For those who missed the overnight fireworks, late on Monday, President Trump asked the US Trade Representative to identify USD 200BN in Chinese goods for further tariffs of 10% which will be imposed if China refuses to change its practices and goes ahead with its retaliation threat, while he also stated that China raising tariffs is unacceptable and that the US will pursue tariffs on another USD 200bln of Chinese goods if China increases tariffs yet again.
Predictably, China – which last week reacted instantly to Trump’s first round of $50BN in tariffs – again responded immediately, wasting no time in accusing Trump of “blackmail.” China’s commerce ministry said on its website that if the US “irrationally” moves forward with the tariffs then China has no choice but to “forcefully fight back” with “qualitative” and “quantitative” measures. Continue reading
- Treasury’s Mnuchin considers China trip amid trade dispute
- China’s Commerce Ministry confirms U.S. has requested visit
U.S. Treasury Secretary Steven Mnuchin said he’s considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing.
Mnuchin said he’s “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade. Continue reading
“Things sure are getting exciting again, ain’t they?” The remark was made by a colleague on Tuesday morning, as we stepped off the elevator to grab a cup of coffee.
“I’ll tell you one thing. President Trump’s trade war with China won’t end well. I mean, come on. China’s outplayed the U.S. at this game for over a quarter century. They have the upper hand. Continue reading
China’s State-Run Global Times Newspaper Declares Victory In The Trade War.
Reuters reports any effort to reduce its U.S. Treasury portfolio would “inflict significant harm on U.S. finances and global investors, driving bond yields higher and making it more costly to finance the federal government.” But, the report notes, China’s leverage with treasuries is only good for as long as it holds them—suggesting any threat it poses may be empty.
China’s government has been relatively vocal in transforming itself into a serious threat against the West — by modernizing its military in anticipation of future wars with Washington. It it therefore not surprising when the official Xinhua news agency reports that China will increase its defense budget by 8.1 percent in 2018, up marginally from last year’s 7 percent.
China has undoubtedly given America’s military-industrial complex and clueless politicians in Washington a stern message, by increasing its defense budget to the highest levels in more than three years, even as the country insists it does not mean harm. Continue reading
THE EUROPEAN Central Bank has accused the US of manipulating exchange rates as tensions between Brussels and Washington continue to escalate wildly.
The ECB is concerned the US is attempting to exert “political influence” on exchange rates, with the issue set to explode into outright confrontation at an upcoming G20 meeting.
The eurozone bank said it was “certainly concerned” by perceived attempts to influence the exchange rate in favour of the US dollar. Continue reading
THE EUROPEAN UNION will retaliate ”swiftly and appropriately” if Donald Trump imposes tough trade sanctions on the bloc, European Commission spokesman Margaritis Schinas said.
It is one of the most impressive economic and political miracles in modern times. And it isn’t over yet.
China is a sovereign state with a population of over 1.3 billion people. The nation possesses the world’s largest economy by some measurements, the world’s largest population and the fourth-largest territory.
These are the building blocks of a superpower. While the world anticipates China gaining superpower status, analysts debate over when and whether its rise will be peaceful.
The Trumpet forecasts that China will continue to grow as a formidable power, combining its strength with Russia. Further, we forecast that it will play a major role in waging economic war that will devastate America.
Where do these forecasts come from? Continue reading
Could this trend lead to the erosion of the dollar’s reserve-currency status?
On September 15, Venezuela began to publish prices for its oil in the Chinese yuan rather than in United States dollars, following President Nicolás Maduro’s promise earlier in the month to rid the South American country’s economy of the “tyranny of the dollar.” News emerged on September 13 that Venezuela was telling oil traders that it will stop receiving or sending payments in dollars.
The Venezuelan Oil Ministry published a statement about the decision to publish prices in yuan, saying, “This format is the result of the announcement made on September 7 by the president [Maduro] … that Venezuela will implement new strategies to free the country from the tyranny of the dollar.”
This is exactly what Global Geopolitics mentioned just a five days ago. The tables have turned on the global playing field and the traditional options once thought to be useful to use against China will now backfire. America will now have to get more creative to once again get ahead in controlling the narrative when it comes to using leverage against its adversaries.
Adding to this, China is likely waiting for such a move to happen, which will benefit the nation in numerous ways:
- China is a master in state propaganda, will successfully claim it’s the victim of a U.S. economic attack and rally support throughout the nation.
