Trump Tweets about China, US Businesses Freak out

“The whole semiconductor industry could collapse.”

China is important to US companies. Qualcomm gets 57% of its revenues in China, Micron 43%, Apple 23%, Jabil 21%, Boeing 13%, Wynn Resorts 60%, according to Bloomberg’s math.

In the last earnings report, GM specifically pointed at its “strong performance in China,” the largest auto market in the world. In the first three quarters this year, GM sold 2.7 million vehicles in China, 38% of GM’s global sales, and up 9% year-over-year. GM’s global vehicle sales rose a mere 0.4%. Without the boom in China, GM’s total vehicle sales would have declined.

And much of the supply chain of US companies is at least partially dependent on China. US companies have long ago jumped on the China bandwagon. With growth languishing in the US, Europe, and Japan, China was the place to be – both, as a booming market for American brands and as a manufacturing base.

This is part of a complex two-way, awfully lopsided $627-billion trade relationship, with the US running a $337 billion trade deficit with China – for the great benefit of US companies and with, let’s say, mixed impact on the US economy. But it cuts both ways: one country’s exports are the other country’s supply chain.

President Elect Trump has now inserted himself into this relationship by questioning in bursts of 140 characters or so the previously unquestionable “One China” policy, whereby the US toes the line and acknowledges that Taiwan is not an independent country but part of China. This is a hot-button issue in China.

So when Trump “accepted” a phone call from Taiwan’s leader – the first direct communication between leaders of the US and Taiwan since 1979, and apparently planned by the Trump folks in advance to demonstrate a hard line on China – and when he in the ensuing media hoopla tweeted that the “One China” policy could be used as a bargaining chip, the Chinese leadership sat up straight. And it has begun to bargain in its own manner.

On Saturday, Wang Jianlin, chairman of Dalian Wanda Group – which acquired among other US jewels, AMC Theatres and Legendary Entertainment, and announced last month that it would acquire Dick Clark Productions – told a conference in Beijing that the jobs of his 20,000 employees in the US would be at risk if a trade war between the US and China broke out.

On Tuesday, an editorial in the Global Times, published by the state-run People’s Daily group, warned, as reported by Bloomberg: “To deal with Trump’s threats, China has a full toolbox.”




On Wednesday, the official China Daily, an English-language paper, cited Zhang Handong, director of the National Development and Reform Commission’s price supervision bureau. China would soon hit a US automaker – he didn’t say which – with an antitrust fine for “monopolistic behavior,” as the paper put it. Investigators found that the company had told distributors to fix prices starting in 2014. For good measure, as if to emphasize the subtext, he added that “no one should read anything improper into the timing of penalty decisions or businesses that are targeted.”

US companies are worried. They have a lot at stake. China has long used administrative procedures and the selective enforcement of anti-monopoly laws, government regulations, and procurement tenders to hamper operations of foreign companies in China for the benefit of local competitors.

“People feel off-balance right now; when there is a sour relationship between the US and China, everyone is affected,” Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai, told Bloomberg. “State-owned enterprises in China have considerable purchasing power, and they’ll be influenced by the government tone, or get specific directives, to avoid American businesses. People will try to read Beijing’s mood and that’ll shape economic activity.”

“Technology companies are quite nervous,” said Eric Huang, a board member of Monte Jade Science and Technology Association and CEO of COINX Ventures, both in Silicon Valley. Tech companies are particularly vulnerable due to their extensive supply chains in China and Taiwan. Bloomberg:

Taiwan plays a critical role in the global tech supply chain. Apple Inc.’s main manufacturing partner is Foxconn Technology Group while Intel Corp. provides chips to many Taiwanese device-makers and the country’s contract semiconductor firms Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. supply many U.S. companies.

While contract manufacturers such as Foxconn and Pegatron Corp. are Taiwanese, most of the assembling is done at enormous plants in mainland China.

Tensions between China and Taiwan, or worse, a Chinese economic embargo of Taiwan, would shred the global supply chains of technology products. All the semiconductor foundries are in Taiwan, explained Ben Lee, co-founder of Glogou in Silicon Valley, whose software helps US businesses market their products in Asia. “The whole semiconductor industry could collapse,” he said.

Trump’s China rhetoric may just be a negotiating tactic, but it already is working its magic.

“Donald Trump doesn’t follow any the rules,” Ta-lin Hsu, founder and chairman of PE firm H&Q Asia Pacific in Palo Alto, told Bloomberg. “It’s causing a huge sense of uncertainty. People are trying to guess what will happen next. No one has a clue.”

Investment plans are on ice given the uncertain outlook and should a US-China trade war break out, companies with small margins caught in the cross-hairs may go bankrupt, according to Hsu.

The hopes are that Trump, as a business man, will be practical and bring a bottom-line focus to the US-China relationship. But Tao Weimin, VP of apparel company V-Grass Fashion in Nanjing, warned that the approach by Trump’s transition team could backfire. “Beijing might feel like it cannot back down or be seen to be weak,” he told Bloomberg. “So there is a possibility of escalation.”

This might come as another nasty surprise for the happily ballooning US stock market valuations that see nothing but a gravity-free paradise in the Trump era.

And so the Hot Money returns and bets big on Oil Nirvana. Read…  Treasuries Melt Down, Junk Bonds Boom, Yield Spreads Collapse




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  134 comments for “Trump Tweets about China, US Businesses Freak out

  1. Dec 14, 2016 at 11:54 am

    Gee-whiz, will the USA have to repatriate some or all of the multi-billion dollar chip-fabrication plants now sited abroad ?

    BOO HOO !

    If I remember college well enough ( many decades ago ) the fabrication technology was originally pioneered by Fairchild and IBM. Andy Grove, Moore’s law and other fine people, companies and ideas.

    Bring ’em back, they’ll perform fine here in the North Carolina Technology region.

    https://en.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants

    And if the Chinese nationalize American intellectual property or the plants, then tariffs will do fine to protect the re-fledgling American chip plants

    Can’t wait for them to come home again !

    SnowieGeorgie

    • Smingles
      Dec 14, 2016 at 1:40 pm

      Aye, a trade war with one of the biggest economies on the planet would be absolutely fantastic! Here, here!

      • Me
        Dec 14, 2016 at 4:09 pm

        They may be “big” in terms of numbers of slaves, etc, but they will collapse in 30 days without America buying their junk….which we can make ourselves.

        We need nothing from them and they know it. IT is why they are scared to death.

        • nhz
          Dec 14, 2016 at 4:57 pm

          The US – especially the tech industry – would collapse even more quickly without its China supply chain.

        • TheDona
          Dec 14, 2016 at 5:42 pm

          What is so special top secret with China’s supply chain?!! They buy food from us. Oil from whomever. Raw materials from Africa. They offer nothing new and clever. All they have is the sheer number of people. With a burgeoning middle class and their proclamation of being a consumer driver society….without the solid legs to stand on….they are ripe to bring down. They are outsourcing like crazy. Look how great outsourcing has worked for out for our “consumer driven” society.

