Simple OP, I did this before w/ the national debt. I want to know if we're headed for a trade war and what it means if we are.

We arguably already are by 21st century standards.

The war is quite asymmetric too. Look at what China is targeting and you can’t but get a feeling they know exactly how to hurt Trump’s base.

The US is already in a serious trade war. China is aggressively shooting and attacking us, looting one source of wealth after another, and we're just sitting there, taking it, while our wealth dwindles.

Over half a trillion in real wealth flows out of the US every year, in terms of stolen IP and know how, forced technology transfers, barriers to entry to free trade that the Chinese put up, while us not having any barriers to theirs. A mass plunder of US wealth by hostile actors has been going on for over a decade. It's the reason (the only reason) why growth has been so sluggish and the recovery from the GFC has been so slow, and why real wages stopped growing. Left unchecked, the US will go bankrupt in time.

Trump just fired the first shots back in two decades. The people who have been plundering the US, used to this state of affairs, are shocked, and will fight hard to keep the status quo of plundering US wealth while we do nothing.

What will come of this? It depends on how much political strength Trump keeps. He has some Democrat support for what he's doing - anyone but the most unhinged loser realizes that what Trump is doing is essential for continued US prosperity, world peace, and long overdue. Chuck Schumer for example, Democrat Senate leader, calls this long overdue and very necessary. So there's chance sanity prevails.

The main obstacle that Trump faces is a hostile, totally unhinged (on this issue) left wing media. Rather than framing this as Trump correcting a long running wholesale theft of US wealth and incredible levels of anti-free-trade actions from China, which should have been corrected years ago, they're framing this as Trump being anti free trade (his actions are strongly pro free trade; Obama was anti free trade by allowing China to mass steal and shut out US companies without forced tech transfer, and board up their markets). They're framing this as this being a trade war that Trump is "starting" rather than shooting back.

The trade war would be over be now if the media wasn't bat**** insane on this topic. As it is, the Chinese can use this media spin to pressure Trump politically. I actually predicted this months ago when this all started, what the Chinese would hit and how in retaliation.

In the end, what happens depends on Trump's political capital. The Chinese are utterly incompetent at home grown innovation or knowhow, and will be for another 5-10 years. They've come a long way but they don't have everything they need yet. Their only path to getting the high technology needed to build their military and become self sufficient economically and technologically is to steal it via forced tech transfers. This theft is the only way to grow into the superpower they wish to be, and fulfill their expansionist and "historical righting" aims they have, such as subjugating Japan and Taiwan. In many ways they're like Nazi Germany in 1932, deep racist grudges with neighboring countries - all the more intense because they're reasonable grudges - meeting an improving economy and deliberate structured economic program to become a military superpower. Their plan is immense global power, and total control in their sphere of influence (Asia). They'll fight hard to keep that goal, but in the end, the truth is that they will get crushed in a trade war at this stage of development, precisely because their economy needs the US market unfettered, and what they're doing now is a wholesale looting of US wealth, and they want to keep of much of that as possible. They will accept lower levels of looting and better market access for US companies in return for their economy not being destroyed. That is Trump's aim.

So where this goes depends on how much political capital Trump has to keep up the pressure. The midterms will decide the outcome. If Trump survives well enough, they'll have to go for conciliation, and scale back their theft in some kind of agreement. They won't like it, but the alternative is economic annihilation. If Trump is greatly weakened, they will pressure harder and harder until Trump is forced to give it up by an unwilling legislative body.

Without the midterms coming up, Trump wins this easily and China capitulates and we get far more free trade - and a soaring stock market as the Chinese market is opened up properly to US companies. With a sane media, Trump also wins this handily. As it is, we'll see escalating pressure and plenty more headlines until this comes to a head.

Howard:

Here's an interesting article I read on this topic.

https://www.theatlantic.com/politics...-china/557345/

Unlike ToothSayer's "Trump is a genius!" political speech, this article offers insight on the U.S.-China trading relationship and how our bilateral agreements have developed over time. As the article points out, no U.S. based multinational corporation had a gun put to their head and was ordered to do business with China. Virtually all of our domestic corporations that made the decision to "invest" in China did so in pursuit of profit - either by exploiting China's cheap labor market or because they want access to China's huge domestic market. (GM sells more cars in China than they do here in the United States.) So, if we are being harmed by China's unfair trading practices, it was the choice of our own profit seeking CEOs and Boards of Directors at companies like Boeing, GM, Caterpillar, Wal-Mart, and dozens (if not hundreds) of other U.S. companies that have consciously chosen to enter the Chinese market and were willing to give in to the demands of the Chinese government in exchange for that opportunity. Put another way, as Vladimir Ilyich Lenin famously said: "The capitalists will sell you the rope with which you hang them!"

