Military Review

China does not capitulate in a trade war, but the US will have to survive

33
Something terrible is coming! Wall Street experts are waiting for a collision between the US and the PRC. Tariffs, duties, and then large-scale trade war. American experts on financial and other storms write about this, and they know a lot about such things. Their most interesting conclusion is that Beijing does not capitulate to Washington.


The Wall Street Journal told the world about the coming collision between the USA and China. No, we are not talking about the exchange of nuclear strikes, the battle for the Chinese namytye islands or some operation of American aircraft carriers. We are not talking about a traditional war with the use of any weapons. Specialists in money and stocks are registered on Wall Street, and not on ships, airplanes and bombs.

At the same time, the result of the financial war between the USA and the PRC will be very similar to the result of the Third World War.

The plans and actions of Mr. Trump are such that their outcome will be the nightmare of the trade war with China. After such a war, the world trade system will collapse. Fall apart like a house of cards. First and foremost, the defeat of the United States and the refusal of China to "surrender" will hit American companies and their employees. The United States does not have the resources today to survive after the Chinese response, and there are no resources to continue the lengthy actions that will be needed during the trade war. In short, Trump is unable to force Xi Jinping to surrender, but he is not going to retreat.

Recently in "The Wall Street Journal" published an article about the upcoming "battle of the titans" between the United States and China. The publication reminds that the last time Washington "went to a trade war" under Ronald Reagan. The rival was not China: in those years, the United States "fought" with Japan.

But today, according to the publication, the White House is preparing “the same big guns” for battle. The trade war will be caused by the use of combinations of tariffs and quotas aimed "mainly at Chinese imports." This import includes a huge range of products: from steel to solar panels and washing machines.

Record Chinese trade surplus with the United States, officially announced in January of 2018, is a “potential catalyst” for “hostilities”. If the trade war really begins, it will not be like “battles that raged in the 1980-ies” (the publication reminds that in those years the United States choked on the supply of Japanese semiconductors, cars, televisions).

This time, the forces of the opponents more or less coincide: America has never before encountered such a powerful adversary as China, if we bear in mind the economic activities, industrial opportunities, as well as global ambitions.

In addition, Japan is still an ally of the United States, but China is increasingly becoming an outspoken competitor, and there is no reason to talk about the political unanimity of the two powers.

The grim predictions of the trade war between the United States and China are also contained in the site material. "Business Recorder".

“American-Chinese trade war?” - asks the author of this publication and immediately gives an answer with links to a number of experts.

A number of US trade experts, the Business Recorder points out, believe that China’s trade surplus with the US could lead to a trade war between the two countries. The consequences of this trade war will go far beyond the borders of two states: the whole world will feel them. But what to say: such a trade war could "actually destroy the entire global trade architecture."

According to the Chinese government, in 2017, exports from China to the United States grew by 15%, which contributed to a change in the trade balance.

In the coming war, both American “friends” and American “allies” will suffer. The Asian supply chain will affect everyone, directly or indirectly.

China is still largely the end point of the assembly of products made from high-tech components supplied from Japan, South Korea and Taiwan.

Tommy Xie, an economist at the Singapore-based OCBC Bank, and Daniel Shane of CNN Money, say in one voice that the “record positive balance” of the trade balance is likely to lead to “big trade disputes” between China and the United States.

According to Shane, China last year benefited from an increase in the growth rate of the global economy: the country's total exports increased by 11%, according to official data from the Chinese government.

And, most interestingly, this increase was largely due to American demand.

According to experts, Mr. Trump has the opportunity to impose special tariffs on "a whole range of Chinese goods." But if he does, he will provoke a Chinese answer. Moreover, if China’s economy slows down this year, as some experts predict, this could create a trade deficit.

Something else is important. Investors are concerned that China is America’s largest foreign lender. China has a huge chunk of US national debt in its pocket! According to the US Treasury, this is 1,2 trillion dollars. It's funny that independent experts estimate the volume of the Chinese part of the American debt even higher. The “content” by China of the American economy is largely due to the large trade turnover.