          Not to mention the Chinese Zombie companies…

          By the way I find it interesting that China’s richest man, Wang Jianlin, has to buy out Hollywood instead of create from the inside out. Korea has an awesome creative enclave. If you are up to reading subtitles Korea has some of the greatest films out there. (Whenever I say Korea, I mean S. Korea)

          Game changer time…..screw China. Sorry for you folks who like plastic christmas ornaments, melamine in your baby formula and paper towel shirts though. ;-)

        • Intosh
          Dec 14, 2016 at 5:21 pm

          After the 2008 crisis, when the dust settled, it is China with policies stimulating internal consumption that largely brought the world economy back from the dead.

          “We need nothing from them”. I’m surprised to see such ignorant comment here.

        • Dec 15, 2016 at 1:28 am

          China is #1 supplier of rare-earth metals as are found in products from glass, microprocessors, magnets, satellites, optics, weapons, etc. These can be had elsewhere but not without difficulty.

          The $337 billion trade deficit represents loans to China, money that costs Wall Street absolutely zero to make, unlike poison dog food which costs something … even if it is little. It is hard to see China not repaying these loans. Even now dollars gush out of every nook and cranny of the Chinese economy … but as loans are repaid the amount of dollars in circulation diminishes. Lending dollars into circulation in China provides liquidity for the rest of the world. China dollars become ‘Petrodollars’, they are recycled into Treasuries and the US stock market.

          Cut off those loans = bad for Wall Street.

        • John
          Dec 15, 2016 at 9:30 pm

          When companies leave for cheap labor they never come back.The Chinese have too much control over our economy,Trump better have a plan to deal with China.High tariffs only mean price increases for the American consumers.

    • NotSoSure
      Dec 14, 2016 at 1:45 pm

      No they won’t. Making semiconductors require engineering degrees beyond a typical manufacturing job. Not to mention a super clean high tech facility.

      You are talking as if a guy who’s just laid off from the car factory down the road will be able to come into a semiconductor factory and be effective immediately. That’s not going to happen.

      The only way for this to happen is if the US Dollar is much cheaper than other country’s currencies, just like how production cost was much cheaper in other countries way back when.

      The price for American Manufacturing to return is a US Dollar Hyperinflation. That’s what everybody who promises a US manufacturing resurgence is dancing around.

      • Dec 14, 2016 at 2:25 pm

        Did you just state or imply that USA manufacturing workers can not be trained to work in a semi-conductor fabrication plant ?

        But Chinese workers can ? Taiwanese workers can ? And Japanese, Malaysian and Indonesian workers can ? Not to mention the Irish !

        I ask some simple questions just above, but I won’t dare answer them for you.

        https://www.fairchildsemi.com/about/careers/

        SnowieGeorgie

        • NotSoSure
          Dec 14, 2016 at 4:24 pm

          No, I didn’t say that, I said US workers are too expensive to train at the current US Dollar. Reread my piece.

          All those 3rd world country workers are super cheap. They can screw a couple of things up initially but the companies will come ahead.

          As usual, Americans want something but neglect to discuss the cost. It’s how the country goes into the doldrums in the first place, but hei let’s keep going!!

      • Winston
        Dec 14, 2016 at 2:52 pm

        “Making semiconductors require engineering degrees beyond a typical manufacturing job.”

        IC fabrication jobs are few. The entire process is mostly automated, primarily for cleanliness issues as the tiniest spec of dust can end up killing a chip on the wafer during production. The vast majority of engineering work goes into chip design and production machine design. Few on-site personnel need engineering degrees.

        Now, we never should have provided ANY tech to be stolen as part of domestic production and sales within such a culturally inherent IP thief of a nation:

        William P. Alford
        To Steal a Book is an Elegant Offense: Intellectual Property Law in Chinese Civilization.
        Stanford University Press

        http://digitalcommons.law.yale.edu/yjlh/vol8/iss2/10/

        However, as has been said, a capitalist will sell you the rope you use to hang them.

        • TheDona
          Dec 14, 2016 at 3:23 pm

          Winston…incorrect. Electrical engineers, chemical engineers, materials engineers are needed to keep the manufacturing side of chips humming. Yes lots is now automated but the backbone is with degreed engineers. Chip design has to translate into an actual product that can be made. These people have to make that happen….and that is not an easy feat.

          Regarding stolen IP….yeah that is happening way too often. The Chinese do the same thing as they do with Fake Chanel Handbags….they sell it out the back door. Fake chips everywhere.

          Bring the chip manufacturing back to US and it would take the Chinese off at the knees.

        • Winston
          Dec 14, 2016 at 9:21 pm

          “Winston…incorrect. Electrical engineers, chemical engineers, materials engineers are needed to keep the manufacturing side of chips humming.”

          See below the first paragraph in this post:

          CrazyCooter
          Dec 14, 2016 at 4:44 pm

          That is what I was describing.

      • TheDona
        Dec 14, 2016 at 2:59 pm

        Semiconductor is my wheelhouse. There are so many laid off Semiconductor manufacturing Engineers and so many manufacturing fabrication plants (Fabs) shut down here in the US over the last 8 years….it would make your head spin. It would not take us long at all to ramp back up. If you wanted to pull the rug out from under China…bring the chip manufacturing back to the US. We are ready!

        • Petunia
          Dec 14, 2016 at 3:43 pm

          I agree that we should bring back chip manufacturing. But not to long ago IBM sold its chip business when the morons in DC started screaming about putting back doors into everything. IBM could see that nobody would buy from them under those conditions. So when and if it comes back, it should be controlled by people who actually know how to make and sell technology.

        • Intosh
          Dec 14, 2016 at 5:28 pm

          Semiconductor might be your wheelhouse but probably not business. To whom do you think those products end up being mostly sold to nowadays?

          Pull the rug out from under China? Not so fast.

      • CrazyCooter
        Dec 14, 2016 at 4:44 pm

        Have you ever worked in semi? I have – I wrote software that factory floor equipment used to automate configuration before running boats of wafers through a diffusion furnace. Operators had some responsibility, but the automation allowed non-degreed workers (associates degree at the most) to run the equipment 24x7x365. They couldn’t be idiots – but it wasn’t rocket science either.

        And they had good pay and benefits – certainly enough to live a quality, middle class US lifestyle.

        Bugger off – I want to see our manufacturing base returned.

        Regards,

        Cooter

        • NotSoSure
          Dec 14, 2016 at 5:47 pm

          And if there’s a problem with the software then what? Tell the guy to fix it? How about some of the more sensitive equipments like the diffusion furnace?

          You mention that automation has already progressed quite a bit, then how many manufacturing jobs will bringing “chip manufacturing back to the US” bring?

          You guys are missing the real issue. Automation will mean no jobs for Americans, Chinese, etc pretty soon enough.

          Here’s one idea for you software big shot: would you be willing to sacrifice your job to bring back some manual work back to the process? Because that could be one of the consequences of returning the so called “manufacturing base” or is this another “Not in my backyard” rant? You want to bring back manufacturing and yet you want manufacturing to be more automated. Which one do you want? And sure “the best things in life are free”.

          As I’ve pointed out. Americans think that bringing back manufacturing is just a matter of waving some Harry Potter wand. You guys haven’t thought about the practical matters.

          Talk is cheap just like “Making America Great Again” is just a cheap slogan.

