On September 13, the Trump administration reached out to China with an offer for more trade talks.
The WSJ reported the “Trump administration said it sensed a new vulnerability—and possibly more flexibility—among Chinese officials pressured by U.S. tariffs imposed earlier this year and threats for more.“
I inaccurately commented Trump Gets Cold Feet on More Tariffs: US Proposes More Talks With China.
My view was similar to the WSJ take. Trump lashed out at the WSJ.
The Wall Street Journal has it wrong, we are under no pressure to make a deal with China, they are under pressure to make a deal with us. Our markets are surging, theirs are collapsing. We will soon be taking in Billions in Tariffs & making products at home. If we meet, we meet?
— Donald J. Trump (@realDonaldTrump) September 13, 2018
On September 14, I noted Trump Tells Aides to Proceed With $200 Billion in Tariffs on China.
The consensus opinion now is that more tariffs will be announced Monday or Tuesday.
Who’s Bluffing Whom?
Understandably, Beijing is balking at the Trump administration’s pressure tactics as China Weighs Skipping Trade Talks After U.S. Tariff Threat.
> Faced with fresh threats of tariffs from Washington, China is considering declining the Trump administration’s offer of trade talks later this month, according to officials with knowledge of the discussions.
> The White House plans to announce within the next few days tariffs on as much as $200 billion in Chinese goods, The Wall Street Journal reported Saturday, in a move designed to further squeeze Beijing before another round of negotiations proposed by the U.S. The pressure tactics, however, aren’t sitting well with Beijing, which has repeatedly said it wouldn’t negotiate under threat.
> “China never said it doesn’t want to negotiate with the U.S.,” Yang Weimin, a former senior economic adviser to President Xi Jinping, said Sunday. “But the U.S. side has to show sincerity” toward resolving the trade dispute. Added a current senior official who advises the leadership on foreign-policy matters: “China is not going to negotiate with a gun pointed to its head.”
Counter-Threat
> In response to the pressure from Washington, some Chinese officials involved in advising the leadership are proposing to step up the trade fight a notch by restricting China’s sales of materials, equipment and other parts key to U.S. manufacturers’ supply chain. Such restrictions could even apply to Apple Inc.’s iPhones, which are assembled in the mainland, officials said, without elaborating. Apple didn’t immediately respond to a request for comment.
> China can adopt “export restraints” as a way to hit back at the U.S. in addition to retaliatory tariffs, former Finance Minister Lou Jiwei told a gathering of Chinese and American academics and business executives Sunday.
Pressure Tactics
Trump seems to think that countries will respond to pressure. Of course, that assumes Trump is thinking at all, which is clearly debatable.
Whether or not Trump is thinking, history shows that countries do not respond to pressure.
Venezuela, Iran, Iraq, Russia, and Turkey are proof enough.
Going back further, one can look at our counterproductive policies on Cuba (still ongoing) and let’s not forget the war in Vietnam which the US lost.
A friend comments “You can also add Rhodesia (now Zimbabwe) which faced brutal sanctions in the 1960’s as did South Africa. Both attempts failed.”
Tolerance For Pain
Yes, Trump can inflict more damage on China than the other way around. But unlike China, the US has something called elections.
If voters are dissatisfied with results, US leaders do not stay in power. Similar conditions do not apply in Cuba, Iran, Venezuela, or Turkey where the system is rigged even if people do get to vote.
Losing vs. Losing More
One does not win by losing less than the other guy. Nor does one win with tactics that may cost heavily in midterm elections.
Mike “Mish” Shedlock
Uncharted waters for sure, it’s been since March and we’ve gone nowhere with this. Looks like China is tired of the rhetoric, I mean .. they know when someone is just blowing hot air (typical for politicians), and are going to the corporations instead to get what they want, and the corporations own Washingtons elected officials.
“Trump seems to think that countries will respond to pressure. Of course, that assumes Trump is thinking at all, which is clearly debatable.”
There is no need to insult. Were you thinking at all when your wrote the piece “Trump Gets Cold Feet on More Tariffs: US Proposes More Talks With China”? Many issues have multiple solutions. And nobody is right 100% of the time. Including you and me.
There is a reason other nations do not respond to pressure. It’s like paying your blackmailer or protection money. Once you succumb to the first step, you’re in for permanent and increasing intimidation. It never stops. School yards work the same way. Placating bullies does not work. Any kid that does not step up to confrontation is thereafter seen as an easy mark. It’s always better to fight and lose than to let bullies walk over you.
Let’s see.
DJT built and runs a billion dollar business with a payroll of thousands. Star of hit TV show for nearly a decade. Beats 11+ other Republicans to win the nomination and then beats Hillary despite being outspend 3:1.
What great thinking have you done Mish? You live in Chicago, write a blog, take some photos and help run a financial management business.
Seems like your thinking is clearly debatable, as obviously, you really haven’t done that much.
Was that insulting?
Now go look in the mirror.
Trump seems to think that countries will respond to pressure. Of course, that assumes Trump is thinking at all, which is clearly debatable.
