* Certain sectors of US industries are being disproportionately harmed by the trade war: steel, agriculture, and similar.
* Other sectors of US industries, such as service and retail, are less affected, and are posting strong numbers. This, along with a tight job market, point to a generally strong economy even if specific industries are suffering.
* China is difficult to understand due to the government being known for opacity in their finances. Therefore, we can generally only speculate on second or third order effects of trends, eg. what does the currency floating mean? It means China is shifting financial strategies for X or Y. But we have no idea the X or Y reasoning, only speculations of possible reasons.
* There are several indicators of a recession coming on, including significant day-to-day dips and yield curve inversions and slowdowns in other regions like Europe. However, recessions can't be known until the numbers come out and womp womp we're in one.
The good news is that the labor force is at record highs. IOW were as close to full employment as we have ever been.
The bad news is there's no where to go but down.
With successive globalization more and more nations got interconnected with multiple layers of mutual import/export of raw material, parts or finished goods and services. If its made in USA or China does not mean it's completely made in USA or China, the components or raw material for it might come from multiple nations. This trade tariffs and war is taking us to old century where we had closed borders and middle man charge a premium to get products and services in and out.
Eventually it will be a loss for everyone not just for any specific nation.
I feel like there is too much misinformation out there for any person to be informed these days. Any effort to wade through that should be a currency worth more than gold in my mind, and easily sharable, reference-able, tamper-proof (immutable/signed/etc), and easily remembered.
Information is tough these days. We need to find ways to adapt, because misinformation seems to be winning by leagues.
Industrialist cashing out their factories and running for good life in America not because they can't make sale now, but because they have an expectation of "hard times to come" (even if such are nowhere to be genuinely seen.)
Typical macroeconomic indicators often don't result in undisputed broad characteristizations of conditions (good, bad, teetering on the edge of recession), and, even moreso, don't tell you how they would be different if you changed a particular factor (e.g., the trade war.)
It's not clear to me that is the case as much as the recession was a long time in coming anyway.
Economic predictions have been all over the map. The stimulus after the events of 2008 was supposed to bring in a lot of inflation, some folks seemed very sure of that ... didn't happen.
> A 25 percent tariff on automobiles and a 5 percent levy on auto parts take hold Dec. 15.
That means your car's transmission replacement goes from ~$3k to ~$3200 (due to the additional markup on parts for time, labor, insurance, etc). Not too too bad for the end user, but actually bad for the parts companies, mechanics, tool and die makers, and others in the supply chain. This will be hurting your local repair shop very directly.
And being a head of a giant country, the man just can't avoid doing that from time to time, unlike the head of some tiny banana republic.
I sincerely hope someone is in the room on our side who has seriously considered the possibility here that we may have miscalculated. There needs to be some contingency in place so that we don't get stuck in round and round of barrier escalation.
This idea is one that has me slightly less pessimistic about the chances of the world actually doing something about climate change. We don't have to have 195 countries agreeing to a plan and have huge advantages accrue to cheaters who don't follow the plan. We can start with a small but significant number and it's the cheaters that lose out.
Satellite monitoring of CO2 emissions has a pretty wide error bar, but it's not that wide.
These things cost money, and the median Chinese consumer does not have the budget for these items.
"America is worse per capita" is a bad excuse for China to do nothing.
The analogy only works if what a single person is doing is inconsequential if they are the only ones doing it. Murder certainly does not belong there.
Murder isn't a good example of it.
They just import it without pollution in China, but it's happening elsewhere.
So a carbon tax like you suggest would do more harm.
I think China is targeting specific products, not thinking of this the same way I think you're thinking of this.
But Trump's goal with the tariffs was simply to destroy economic cooperation between the US and China, so that peaceful business entanglements would be less able to prevent escalation toward war.
This move is also available to Trump, but there's no way he'd ever take it.
It'd also be a genius tactic to adopt by the Democratic presidential candidate's. Trump's trade war is quite popular with the American public; the presidential candidates could be hurt quite badly by opposing it directly.
Actually, 2/3 of Americans support the President's trade war.