      • shawn
        Dec 15, 2016 at 3:29 pm

        High skilled labor in China is pretty expensive as well. Ever wonder what China’s real rate of inflation is? A lot more than our 7 to 13% when you include assets etc. There are other ways of evening the playing field beyond labor costs. That is if liberals do not run our economy.

  2. memento mori
    Dec 14, 2016 at 11:57 am

    Trump might have the answer to globalization : If you want to sell your product in the US then you must produce it here, if you want to sell it in China then you can produce it there. Looks like the world is moving toward a solution like this over time. Time will tell if it is good or bad.

    • Dec 14, 2016 at 12:21 pm

      Local vs. Global Production, supply chains and finished products :

      James Howard Kunstler has seen the future — especially in his “World Made By Hand” series :

      https://www.goodreads.com/series/122632-world-made-by-hand

      And also in his book “The Long Emergency”

      He sees a return to local manufacturing . . . . . .

      http://kunstler.com/writings/books/

      Visit his site and get to know him, I give him five stars for thoughtfulness, originality, and excellent thinking for changing times.

      http://kunstler.com/

      SnowieGeorgie

    • Smingles
      Dec 14, 2016 at 1:37 pm

      “Trump might have the answer to globalization : If you want to sell your product in the US then you must produce it here, if you want to sell it in China then you can produce it there.”

      So it sounds like your answer is basically a loose form of fascism in the form of DJT. That’s great! Just great!

      Imagine the absolute conniption conservatives would have had if Obama threatened to tax a specific company because it wanted to move jobs somewhere else? And isn’t giving tax breaks to specific companies the very definition of crony capitalism? I recall Republicans freaking out over tax breaks to certain solar companies.

      More than anything, it’s the hypocrisy that’s disgusting.

      • Chicken
        Dec 14, 2016 at 2:20 pm

        All of a sudden hypocrisy is disgusting, after 3 straight decades of it. I think you just gave me cancer! :(

        • interesting
          Dec 14, 2016 at 3:35 pm

          Chicken,

          amazing isn’t it? I guess it’s okay when it’s someone else whose career that is destroyed.

    • Me
      Dec 14, 2016 at 4:14 pm

      My Chevy Avalanche was about $40,000 new.

      Assembled in Mexico, where they pay about $1 an hour?

      I sure as hell got no advantage to that. The money went to…WHO?

      I am of the opinion if that same truck was built here, in Detroit, it would have cost about….let me guess……..”$40,000?

      • nhz
        Dec 14, 2016 at 5:01 pm

        You think GM managers and shareholders are going to accept way lower profits just because their cars are build in the US again? in your dreams …

        • Intosh
          Dec 14, 2016 at 5:34 pm

          What those GM managers might want to do is pay $1/hour to those new American auto workers. ;-)

    • Posa
      Dec 15, 2016 at 3:22 pm

      Momento– An elegant solution that needs to be a bit modified… “If you want to sell your product in the US then you must “… here I differ “pay American wages/benefits/ enviro protections”; provide open trade reciprocity and NO dumping.

      We don’t want the US market to be dominated by a few monopolies… so EU, Scandinavian and probably Japanese firms can export to the US or build here. In fact Chinese firms can build in the US for the domestic market.

      But what we don’t want is wage arbitrage… an integrated North American market can provide prosperity for all… let cheap Chinese labor build for the Vietnamese and Indian market

    • Shawn
      Dec 15, 2016 at 3:37 pm

      Ya duh! It’s the only way go. The much hyped promises of globalization have failed. Here is where the tire hits the road, if Trump does not improve job prospects for middle America, which I would assume brings back some manufacturing jobs, he will be thrown out in four years and the GOP will be decimated in 2 years.

  3. Paulo
    Dec 14, 2016 at 12:14 pm

    Memo from the CEOs desk:

    “Reminder, call the Donald and explaain reality to him.”

    Jeeez, how many times did ‘they’ try and take out Castro? Answer….638.

    And those were just politicians working for the Casino owning mafia. “one assassination attempt on Fidel Castro prior to the Bay of Pigs invasion involved noted American mobsters Johnny Roselli, Salvatore Giancana and Santo Trafficante.”[4] Or was the mafia working for the Govt? Does it matter? Same thing.

    It would not surpise me one iota if CEOs are already phoning Trump and telling him the time of day about their investments. It’s one thing to play the WalMart brigade for chumps, its another thing to mess with the rice bowls of the rich and powerful.

    • Petunia
      Dec 14, 2016 at 3:49 pm

      We never wanted to kill Castro. Having him, and the threat of communism, less then 100 miles off the coast was a gift to the military industrial complex. The neocons are probably the only ones that wept when he died.

      • Me
        Dec 14, 2016 at 4:17 pm

        I agree with you. A nation needs an “enemy”. If you don’t have one, create one.

      • Lee
        Dec 15, 2016 at 3:41 am

        You people want to know the truth about Castro and Cuban intelligence agencies?

        They ran circles around the incomps in the CIA, DIA, and FBI.

        Well trained, superior, and ruthless.

        Castro, like all other top level communists, was nothing more than a dictator who used any tool available to keep in power and that included torture, murder, extortion, rape, and execution.

        Like the Kim family in North Korea – only just a little less worse – Kim family the ‘lite’ version.

        • Dan Romig
          Dec 15, 2016 at 7:08 am

          Around the spring of 1990 or 1991, there was a 16 Cuban windsurfer that defected to the USA. His whole village came to wish him well and pray for him. He chose a departure time based on wind and tides, but knew it would be nearly impossible to hold onto his sail’s handle, so this young man had his hands duct taped to his handle for the journey, and he made it!

          I was lifting weights in the Sarasota YMCA with twenty other athletes, mostly baseball players and a few other windsurfers, when the news came to us. Quite a sight to see everyone quit pumping iron to wipe away tears and high five each other.

          A young Cuban really did “Live free or die.”

  4. Valuationguy
    Dec 14, 2016 at 12:26 pm

    Typical Trump…

    Set up a ‘seemingly’ outrageous negotiating position to start from…..and then negotiate to the middle. (‘Seeming’ in the sense that its not outrageous at all…but it a far cry from the rug the Chinese have been stepping on for years….)

    Immigration
    Obamacare
    Business….

    Did ANYONE pay attention to Trump’s tactics in the election?

    (Reagan did this first….btw…and he was pretty successful as President.)

    Yes…American foreign policy is massively changing….becoming more nationalist rather than globalistic…..

    Trump see everything as a potential deal…in which he wants to come out the winner as much as (if not more so than) the other guy.

    I think Wolf has touched on the key though….Chinese officials cannot really afford to give an inch lest their tanking economy get pushed over the edge even sooner…..something Trump probably knows but may have a poor understanding of how Chinese politicians (rather than Chinese businessmen) historically act when opposed (i.e. irrationally).

    • walter map
      Dec 14, 2016 at 2:06 pm

      “Reagan did this first….btw…and he was pretty successful as President.”

      Which successes were those? Arms for hostages? Biggest tax increases in U.S. history? Foreign ‘aid’ billions to dictators? Genocide in Central America? Phony tinkle-on Reaganomics? Deregulation that brought you the S&L and 2008 crashes and the upward trajectory of deficits? Are all your heroes so tainted?

