After Friday’s blitz of reciprocal trade war escalations, which saw a furious Trump slam the two “enemies of the state”, Fed Chair Powell and China president Xi, following China’s widely expected tariff hike retaliation and Powell’s uneventful Jackson Hole speech, and further raise tariffs on virtually all Chinese imports after stocks suffered another major selloff, we said that the next steps were clear.
And now China has to retaliate and so on
— zerohedge (@zerohedge) August 23, 2019
Sure enough, in response China said it would continue fighting the trade war with the US “until the end” as tit-for-tat escalation is now virtually assured with no end in sight.
On Saturday, China’s commerce ministry issued a statement calling on Washington not to “misjudge the situation and underestimate the determination of Chinese people” after US President Donald Trump announced new tariffs on Chinese imports.
“The US should immediately stop its wrong action, or it will have to bear all consequences,” the statement said.
At the same time, a sharply worded commentary in the official party mouthpiece, People’s Daily, said China had the strength to continue the dispute and accused Washington of sacrificing the interests of its own people. Published under the pseudonym “Wuyuehe”, the piece described the latest tariff measures by the US as “barbaric”. The op-ed said China’s own tariffs on $75 billion worth of American products, announced late on Friday, were a response to America’s unilateral escalation of the trade conflict, and vowed that China was determined to fight back “until the end”.
“China’s will to defend the core interests of the country and the fundamental interests of the people is indestructible, and will not fear any challenge,” the author wrote, promising that “history will prove that the side on the path of fairness and justice will have the last laugh.”
Predictably, China also took offense by Trump’s characterization of Chinese President Xi Jinping as an “enemy” and his “order” to American companies “to immediately start looking for an alternative to China.”
Already a sad, toothless sideshow which will culminate without an official communique due to disagreements among the participants, this weekend’s G7 summit in Biarritz will be upstaged by the intensifying trade war between the two nations, with analysts warning Trump may pressure other Western leaders to toughen their stance against Beijing. Meanwhile, French President Macron is expected to simply focus on Brazil’s handling of the Amazon rainforest fires - fires which take place every year to a lesser or greater extent - and climate change during the gathering from Saturday to Monday.
(Lack of) diplomacy aside, the hit to China will be profound: according to China’s Customs Tariff Commission, a total of 5,078 US products would be subject to additional tariffs of 10% or 5%, as the duties are implemented in two batches – the first from September 1 and the second from December 15.
As the SCMP notes, an earlier commentary from Taoran Notes, a social media account affiliated with official newspaper Economic Daily, said China’s countermeasures were akin to a “precision instrument”, targeting industries such as US soybeans, crude oil and cars.
Meamwhile, Brian Dodge, chief operating officer of the Retail Industry Leaders Association, said Trump’s continued escalation of tariffs had already rattled the US market.
“Mr President, we implore you to end this trade war before the damage is irreversible,” he said. “If uncertainty spreads from Wall Street to Main Street, the record expansion we’re enjoying will undoubtedly come to an end and it will be the American consumer, not China, who will suffer.”
However, as Bill Reinsch, senior adviser at the Washington-based think tank Centre for Strategic and International Studies, correctly assesed, a de-escalation in the trade hostilities was unlikely because neither side saw any political upside to offering concessions. Trump “wants to keep bullying China and China wants to keep telling the rest of the world that they are the good guy here,” Reinsch said.
At the same time, picking up on what we said in “Mr. President, This Is How To Get The Fed To Launch Quantitative Easing“, Eurasia Group’s Ian Bremmer said that “Trump really doesn’t want the economy to tank… but if he’s headed for confrontation with China anyway (and he is), he’d rather take the hit way before elections. Implies escalation from US soon.”
More importantly, it also means that the Fed will be under increased pressure to not only cut rates, but launch “some quantitative easing” as Trump demanded on August 19. As a reminder, at the end of the day, Trump sees the Fed’s actions - or lack thereof - as far more important to the US economy than the outcome of the trade war, which explains hiw question “who is our bigger enemy, Jay Powell or Chairman Xi?”
To answer, and provoke Powell into conceding, Trump is now willing to take the US, and global, economy to the edge of recession. It’s a big gamble, although Trump’s position got an unexpected supporter late on Friday, when none other than BOE head Mark Carney effectively endorsed Trump’s destabilizing policies by saying that the time of the US Dollar as the world’s reserve currency is now over.
via zerohedge
Most products made in China are not of good quality. Where it is a car part or a simple gadget that is needed for temporary fix. I’ve compared products from Mexico and China and the mexican product is better. We should just quit business with China and keep Mexico as our primary trade partner. Not need to pay for long shipping travel of product. Could even help the immigrants in trying to come over if factories were built to supply our demand.
I must agree with some of your findings the only thing I have found is Mexicos lack of electronics and innovation. China takes/steals our inventions and improves upon them they good at that. But as far as producing products that USA set up and now Mexicans are learning and have pride in the products they produce as Americans do.