> “While Trump plays a game of chicken on tariffs, a record number of Americans believe that free trade is good,” says Democratic pollster Jeff Horwitt at Hart Research Associates.
Horwitt is spinning his poll to make it seem like free trade is not what the trade war will result in. A majority of Americans support Trump. Don't make the 2016 mistake of trusting polls again...
And you're spinning it as 2/3rds supporting Trump's tariffs. Which is not the poll's question.
>A majority of Americans support Trump
What has this got to do with anything, even if true? Which it is not, see below.
>Don't make the 2016 mistake of trusting polls again...
What 2016 mistake? 2 million more voted against Trump than votd for him. He won because the electoral college is effective gerrymandered because of demographic changes. So you have zero basis to state that a majority of Americans support Trump for now.
I mean, you're the one quoting a poll, and saying it shows that 2/3rds support Trump's tariffs.
Which is wrong on two levels, first, that's not even what the poll shows, second, even if it did, if you're right about polls being wrong, then the poll is useless to measure public sentiment.
Also, you cannot just make up things without telling us how you arrived at those assertions.
If that holds for other groups (trade war support just below Trump support) it would indicate America broadly opposes the trade war, as Trump's at <45% support in current polling.
There is no need to be condescending.
I'd say there is no plan and it is just the randomness of a capricious old man.
That's a glib take I admit, but I really think that all indications are we're dealing with a very glib president.
His hard-nosed deals bring profits for his investors, and massive revenue streams.
Call him whatever you will, and demean him to the world, it still won't change facts; he's an extraordinarily profitable businessman, with extreme revenue returns.
::shrug:: The proof is in the pudding so to speak. Our President's actions will prove themselves, one way or another.
His own waffling and capriciousness have sunk even his own initiates in congress with his own party members. Leaks from the white house, members of his own party, even his own people who have publicly stated he is very impulsive (some are less generous of that).
This is a genuine question : how do you know the profitability of Donald Trump's investments or companies ?
From my understanding, he has always worked for his private company/holding/organization, and thus there is no yearly or quarterly public reports. Did I miss something ? Maybe there is some joint venture with transparent reports ?
But as for any intent to "trash the US", at least as far as a trade fight goes I'm not convinced that any other trade fight plays out any differently. Personally I would do things differently, but the results may be the same.
edit - I thought I'd respond to this bit as well -
>I'm not sure it is possible to distinguish one or another
When the President of the US is comparing China with the head of the Federal Reserve, in order to claim that the Federal Reserve is a domestic enemy, while systematically poisoning relations with any country that hosts a US military base, Denmark/Greenland being just the latest example, then I think it is possible to distinguish the two. Someone being random tends not to travel in a specific direction unless it is the path of least resistance.
I think the China tariffs are different. Both sides have doubled down, then doubled down again. It’s even possible both Trump and China see this as an opportunity to reduce their dependency on each other.
China also may calculate thus could take some excess heat out of their economy. If there is a down turn, which many observers have been predicting anyway, they can blame Trump and make enduring austerity a patriotic issue.
A similar dynamic is playing out with Brexit. A no deal exit may be hugely damaging to both sides. But they each calculate they can blame it on the other side, and even paint anyone complaining about the effects as unpatriotic. That won’t necessarily persuade the complainers, but as long as it plays well to the politicians own support base that may not matter enough electorally.
In the meantime every tariff they add just serves Trump's goal of keeping jobs in America ( or at least that is how he will pitch it). Were already seeing plenty of companies pack up shop in China.
HN readers are hip to the reasons why this needs to happen. Internally, China is destroying its people's savings, purchasing power, environment and health to achieve China's 'great destiny'. Externally, China has created all manner of artificial economic inefficiencies. This includes debt enslavement of African and central Asian nations, dumping of goods, and theft of IP at a monolithic scale.
It's true that the full case has yet to be made to the American people. It's also true the US cannot do this alone and the EU (China's largest trading partner) may have to join the fight. And, it is the case that a 'trade deal' may be reached between Trump and China that falls short. None of this is going to alter the larger national (global) security objective of 'helping' China compete for resources in a less zero sum manner.