      • interesting
        Dec 14, 2016 at 3:39 pm

        walter map

        “Deregulation that brought you the S&L and 2008 crashes”

        well you can’t leave slick Willie out of that conversion. the repeal of Glass-Steagalll had a big impact on the 2008 crash….

        but i like to make my pre-rich Reagan loving republican friends heads explode by telling them that Obingo only doubled the debt Reagan almost tripled it

        • walter map
          Dec 14, 2016 at 4:28 pm

          Obama could have reduced those deficits more quickly by ending Dubya’s temporary tax cuts for the rich (which is to say, permanent), but Republicans insisted on keeping welfare for the wealthy.

        • Lee
          Dec 15, 2016 at 3:44 am

          And how much were the absolute numbers and not the phony stats you like to quote?

    • Tyler from Grand Rapids
      Dec 14, 2016 at 3:05 pm

      This exactly, trust Trump – he knows more about this than almost anyone on the planet and follows the same procedure every time.

      Tweet something or say something generally way on the far end, bonus points if it can be taken out of context (Mexican rapists… etc)
      Media, person, company etc go bat shit insane
      Trump doesn’t back down
      More craziness / dominating the news cycle
      Trump makes a deal or gently softens his position
      …..

      Time for a new tweet!

      • night-train
        Dec 15, 2016 at 3:07 am

        “This exactly, trust Trump – he knows more about this than almost anyone on the planet and follows the same procedure every time.”

        The last time I trusted a guy like Trump, I had to pay a lawyer 1/3 of the billing amount to collect. Trust Trump? No way. No how.

  5. Kam
    Dec 14, 2016 at 12:33 pm

    For the United States to be vulnerable to an aggressive belligerent like China, tells you how far away from reality we have come, in the manipulation of the dirty hands of our Globalists. China is no friend of the U.S.
    Corrupt American politicians created this monster, through payoffs from nationless, soulless, corrupt corporations.

    • memento mori
      Dec 14, 2016 at 12:53 pm

      Cant agree more, it is a shame that everyone in the established media is blaming Trump for having taken a call from the democratically elected leader of Taiwan without first asking for permission from red china communist thugs that are running mainland China today.
      What has become of our values? Is it only trade we worry about and nothing else matters?

      • Smingles
        Dec 14, 2016 at 1:24 pm

        “What has become of our values? Is it only trade we worry about and nothing else matters?”

        Values? Utterly laughable. The US is the #1 arms provider to autocrats and dictators around the world– countries like Honduras, Bahrain, Djibouti, Egypt, and Algeria.

        Values never supercede money. Never.

        • nhz
          Dec 14, 2016 at 5:15 pm

          … also the number one sponsor of coups and terrorists worldwide, by far.

          American values went out of the window at least 50 years ago.

        • walter map
          Dec 14, 2016 at 7:31 pm

          “American values went out of the window at least 50 years ago.”

          European observers have deplored the American obsession with financial gain since the 18th century. Americans have largely been interested in the pretence of morals only, while dispensing with actual morals as unprofitable and unconducive to power:

          When there is a lack of honor in government, the morals of the whole people are poisoned.

          – Herbert Hoover

          So America has been poisoned, and is not expected to survive. After all, it was founded on genocide and slavery, and genocide and slavery are its destiny.

      • Chicken
        Dec 14, 2016 at 1:41 pm

        Gotta love fake and misleading news from MSM.

        Keep in mind, Draghi has some money to spend on behalf of Germany before Dec 22th arrives.

    • Smingles
      Dec 14, 2016 at 1:03 pm

      “For the United States to be vulnerable to an aggressive belligerent like China, tells you how far away from reality we have come”

      Well, it’s clear someone is nowhere near reality (here’s a hint: the US is probably the single most belligerent country in the world)…

      • Dec 14, 2016 at 3:16 pm

        Probably ?

        You are uncharacteristically gentle, stating “probably” .

        I would have said “definitely” . Nevertheless, I agree with you wholeheartedly and completely !

        http://www.washingtonsblog.com/2015/02/america-war-93-time-222-239-years-since-1776.html

        SnowieGeorgie

      • Chicken
        Dec 14, 2016 at 3:18 pm

        Perhaps you’re referring to the very same criminal enterprise I’ve been referring to.

      • nhz
        Dec 14, 2016 at 5:18 pm

        yes, must be hard for the school bully that after so many years of terrorizing all the kids there is a new kid on the block that refuses to be beaten down.

      • Intosh
        Dec 14, 2016 at 5:46 pm

        Priceless!

        There is a thread about hypocrisy higher up…

    • CoolHandLuke
      Dec 14, 2016 at 6:51 pm

      Kam,

      You are exactly right our corrupt greedy American politicians paid off by the Global Multi-National capitalists sold our country to “Communist Red China”, at the expense of the American worker and their economic well being, that resulted in huge deficits to our country and massive unemployment, and massive unemployment payments and stimulus programs to attempt to fix things, how stupid can you get?

      Yes to a country who isn’t even our friend, for the sake of cheap labor and to break the unions! This foe China is plotting our demise militarily, cyber-wise, and corporate espionage wise – they recently bragged about being able to destroy all our cities by ICBMs, – you don’t have to think very far where they got the tech, knowledge, resources, and money to do this – I said they would do this back in the early 90’s when they were in the Stone Age.

      Both sides of the aisle created this monster and a monster it will be for many years to come, – overnight they could nationalize all of the US companies there, sell our treasuries, seize Taiwan, play havoc with the South China sea lanes and Japan, that would bring the USA to her knees.

      This isn’t the kind of country I grew up after WWII to see such a sad spectacle of the USA so dependent and vulnerable to a “COMMUNIST” country, – all in the sake of saving a buck, how despicable! – Gen Patton and Gen MacArthur would puke their brains out if alive today!

      Bring back the factories, it will be a painful transition but future generations will be thankful.

  6. NY Geezer
    Dec 14, 2016 at 12:50 pm

    Within China, that country is viewed as a superpower on par with the US. It is alsoviewed as the world’s largest real economy, as the world’s new largest consumer economy, and as the only current driver of the world economy. China does do not feel any need to bargain with Trump and will not do so. But Trump has shown no capacity to compromise or back down from offensive tweets.

    Trump very likely knows that the “one China” policy has been the bedrock foundation of the cooperative relationship between the US and China since the days of the Nixon administration. Perhaps he was testing to see if it still is. Well, now we know. It is.

    How can this end well for anybody?

    • Tom Kauser
      Dec 14, 2016 at 1:01 pm

      My chia trump gets its hair!

    • Kent
      Dec 14, 2016 at 1:15 pm

      Agreed. China would crush the US in an economic war. Big chunks of US industry would collapse almost immediately without Chinese supply lines.

      Trump will be begging for a face-saving solution in no time.

      • Unitron
        Dec 14, 2016 at 3:12 pm

        China needs us and our dollars a lot more than we need them and their crap. Simply making it difficult for China’s banks to obtain dollars would collapse China’s financial system. They can sell as many treasuries as they want, but they won’t, because they can’t do it and have a functioning economy.

        • Kent
          Dec 14, 2016 at 4:46 pm

          China’s financial system is owned by the government and collapses only if the government wants it to. China can export all over the world and take payment in $US, Yuan or local currencies. They only need the US as an export market. But, again, being a communist state, they can put people to work doing anything they want.

