The (trade) war has started

[Victor68]

Normally consumer will buy from a cheaper source.

true, then USA has to add tax to china product to make it cost more than other countries. That is again adding cost to their own consumer who could have paid less for the same item. I wonder how they treat import via a 3rd country.

[Jamesc]

There was a stock market crash on Black Monday in 1987.

 

This is the result of the economic policy of Ronald Reagan and known as Reaganomics.

 

Reaganomics doesn't work but Reagan is Donald Trump's hero and he is trying to follow his economic policies.

 

And we all know where this will end up.

 

Edited May 14, 2019 by Jamesc

[Civic2000]

The US will lose the trade war for one reason.

 

Donny Trump.

 

Trump believe raising import duties from 10-25% means China will be paying the billions that US gets.

 

His own chief economic advisor Larry Kudlow said on Fox News it's the US consumer and companies that are paying.

 

Trump refused to accept and again said it China that is paying.

 

 

It's like saying its not the car buyers that are paying for COE it's the car dealers.

 

[Jamesc]

 

Exactly.

 

 

And not only consumers but also US companies.

 

US companies are selling China products like Amazon or Made in China products like Apple.

Edited May 14, 2019 by Jamesc

[Wt_know]

i assume >70% FMCG are made in china

even the brand is Korean or Japanese

will that kena high tariff

can export thru Singapore

huat ah!

[Civic2000]

Exactly.

 

 

And not only consumers but also US companies.

 

US companies are selling China products like Amazon or Made in China products like Apple.

 

His family's products also manufactured in China.

[Jamesc]

The only way to win a trade war is to outsell your competitors.

 

And actually 3 US companies are doing very well in China.

 

Which 3? It's as easy as ABC.

 

Apple Boeing and Caterpillar.

 

And because of the trade war these 3 are getting the hardest bit in China.

 

It's ironic.

 

[Enye]

wah trump administration is happily collecting billions in taxes

 

china meanwhile reduced VAT to 13% already while maintaining export rebates 

 

china reserves can sustain how long?

 

   

 

Edited May 14, 2019 by Enye

[Beregond]

His family's products also manufactured in China.

the posion and reliance of cheap product from china is very very deep in US already .

[Victor68]

It may take more than just exporting via 3rd country. Perhaps doing the final assembly in a 3rd country so they are Made in Malaysia or something. If it costs more then they might just buy from another country which can sell at a lower price.

 

Before the 2000's Chinese have to pay a huge premium to import / export everything through third country. The CN customs officials eat until fat fat. So no major loss to them but peasants like us eat grass.

While I agree manufacturing can always consider another country, setting up a plant for making slippers and higher end products can be very different. Also, even if you set up a plant, the logistics, communication, connectivity, skilled workers, stability, etc will have major impact on the overall production. Otherwise why people pick where to set up plants right?

[Jamesc]

US farmers stressed, angry at trade wars

https://www.businesstimes.com.sg/government-economy/us-farmers-stressed-angry-at-trade-wars

[NEW YORK] US farmers find themselves in the crosshairs of a trade war with China and others launched by President Donald Trump, who was elected with the support of many in rural America.

On Friday, Mr Trump announced long-threatened trade tariffs on tens of billions of dollars worth of Chinese goods, sparking an immediate retaliation from Beijing on an equivalent of US products including agricultural goods, notably soy.

"For American farmers, this isn't theoretical anymore, it's downright scary," the Farmers for Free Trade lobbying group said of the prospects for escalating tariffs.

"It's no longer a negotiating tactic, it's a tax on their livelihoods."

China is the largest buyer of soy beans, buying US$12 billion in 2017, about 30 per cent of the US harvest.

"We were already in a depressed market. These trade uncertainties add a lot of stress to this situation," said Jamie Beyer, a farmer in Wheaton, Minnesota who grows soybean, corn, sugar beets, wheat and alfalfa.

"We feel these tariffs are very damaging to our agricultural economy."

Farmers are the most at risk in this trade battle, as their incomes already were falling, declining by around 50 per cent since 2013, and this year expected to reach the lowest level since 2006.

EASY TARGET

The sector already was shaken up by the difficult negotiations on the North American Free Trade Agreement (Nafta) with Canada and Mexico, two major importers of agricultural products.

On her family farm in Oklahoma, Hope Pjesky raises cattle and grows winter wheat, and says she is "very nervous" about recent developments.

"Unfortunately, agriculture seems to be the industry that they hit back on when there is retaliation. I just wish there were a better way to go about addressing that issue," she said.

That is according to plan, since US trading partners have singled out American products from states strongly supportive of Mr Trump, in hopes of increasing the pressure on him to reconsider.

But Ms Pjesky noted that "there are a lot of people who voted for him that still have faith that it is just going to end up well."

It is difficult to quantify the precise cost of Chinese sanctions, but Missouri corn and soybean farmer Blake Hurst said he already is seeing an impact on prices.

The weather remains the main factor influencing the price of corn, wheat, soybeans and cotton, but the threat of renewed tensions between Beijing and Washington hit the market hard this week and the soybean price fell by more than six per cent.

"It will affect our profitability" and cut the number of acres cultivated, he said.

TRUMP SUPPORT

Roger Johnson, who leads the country's second largest agricultural union, the National Farmers Union, said the group supports the White House goal of reducing the US trade deficit.

"But our organisation grows increasingly concerned that this administration does not have a plan to ensure family farmers and ranchers aren't thrown under the bus for the sake of these goals," he said.

Even so, few blame Mr Trump directly.