You did not respond to Misch’s ideas, you are trying to insult him by praising Trump who proved himself that he does not understand anything about fabrication and trade. You think he is a successful businessman, in fact he lost money on many companies and bankrupt them, he was not so successful , now we see why ..
It seems like you don’t like Mish and do not respect his ideas, then why are you still here in this website ? I can tell you why, you like him until he says something about your favourite man Trump, then you become emotional and attack anyone who criticize Trump.
You seem to be among those who like to censor other’s opinion. Mish has been insulting Trump on his blog. When he starts to insult Obama nonstop, are you going to leave his blog? Cheers.
Trump beat 16 other primary candidates in one of the deepest, most competitive Republican fields ever and he did it virtually on his own. Those 16 other candidates soaked up most all of the political “talent” leaving Trump to just use his instincts. It was plenty and he wiped the floor with them.
Mish unfolds his thoughts here. Whenever Trump opens his mouth, there are no thoughts being unfolded, just a bunch of boiler-plate prejudices and a lot of reversals. Anything approaching a thought is based on erroneous facts and long debunked preconceptions. There is nothing there to discuss or argue one way or the other.
What’s this? The haunting cry of the diehard fanboi!
China has been directly and indirectly stealing intellectual property for many years. The nation has been dishonest with its dealings with many nations including ours. President Trump is the first individual to call out their behavior. Google has agreed to develop algorithms for the Chinese government to use against their citizens. If you think actions are necessary, I fully support the actions of our POTUS against the Chinese government. This not the time for weak kneed individuals and others that have watched and profited from the Chinese actions of aggression. Individuals like Mish have come up with no actions or solutions to counter this aggression. STFU or propose a better solution. I believe Mish and people who support his non-tariffs actions are jellyfish.
Spot ON!
The Chinese don’t give a shit. The only way to make them agree to our demands is through military force.
Wait, you’re insinuating that we should attack China? How many wars do you want to be in simultaneously?
If that’s how you really feel, head to your local recruitment office and enlist. Have fun guarding Afghan poppy fields!
I’m saying only a war will change their mind. A trade war will never work
Long time ago, I read a book on Chinese history written by an admitted anti-communist Chinese author. However, his point was — Don’t get too worried about the Chinese communist government, because it won’t last. 3,000 years of Chinese history show a repeated cycle of the central government losing the Mandate of Heaven, and provinces breaking away, leading to periods of raging civil war, until eventually a victor in the civil wars becomes strong enough to reimpose central authority. Again and again!
If we could ever get the facts, my guess is that the Chinese property bubble is worse than the Australian version. Incredibly, an ordinary apartment in multistory block in a third tier Chinese city costs about the same as a good condominium in an upscale part of Dallas. If trade-reducing actions of the Chinese government rock that property market, the Mandate of Heaven is likely to crumble.
Both the Chinese government and the US Administration have got strengths and weaknesses. They are both playing their hands in a process known as real world negotiations. Don’t get too excited about mid-game speculation in the Wall Street Journal.
Read some Chinese history. They starved millions (on purpose) during Mao’s reign of terror just to harvest grain to pay off foreign debts. They burned houses and anything else they could find to fire their rudimentary backyard kilns to make materials for “steel” production so as to be in control of their supply or to sell to generate foreign exchange. People were living and dying outdoors with no clothes or food just to satisfy the “cadres” and their quotas, all of which came down from Mao and his senior people.
This is the mentality of the Chinese now joined with their desire for world domination by any means necessary. They will resort to whatever tactics necessary, which will eventually include the takeover, by violence/war, of Taiwan to show us and the world that there is nothing that can be done about it short of nuclear conflict. How are we going to penetrate the “nine-dash line” to come to the rescue of Taiwan?
China considers itself the “middle kingdom” and that the world revolves around it. They are not going back to being second-class citizens of Eurocentric domination. And, this includes ethnic Chinese living all over the world. Do you think they are fully assimilating and swearing allegiance to their foreign home? Nope. They send their children to Chinese classes, have Chinese names as well as “John and Sue”, speak Chinese at home, write Chinese characters, etc. Do you wonder why so many Chinese are working in Silicon Valley? That’s where the technology their masters in mainland China need exists and they are instructed to steal it. Many are caught with the information by the FBI trying to leave the US bound for China. But many more are successful, similar to the few Mexican illegal aliens who are caught and the millions who have made it through.
They are geared for the long haul, and like John Kerry recently told the Iranians, they will just need to wait out the Trump years and then return to business as usual with the next President.
Our country is literally being ripped apart by squabbling over stupid PC issues while the Chinese are laughing all the way to the trade bank and Mexican cartels take hundreds of millions in drug money out.
Trump is trying to renegotiate a few trade deals and slow down illegal immigration. What does he get for it? Non-stop hatred. What’s his problem? He’s the wrong man for the right job.
Would think Trump delays major action until after elections. Lots of hot air verbiage by Art of the Dealster. China has short term advantage of devalued yuan and American consumers advancing purchases over tariff fears. They would be foolish to hand him victory before elections, or at all for that matter.
Note the Trumpsters love of taxes that are biased to the lower 66% and away from the rich.