          The world will find out that they don’t need the US. But they do need Chinese production.

      • Chicken
        Dec 14, 2016 at 3:26 pm

        “Big chunks of US industry would collapse”

        Yes, this has happened already, not news. In fact, a large part of the gargantuan military budget is intended to stave off total collapse. This is more defective policy chasing defective policy and avoidance of root causes.

        Always the horse pulls the cart, it’s not pure happenstance despite the convincing insanity plead.

    • Chicken
      Dec 14, 2016 at 1:17 pm

      Same way Americans make a majority of products sold in the rest of Asia? Oops no, it’s the opposite.

      • TheDona
        Dec 14, 2016 at 4:35 pm

        At least the Koreans are creative. I think we could cut out China and embrace Korea more. Poor Japan, they had a leg up at one time and lost it. Disclaimer: I deal with all three countries in my business.

        All of their sense of Nationalism is astounding. They seriously laugh at us.

        • night-train
          Dec 15, 2016 at 3:17 am

          Good relations with China are necessary in order to deal with North Korea. Granted, we need China to be more involved to reel NK in. But alienation isn’t much of an inducement.

    • Kam
      Dec 14, 2016 at 5:19 pm

      NY Geezer:
      Nonsense ! The American support of China’s entry into the WTO is the plank upon which all of today’s China is supported. Some palms, front and center- the Clinton’s, were well greased to make this happen. Old Sam Walton was hardly cold in his grave when “American made” was buried along with him.
      And I never suggested to anyone that the USA wasn’t aggressive militarily, but until China start collecting billions of dollars from export of crap into the U.S. they had no capacity to build islands in the South China sea. China, the devil’s child spawned by American Traitors.

      • Intosh
        Dec 14, 2016 at 6:00 pm

        But Americans were so happy and willing to have China make and export the “crap” they love to buy for cheap and for the American executives and shareholders to make billions of dollars of profit in the process. Oh how the view has changed now that reality hit. Ignorance was bliss. Blame your own system/culture of ever growing profit and need for consumption — on your greed. You reap what you sow.

        • walter map
          Dec 14, 2016 at 7:21 pm

          “Blame your own system/culture of ever growing profit and need for consumption — on your greed.”

          America does not have a “culture”. Instead, it has marketing.

        • Born londoner
          Dec 15, 2016 at 1:22 pm

          is that the same greed the Chinese adhere to,
          ?

          “Deng Xiaoping announced that “to get rich is glorious”

          In 1978, Deng Xiaoping assumed the leadership of an impoverished China, after Mao Zedong’s disastrous Cultural Revolution

        • Intosh
          Dec 22, 2016 at 10:44 am

          “is that the same greed the Chinese adhere to?”

          Are you saying because someone else is also guilty, you are not at fault?

          Childish argument.

      • Intosh
        Dec 14, 2016 at 6:03 pm

        And it’s gonna be the same thing with the question of the environment. When the bill comes, people like you will blame some “American Traitors”. Again, ignorant is bliss, until reality hits.

  7. Tom Kauser
    Dec 14, 2016 at 1:08 pm

    I love bonds like gold member likes goooold!
    Gold will get to three digits before I will get interested!
    American credit is the best credit in the world no matter how big red China is or gets (citizens have a lot of room to pay more in taxes inside America if needs arose?)

  8. Chicken
    Dec 14, 2016 at 1:14 pm

    “GM specifically pointed at its “strong performance in China,”

    Another smoke screen? Wouldn’t it be fair to include some actual revenue metrics? Oh that’s right, free trade is fair trade, excuse my tangent.

    Besides, how does more cars sold in China contribute anything to taming environmental concerns?

    • NY Geezer
      Dec 14, 2016 at 1:55 pm

      When GM says that 38% of its global sales originate in China, that is a lot of real business , not a smoke screen.

      As to whether it is fair trade, we should wait to see if China’s expected accusations of anti-trust price fixing are against GM.

      With regard to environmental concerns, China is leading the world in requiring the electrification of vehicles sold in China.

      • Chicken
        Dec 14, 2016 at 3:46 pm

        Supporting the MSM agenda is your prerogative, good luck with that.

    • Dec 14, 2016 at 4:41 pm

      Number of vehicles sold (not dollars) is a standard measure in the auto industry. It’s reported by every country every month, including the US and China, sorted by manufacturer. That’s how auto sales are measured. And that’s exactly the number I provided in the sentence just after the phrase you quoted. So read a little further, and you’ll get to it.

      • Chicken
        Dec 14, 2016 at 4:59 pm

        Number of vehicles sold in China is meaningless information in terms of GM’s balance sheet, as far as I know? Things would’ve been considerably different if GM hadn’t fallen into bankruptcy but I seem to recall from that time they received financial assistance from Chinese interests in return for their Chinese trademark and IP ownership?

        Thus, I expect Ford is the target here assuming there’s anything to this beyond Bloomberg’s self-nterests.

  9. nick kelly
    Dec 14, 2016 at 1:26 pm

    26 % of Chinese imports- consumer electronics.

    The US was out of this biz before China was in.
    Japan took out the US 25-30 years ago ( except the usual hi fi niches)
    Last TV made in US 1995, by Zenith but it was a niche by then.
    Now China and South Korea have taken out Japan, Toshiba just exiting TV biz.
    This is very low margin biz.

    Next category 17 % budget apparel, shoes etc.
    The ‘rag trade’ is a business (apart from niches) that is long gone and is not coming back. China’s competitors here are Pakistan, Bangladesh, Sri Lanka etc.
    BTW: the rag trade was never a source of good jobs. New York had sweat shops largely with immigrant women doing the sewing before China was a factor.

    The only people in the US who might do electronic assembly are the same who might do clothing panel assembly- undocumented immigrants, who will put up with the conditions.

    After these two big categories ( 40%) comes a slew of Walmart stuff- kitchen stuff, toys, budget bedding, etc. Rarely will you see anything from the US or the real US competitors, Japan and Germany.

    As for Trump meditating on Taiwan- Mainland politics months before the election I’m not sure I believe that. It doesn’t square with his remarks when it happened, when he tried to pass it off as a routine congratulation. Why wouldn’t he comment on the One-China policy then?
    And as for linking it to trade- is US support for Taiwan for sale?
    What an encouraging signal to the half- dozen other countries alarmed by Chinese expansionism.

    As much as I support a firm response to the latter, I’m going to go with China’s assessment of Trump’s geo-political skills and knowledge.
    They are those of a child.

    • subunit
      Dec 14, 2016 at 2:04 pm

      “As for Trump meditating on Taiwan- Mainland politics months before the election I’m not sure I believe that. ”

      This is incorrect. Trump’s people are not stupid enough to do this kind of thing off the cuff. It’s been widely reported that the lobbying effort to get the call done was started 6mo in advance (http://www.nytimes.com/2016/12/06/us/politics/bob-dole-taiwan-lobby-trump.html?_r=0). Trump doesn’t need to comment on One China, the PRC has gotten the message without him needing to make a (rather gauche) direct threat.

      • Chicken
        Dec 14, 2016 at 4:48 pm

        “China, the PRC has gotten the message without him needing to make a (rather gauche) direct threat.”

