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China and The US: A Good Old-Fashion Trade War

hypocritexposer

Well-known member
Not sure it's the right timing for one of these "old fashioned" trade wars.

Like just how far back in history are we going, like 1930-40s?

China and The US: A Good Old-Fashion Trade War

Posted: September 14, 2009 at 5:15 am

China voiced unusually strong objections to tariffs put on its tire exports to the US. The American government believes that the Chinese are targeting the industry which is costing US jobs. Labor unions will like the decision, as will a number of members of Congress who think China does not work on a level playing field when it comes to trade.

China has already begun the process of retaliation. It has the upper hand in a trade war with the US and it is about to use that hand to proves its supremacy.

The mainland government has said it will scrutinize U.S. imports of chicken and auto products and may put limits on them. The Chinese Ministry of Commerce said “China has consistently opposed trade protectionism, and the country’s actions since the financial crisis have reflected this stance.”

The fear of China using its financial and manufacturing muscle to compete effectively in the US and elsewhere abroad has grown as the global recession has taken a tool on jobs. There is also increasing resentment over China using capital from its $2 trillion in foreign currency reserves to buy up cheap assets, particularly commodities and real estate, which have been pushed down by the economic crisis.

China has a large advantage over the US on the trade issue. Large American companies like Wal-Mart (WMT) source so many good from China that the supply chain could not be replaced by getting manufactured goods elsewhere. China does not rely as much on American imports as the balance of trade shows every month.

The temptation to take actions against China for instances where it ships goods to America at what appear to be below market prices will increase as unemployment moves to 10% and beyond. But, it is a sucker’s game for the US. China has the factories and America has the consumers. All locking out China’s products does is drive up consumer prices and drive down consumer spending which is still the engine of US GDP.

Douglas A. McIntyre

http://247wallst.com/2009/09/14/china-and-the-us-a-good-old-fashion-trade-war/
 
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Anonymous

Guest
hypocritexposer said:
Not sure it's the right timing for one of these "old fashioned" trade wars.

Like just how far back in history are we going, like 1930-40s?

China and The US: A Good Old-Fashion Trade War

Posted: September 14, 2009 at 5:15 am

China voiced unusually strong objections to tariffs put on its tire exports to the US. The American government believes that the Chinese are targeting the industry which is costing US jobs. Labor unions will like the decision, as will a number of members of Congress who think China does not work on a level playing field when it comes to trade.

China has already begun the process of retaliation. It has the upper hand in a trade war with the US and it is about to use that hand to proves its supremacy.

The mainland government has said it will scrutinize U.S. imports of chicken and auto products and may put limits on them. The Chinese Ministry of Commerce said “China has consistently opposed trade protectionism, and the country’s actions since the financial crisis have reflected this stance.”

The fear of China using its financial and manufacturing muscle to compete effectively in the US and elsewhere abroad has grown as the global recession has taken a tool on jobs. There is also increasing resentment over China using capital from its $2 trillion in foreign currency reserves to buy up cheap assets, particularly commodities and real estate, which have been pushed down by the economic crisis.

China has a large advantage over the US on the trade issue. Large American companies like Wal-Mart (WMT) source so many good from China that the supply chain could not be replaced by getting manufactured goods elsewhere. China does not rely as much on American imports as the balance of trade shows every month.

The temptation to take actions against China for instances where it ships goods to America at what appear to be below market prices will increase as unemployment moves to 10% and beyond. But, it is a sucker’s game for the US. China has the factories and America has the consumers. All locking out China’s products does is drive up consumer prices and drive down consumer spending which is still the engine of US GDP.Douglas A. McIntyre

http://247wallst.com/2009/09/14/china-and-the-us-a-good-old-fashion-trade-war/


Dare to think about this. IF ONE IS HELL BENT ON DESTROYING AMERICA WHAT BETTER WAY THAN UNDERMINE YOUR OWN ECONOMY.

Can we say bring AMERICA to its's knees from within?

Yes I was shouting where all the barn blind stupid libs could hear. They need to wake up the whole Washington establishment needs to be given walking papers. BOTH SIDES OF THE ISLE. Even the Supreme Court could stand to be revamped with ones who make decisions based on the constitution of AMERICA NOT THE WILL OF THE WORLD.

What we need is GOD Fearing, and GOD loving leaders like the founders of this country were!
 
A

Anonymous

Guest
"The president sent the message that we expect others to live by the rules, just as we do," Leo W. Gerard, president of the union, said Friday night.

"The President decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case," the White House said in a statement released Friday night.

Obama's decision signals a marked shift from the policy of the Bush administration, which had rejected taking action in four similar cases it reviewed.

The union complaint was filed under a law Congress passed in 2000 that allows the United States to impose tariffs and other trade protections if a surge in Chinese imports damages a U.S. industry.

