I don't know about the rest of the world, but China is cheating and thieving off the US on a massive scale, and has been for a very long time. When they petitioned to join the WTO, they made promises, which they have broken. When they went to negotiating table at the threat of WTO action under Bush/Obama, they made promises, which they broke, and didn't change their behavior at all.
It's a travesty and it's cost the US trillions of dollars, and is the main reason why US wages are stagnant and the US economy has been sluggish compared to historical norms for over a decade.
China does three things:
1. Puts large tariffs on any goods they deem their national interest would be better served by restricting foreign manufacturers. They do this across a very broad range of industries.
2. Use widespread lawfare, threats, IP laws against corporations for which they want to extract concessions/technology transfer, in a way where approvals deliberately get held up for months or years in court or in local planning. They also quietly do underhanded pressure on company executives including blackmail.
3. Uses those tariffs and lawfare to force corporations to form "joint partnerships" with Chinese companies if they want access to the Chinese market. These joint partnerships involve:
a) Complete transfer of all intellectual property, collectively worth trillions in hard-won knowhow
b) 51% ownership given to the Chinese government in perpetuity of this joint partnership
c) Building/moving of factories in/to China
d) Training of local Chinese workforce and managers and technicians
This is pretty the exact opposite of free trade. China have free access to our market with close to no restrictions The Chinese market is closed to anyone without handing over the entirety of their wealth and knowhow and moving their factories to China and hand over half of all future production to the Chinese government in perpetuity.
It's the greatest theft of wealth in history, what's more to an extremely creepy communist dictatorship with expansionary aims. This isn't a partisan issue. That the media frames Trump as being against free trade is pure fake news, and a shocking indictment on the fourth estate. The current system is highly anti free trade, in a way that helps China at the expense of the US. Forcing a change to this system is pro free trade. Allowing it continue, like Obama did, is anti free trade.
Lest anyone is enough of a dickhead to think this is a partisan issue, and bring politics into it, I'll leave the last word to senate minority leader Chuck Schumer:
Schumer praises Trump's trade crackdown:
Quote:
He added that "unfortunately, previous presidents, Democrat and Republican, just stood by as China did what it did to us. President Trump is exactly right."
Trump is expected to announce on Thursday new tariffs against China in light of an investigation into intellectual property theft.
Democrats have pressed Trump for months to get tougher on China. They were critical of his steel and aluminum tariffs in part because they felt they didn't do enough to target Beijing.
Schumer added on Thursday that he is "very pleased" with Trump's latest move. "I commend him," the Senate's top Democrat said.
"Today's announcement by the president will be a great start in that direction. Democrats, Republicans, Americans of ever political ideology, every region in the country should support these actions," he said.
This is an issue where the facts are clear, there is really no dispute, and yet the fake news media have this 180 degrees wrong. It should make you never listen to anything the media ever says on anything again.
A good read is the
US Trade Representative's Report. It's comprehensive and goes into detail on the extreme level of anti free trade practices. If you want to understand the issue in detail, you should read it. Basic summary:
Quote:
“Today, almost two decades after it pledged to support the multilateral trading system of the WTO, the Chinese government pursues a wide array of continually evolving interventionist policies and practices aimed at limiting market access for imported goods and services and foreign manufacturers and service suppliers.”
“China’s regulatory authorities do not allow U.S. companies to make their own decisions about technology transfer and the assignment or licensing of intellectual property rights. Instead, they continue to require or pressure foreign companies to transfer technology as a condition for securing investment or other approvals.”
“China is determined to maintain the state’s leading role in the economy and to continue to pursue industrial policies that promote, guide and support domestic industries while simultaneously and actively seeking to impede, disadvantage and harm their foreign counterparts, even though this approach is incompatible with the market-based approach expressly envisioned by WTO members and contrary to the fundamental principles running throughout the many WTO agreements.”
“Many of the policy tools being used by the Chinese government…are largely unprecedented, as other WTO members do not use them, and include a wide array of state intervention and support designed to promote the development of Chinese industry in large part by restricting, taking advantage of, discriminating against or otherwise creating disadvantages for foreign enterprises and their technologies, products and services.”
This is one of the greatest travesties in US history that this has been allowed to go on, particularly when reigning in China and forcing them to play by the rules would have been easy to do for a president with a spine and a brain and caused almost no problems to the US even five years ago when China was more dependent and had no choice but to cave.
Interestingly for trading, there's this bit of recent news. Basically, the Koch brothers, for whatever reason, want Trump to impose no tariffs on China, which means the status quo continues to the detriment and eventual bankruptcy of the US
https://qz.com/1297547/trumps-trade-...urb-his-power/
Quote:
Meanwhile, the deep-pocketed Koch brothers, Republican kingmakers, went on the offensive against Trump earlier this week, rolling out a new, and radical list of trade-friendly demands on June 4. They plan to push it through their think-tank, grassroots political network, and Hispanic libertarian group.
The demands are aimed specifically at easing Trump’s protectionism, as well as dismantling a host of long-standing US policies, some of which have been popular with industries and voters for decades:
The president should lift steel and aluminum tariffs, drop proposed tariffs on China, and “avoid any new tariffs.”
A bill was brought to remove Trump's ability to levy tariffs...it was killed by the senate leader, but there is backing for it. I think that's part of the reason (along with a strong economy) for the recent small rally in SPY. This news was heartening to those afraid of a trade war.
Last edited by ToothSayer; 06-09-2018 at 09:32 PM.