But it's simply too late. The policies you describe are benefitting most Chinese people and are broadly supported domestically in China. Your characterization of China's dealings in Africa borders on absurd, and the IP theft claim (even if true) would not justify any of what you suggest is necessary.
> It's true that the full case has yet to be made to the American people.
Nor will it be. There is no definition of US national interest that is utilized in policy discussions. Leaders stick to painting foreign leaders as despots and the American people happily pay for all the warmaking.
What is different about China is that most Americans broadly support what China is doing and respect President Xi's leadership.
The US spent $3.6T on a useless war that had supremely negative ROI and now China is right behind us ready to attain first world status and beat us at 5G, etc. China didn't cheat us, our leaders did by wasting $3.6T in the middle east. The US middle eastern wars are the biggest financial fraud in the history of the world.
By simply doing infrastructure improvement and focusing on domestic issues, China has nearly overtaken the US, and the US response is supremely outdated and fails to recognize that it was US mismanagement that closed the gap, not Chinese cheating.
More reference is needed. As a Mandarin Chinese my impression so far is otherwise.
China issues much debt in USD and pays interest in USD. What should be 1 unit of debt is 6 or 7 units of debt because of currency differential & risk premium.
China purchases many imports in USD.
To keep RMB well under USD, China must sell USD and buy RMB in open market. This has happened for many years.
In sum, as long as China subsidizes domestic market the effect of all of this is not felt to most Chinese. However, this becomes very, very, very, very costly. Look at food prices in China as one example.
When there is a rebalance / reconciliation the RMB savings will be hurt.
China hopes to prevent this by gold purchase and Belt & Road growth.
Very difficult situation. Bad management of economy.
It is fully in its capacity to make Washington to capitulate.
If they were to go with embargoes and not tariffs, things would be dramatically different, especially if they can nuke holiday season sales.
Just a plain clothing embargo would send all and every American retailer scrambling. There will be not enough merchandise in all India, Bangladesh, and Vietnam combined. And it will be even worse if Chinese factories in those countries would also join the embargo.
For things like regular household goods will also be no real alternatives as even export oriented economies like Vietnam import god knows how much plasticware from China just because it is often cheaper than manufacturing locally.
Just thing of how many "dollar goods" you buy every month, and what would you do if there would simply be none.
I instantly remember my childhood in early nineties Russia. We were one of richest families in the city or likely the entire Russian Far East, with father's business and mom's salary making few hundred thousand bucks a years, but from time to time we had to subsist on millet for months in a row for a simple reason that there were physically no other food in the entire region.
>Just a plain clothing embargo would send all and every American retailer scrambling. There will be not enough merchandise in all India, Bangladesh, and Vietnam combined. And it will be even worse if Chinese factories in those countries would also join the embargo.
>For things like regular household goods will also be no real alternatives as even export oriented economies like Vietnam import god knows how much plasticware from China just because it is often cheaper than manufacturing locally.
I am confused.
No countries that I know of apply tariffs and embargoes on exports of goods, except stuff that's national security sensitive like military tech. They do the opposite, i.e subsidize exports, which is at the core of this mess, i.e Trump thinking that China is subsidizing too much and devaluing their currency.
Are you advocating that China apply tariffs and embargoes on exports to the US? Isn't that what the US exactly wants?
Also embargoes mean that, in the future, after this is resolved, importers will be very vary of trust Chinese exports and will prefer other countries even if somewhat more expensive, just for stability.
When even rich people start feeling powerlessness at not being able to get basic material necessities, things do happen.
At some point, people stop looking at Beijing, and start looking at Trump
So US will be stuck, and will have to live with understanding that even a plain plastic bucket costs $20.
and while xi is president for life, he doesn't want to risk mass unrest in his own country.
Were it to take a short, controlled dip into recession to teach US a lesson, it would not be really noticed domestically.
And it will be a much better alternative than to let China to slowly bleed as manufacturers leave the country just to be able to sell to US in long term.
So by playing it cool and letting Trump get in a few rounds of tit for tat, China is expecting not to have to take more drastic measures in order to win.
I expect that China's restraint will pay off, as the trade war has already sent the economy into the early stages of recession, and China still has a year to let Trump dig his own grave.
But if Trump is re-elected...