China agreed to the provision while negotiating to join the World Trade Organization, but until Friday the general "safeguard" provisions of the law had never been invoked.

Critics warned that if the general "safeguard," which expires in four years, was never used to protect American workers from Chinese imports, then political support for free trade would be eroded.

"Since China joined the WTO, American workers have not been assured that the government would defend them against unfair trade," Sen. Sherrod Brown (D-Ohio) said.
 

MoGal

Well-known member
These free trade agreements where we export jobs and all we do is import goods has brought this country down.

Do you remember the "Mikey" commercials? Give it to Mikey, he'll eat anything.......... well that is what the USA became. We've been the garbage disposal for every country to build up their economy at the detriment of the American people because they just got deeper and deeper in debt.

Thank you Hypo for bumping it up. I hadn't seen this as yet.

Shadowstats.com is saying unemployment is at 20%....... I just wonder what it is IF they would figure it the same way they did in the 1930's.... this government is well known for changing the way they figure anything so they can get the numbers they want..... its called creative accounting.

Hypo: Have you seen the article about China has told the central banks they will have new banking rules effective Sept. 16th??????????? The government doesn't have to honor derivitives as they've realized they are worth exactly zero.......... the central bankers and the news here in the USA has been deafeningly quiet ............ look for another bank bailout coming up (yes the same banks who own controlling stock of the federal reserve) ........... and yes we would be bailing out the central banks of China (Goldman Sachs, Jp Morgan, UBS and Morgan Stanley)

edited to add teh link: http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSSP47327420090831?pageNumber=1&virtualBrandChannel=11604
 

hypocritexposer

Well-known member
Yes, I'll link you to a thread that MsSage started.

I think I posted about 5 articles in it about the Chinese and Banking etc.

http://ranchers.net/forum/viewtopic.php?p=410093&highlight=china#410093
 

MoGal

Well-known member
I ran across this one:

http://www.sfexaminer.com/politics/ap/china_balks_at_us_tire_pressure_but_2_economies_need_each_other_wider_trade_war_unlikely.html

On Sunday, Beijing announced it would investigate complaints that American auto and chicken products are being dumped in China or benefit from subsidies. The ministry said the U.S. imports have "dealt a blow to domestic industries."

I thought we sent them chickens and they processed them and we bought them back....... no??
 

MoGal

Well-known member
IF it takes 5 years before the U.S. economy generates enough jobs to overcome those lost and to employ the new workers entering the labor force that will really dampen trade efforts.......... plus I saw an article that 33 percent of those aged 34 and under are living back at home now..... we've got the finest government money can buy.


http://news.yahoo.com/s/mcclatchy/20090908/pl_mcclatchy/3307834_1

Still, economists concur that a quarter-century of economic growth fueled by cheap credit is over. Many analysts also think that an extended period of slow job growth and suppressed wage growth will keep consumers — and the businesses that sell to them — in the dumps for years.

"Those things are likely to be subpar for a long period of time," said Martin Regalia, the chief economist for the U.S. Chamber of Commerce . "I think it means that we probably see potential rates of growth that are in the 2-2.5 (percent) range, or maybe . . . 1.8-1.9 (percent)." A growth rate of 3 percent to 3.5 percent is considered average.

The unemployment rate rose to 9.7 percent in August and is expected to peak above 10 percent in the months ahead. It's already there in at least 15 states. Regalia thinks that it could be five years before the U.S. economy generates enough jobs to overcome those lost and to employ the new workers entering the labor force.

All this is likely to keep consumers on the sidelines.

"I think this financial panic and Great Recession is an inflection point for the financial system and the economy," said Mark Zandi , the chief economist for forecaster Moody's Economy.com. "It means much less risk-taking, at least for a number of years to come — a decade or two. That will be evident in less credit and more costly credit. If you are a household or a business, it will cost you more, and it will be more difficult to get that credit."

The numbers bear him out. The Fed's most recent release of credit data showed that consumer credit decreased at an annual rate of 5.2 percent from April to June, after falling by a 3.6 percent annual rate from January to March. Revolving lines of credit, which include credit cards, fell by an annualized 8.9 percent in the first quarter, followed by an 8.2 percent drop in the second quarter.

That's a sea change. For much of the past two decades, strong U.S. growth has come largely through expanding credit. The global economy fed off this trend.

China became a manufacturing hub by selling attractively priced exports to U.S. consumers who were living beyond their means. China's Asian neighbors sent it components for final assembly; Africa and Latin America sold China their raw materials. All fed off U.S. consumers' bottomless appetite for more, bought on credit.

"That's over. Consumers can do their part — spend at a rate consistent with their income growth, but not much beyond that," Zandi said.
 

hypocritexposer

Well-known member
Lost: 600,000 Jobs

By INVESTOR'S BUSINESS DAILY | Posted Thursday, September 17, 2009 4:20 PM PT

Economy: As if Big Labor hasn't been repaid enough for its help in electing Democrats, a new report shows that protectionism — the unions' signature issue — costs 585,000 of the rest of us our jobs.