        Yes, we should just turn off the computer while the MSM swamp is draining b/c they will continually masturbate misinformation campaigns which have become their sole mechanism for generating revenue.

        They’re giving me cancer too.

      • nick kelly
        Dec 14, 2016 at 8:20 pm

        I checked the link- interesting. But I query whether this was ‘Trump’s people’ planning this. Who would be his people months before the election? His family, Kellyanne?

        Bob Dole isn’t one. He’s one of Taiwan’s people. He got 140K from Taiwan to arrange the call. We know Bob Dole and Taiwan appreciate the significance- Trump?

        BTW: I’m pro- Taiwan and like to point out that its GDP per capita is 300 percent that of the Mainland ( 21K versus 7K)

        If China could have skipped Mao and the CCP it would have been the world’s biggest economy decades ago.

        • nick kelly
          Dec 14, 2016 at 8:24 pm

          PS: the real blunder was suggesting that the US attitude to the Mainland-Taiwan thing was related to trade negotiations.

          This offended both of them, and should also offend Americans.

        • d
          Dec 15, 2016 at 4:41 am

          “If China could have skipped Mao and the CCP it would have been the world’s biggest economy decades ago.”

          To do that you need first to skip lenin and marx a good idea but going back in time , and killing people, creates dangerous ripples in time, and alt realities.

          Simply give a little more time and the same thing that defeated the chinese nationalist will defeat the CCP. Corruption.

          The xi clan now almost completely in control the military and the CCP.

          Their leve of corruption makes all those in the past look like angels.

          Although they have taken on Xi’s message. Out of sight .

          The Xi corruption witch hunt is simply a purge weapon.

          Just like du 30’s war on drugs, the only drug dealers being killed are those who sell for those triad’s, who oppose the drug dealing bejing supported triads that support du 30.

          The Philippines does not produce the drug, it import’s if, from DPRK via china.

          To solve the drug problem in the Philippines, simply cut off the supply, from china.

          The Chinese drug dealers in the Philippines have been very efficient in the Philippines.

          They have created a sad statistic, almost every extended family in the Philippines, has at least 1 methamphetamine user.

          When japan did much less than this in china with opium, they were the devils to the world.

          china is addicting the world to its cheap methamphetamine produced for it in DPRK, and nobody say’s a thing.

        • Dan Romig
          Dec 15, 2016 at 7:27 am

          I too an pro-Taiwan, but the Island’s history is quite complex. Many Taiwanese were allied with Japan during WW II. After WW II ended, China had a civil war within between communists and nationalists. The last refuge for the nationalists was Taiwan. As I commented a few weeks ago, my Professor of quantum physics was on the last boat that left the mainland to get to Taiwan. He and his family would not have been spared death from the communists had they not escaped.

        • d
          Dec 15, 2016 at 8:05 am

          The Nationalist and Mao were fighting each other and pretending to fight the Japaneses, at the same time.

          From the first intervention of japan into china posts ww I.

          The Americans were most frustrated that aid supplied to the Nationalist to fight Japan was repeatedly used in the war with Mao.

    • Chicken
      Dec 14, 2016 at 3:55 pm

      I’m not a big believer in preconceived notions, I’m a bottom line guy. My expectation is Trump is as well.

    • Me
      Dec 14, 2016 at 4:28 pm

      You just proved my point. We don’t need anything from China.

      We can get all those items from Bangladesh, Vietnam, Korea, Taiwan, etc.

      Thank you. And when we start to buy all that from THEM, they will be real nice to us and not cop an attitude like the uppity Chinese do.

  10. Mel
    Dec 14, 2016 at 1:45 pm

    Point of information: Does anyone know of a good primer to explain how business transactions get cleared across sovereign boundaries? Eg. what happens in detail when buyers in the U.S. pay Chinese suppliers, and vice versa.
    My ideal would be something similar in style to Jay’s chalk talks on banking and finance at the Khan Academy.

    • Petunia
      Dec 14, 2016 at 3:33 pm

      Transactions are usually done with letters of credit. Buyer’s bank issues guarantee of payment to seller when conditions are met, usually presenting bill of lading from a carrier, that goods were delivered for shipment. Seller can get money from his bank on presentation of proof of conditions being met, he gets paid. The seller’s bank then presents documents to foreign bank and requests payment, usually settled thru Swift/BIS. Lots of fees are collected along the way.

      • Dec 14, 2016 at 3:42 pm

        Well aid

        Utilizing SWIFT, an American creation :

        https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication

        Just like the IMF, the World Bank and other post WWII American monsters that dominate world finance and trade.

        The world needs a break from USA domination for sure.

        SnowieGeorgie

        • SnowieGeorgie
          Dec 14, 2016 at 3:44 pm

          “Well said” Sorry I missed that typo.

        • Chicken
          Dec 14, 2016 at 4:06 pm

          By USA domination, you’re referring to the American middle class owned entities actually contributing real revenue to the US Treasury or are you referring to offshore elite owned enterprise that pays no taxes for the benefit of monopolizing global trade?

          Just wondering, I think there’s a huge distinction to be made and some effort should be made to qualify this aspect while flying that US flag,

        • Me
          Dec 14, 2016 at 4:30 pm

          Why? WE should dominate. Why not?

        • Dec 14, 2016 at 4:37 pm

          To Chicken ( there was not a REPLY button on your post/question ) :

          YOU ASKED : By USA domination, you’re referring to the American middle class owned entities actually contributing real revenue to the US Treasury or are you referring to offshore elite owned enterprise that pays no taxes for the benefit of monopolizing global trade?

          I was referring to neither, but your second part about offshore etc., was a good answer.

          The USA in it’s ongoing quest to me the master of its dominion ( i.e., the US colonies, the world ) uses sanctions sanctions sanctions. Such acts are tiresome, immoral and just plain ought to be stopped.

          If we do not like a country, then cease relations and give up our embassy.

          SANCTIONS WORK BECAUSE OF THE DOLLARIZATION of much of the world, and that works a great deal because of SWIFT.

          Russia and China have been working on a replacement for SWIFT, and once they have one, sanctions won’t work any more. No more freezing the accounts of foreign entities that keep financial accounts accessible to the USA financial monster, solely because of SWIFT ( I have simplified a bit here ).

          http://journal-neo.org/2014/10/10/russia-in-negotiation-with-china-for-alternative-swift-bank-system/

          http://russia-insider.com/en/business/russias-alternative-swift-challenge-us/ri7666

          The IMF, another USA financial monster has damaged economies all over the world with IMF remedies for them, such as austerity, and loans with extremely disadvantageous terms.

          USA DOMINATION, of which the entire world, not just Russia and Iran, must be very weary.

          SnowieGeorgie

        • nhz
          Dec 14, 2016 at 5:25 pm

          American creation? It was established in Brussels and today it certainly is an organization that isn’t very fond of the constant US interference with its business (interference that is mostly for illegal or dubious political purposes).

