The Chinese Commerce Minister has said that "the current spate of tariffs and retaliatory tariffs will damage the world economy".
Please if you know that Chinese Minister, tell him that "will damage" is "futuristic". "Has damaged" is "past tense" and can even be "present continuous".
Tell him that Turkey is a shadow of itself now. South Africa "be as e get now". Nigeria nko? - "isi aputaro" - land no levelš
Are you a good student of history?
You're not? You're just engaged in daily "rat race?"
When will you even leave rat race for a moment and pay attention to history? If you don't know where you're coming from, you will never know where you're going to.
Check this out! It's scary!
" By Jaden Orbi of CNBC.
"But in one case, a trade war had dire global consequences.
Let's take it back to the 1930s. America was turning inward with protectionist policies. The government was restricting trade with other countries. And in an effort to save U.S. factories, a couple of congressmen came up with a plan. It was formally called the Tariff Act of 1930, but it's more commonly known as the Smoot-Hawley Tariff Act.
The plan faced a lot of opposition, but it ultimately became law. The act raised tariffs on American imports to nearly record levels. But instead of reviving the economy, it actually exacerbated the Great Depression.
Nations across the world were striking each other with tit-for-tit tariffs. European countries put a tax on American goods, which slowed trade between the U.S. and Europe. That made it harder for the U.S. to crawl out of its economic slump.
Nationalist rhetoric was heating up, with countries blaming others for their struggles. All of that eventually escalated, turning a trade war into a real war when World War II began.
That's why after the war ended, nations formed the World Trade Organization to regulate international trade, in the hopes that nothing like the global trade war of the 1930s would ever happen again." - End
Today, we have many of old parents and grandparents that boast of fighting the World War in Congo. Poor old men! They probably didn't know how it started. Just fight, they were off!
So, my brother, in which sector will you fight? I won't fight in Congo. I will fight on the side of America in Las Vegas.
I will tell you why!
America has more "fire power". After they introduced an additional $200b tariffs covering about 6,000 of Chinese goods and products, China is only trying to respond with tariffs on American goods worth $60b. They're running out of American goods to impose tariffs on. You see why I want to fight in Las Vegas?
But I think you should fight in Congo. Your forefathers fought there. Go and continue from where they stopped. That's your inheritanceš¤£
I remain Sam
CC: Bloomberg
History's Not on the Market's Side in a Trade War!
The fallacy in interpreting the immediate investor reaction as muted misses the likely secondary and tertiary impact of tariffs.
By Komal Sri-Kumar
June 18, 2018
Financial markets will have a tough time shrugging off a trade war.
Komal Sri-Kumar is the president and founder of Sri-Kumar Global Strategies, and the former chief global strategist of Trust Company of the West.
The first shots of a global trade war were fired on Friday as U.S. President Donald Trump announced a 25 percent levy on $50 billion of imports from China. The tariffs focus on “industrially significant technology,” and intend to hurt China for alleged theft of intellectual property rights. China responded within hours with a detailed list of imports from the U.S. valued at $50 billion that it would impose a similar 25 percent tax on.
The financial markets have largely taken the decisions in stride, probably due to some estimates suggesting a negligible impact on economic growth, employment and share prices. The fallacy in interpreting the immediate investor reaction is that it misses the likely secondary and tertiary impact of the tariffs on suppliers of the affected items, the higher cost to users and reduced demand for the affected items. Such an impact tends to occur gradually, and is likely to have a more profound influence on share prices over time.
History suggests that investors should be cautious about extrapolating the immediate reaction of financial markets. The Smoot-Hawley tariff act passed in June 1930 is widely considered to have been a factor in deepening the depression and causing equities to plunge. However, the Dow Jones Industrial Average rose from that June to August 1930 as investors believed initially that the tariffs would provide a boost for American companies by deterring foreign competition. As late as Oct. 15 that year, a euphoric Irving Fisher, the well-known Yale University economist, declared that equities had reached a “permanently high plateau.” The stock market crashed two weeks later. While the tariffs were not the instigator of the drop in share prices, they added to the bearish sentiment over time.
Permanently High Plateau?