Huge US purchases of Chinese products give China dollars, which then “find their way” to the Central Bank of China, and that, in turn, spends them on the acquisition of US government debt securities. And now investors fear that if China purchases less US Treasury securities, the US government will have to look for "alternative buyers." You may have to increase the interest rates that the US government pays holders of securities. The bottom line: the cost of servicing the US government debt will increase. But this debt, the publication indicates, is already estimated at more than 20 trillions of dollars! Increased debt support costs will lead to devastating consequences in the United States itself.

However, Trump clearly aimed at a trade war. According to analysts, "tougher measures against China" will be taken in the coming months. These measures will lead later to a trade war.

As Jethro Mullen of CNN Money believes, in 2018, "everything will be bad." This is because Trump's patience ends. Trump is angry at Beijing: his trading advisors (or himself) will soon announce the results of some major investigations, including dumping of steel and theft of intellectual property. In general, this is called unfair Chinese trade practice. The hard position of the White House may lead to an increase in tariffs for Chinese goods. In addition, China has officially, in the strategy recently announced by Trump, declared the US rival along with Russia. China and Russia, the document says, "are trying to undermine American security and prosperity."

According to Mr. Mullen, Beijing has already caught “confrontational signals” from Washington. The Chinese government is nervous and predicts "the real start of turbulence in Sino-US trade relations."

To summarize The opinions of various experts are easily reduced to one, the most important: it is much easier to get into a trade war than to get out of it. Now is not the time that was under Reagan. Many American manufactures in pursuit of cheap labor have since moved to China. Everyone knows where the same iPhones are going. By hitting China with duties and tariffs, Trump will also hit those American companies that cannot imagine their existence without China.

Last year, in the South China Morning Post, a list of "retaliation" appeared, with which the Celestial Empire would punish a political businessman from the White House. Recall in briefwhat it was about.

A hard blow will have to endure the company "Boeing". China is the largest aviation market in the world. State carriers of China have always always made large orders of aircraft from either the American or the European manufacturer ("Airbus"). And today only Boeing 150 has thousands of jobs in the United States dependent on Chinese airlines!

"Apple" with its notorious iPhones. In Greater China (Mainland, Hong Kong and Taiwan), Apple has 25,3% of operating income (2016). Trade war will punish this company.

General Motors, Ford and Chrysler. America's three largest automakers have been investing heavily in China in automobile assembly, design centers, personnel and extensive sales networks for over ten years. More than 20 million cars are sold in China every year.

China does not capitulate in a trade war, but the US will have to survive


Wal-Mart stores. Their audience in China is growing every year at almost 10 percent! In Guangdong, Wal-Mart plans to open 40 new stores in five years. But during a trade war, these plans will go to the cat's tail.

"Starbucks". The world's largest coffee supplier wants to double the number of stores in the PRC over the next five years. In case of tariff measures, the Chinese will punish Starbucks in response.

Even Hollywood film studios that dream of expanding movie rental quotas in the PRC will suffer.

As a result, American business, whose representative, in essence, is Trump himself, curses Trump!

In a word, Mr. Trump, who is trying to help his native America to become great again, will lead Americans to the place that Wall Street businessmen politely call “survival”.

Observed and commented on Oleg Chuvakin
- especially for topwar.ru
33 comments
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  1. andrewkor
    andrewkor 21 February 2018 06: 34
    +4
    Well, friends, we stock up on popcorn until it goes up.
  2. Monster_Fat
    Monster_Fat 21 February 2018 07: 12
    +1
    As a result, American business, whose representative, in essence, is Trump himself, curses Trump!