In a word, it's complicated.

Howard:

The folks at Nate Silver's 538 web site created a game where you can be an elected President of a country (the United States?) pitted against the leader of another country (China?) with which you have a trading relationship. The results of this "game" are not encouraging ...

https://fivethirtyeight.com/features...of-trade-wars/

trump's already ****ed this up.

to pressure china into changing their mercantilist policies you'd need an international coalition willing to impose tarrifs and such on china (canada, EU, ...).
the way he's acted towards historical US allies, nobody will help him.
maybe the next president will go about this with more of a plan.

with the midterms coming up china can just wait this out.

I'm far from pro Trump but even a broken clock is right twice a day. Honestly the necessity of starting a trade war with the Chinese is why Trump causing friction with literally ANYONE else on planet earth has irritated me so much over the last year and change. Thankfully it looks like the Europeans may come along in our trade war with the Chinese.

They really are trying to have a third world trade policy while exporting microchips. It's a problem.Trade deficits aren't as big a problem as TS is suggesting because in exchange for that money we get cheap goods that have value... not just cheap plastic **** at Walmart, but other things. And that should continue, but in exchange they need to actually buy our goods and services in exchange. As it stands now it's massively unbalanced and a real problem.

Your bitter bias is showing. Where does ToothSayer say or imply that Trump is a genius or even clever in that post? He says people against the US retaliating for China's mercantilism are insane. All he implies is that Trump isn't delusional or idiotic on this issue, and you get "Trump is a genius!" out of that? This is what undermining your own credibility looks like. Maybe you should be posting on Tumblr instead.

There's nothing genius about what Trump is doing. It's obvious, moral, and essential. What's shocking is that it wasn't done before, when a good outcome could have been achieved with far less pain.

What China is doing is certainly clever. What's amazing is that they've been allowed to get away with such flagrant and destructive anti-free-trade practices. The needless duplication of capital, the energy inefficiency that the Chinese have that is soaring global CO2 - it is remarkable that the Western political class are so broken they allowed this to happen.
Um, I agree with all of this (anyone knows the above), and it doesn't detract from my point in the slightest.

If the Chinese were bribing US officials to hand military secrets to them, would that be ok as well, since it's "voluntary" and "they weren't putting a gun to people's heads"? Your position is ridiculous.

Yes, a Nazi-level dangerous communist dictatorship, with similar expansionist aims and a lot of deep neighborly grudges - especially against Japan which they want to subjugate for Japan's unspeakable humiliations and atrocities against the Chinese in WWII - has exploited weaknesses in free societies, capitalism and free markets, to enrich and arm themselves at the expense of of other countries. That is to be expected of such societies. What is shocking is that Bush and Obama didn't do a damn thing about it. This could have been handled with far less pain years ago. America would be richer and the world would be safer. But previous presidents were utter losers.

China signed up to agreements as a condition of entering the WTO. They are breaking those agreements on a massive scale with impunity, harming the US greatly as they do. Should agreements and norms not be enforced?

There's not really a correct position, morally, practically, free trade wise, other than mine on this issue. The US desperately needs to do this and it should have been done a long time ago. In 5-10 years China will become more self sufficient and unable to be pressured any more. Then you have a billion people with a high male to female ratio controlled by a brutal, expansionist, highly totalitarian communist dictatorship who just elected a president for life who recently promised "fire and blood" to China's enemies and a restoration of China's historical claims - which means taking the territory of others.

Here's a good read about how Chinese think, from a hedge fund who visited China.

https://files.brontecapital.com/amal...ter_201503.pdf



This is how many Chinese think. They have the same grievances as Nazi Germany - they feel they have been unfairly treated, that their proper position is as the most powerful country on Earth, and hold deep grudges against neighbors. Name a single country under a dictatorship where gaining great economic and military power has ever resulted in a good outcome rather than a horrible one?

Anyway, I say all this to frame the trade war so it's understood. Trump is doing this for incredibly important reasons - this is perhaps the most important issues for America's and the world's future - which means he won't back off. On this issue at least, he's not some dotard anti free trader who's trying to be protectionist. That is pure unhinged fake news, but it's the mainstream media's take right now.

China's aim is like Nazi Germany in 1932 - to become a military and economic superpower at all costs, so they can regain their former glory, take their former territory (defined as anything that China has ever had power over in the last 2000 years) and punish those who have wronged them in history (Japan especially, who they hate, but many others). The only way to do this given their lack of an open innovative enlightened society is via theft of IP and cheating at free trade to force technology transfer.

This is the background of the trade war. Understand it, or listen to the fake news media and don't. I predicted how this would turn out - that Trump wouldn't back down given how important this issue is, and how China would intelligently hit back with political pressure points months ago. That is because I understand both sides. You should too if you want to trade on this.

