China v US Trade War

Guest Post by Martin Armstrong

China understands the difference between the German mercantilist model of manufacturing and sells to everyone else and the United States which became the largest economy in the world because it allowed its domestic consumer economy to develop. China will become the largest economy in the world and take the crown from the United States because America lacks the political stability to foster long-term economic growth like China.

That statement will be a political bombshell no doubt. The demise of the United States is easily seen by the polarization of American politics. The Democrats come in and want to raise taxes and hunt the rich sending jobs and capital overseas. The Republicans come in and want to lower taxes and bring jobs and capital back home. The problem is very clear. Tax rates should NOT be a political yoyo. Corporations must have a budget. They cannot plan long-term because it all depends upon the next election every time. Unless the Supreme Court outlaws Marxism, there is no hope for the United States to survive long-term. Our political system will self-destruct the economy. There is just no consistency which is vital to economic growth.

China, in contrast, has a long-term plan. Its politicians are a career employee, but they need not stand for election. That actually allows for actual long-term planning where the United States cannot compete because of the polarization in American politics dominated by free-market Adam Smith v Marxist Socialism. This political war keeps getting worse and it is tearing the economy apart.

Those who have been expecting a quiet solution to the China v USA Trade War were shocked by the statements on Friday. China’s trade war escalation increased tariffs on imports imposing $75 billion worth of duties on U.S. goods, beginning Sept. 1 and December 15. China’s foreign ministry said that it would resume tariffs on U.S. imports of automobiles and auto parts and place an additional 5% or 10% tariff on agricultural and food products like soybeans, coffee, whiskey, and seafood.

China has a major car manufacturing operation. China had no problem allowing investment in its financial sector because there is a serious problem which can use capital at this point in time. China’s banks are not intricately connected to US banks as was the case with European and American banks. Therefore, a debt problem in China is more likely to have an isolated Asian influence rather than create a contagion infecting the US economy directly.

Donald J. Trump

@realDonaldTrump

Trump responded in a series of 4 tweets where he said:

Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE, all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop – it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!

To put this all in perspective, $75 billion in tariffs to an American economy in excess of $20 trillion, amounts to .003%. You would think all the wild swings and talk of trade would be a major factor in the US economy. However, it is not and China would very much like to see Trump lose the election so they can get back to negotiating trade deals by offering special treatments to the career politicians who look to get something out of everything for themselves.

The way the markets respond to every issue with trade is really overkilled. But the market is in a bearish mode as the Economic Confidence Model heads into its business cycle low come January 2020.

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22winmag - Repeal the 19th before it turns 100!
22winmag - Repeal the 19th before it turns 100!

Spokesmouth Trump’s handlers want to whipsaw the “economy.”

Nobody saw this coming.

ursel doran
ursel doran

The old origins of the “Green New Deal” is an eye opener for manipulation of the Sheeples by the Elites ego mania.

https://orientalreview.org/2019/07/31/the-genocidal-roots-of-the-green-new-deal-the-limits-to-growth-and-the-unchaining-of-prometheus/ Silk Road Into the Americas as Neo-Li

Martel's Hammer
Martel's Hammer

Well….China’s current rulers are behaving in an uncharacteristic way seeking broader empire….usually the xenophobic Chinese have been content to mostly stay home and pretend they are superior…especially after getting their asses kicked by the Mongols and failing epically to invade Japan…..The difference is the Chinese communist party needs to feed an expanding middle class or risk being deposed and getting executed themselves…….alas empire building in a command and control economic model is easier said than done…the Russians flailed and failed…..

The Chinese have people but they don’t have much in the way of natural resources and have a dire need for clean water…..they are much weaker than they appear and on trade yes they can hurt us but not as bad as we are hurting them……how long before the Hong Kong revolution spreads to the Guandong, Shenzen, etc.

There is a solution……free and fair trade and that’s not a bad outcome for anybody, ever but political interests tend to prevail so a third world war is a significant possibility…Xie and crew cannot afford to lose the current status quo…which artificially enrich China…..because anything less means their legitimacy is over……Trump has nothing to lose and everything to gain.