        • nick kelly
          Dec 15, 2016 at 1:23 am

          SWIFT is so important that Russia has said it would be an act of war if Russia is expelled.
          I’ve worked for companies that used SWIFT weekly, as have many in most developed countries ( You have to be careful in third world even with SWIFT, the bank can be in on the scam)

          As for its critics- it is the ONLY system for certain types of non sovereign inter-national debts. That’s why Russia has said it would be an act of war if it was excluded- when it and China could supposedly form their own circle jerk and just say FU SWIFT.
          Go for it- no one is stopping them- but they don’t trust each other.

      • Mel
        Dec 14, 2016 at 7:51 pm

        SWIFT. Got it. Not a primer, but plenty to go on. Thanks, and also to SnowyGeorge for the Wikipedia link.

      • d
        Dec 15, 2016 at 5:07 am

        “Transactions are usually done with letters of credit.”

        Big corporate Transactions are usually done with letters of credit.

        Not always CIF.

        Although most landing port customs prefer it that way as most apply duty CIF.

        If goods are shipped FOB freight collect, or CF. They don’t get tax on insurance costs for starters. Just as there are a dozen way’s to buy and settle a car on Craig’s list from the other side of the country, the same applies to imported/exported goods.

        One of the simplest methods of getting money out of china and defrauding chinese banks in the process if you want to.

        Borrow the money to buy several container loads of any commodity item item in china: tires, sox, chainsaws, Etc.

        Pay for them in china, in chinese currency, sell them ex warf in the destination nation for destination currency, or US $, put the cash in a bag and drive away.

        Another variation is to get the goods on sale or return.

        The supplier ships the goods CF and pays the duty on the alleged price.

        The purchaser then pays the supplier on progress, or at completion of sale. Into a nominated account.

        A variation on the above is used to dump goods into foreign markets destroying local produces who simply can not compete with these products dumping prices.

        Where a huge “discount/rebate” is given to the purchaser after the goods have cleared customs as the goods are not “Selling” at the “agreed value”.

        The goods were not dumped as the duty was paid on the accepted by customs price, on entry.

  11. mvojy
    Dec 14, 2016 at 2:29 pm

    Let’s see what happens when Americans unite and stop buying anything “Made in China”. You will see the jobs come flying back to the USA. I know I can stop buying cheap inferior goods.

    • nhz
      Dec 14, 2016 at 5:26 pm

      who knows, having empty shelves at Wallmart (and countless other shops) might kickstart a real revolution in the US ;-)

      • Mike B
        Dec 15, 2016 at 1:47 pm

        More likely it would just lead to a blind and disorderly panic among the mouth breathing classes.

    • night-train
      Dec 15, 2016 at 3:28 am

      America unites. LOL. Too many competing interests and too much rancor. But, by all means, dream on.

  12. A G
    Dec 14, 2016 at 3:22 pm

    Fed hikes it .25% and the DXY is responding in kind…..knocking on the door for 102.

  13. interesting
    Dec 14, 2016 at 3:28 pm

    “for the great benefit of US companies and with, let’s say, mixed impact on the US economy”

    well it’s completely and totally destroyed my economy, I’m living off the scraps that China doesn’t get.

    • Chicken
      Dec 14, 2016 at 4:21 pm

      “for the great benefit of US companies”

      These would be the very same “US” companies that bank through offshore tax shelters and manufacture their products in foreign low wage sweat shop factories lacking environmental control, then pay no taxes to the US Treasury for labor or products, finished goods and services they import to the US.

      Free Trade doesn’t infer Fair trade.

  14. chhelo
    Dec 14, 2016 at 4:01 pm

    Taxes, Taxes, Taxes.

    This is the spoiler. An antiquated system of taxation that is overly burdensome for a 21st Century economy.

    Switching to a retail based value added tax system with the elimination of the current system is the answer.

    https://www.flfairtax.org/Documents/Whitepapers/g,agriculture,tradeandcompetitivenesswhitepaper4-19-2013.pdf

    Moving in this direction will bring manufacturing jobs back to the US and make us more competitive overseas. Safeguards are built in for lower income workers which basically provides not only tax free purchasing power but will likely even reduce the cost of what they purchase.

    The current federal tax system does only one thing well. Buys the votes of all that want to ride on the coattails of the producers. Marxism 101.

    • nhz
      Dec 14, 2016 at 5:28 pm

      Europe has high retail based VAT tax but much of the same problems …

      and of course, VAT taxes have many loopholes for the elite as well (like purchasing through companies, or leasing instead of owning).

      • Kent
        Dec 14, 2016 at 7:28 pm

        nhz is making a great point. Any tax system, given enough corruption at the federal level, will devolve into the same mess as the current income tax system.

        Root out the corruption, and any old tax system works fine.

  15. michael engel
    Dec 14, 2016 at 4:32 pm

    _ DR. Schacht rise from the ashes, in China.
    – Hollywood, Wall street, Walmart, GM, Ford :
    what in China stays in China. Just like in the
    good old days, in Germany, in 1930’s.
    – But, a decade before that, we confiscated every
    thing German in the US, by law, written in
    Paris 1919.
    – It’s ok to have assets & profit in China, as long as it’s stay there.
    – Us corporations will not be able to move
    their assets out of China, converting CNY to USD.
    – This tension will be use full to both Xi & Trump.

  16. Chicken
    Dec 14, 2016 at 4:35 pm

    “Qualcomm gets 57% of its revenues in China, Micron 43%, Apple 23%, Jabil 21%, Boeing 13%, Wynn Resorts 60%, according to Bloomberg’s math.”

    I realize Bloomberg is a bastion of honest journalism but do any of these companies actually contribute substantially to US Treasury tax receipts?

    Seems to me while watching the debt clock speeding up these past few decades, Bloomberg has habitually neglected to report on reasons US Treasury has been racking up far more debt than revenue or have I not been paying attention?

    • walter map
      Dec 14, 2016 at 7:50 pm

      “do any of these companies actually contribute substantially to US Treasury tax receipts?”

      Despite the campaign rhetoric, your new president is unlikely to do anything at all about billionaire tax evaders, foreign or domestic, for reasons which should be obvious.

      • Chicken
        Dec 14, 2016 at 11:32 pm

        What’s obvious to me is, Trump isn’t responsible for past sins.

        • walter map
          Dec 14, 2016 at 11:51 pm

          Is it obvious to you that he’ll exploit them? Or is this just your way of excusing him for doing so?

        • Dec 15, 2016 at 12:20 am

          But wait… Obama was responsible for past sins … tons of past sins.

        • Edward E
          Dec 15, 2016 at 9:03 am

          Hey his past sins, well he did fulfill the promise to bring us change we can believe in! Didn’t tell us it would take eight years to do it, but…

        • Edward E
          Dec 15, 2016 at 9:21 am

          DJT is showing himself and his friends just how much he can get away with. He’s also showing his contempt for positions in government by nominating the wrong people. One prick who couldn’t even remember that he proposed to eliminate the department he’s to head up.

  17. Tom Kauser
    Dec 14, 2016 at 6:09 pm

    We should take a moment to reflect and thank our higher power that Trump got the president job instead of a bartender or waiter job?