I agree. Everything should continue as now EXCEPT the huge barriers that China has put up around their market, destroying free trade, and their massive theft of IP via both hacking and forced technology transfers. And their forcing of US companies to form joint ventures - 50% owned by the Chinese government - in order to enter the Chinese market.

I and Trump want more free trade, not less. Free trade is a great thing and we need more of it. The fake news left wing media are simply crazy on this topic.

What's the definition of trade war?

They exploit our intellectual property, we exploit their cheap labor and massive consumer population. Is that a war? It sounds more like a marriage of convenience in which we've finally decided to announce our lack of satisfaction.

We're not in a trade war until the divorce proceedings begin if you ask me.

Another thread for TS to tard up with his political beliefs, yay! (just let him back in the politics forum please). Btw, it's funny how you say "we're just sitting here" "our wealth" when you aren't even American (supposedly).

Let's blame the media for the actual words and actions coming out of the administration that confuse everyone (even his own top aides), it's 4d chess guys!

I use "we" because it's an easier shorthand.
How has my view not played out precisely? I'm describing the ideologies of both sides accurately and they're informative on where this trade war will go and on what various actions mean.

The idea that you can understand and predict what parties are going to do without deeply understanding what drives their thinking is ridiculous.

The market - largely informed by fake news - blew off the trade news, ripped on Kudlow statements, as if this was new information, as if a few comments showed Kudlow was a "moderating" force rather than 100% in agreement with Trump, like Chuck Schumer is. Friday's selloff was on more trade news and comments where they discovered that in fact the view I'm espousing is the correct one.

Understanding that the market has an irrational view of Trump and his resolve, and an irrational view of China and its resolve, and reasons for doing what they do, is a valuable thing. When there's a big gap between the market's view - driven by fake news - and the reality, money gets made.

What have you provided to this thread except whining? What do you think the reasons are behind Trump's actions? That he's just a dummy playing in what he doesn't understand? An idiot protectionist?

You're being a dotard-in-training on this. The "Trump is a dummy" meme and "he has no chance" meme have been the moron fake news since he first announced. How did their predictions turn out? Are you going to keep doubling down and tripling and centupling down on the wrong view of the situation? What's the definition of madness?

Trump is taking a measured, reasonable, necessary action that many people with sense and power, fully endorse, and that he intends to see through because it's important for the US and it's something that's been on his mind and agenda for decades. US companies have been secretly asking for this for a long time, because the status quo is very injurious to their business, both long and short term. He even has some Democrat support despite such support being sacrilege, precisely because of the above. This gives him more strength and has greater likelihood of escalation, even after the midterms.

If someone has something intelligent to say, by all means go ahead, but this "lol Trump is such a dummy" is ridiculous and pointless and is actual political content, unlike mine which is relevant to trading.

Your main argument is its because of the fake news liberal media (which in the ultra left actually supports tariffs i.e. Bernie) that the public and market aren't getting it and to listen to you instead because you understand the issue. Ok buddy, I'm sure that's actionable trading and investing advice lmao.

No, I have lots of arguments, about the state of mind of each party and what they're likely to do and why.

And if the market "got it", it wouldn't drop 2-3% quickly on predictable Trump statements and tweets.

I lay out my reasoning with evidence. People are free to accept or reject it, or file it away as a partial truth. You want a loser echo chamber like we have in the politics forum, that lost their members over a million dollars betting the wrong way with high conviction because their echo chamber got the error bars hilariously wrong?

lol Trump is a ****ing idiot on trade protectionism and tariffs don't work!! Haha what a dummy lol.

Is that better? Did you learn something from that? Are we all wiser with your ****ing stupid groupthink ideas?

By the way, if protectionism doesn't work, why is China, the most protectionist large economy in the world by a huge margin, crushing everyone on growth rates, on improving technical knowhow, on breadth and sophistication of their economy, and increasing wealth, while the US is going deeper into serious debt and having very very sluggish growth compared to all historical rates?

You haven't even thought this through on level one, yet you hold forth? Could you be more of a dickhead?

We've gotten to the name calling portion of your commentary, popcorn. Funny coming from the guy who recommended short on the market last year while Trump's economic policies were still playing out... Heh maybe I should've listened to you then too . So are you saying we all should be buying stocks in the event Trump "wins," I'm confused what the current actionable advice we can use is...

The imbalance is stacked heavily in China's favor. The US exports $120 billion to China, and China exports about close to $500 billion to the US. On top of that, China is extremely protective of their economy, putting up tariffs and non tariff barriers that other 1st world nations would never be able to get away with.

If a trade war were to happen, US prices on goods from China would increase, but the trade deficit would decrease. Stock prices of companies that export to China would decrease, therefore the stock market to a degree.