    Yah? Or maybe it’s such a CPT, like that of the GDP, just transfer all the “runaway” production to the taxable zone and the type of “import substitution” in the US ...... wink
    1. Mih1974
      Mih1974 21 February 2018 21: 25
      +6
      You won’t be fed up with taxes alone, as it is rightly said - in response, China will close its simply monstrous market for US companies. The same Boeing will tear and throw if it is thrown out of the market, not to mention car companies. I advise you to recall how China has already cut off all foreign Internet companies in favor of its own and now the largest and most delicious Internet services market for Americans is inaccessible and their very strong competitors have grown. It’s clear that Trump’s hysteria - every day putting off the war with China, makes his position weaker and weaker.
      Let's remember that the main “commodity” of the USA is the dollar, and the main “pirate” is the American army. China is already striking at the main "product" and more and more discredits the "PR man". More and more countries are moving from the dollar zone to the call of the renminbi. And Russia (and China) are increasingly discrediting the US Army as incapable of at least something. First, in Syria, then in the village of Korea, the American army screwed up, it didn’t do the most important thing that is required of it, and this is not Victory, it is an FORCE to unconditional economic submission to the General. Trump is trying to return production to taxes, but where does he go about the environmental standards that he spat on in China, where will he get as cheap workers as in China, and where will he get that concentration of different industries? And all three of these facts very much affect the cost.
  3. rotmistr60
    rotmistr60 21 February 2018 07: 16
    +3
    First of all, the US defeat and China’s refusal to “surrender” will hit American companies and their employees
    Let's hope this happens. In this case, not China, but Russia will observe from the outside and at the end will make its decision. In Russia, trade with the United States is scanty, with the dollar anyway sooner or later, but something needs to be decided.
  4. antivirus
    antivirus 21 February 2018 08: 14
    0
    China and Russia, the document said, "are trying to undermine American security and prosperity."

    "blessed be you for ever, that it has come to die and die ..."
  5. antivirus
    antivirus 21 February 2018 08: 27
    +2
    Even Hollywood film studios that dream of expanding movie rental quotas in the PRC will suffer.

    But what about quotas in the Russian Federation?
    movie rental quotas are not for the Ministry of Culture, IT'S FOR ACCOUNTANTS - economists (Kudrin) - they consider money and operate in foreign policy as “part of the investment attractiveness”
    1. Mih1974
      Mih1974 21 February 2018 21: 26
      +1
      Our rental market is just ridiculous.
      1. antivirus
        antivirus 21 February 2018 21: 55
        +1
        that’s why they would grow it in relation to the market of ham and buses.
        who needs and they’ll watch the video, but throwing money around is not rational
  6. antivirus
    antivirus 21 February 2018 08: 28
    +1
    China and Russia, the document said, "are trying to undermine American security and prosperity."


    - "blessed be you forever. that came to die and die ..."
  7. Fayter2017
    Fayter2017 21 February 2018 08: 43
    +4
    . But this debt, the publication indicates, is already estimated at more than $ 20 trillion! Increased debt costs will have devastating consequences in the United States itself.

    What prevents amers from printing 20 trillion bucks and closing a debt?
    As long as they have an army and a navy and oil is sold for dollars, no one decree is given to them.
    1. Mestny
      Mestny 21 February 2018 10: 29
      +1
      Well, something is interfering, if not yet printed.
    2. Spook
      Spook 21 February 2018 14: 53
      +3
      I’m not very versed in this issue, but it seems you do not correctly understand the essence of the work of their financial system. As I understand it, they issue money under the promise of returning them with interest, and this is precisely what increases their state debt. Your proposal will simply increase their public debt by another 20 trillion. Their maneuvers on this issue are attempts to increase inflation to reduce the debt burden, but this is their curse - bucks are willingly bought up and the buck does not fall. They would like to lower the buck to stimulate their own production, but it is no longer tied to their economy, and therefore prohibitive measures have to be used.
      1. l7yzo
        l7yzo 23 February 2018 09: 31
        +2
        Unfortunately, they still don’t want to explain to us what the US debt is and how they cunningly hide inflation and a lot of money released. If you remove government debt - this is 19 trillion - that would be this mass of money in circulation - a dollar would cost a penny or less.
        For example, China has before it on its account debt from the United States (China's foreign exchange reserves of 3 trillion) - this is nothing more than China sold the United States in the amount of 3 trillion dollars. This money the Central Bank of China has changed to RMB. And here is what I changed (emitted) and sent back to the United States (i.e., this type of money should destroy the United States, as the issuing country). BUT the USA puts this money on the account of this country - "Currency reserves". And voila - the United States bought 3 trillion worth of goods in China for air. and China, secured by the dollar, issued RMB for this amount. And everyone is happy - and so everyone is strange.