  18. r cohn
    Dec 14, 2016 at 6:12 pm

    China faces a number of incipient separatists movements,especially in Tibet and Xinjiang.
    China is taking an increasingly aggressive attitude towards Singapore.
    Hong Kong is not happy with the lack of political freedoms since the Chinese takeover in 1997.
    China has placed weapons some of the so called “islands ” in the South China sea.
    China has been very heavy handed in damming rivers
    What does this have to do with semi-conductors?
    The US trade deficit with China runs has run over 3 trillion since 2000.This is not an example of free trade,but a very one sided trade.Now if Trump follows through on his trade promises and some companies start bringing back factories to the US,then China faces explosive social unrest .Add this to the issues that I cited above and China could face internal problem of unbelievable magnitutde.
    The idiots in the government think that Russia is the problem.Russia has population of 146m while China has over 1.4B.
    Russia has a GDP of ~1.3T while China has over 12T
    China is the problem not Russia

    • Kent
      Dec 14, 2016 at 7:32 pm

      Look, the American people need a boogeyman to support defense industry spending. Do we really want that to be China? Let’s make it Russia for all the reasons you stated above.

      The defense industry is the last bastion of American industrial prowess and the greatest visible display of the value of unadulterated socialism in the world. Is that something we want to harm? Hell no.

      • DH
        Dec 14, 2016 at 8:47 pm

        Agreed. An industrial super power with nuclear weapons and a ground force of 1.6 million is a dubious choice for directing our saber rattling.

        • Lee
          Dec 15, 2016 at 3:54 am

          Yeah, what are they going to do with those 1.6 million ground forces?

        • d
          Dec 15, 2016 at 5:26 am

          1.6 Million.

          that’s about 3 M short before you count all the chinese paramilitary entity’s as well.

          Nobody can put a solid number on it, due to the deliberately opaque way the PLA and it’s paramilitaries are configured.

          chinas answer to the shock and awe the US displayed in Iraq II. Which absolutely terrified them.

          3 rifles, behind ever blade of grass.

      • Chicken
        Dec 14, 2016 at 11:46 pm

        “the American people need a boogeyman to support defense industry spending.”

        If by American people you mean those who profit greatly, then I agree. My observation is the American people have paid and will continue to pay dearly for this misappropriation.

      • Intosh
        Dec 15, 2016 at 1:51 pm

        It not only is an excuse for defense spending but also serves to distract the masses away from the real culprits of their ills.

        Textbook play.

    • subunit
      Dec 14, 2016 at 7:45 pm

      I’d argue the colonisation of East Turkestan and Tibet is now complete. All of the Uyghur expats I’ve spoken to regard it as a hopeless cause, and even when I was there some years ago the brothers in Kashgar and Urumqi didn’t seem to have any hope of winning an open conflict. Both “provinces” now have demographic Han majorities and local potentates with control of regional PLA and PSB units (eg. in Xinjiang/E.T.- much of the “unrest” in the news, if you dig a little deeper, are armed clashes between armed, uniformed Han paramilitaries). In the event of a systemic breakdown, they will remain under Han military control. I don’t think the locals have it together much better than the natives in North America to be honest.

      Still, replace that point with “environmental problems, contaminated soil, depleted water system” and I think the overall point stands.

    • d
      Dec 15, 2016 at 5:19 am

      “Now if Trump follows through on his trade promises and some companies start bringing back factories to the US,”

      FACT

      Factories are already migrating out of china.

      FACt

      Very few of those US companies are migrating from china back to the US, and using any volume of US manpower.

      One of the bigger “Loud” migrations. Foxcon from china to india. The majority owner of Foxcon is Taiwanese.

      Americans complain about china staling US jobs. china has stolen over 50% of Taiwan’s entire economy, since the Mainland -Taiwan economic cooperation post 1990.

      What chian has stolen from the US, is a fly in the ointment of what it has stolen from other country’s.

  19. Me
    Dec 14, 2016 at 6:45 pm

    Excellent comments.

  20. illumined
    Dec 14, 2016 at 9:45 pm

    I think a point that gets lost is that deficit countries are the beneficiaries of trade wars, the surplus countries are the losers. Supply chains can be realigned, it may take some time but it can happen fairly quickly. The Chinese jobs that are lost on the other hand won’t come back so quickly, if at all.

    And where is this “all the semiconductor plants are in China or Taiwan” nonsense coming from? There’s more than half a dozen of them in my area of the US alone, and looking through the list provided by an earlier commentator the US still has most of the existing plants in the world by far.

  21. TCG
    Dec 15, 2016 at 12:35 am

    One thing I do know about silicon manufacturing is that old plants need significant, time-consuming and expensive retooling as the transistor density is increased with each new generation of chips and often entire new fabs are built for new generations of chips.

    Even if technology makers wanted to bring new plants to the US, they couldn’t simply reuse empty plants that closed years ago to make modern chips, but it would take years to get them in place.

    I’d be careful making threats and stirring the pot if I were him since other countries might actually mean their threats and also be taking him more literally than the things he shoots off his mouth about.

    It will be interesting to see what happens with Trump since he has been throwing out bluster and swagger for decades and his most obvious competencies seem to be getting media attention for his brand, making friends with other rich people and knowing which side his bread is buttered on. I guess we’ll see how much those talents and policies play out to help the little people and how much they help the Donald and his tycoon pals in the years ahead.

    • night-train
      Dec 15, 2016 at 3:39 am

      Well said. Amazing how many people have so much faith in a guy who didn’t release his tax returns or serious medical records. They have no idea how much he is really worth. But his cult members believe every thing he says and, even when he hasn’t said, know exactly what he is going to do

      And completely overlook more conflicts of interest than any POTUS has ever had.

    • nhz
      Dec 15, 2016 at 3:54 am

      exactly; you can’t simply relocate existing semi plants from China to Vietnam or the US, or build a new one (with US-sourced material) and have it operating within weeks or months. As someone mentioned above, there are many essential materials (like rare earth metals) and raw products that are only available in quantity and for good price from China.

      That is why I said that the US would run into severe problems very soon if trade with China stops. Theoretically they can rebuild, but in practice they would NEED China for rebuilding on their own ground – or accept that their whole tech and military industry is in a coma for years. Do people think that the US would survive a few years of an economy that has to concentrate on rebuilding most things from scratch? Not a chance … it’s about as delusional as the neocon dream that they can simply nuke Russia and China and start establishing the real Kingdom.

  22. Gregg Armstrong
    Dec 15, 2016 at 1:01 pm

    So we send 100,000 factories and 20,000,000 manufacturing jobs to the People’s Republic of China and we get 20,000 lousy, minimum wage movie theater jobs in exchange. That may work out great for the parasites running the criminal crony capitalist conporations but it’s a dreadfully awful exchange for working Americans.

    • Dec 15, 2016 at 1:26 pm

      We didn’t even “get 20,000” of these jobs. We had them before. The companies were bought lock, stock, and barrel. So there was no increase in US jobs.

  23. Shawn
    Dec 15, 2016 at 3:11 pm

    If the US is to survive, it has to move towards a German style stake holder economy. The share holder economy doesn’t work for the vast majority of people in this country. Trickle down economic and globalization has failed and what we have now is an economy that benefits the top 10 %. This is unsustainable, it the kind of situation that start revolutions. However German company are being bought up by the Chinese, let’s see how that plays out.

  24. Will
    Dec 24, 2016 at 11:45 pm

    It is a conflict between people and corporate profits

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