The rest of the industrialized nations are not on China's side on this issue. Everyone has complaints about how restrictive China's economy is, and they will be sitting on the fences. If they had any balls, they would join the US, and China would be forced to drop their tariffs and non tariff barriers. So if a trade war happens, there won't be any global retaliations from other nations to the US.

Yeah, for pure short term self interest, other countries do not want to publicly be part of this fight. However, they are definitely cheering for China to be brought to heel and will help behind the scenes and jump on board if China looks like it's going to lose. I'm not sure when the West became so weak and stupid and unprincipled. Trump would also win easily if the media was framing the issue as China-caused and cheering him rather than caricaturing and outright lying in a 180 degree wrong presentation of his position. Perhaps the narrative will change over time.

As it is I don't know for certain how this plays out, but both sides of politics outside of the commentary class (fake news) and all countries are on board with this being very important and needing to happen, so there may be more political will to bring to bear than we would think looking at public statements and the media's false take.

I don't have much insight into the WTO. It seems a slow and ineffective body and probably best ignored.

What most likely ends up happening, is that the US and China sits down through back channels and starts negotiating and a deal is cut before any tariffs are physically imposed.

The elephant in the room among this potential trade war is nuclear negotiation with North Korea.

If the US can get China to exert considerable pressure on North Korea to have its nuclear weapons dismantled, than I believe Trump would be willing politically to drop the trade issue and book a win with the nuclear deal. Getting a nuclear deal delivered like Obama got one with Iran is a massive carrot for Trump.

It's good to hear a different opinion.

I don't get why China would negotiate. They need and want the status quo, and they probably believe they can sit this out, tank the US stock market, hurt US producers in their key targeted areas for maximum political pain, and destroy Trump in the midterms, making him an ineffective president with houses against him.

I fail to see a reason why they wouldn't try this strategy rather than give up what they need to grow into the military and economic power they want to be.

Which means likely pain for months to come.

Perhaps this is his aim, and he's acting now because he wants China to get it done before the midterms. I don't read it like this, however.

I guess the future all comes down to an estimation of Trump's will and willingness to fight on this. Is he a politician or someone who's acting because he genuinely cares about the country and thinks this is extremely important? I think it's quite obviously the latter. He had a wonderful billionaire's life where he was happily cheating on his wife, wining and dining, having fun, traveling everywhere. Now he's a rat in a cage being smeared...he said from the time he was a young man that politics was a dirty business and a "mean life" which was why he never wanted to go into it and was very reluctant to.



So I think his view is genuine and he considers this the most important issue of his presidency. I don't know how else to read this.

China will want to negotiate, not fight this to bitter end.

Imagine China does exactly what you predict, meaning target Trump's voters, hurt the stock market, and create as much political pain as possible for Trump to get him voted out. Trump before he leaves office in 2020 will most definitely escalate into a trade war with China, more than what has happened so far. What will the result be? The trade deficit between the US and China will go down, and China's exports will suffer. US exports to China will surfer as well, but not enough to drive the US economy into recession. Prices of US goods will increase, but I predict only marginally.

Now what happens after 2020 assuming a Democrat or even a Republican wins? The new president will keep those higher tariffs in place, and most definitely will not be removing them for free. Does China want a world with those higher tariffs in place permanently? I don't think so.

China might very well continue fighting because it doesn't want to be seen as weak to the international economic community, and invite other "jackals" to the party to join in on the fight. But I see a larger trade de-escalation happening that encompasses the Nuclear deal.

Last businessman president who thought tariffs were a good idea like this--they caused the great depression but yeah keep pointing out how obviously correct that idea is and it should've been done sooner.

Then again this thread is already at least one troll posting giant walls of trolling text so why am I bothering.

Because he was actually a protectionist trying to decrease free trade, not a free trader lover like Trump trying to increase free trade, against a protectionist. How is this so difficult for you?

Also, you need to stop reading fake news. The Great Depression happened because of the great crash in 1929, driven by one of the greatest and most insane global speculation bubbles of all time. The tariff act became law in 1930. It may or may not have extended the pain, but it certainly didn't cause the Great Depression. Their were no tariffs in 2008 (except Chinese ones!) during the GFC and the incredibly slow recovery, and that was far less of a bubble crash and liquidity rout than 1929.

People can have a reasoned discussion with different opinions, and both learn, should they choose to. Me and Tien disagree and I'm learning from him.

You need to have the requisite intelligence and background knowledge, and have actually thought things through a little, to particpate. Your views are cardboard cutout groupthink, and are juvenile, simplistic and stupid, yet you act like they're correct. You're the troll here, son.

ASAP17, wheatrich:

If TS is so obviously trolling then it should be trivial for you provide some evidence or arguments to point out flaws in his reasoning.

Otherwise stop polluting the thread with one liners.