He can lose in 2020 and go back to being a billionaire…

So expect Trump to stay strong and keep pushing…..with alternative agreements with the UK, EU (maybe), Japan, South Korea and on and on. Sure the big Ag guys are fucked….but so what….they have been sucking the government teat for a long time…fuck them. The spectacle of genuflecting to Iowa Corn/Ethanol is disgusting…..time to end that. Trump will provide some relief funded by collected tariffs but a little pain will refocus supply chains out of China etc. Good.

Domestically in the US….in 2020 if Trumps wins the Dems will start a civil war, if the Dems win in 2020….well they will start a genocide of whites. Spicy Time is here.

comment image?resize=500%2C563&ssl=1

Harrington Richardson
Harrington Richardson

MH, I think you are closer to the bullseye than Armstrong. Kyle Bass does too. China is the paper tiger or paper dragon and they still suffer from the Three No’s. No banks. No Water. No Women.
Certainly Armstrong cannot be serious if he thinks the Chinese have no crony bullshit even worse than in other countries. After watching Trump in action the Dhimmicrats and most Republicans look ten times as lame as in the past. He has no peer at this time.

Vote Harder
Vote Harder

The cure for this trade war may be worse than the disease.

Martel's Hammer
Martel's Hammer

Which in a 4th Turning is not the choice that will be made. The last 4 Administrations sat on their asses while China “rose” or more accurately raped us with the willing and complicit support of the globalists. Sure we could limp along another 20 years with Walmart shit and Walmart wages…..and all of us could start to look like the People of Walmart but in a 4th Turning the collective spirit of the population says NO! No More FUCKING DESTROYING OUR LIVES and we reset.

Trump hopefully is the empowering agent to translate that desire into action at a governmental level. If he is not we will find somebody else.

Rejoice because we are going to cure this disease not just manage it as a chronic illness….yes there will be suffering but we have had it very easy for a very long time……

Vote Harder
Vote Harder

I hope you’re right.

Vote Harder
Vote Harder

Murica’s going camping for a while

Yes, Chairman Powell, There Really Is a Recession, and It Is Getting Worse

• It Is Felt and Seen Increasingly on Main Street U.S.A., Which Never Recovered Fully from the 2008 Banking Collapse and Great Recession
• Real Average Weekly Earnings for all Employees Are on Track for a Second Consecutive Quarterly Decline in Third-Quarter 2019
• July Freight Index Generated a Formal Economic-Contraction Signal
• Third-Quarter 2019 Industrial Production Is On Track for Its Third Consecutive Quarterly Decline, On Top of Downside Revisions to First- and Second-Quarter 2019 Contractions
• July Real Retail Sales Gained 0.4% in the Month, 1.6% Year-to-Year, Yet, Real Annual Growth Below 2.0% Rarely Is Seen Outside of Recessions
• At the Same Time, Retail Sales of Automobiles Turned Down Anew, On Top of Downside Revisions
• In Second-Quarter 2019, Nominal Construction Spending Fell Into Annual Decline for the First Time Since the Onset of the Great Recession
• Implications Are for a Downside Revision to Second-Quarter GDP
• Expanded FOMC Accommodation, Likely Will Include Renewed Quantitative Easing
• Unusually Volatile and Dangerous Financial Markets Remain in Play

gatsby1219
gatsby1219

Walter Jon Williams (born 1953) is an American writer, primarily of science fiction. Previously he wrote nautical adventure fiction under the name Jon Williams, in particular, a series of historical novels set during the age of sail, Privateers and Gentlemen (1981–1984)

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

Harrington Richardson
Harrington Richardson

A recession is marked by two consecutive quarters of negative growth. We haven’t had that. Therefore one may not declare a recession regardless of the desire of the fifth column to fuque things up.

TN Patriot
TN Patriot

China has a 50 year plan and continues to update it every year.

We have a 2 year election cycle, so cannot plan anything very far out.

You can be your bottom dollar, the ChiComs will be all in for Biden. They already have an in with Hunter and he owes them.

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