The aim is to preserve a few thousand jobs at most, but it's coming at a high price. On Monday, the U.S. Chamber of Commerce released a comprehensive report called "Trade Action: The Cost for American Workers and Companies." It describes how the Obama administration's trade decisions, all of which were sought by Big Labor, have so far cost 585,000 American jobs.

t started in February 2008, with the $787 billion American Recovery and Reinvestment Act of 2009. It required all iron, steel and manufactured goods purchased for public works projects to be American-made, and all textiles, clothing and equipment purchased by the Department of Homeland Security to be U.S.-made.

"We estimate that any net increase in U.S. employment resulting from the new 'Buy American' provisions will quickly evaporate as other countries implement 'buy national' policies of their own," the Chamber said. Even a 1% loss of sales would create big job losses, the Chamber said, and that doesn't include retaliation. Job toll: 176,800.

http://www.ibdeditorials.com/IBDArticles.aspx?id=338078386864116
 

MoGal

Well-known member
Well, I ran across this and was unable to post it because I couldn't get on this forum since that last post above..... now this fella has all the graphs, etc..... so when you hear tariffs are tearing down this country.... just remember tariffs go directly to the treasury NOT the federal reserve.....
http://unlawflcombatnt.proboards.com/index.cgi?action=display&board=globalization&thread=2528&page=1
its quite an interesting thread this is only part of it:

------------------------------------

The Smoot-Hawley Tariff was signed into law on June 17, 1930, and raised U.S. tariffs on over 20,000 imported goods. Legislation was passed in 1934 that weakened the effect of the Smoot-Hawley Tariff. In effect, the legislation functionally repealed Smoot-Hawley. Thus, the effects of Smoot-Hawley cover only the period between June 17, 1930, and 1934. This is the time frame that should be focused on.


So in reviewing the chart, where is the evidence that the Smoot-Hawley Tariff caused major damage to the economy?? Is there any at all?

The US was already in a Depression. Prior to Smoot-Hawley, the 1929 Trade Surplus was +0.38% of our GDP.

Let's focus on exports alone. Exports were $5.9 billion in 1929, and had declined to $2.9 billion in 1933. This $3 billion decline was roughly 3.8% of our 1929 GDP, which had declined by a whopping 46% over the same period of time. Thus, of the -46% GDP decline, only -3.8% of it was due to a fall in exports.

But the gain from import reduction must also be included. (A decline in imports increases GDP). If the import decline is added back to the GDP total (to measure the net trade balance), the "loss" was only $0.2 billion from our GDP — or less than ½ of 1% of the total GDP decline.

In other words, the document-able "loss" from the Smoot-Hawley Tariff — the "net export" loss — was less than ½ of 1% of our our GDP decline


To put this in perspective, let's compare all the GDP components together:

1929 .......................................................... 1933

GDP $103.6 billion--------------------->$56.4 billion ( [image] -$47.2 billion)
Consum. Expend $77.4 bil-------------->$45.9 billion ( [image] -$31.5 bill)
Private Invest $16.5 bil----------------> $1.7 billion ( [image] -$14.8 billion)
Trade Balance +$0.3 bil--------------->+$0.1 billion ( [image] -$0.2 billion)
Exports $5.9 billion--------------------> $2.0 billion ( [image] -$3.9 billion)
Imports $5.6 billion--------------------> $1.9 billion ( [image] -$3.7 billion)

Again, at the risk of being repetitious, how much difference to US GDP did the export loss make? The Trade Balance worsened by only -$0.2 billion, or about -0.19% of our 1929 GDP, or less than 1/5th of 1% of 1929 GDP. Meanwhile, our total GDP [image] a whopping -46%.

How much effect did a 1/5th of 1% loss of GDP have on the Great Depression, especially when spread over a 4-year period?

From the actual statistics, the true "harm" caused by the Smoot-Hawley is completely fictional. The harmful effects exist only in the minds of self-serving Globalist propagandists.

Based on available statistics, Smoot-Hawley had almost NO effect on the Great Depression. At the very most, caused a -3.8% decline in GDP from loss of exports. But factoring in the GDP increase from a decline in imports, it caused less than 1% of the GDP decline.

The Smoot-Hawley Tariff did not cause the Great Depression, nor did it worsen it or extend it. Claims to the contrary are false and easily refutable. The evidence to disprove those claims is abundant, overwhelming, and freely available to the public. The available GDP numbers completely exonerate the Smoot-Hawley Tariff from any contribution to the Great Depression.

The Smoot-Hawley myth needs to be put to rest, once and for all. The claim that it worsened the Great Depression is nothing but a fairy tale.
 
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