There was a delayed reaction in stocks to the Smoot-Hawley tariff act back in June 1930
Source: Bloomberg
More recently, President George W. Bush imposed tariffs ranging from 8 percent to 30 percent on various steel products in March 2002 to last for three years. The levies were canceled in December 2003. In addition to the fear of retaliation by the European Union against American products including Florida oranges and Harley-Davidson motorcycles, a respected study found that the 197,000 jobs lost in steel-consuming industries exceeded the 187,500 people employed by the entire steel industry. Equities fell from March 2002 to October 2002 and did not regain their March 2002 levels until January 2004.
Lasting Impact!
Tariffs imposed by President George W. Bush negatively impacted U.S. equities
Source: Bloomberg
The latest skirmish has Chinese authorities targeting U.S. farm products, automobiles and energy. Food, beverage and feed are a major U.S. export category and soybeans, the top product in this category, is being targeted. Global giants such as Cargill Inc. and Archer-Daniels-Midland Co. dominate this sector, and are likely to feel the pinch of the worsening global trade outlook.
China is the world’s largest market for automobile producers, and General Motors Co.’s sales of 4.04 million cars in China in 2017 substantially exceeded the 3 million cars that it sold in the U.S. Automobile exporters will face not only the impact of reduced Chinese demand for U.S.-made cars once the tariffs go into effect, but would also have to pay more for imported steel on account of the new levies to be imposed on purchases from Canada, Mexico and the EU.
Crude oil and related products form the second-most important U.S. export category, and it is also the fastest growing export sector. China has become a significant importer of U.S. crude, and has indicated that the new levies would affect oil and other forms of energy purchased from the U.S.
The likelihood that the tariffs would affect a wide range of U.S. companies in a number of sectors stems from the fact that food, transportation and energy affect the entire economy with consequences for the stock market. Second, Trump has threatened to implement additional measures if the Chinese retaliate, and equities could be affected by a vicious cycle of tit-for-tat action.
History suggests that the harmful impact of tariffs affect equity prices over several months, and retaliation by trade partners typically makes the correction worse. And when the items targeted are widely used, the consequences are likely to be felt by companies in a broad range of sectors that supply to the affected companies, or consume their products - End
China Vs. U.S.: The Forever Trade War.
Brace Yourself For the Forever Trade War!!!!!
China-U.S. disputes are deep-rooted and could take decades to resolve.
By Mark Gongloff
September 21, 2018
The U.S. stock market, zooming to daily records, has apparently decided President Donald Trump’s trade dispute with China will either be settled soon or won’t amount to much. It’s wrong about at least the first part of that, warns Andrew Browne.
For one thing, Trump clearly believes “globalism” is history’s greatest monster, and nothing embodies globalism quite like trade. He thinks trade deficits are inherently evil, full stop, and the U.S. has a massive one with China that no quick settlement will resolve. Such views would not fly at the Wharton School, but they were red meat for his voters left reeling by the financial crisis and decades of growing inequality, Andrew writes. Those same flaws of liberal capitalism fueled the rise of state capitalism’s hero, President Xi Jinping in China. Protectionism and nationalism are core to the brands of both men, putting them naturally in conflict and unlikely to back down any time soon.
True, Trump’s MO is to bluster and threaten wildly and then retreat. The new round of tariffs on Chinese goods due to take effect on Monday could be part of such a strategy. They may also not be too economically damaging at the start; hence the record stock prices. But the longer-term clash of cultures will be more disruptive – and more durable, Andrew writes: “Though this is not exactly a replay of the Cold War – for one, the two economies are deeply entwined – trade hostilities infect just about every area of the relationship, from the military and security realms to scientific and technological collaboration.”
Dragonfly Could Bite Google!
With 800 million or so Internet users, China’s an irresistible market for Google and other web companies. That’s why, ignoring the objections of some employees and its own “don’t be evil” motto, it seems determined to press ahead with a China-friendly version of its search engine. Dubbed Dragonfly, this tool would block such offensive terms as “human rights” and, uh, “Winnie the Pooh” to comply with Chinese censorship. There’s a lot of money to be made here, but it may not be worth the cost to Google’s reputation or the risk that it will dance increasingly to Beijing’s tune, writes Adam Minter: “If the company annoys the government with its actions overseas, Dragonfly would offer up an easy target for retaliation.”
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