        In short, the United States and its treasury, the Moloriki and their treasuries, are in general an awesome idea.
        1. Spook
          Spook 26 February 2018 09: 14
          0
          Yes, by the way I heard a similar scheme that the dollar’s ​​turnover in the world is free, but the return of this mass to the USA is limited, they have their own internal circulation there.
  8. igorra
    igorra 21 February 2018 08: 57
    +1
    The most important thing is not to leave the coast and wait for 2 enemy corpses to swim.
  9. passing
    passing 21 February 2018 10: 22
    +1
    Nothing will happen between China and the USA! The US is easier to destroy a couple of small countries, or to make friends before the snot with India and smash North Korea. And China is weak in knees to shout at the USA insolent.
    1. Mih1974
      Mih1974 21 February 2018 21: 28
      +2
      You are mistaken, China has long been taking small steps, but it is leading to a complete exit from the dollar zone, and this is essentially a death for world domination of the dollar.
      1. passing
        passing 22 February 2018 21: 56
        +1
        Quote: Mih1974
        You are mistaken, China has long been taking small steps, but it is leading to a complete exit from the dollar zone, and this is essentially a death for world domination of the dollar.

        One of the leaders in the purchase of US debt, is it leading to a complete exit from the dollar zone?
        You continue to watch TV, the rotting west will soon collapse ... definitely
  10. Altona
    Altona 21 February 2018 11: 20
    0
    Nothing, remember the dying Detroit and Chicago, will teach blacks, sorry African Americans work as locksmiths. laughing laughing
  11. Altona
    Altona 21 February 2018 11: 21
    +1
    Quote: Monster_Fat
    Yah? Or maybe it’s such a CPT, like that of the GDP, just transfer all the “runaway” production to the taxable zone and the type of “import substitution” in American ...

    -------------------------
    So a flag in his hands and an electric train to meet him. laughing
  12. years
    years 21 February 2018 13: 37
    0
    Quote: rotmistr60
    with the dollar anyway sooner or later, but something needs to be decided

    Introduce a high tax on his treatment in Russia .... And then everything - a dollar kayuk .... wink
    1. Spook
      Spook 21 February 2018 14: 55
      +1
      then we will change dollars as in the 90s from under the floor of various kinds of dubious individuals and increase the share of the shadow economy with crime
  13. Rico1977
    Rico1977 21 February 2018 15: 18
    0
    The United States has no choice. Need money. Everyone is shaking, and the further the more. Stalemate situation.
  14. naidas
    naidas 21 February 2018 20: 03
    0
    It is unlikely, rather, following the example of England, they will take the money of the Russian oligarchs, where they can reach and pay off their debts.
  15. Fayter2017
    Fayter2017 22 February 2018 01: 24
    +1
    Quote: Spook
    money under a promise to return them with interest.

    The promised in this case, as I understand it, is not expected, since no one will voluntarily give it back.
    The whole world receives Amer cut paper under promises. And the Americans get something real, something that you can touch with your hands. Therefore, they will continue this policy forever, regardless of the size of the debt.
    1. The comment was deleted.
      1. Fayter2017
        Fayter2017 22 February 2018 11: 55
        +1
        And why should the government of this country look for money somewhere, borrow it, if they themselves print it?
        The whole world, in fact, provides them with their own money and pledges under theirs and promises to pay off someday.
        Forced no one in the United States will be able to and will not want to make interest payments, since the entire world market will collapse.
        1. Spook
          Spook 22 February 2018 14: 24
          0
          I’m not saying that I understand a lot about this, but it seems you don’t really understand how the US monetary system functions, take an interest - there are a lot of interesting things

          there is a lot of dreary but there are also interesting points https://ru.wikipedia.org/wiki/%D0%A4%D0%B5%D0%B4%
          D0%B5%D1%80%D0%B0%D0%BB%D1%8C%D0%BD%D0%B0%D1%8F_%
          D1%80%D0%B5%D0%B7%D0%B5%D1%80%D0%B2%D0%BD%D0%B0%D
          1%8F_%D1%81%D0%B8%D1%81%D1%82%D0%B5%D0%BC%D0%B0

          The Fed carries out a cash issue, which is mainly used to purchase US Treasury obligations (bonds) (only in special cases other assets are bought). Thus, exchange operations with dollars are based only on trust in the US government and the US financial system as a whole.

