Saturday, August 24, 2019

Trump Dealing China A Lethal Blow?

Is Trump dealing China a lethal blow?


Redneck Texan said...

I dont think so.

If I was China, I would go ahead and just ban all exports to the US.

Nullify all our threats.

Despite our Walmarts be full of their stuff, we only account for 19% of China's exports.

They could absorb that loss and still be the largest exporter of manufactured goods on the planet. And they dont have to worry about an angry electorate.

That would put our retailing sector in a tailspin for years. It would take years to gear up domestic manufacturing or resource supply chains to other cheap labor Asian markets.

Their biggest loss would be making it only slightly harder for them to steal our intellectual property.

China will be just fine without having access to US retail markets.

The US too would eventually be better off without cheap Chinese products undermining our manufacturing sector.

The whole plan of opening to China in the early 70s was sold to us as a way to eventual raise the standard of living there enough to encourage a democratic future there. That was a lie to begin with and a proven failure. All it has done is allow our wealthy to increase their profits and allowed China to increase their military strength.

I support what Trump is trying to do, but I think he overestimates the damage we are capable of inflicting on China'a long tern economic and military growth.

Pastorius said...

He's usually seems to be pretty cagey and calculated about economic matters. What do you think is causing this blind spot you perceive?

Redneck Texan said...

I agree. His Daddy taught him to be a businessman in New York. I'm sure he knows more about the intricacies of Economics than any President we've ever had.

And has a pretty good handle on the American mindset outside of New York.

But I think that all came at the price of a lack of knowledge of geo-politics and global history, and in this case the Chinese cultural mindset.

He's not going to ever bluff them into backing down. His advertised intentions and demands on the Chinese are unrealistic.

If this is all just a ploy to get US manufacturing out of China, then its a brilliant diversion.

If he actually expects China to ever accommodate his demands he doesn't comprehend the long game they're playing and the Cultural differences involved. The Chinese government and people can endure financial hardships Trump's constituency cannot.

Trump seems to be of the opinion that other nations require access to the American consumer for their economies to prosper. Threatening to remove that access will cause policy changes in Canada and Mexico, and perhaps some EU countries, but not in China.

China is a prosperous authoritarian dictatorship with millennia of hardship, bloodshed, and foreign subjugation under their belt. They're never going to respond to economic threats regardless the temporary pain inflicted on their economy. The Chinese people are not going to overthrow the government just because their job disappears.

But they could certainly disrupt Americas supply of cheap shit long enough to cost Trump the next election. Imagine how empty America's store shelves would be if they banned all exports to the USA. Imagine what effect that would have on Trump's domestic support.

Despite the trade imbalance, they certainly have more political leverage over him than he does over them. I'm not sure truly realizes this.

If he does then he is certainly risking his political future over principle. Or he's playing some kind of 3D chess with the American economy my Dad never taught me to play.

Anonymous said...

It isn't that straight forward.

The US is 19% but next biggest is Hong Kong at 12% and all of a sudden it isn't doing so swell either. Next is Japan at 6%, South Korea at 5%, India at 3% all of whom are allied with the US. If you total that up then at this point 45% of China's exports are threatened to some extent. And that doesn't take into account how tariffs hurt them in countries like Canada, Mexico and the EU.

I don't think Trump is as gullible about the Chinese economy and culture as Redneck Texan paints him. I do agree that it isn't such a clear cut "WIN" as he paints it. But I think he knows it which is why we've seen him backtrack at times too. This is a complex issue and he seems to have a handle on how complex it is which is where he is willing to change strategies as well.

China's got a bigger problem than its exports. That is the internal sustainability. The Chinese people aren't all die hard communists willing to endure anything and die for the fatherland. Chinese communist party has thrived thus far by being able to show real economic progress. It is starting to erode fast and when that happens it becomes harder and harder to keep the populace under control.

I dont think China is affected much right now but if Trump does get the second term, we'll start to see signs of real collapse and unrest within China.

Redneck Texan said...

China wont have any more trouble keeping the populace under control during an economic downturn than Zimbabwe, Iran, Venezuela, or Cuba does.

The true believers have all the guns.

In fact less trouble because their domestic economy and regional exports will remain strong.... enough.

Honk Kong is I think a different story. Those people have experienced intellectual freedom for generations, and trying to take that away from them will be an unprecedented experience in Asia. They might be more willing to die for freedom than the mainlanders who have never known freedom, and currently value order over the messy chaos of freedom.

But perhaps you're right, I certainly cant predict the future. I can only examine their past and extrapolate.

But I dont know that real collapse and unrest within in China, or even a Democratic takeover of China, is necessarily a good thing for us either.