- China, through provocation, will have produced a reason to retaliate. The trade war begins.
- Retaliation will be successful due to the weakening of the U.S. positions and strengthening of Chinese leverage. World-wide, this will cause people and nations to question America’s ability to act and standing as the lone global superpower. If the Dollar goes down, the U.S. goes down with it.
Following Treasury Secretary Mnuchin’s threat that the US could impose economic sanctions on China if it does not implement the new sanctions regime against North Korea:“If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system, and that’s quite meaningful.”
While this sounds like a step that needed to be taken, and it is, it’s too little too late. China (and Russia) have created an alternative to SWIFT. Thus, cutting China off only means it will switch to its own and abandon the U.S. Dollar system — with Russia likely to join. In effect, it will end up hurting the United States more than the intended target(s).
Over the last decade China and Russia have feverishly worked around America’s global influence. Russia and China no longer need GPS, as they have their own indigenous satellite navigation systems — Europe, too. You’ll only do their militaries a favor if you cut that off. Control over the internet has been ceded by America, so there’s also no method or means of punishment there. The IMF has been undermined by the AIIB, so it’s also hard to do anything there as well.
America’s choices are limited and not as effective as they used to be. The joke may be on the U.S. should push come to shove. The alternatives set up only mean America will likely isolate itself should it choose punitive measures.
In an unexpectedly strong diplomatic escalation, one day after China agreed to vote alongside the US (and Russia) during Monday’s United National Security Council vote in passing the watered down North Korea sanctions, the US warned that if China were to violate or fail to comply with the newly imposed sanctions against Kim’s regime, it could cut off Beijing’s access to both the US financial system as well as the “international dollar system.”
Speaking at CNBC’s Delivering Alpha conference on Tuesday, Steven Mnuchin said that China had agreed to “historic” North Korean sanctions during Monday’s United Nations vote. “We worked very closely with the U.N. I’m very pleased with the resolution that was just passed. This is some of the strongest items. We now have more tools in our toolbox, and we will continue to use them and put additional sanctions on North Korea until they stop this behavior.”
Beijing: China has expressed “grave concern” at the Trump administration’s probe into whether China steals intellectual property and discriminates against US technology companies.
After Mr Trump signed a presidential order to start the probe, which could lead to sanctions, China’s commerce ministry hit back saying the United States “should not become a destroyer of the multilateral rules” of world trade. Continue reading
Yesterday, the WSJ reported that the Trump administration is planning to begin a probe of what the U.S. sees as violations of intellectual property by China. Against a backdrop of Trump’s frustrations with domestic policy, sliding approval ratings and disagreement with China over North Korea, the chances of protectionist action are rising, as is the probability of a “hot”, retaliatory trade war. This morning ow learn when Trump is set to fire the first shot. Reuters reports, citing White House officials, that President Trump is expected to make a speech and sign a memorandum at the White House on tomorrow, Friday, that will target China’s intellectual property and trade practices, effectively firing the first shot in what could escalate into a major US-China trade war. Continue reading
In a post-American trade war, this emerging bloc will wield devastating power.
Stories of international angst over United States President Donald Trump’s protectionist approach are becoming more commonplace. Mr. Trump’s “buy American, hire American” catchphrase sounds good for many at home, but abroad, it is prompting a weighty reorganization of international trade relationships. And long term, the result will be a trade war that will prove ruinous to the U.S.
World trade has changed a great deal over the last several decades. The international community at large no longer depends on America’s giant import expenditures and exports. Parag Khanna of Politico wrote:
As Americans, it’s easy to assume that global trade still depends on America as the consumer of last resort. But that’s no longer true. In fact, the majority of trade in emerging-market nations is with each other, not with the U.S. In 1990, emerging economies sent 65 percent of their exports to developed nations like the U.S. and Europe, and only 35 percent to other developing countries. Today, that figure is nearly reversed. Continue reading
EU countries are considering three main variants of answering possible changes in the US trade policy.
Active discussions on how to react to plans of US President Donald Trump to introduce a 20 percent duty on imported goods in the US are held in EU countries, the German Süddeutsche Zeitung newspaper reported.
First of all, EU states themselves could subsidize their enterprises in order to save the companies from additional costs for new duties. In addition, companies would manage to remain competitive. However, this variant would hit the budget of European countries. Continue reading