          In addition to part of the seigniorage in the form of interest payments on treasury bonds, the income of the Fed consists of income from payment transactions, deposits, and operations with securities.

          After paying salaries to managers and employees of the Fed and fixed dividends on shares, the Fed transfers the remaining profit to the treasury accounts, which are received in the revenue part of the budget.
          1. Fayter2017
            Fayter2017 24 February 2018 06: 41
            +1
            From your own words
            Thus, exchange operations with dollars are based only on trust in the US government and the US financial system as a whole.

            Which again proves that using the dollar in international payments and trade, Americans sell air. The dollar is backed by only trillions of debts and promises and / or confidence in the US financial system.
            Therefore, any attempts to go out or break with this vicious circle are immediately suppressed by sanctions - Russia, Iran. Or the war, Iraq, Libya.
            The next step is China, which decided in settlements with many countries to switch to yuan ...
            1. Spook
              Spook 26 February 2018 09: 27
              0
              Which again proves that using the dollar in international payments and trade, Americans sell air.


              Well, purely theoretically in the USA there is production and for the dollar you can buy their goods

              The dollar is backed by only trillions of debts and promises and / or confidence in the US financial system.


              but somewhere else? I just really do not know the working examples, except for the USSR. Most likely it should be different where there are non-convertible currencies, probably these are all sorts of DPRK or maybe Iran ... just very little information about it at all

              China does not exactly work according to the capitalist scheme, but it certainly does not work, I’m not an expert - can someone tell me that it imitates money for debt or for securing goods.

              Therefore, any attempts to go out or break with this vicious circle are immediately suppressed by sanctions - Russia, Iran. Or the war, Iraq, Libya.


              the creep out of this circle is to reduce the feed base of the dollar and the result is always only war.

              sanctions is a voluntary decrease in the dollar base of fodder, I think the use of sanctions is included as some kind of fire reaction in order to at least slightly slow down the negative trends

              The next step is China, which decided in settlements with many countries to switch to yuan ..


              China is more likely a friend of the United States than us, and to be honest we stand by while they discuss their important affairs

              At the same time, China has enough problems to look for new ones.
  16. gladcu2
    gladcu2 22 February 2018 01: 55
    0
    Here before Trump, the guide to the place of survival was full.
    Capitalism is a system of drive to crisis.
  17. years
    years 22 February 2018 13: 36
    0
    Quote: Spook
    then we will change dollars as in the 90s from under the floor of various kinds of dubious individuals and increase the share of the shadow economy with crime

    If dollars are in free circulation in cash .... but we will not allow this. Only cashless payments. Electronic cards. There were no such people in the 90s.
    1. Spook
      Spook 26 February 2018 09: 29
      0
      it is already a police state ...
  18. l7yzo
    l7yzo 23 February 2018 09: 26
    +2
    The devil is not so terrible as he is painted. China is now much less prepared than the United States for an economic war. They have huge indebtedness of the population itself to banks (large loans), and moreover, young people. Secondly, they have huge overproduction. If they reduce capacity, then the budget will begin to crack at the seams at China's first. And the reduction of the same capacities from the USA is that China will lose jobs and most importantly TECHNOLOGIES. After all, they first started saying so - only our Chinese patents apply in China - they don't give a damn about the rest. In any case, their war is inevitable, the question is to start earlier, when the USA still has real trump cards and forces. And by the way - large corporations themselves are for, After 10 years will pass and Chinese corporations will begin to push them. They think ahead of their future.