It would be great to ditch China since they have forgotten what we did for them before WWll helping defend them from Japan. Soon they forget. Mexico needs to somehow fix their corruption within their government which allows Cartels to run them and dictate their evils. To bad
they don’t ask us for help to clean up and pay us to wipe out these cartels and clean up the corruption. Put our forces close to home and would also help keep us safer along with Mexico.
Just a thought.
China is and has been taking us for fools for years and now we have someone in office who is true to the well being of the USA one who wants our jobs back home right here in the USA. “Made in America or USA “…!
As far as the head of the Federal Reserve Mr. President “Fire his sorry rear end” this you can do. I also say audit the Feds they are way past do to be audited/investigated of their processes…
I think in 2020 the President should do a complete Federal government house cleaning. The Feds payrolls are completely outrageous to many people and wages exceed way beyond the pay scale of the normal American work force. Must bring Government wages back inline with corporate America wages and benefits. No government officials/ workers should get any benefits that working class America gets.
I agree
1. Cancel all student, work and visitor Visas for Chinese nationals.
2. Work with Mexican government to establish high tech manufacturing zones.
3. Forget tariffs, close ports to Chinese products. Refuse postal delivery from China.
4. Get military really for shooting war. 4A. Get Tiwan S Korea and Japan really to defend themselves.
6. Start national campaign encouraging US to reject products made in China. Buy American!
So the Middle Kingdom is pissed at us barbarians. That’s just so awfully, terribly, badly awful. I’m shivering in my boots as I type this. Unfortunately for China, it needs our markets far more than the US needs its markets. Piss on ’em.
We may be Barbarians in their estimation but every American lives a helluva lot better than the average Chinaman. This I know as I have been there twice and to Tibet also to see the Chinese occupation of Tibet. The only ones who live top drawer are the Chicom Elite which is what happens in a socialist or communist or fascist dictatorship. You know -like what half the guys in the Demomarxist primary want. Promising all that free stuff they will never be able to produce-there is not infinite free tuition dollars for college ,infinite money to pay college loans off, infinite money to pay for free medical care for everyone even illegal aliens. The people who work in the above mentioned fields are not slaves and there is not enough of them to fulfill Marxist utopian promises.
The American corporations who still want to do business with China are really disloyal to America in lieu of profits. It’s a type of treason. Their greed supersedes their loyalties to the ground they live on.
Greed allows them to take advantage of the American people (taxpayers), who pay the subsidies to China, that make it possible for their business interests to flourish. Part of the ‘historic’ deal with China was for the U.S. to provide discounted shipping expenses for the goods coming out of China. The giant corporations and hoards of smaller American businesses are really just profiting off the taxpayer, and no different in the ‘essence’ of China’s underhandedness.
We pay for China’s cheaper-than-dirt shipping, so U.S. businesses and manufacturing can pay Pennies — to earn Dollars when they get their goods back in the U.S. Add to that to the ridiculous tariffs China gets to ‘earn’ in the deal; thanks to flimsy former presidential ‘prowess’, and you have what we deal with today.
China is screaming because their economy is floundering. Sleazy, greedy American corporations are whining because their potential profit margins are threatened. Many of them are DEMONRATS, and have already come out in public to say “Not a chance”, “We have invested too much in China”, “We can’t get Americans to work cheap enough”.
We might have to pay a bit more for American-made ‘stuff’, but we should be proud to do it.
American companies who refuse to pull away from China should be fined out of existence.
This POTUS is the most courageous leader we have had in decades. It is time we stopped being the “piggybank” of the world.
Be careful Mitch’s wife family is in that business.
Mitch McConnell and I’m sure several others have investments in China. Too bad, Mitch~~ our country is not up for grabs from the Chinese or anyone else. Thank God we finally have a president who knows how to conduct business and won’t lay down and become a door mat for any foreign country that wants to have a piece of America.
Mitch.s wife is heiress to Chinese shipping. She also holds a high, well paid position in the Trump administration. They are a real power couple with much political leverage.
The tariffs will hurt China much more than the US because China exports hundreds of billions of dollars more to the US than they import from the US.
What is this “fight until the end”? I thought the Chicoms were supposed to be the future.
The Chinese may have a problem with that last laugh thing. They do not seem to have a sense of humor.
Time to stop buying China’s crappy goods. Remember how they poisoned our pets’ food? Stores are full of Chinese merchandise, even Hallmark greeting cards come from China. Time to spend our dollars on goods made by our own people or from friendly countries.
Didn’t they also contaminate Baby formula with some kind of plastic and babies died also? Too often you cannot find the country of origin on labels-you only see the American distributor.. We need legislation to see in print where the product was produced.
Bring it ON COMMUNISTS Scum. Now is the time to make China pay back all that money these asswipe stole from the USA. Bring it ON Scumbags
President Trump also should not issue any more student visa to the Chinese so the students cannot continue to steal technology and inventions that the universities are working on-often with U.S. Government grant dollars.