which is an infinitely worse way of dealing with the situation.

I'd rather wait until 2021 rather than engage in a horrible trade war. I have very little room for protectionists (this includes Bernie - I have hope that Warren or Harris trends to free trade but with slightly more worker/child protections).

[NobodyHere]

Originally Posted by Edward64

I was all for it and do wish we gave it a chance. But it is what it is and we are where we are - its Trump's way or wait till 2021.

To be fair though, Bernie and Hillary did not support TPP either (Hillary more so for political reasons I think) so they thought it would hurt the US economy/competitiveness.

Hillary called the TPP the "gold standard". That is, until she started running for president and the TPP didn't poll well.

[Thomkal]

Trump pulls nomination of Ratcliffe as Director of National Intelligence blaming the "LameStream Media" for treating him unfairly and having to undergo months of slander and libel and he explained to Ratcliffe how miserable it would be for he and his family to have deal with that-so he's staying in Congress.

[PilotMan]

Originally Posted by Thomkal

Trump pulls nomination of Ratcliffe as Director of National Intelligence blaming the "LameStream Media" for treating him unfairly and having to undergo months of slander and libel and he explained to Ratcliffe how miserable it would be for he and his family to have deal with that-so he's staying in Congress.

Imagine if you had to go through that for over 30 years and then you ran for president!

[RainMaker]

Hurd would have actually made a good DNI (and has had his name thrown around for some time now). I think both Democrats and Republicans like him. Sad to see him get so disillusioned.

[Edward64]

The first culling happening soon

https://www.cnn.com/2019/08/02/polit...ers/index.html

Eight candidates have qualified for the debates in September: 10 candidates on the fundraising side and eight on the polling side. Candidates need to reach both to be on the stage.

Candidates who have qualified for the September debates in both polling and fundraising:

Former Vice President Joe Biden
New Jersey Sen. Cory Booker
Mayor Pete Buttigieg
California Sen. Kamala Harris
Minnesota Sen. Amy Klobuchar
Former Rep. Beto O'Rourke
Vermont Sen. Bernie Sanders
Massachusetts Sen. Elizabeth Warren

There are now 10 Democrats who say they received contributions from at least 130,000 individuals, coming from at least 400 unique donors in 20 or more states.

Businessman Andrew Yang and former Secretary of Housing and Urban Development Julián Castro have reached their fundraising threshold, but still need to hit their polling minimum to qualify, with having received three of their four necessary polls. Billionaire Tom Steyer has two qualifying polls, and former Colorado Governor John Hickenlooper and Hawaii Rep. Tulsi Gabbard each have one. All other candidates haven't reached above 2% in any qualifying polls.

[JPhillips]

Originally Posted by RainMaker

Hurd would have actually made a good DNI (and has had his name thrown around for some time now). I think both Democrats and Republicans like him. Sad to see him get so disillusioned.

Trump's WH has kept a list of everyone they think has been mean or disrespectful. There's no way Trump would nominate Hurd for anything, especially since they seem to be looking for a sycophant.

But, you're right, he'd probably be good and he'd sail through confirmation.

[Edward64]

Originally Posted by ISiddiqui

Who cares what Bernie or Hillary thought about it? Neither of them would have engaged in a trade war with China, which is an infinitely worse way of dealing with the situation.

Just goes to show there was wide support against it - from the socialist left, to the moderate left and to the crazy Trump right.

There's not much from the Dem candidates on China so far (other than for Biden's misguided comment). Looking forward to hear the different strategies.