Mr Hurst said many in Missouri are still willing to give him the benefit of the doubt.

But, he cautioned, "if we don't see any success, then patience will wear thin."

US farmers hardest hit by the trade war voted for Trump, even now do not blame him and still support him.

 

Australian farmers hardest hit by the drought support the government coalition, do not believe in climate change and still support the coalition government who also do not believe in climate change.

 

What is it with farmers?

 

They have been sniffing their weed killer Roundup or smoking their weed?

 

[Jamesc]

Some people do not believe the stock markets will collapse. I respect their opinion.

 

Some people do not believe we will go into a recession. I respect their opinion.

 

I believe we will have a bad crash.

 

I believe we will have a bad recession.

 

So if we really have a bad crash and recession no point asking the people who never saw the crash and recession coming how to solve it.

 

What do they know? They never even saw it coming.

 

So the only person that we should ask how to get out of the recession is me.

 

And I have a solution which we should put in place.

 

All staff to work only 4 days and to be paid 5 days.

 

I know what everyone is thinking now.

 

Loss of productivity.

 

Companies will go out of business.

 

What a stupid idea.

 

Every company that moved to a 4 day week improved their output and productivity.

 

When Honda moved to 35 hour week form 37 hour in the UK they asked the staff to submit ideas to get the 5% productivity improvements.

 

But first they asked the staff which 2 hours they wanted off and the staff said Friday to stop work at 7pm instead of 9 so they can go to the pub for drinking. Brits.

 

They got more than 5% improvement in productivity.

 

At one time in the world people worked 7 days a week. Then they moved to 6 days and productivity went up 40%.

 

In Singapore we moved from 5.5 days to alternate Saturday to 1 in 4 to 5 day weeks. Which company went bankrupt because of this? None right.

 

So 5 to 4 days we will also not go bankrupt but MC will substantially be reduced and productivity will improve.

 

If company are hesitant then can start with move to 4.75 day week and if still not bankrupt 4.5 and if still not gone case 4 day weeks.

 

Edited May 14, 2019 by Jamesc

[Wind30]

The US will lose the trade war for one reason.

 

Donny Trump.

 

Trump believe raising import duties from 10-25% means China will be paying the billions that US gets.

 

His own chief economic advisor Larry Kudlow said on Fox News it's the US consumer and companies that are paying.

 

Trump refused to accept and again said it China that is paying.

 

 

It's like saying its not the car buyers that are paying for COE it's the car dealers.

 

not really... I think the scenario is easily analysed.

 

After the tariffs hit, both the US buyer and the china seller will look at their next best buyer/seller. Can china find another buyer for their goods and if so what price? If it is less than 25% cheaper price, they will go buyer B, else they will negotiate a price with the US buyer which is buyer B price + 33% or any price higher than this. 

 

US buyer will look for another seller that is cheaper than "buyer B price + 33%". If seller B price is cheaper than this, basically USA and China will sell/buy their goods elsewhere. This case is a lose-lose situation as both sides end up worse off. 

 

I believe china will not be able to hike their price up by 25% and still remain competitive since they compete by cost... They also cannot find another buyer big enough for their stuff and they will end up with a price between 0-25%, like maybe a 10% increase. In that case I think the USA will gain a LOT as any delta from the 25% is net gain to the us government. 

 

I really think Trump is doing USA economy a whole bunch of good. 

Edited May 14, 2019 by Wind30

[Vid]

i assume >70% FMCG are made in china

even the brand is Korean or Japanese

will that kena high tariff

can export thru Singapore

huat ah!

 

Don't think can. As long as made in China, all kenna.

[Beregond]

not really... I think the scenario is easily analysed.

 

After the tariffs hit, both the US buyer and the china seller will look at their next best buyer/seller. Can china find another buyer for their goods and if so what price? If it is less than 25% cheaper price, they will go buyer B, else they will negotiate a price with the US buyer which is buyer B price + 33% or any price higher than this. 

 

US buyer will look for another seller that is cheaper than "buyer B price + 33%". If seller B price is cheaper than this, basically USA and China will sell/buy their goods elsewhere.

 

I believe china will not be able to hike their price up by 25% and still remain competitive since they compete by cost... In that case I think the USA will gain a LOT as any delta from the 25% is net gain to the us government. 

 

I really think Trump is doing USA economy a whole bunch of good. 

i dun know what u mean.

 

but  i believe it work this way.

 

last time US importer buy 1 shoe from china for $100.00

but now tariff come in, US importer still buy that shoe for $100.00 

but they need pay extra 25% tax to US gov.

so now the cost price of the shoe for US importer become $125.00

 

(if china seller say heh i help u abit now i discount for u extra $10 buks, that is another totally different issue )

 

(pls correct me if i am wrong)

[Enye]

 

(if china seller say heh i help u abit now i discount for u extra $10 buks, that is another totally different issue )

 

 

 

ya china seller discount $10

 

then china govt absorb another $10 

 

then us buyers only see $5 increase

 

   

[Enye]

The US importer die die must buy from one seller ? Got happy ending ? Adidas and Nike are making shoes in Vietnam, no tariffs. 

 

short term ...difficult

 

china is where all the spare manufacturing capacity/over capacity is 

 

other countries will struggle to pick up the slack given that they have neglected to expand capacity in the wake of china's rise

 

 

[Enye]

nike-tnc-case-study-3-638.jpg

 

as i said...difficult but not impossible

 

which country or combination of countries can pick up the slack if 195 factories in china shut?

 

it would be a supply chain nightmare though