Trump’s China Trade War – The Facts

The Federal Reserve and the World Bank at the behest of a handful of economists who are decidedly left leaning have published two scathing reports which claim that Trump’s trade war with China is costing US taxpayers upwards of $68 billion annually.

Of course the statements are biased. Of course they represent an agenda and potential fodder. If they are true.

Economists are an interesting breed. They sit in glass houses and create a conclusion without seeming to have a basic understanding of real world business and tend to adamantly disagree with each other on a broader scale while presenting a portion of the facts.

Somewhat like the climate change fiasco.

Trades are business contracts. They may be executed as a one-time transaction, transactions that occur over a series of months, and often are transactions that are locked years.   They take time to execute. Terms are pre-determined. Terms are re-negotiated.

These ‘Economists’ have made a determination based on data that is virtually impossible to track. In addition, their supposition ‘estimates’ an annual cost. But even that is wholly unreliable because the Tariffs were imposed over the course of several months in 2018, with intellectual property, aluminum and steel at the forefront.   They effectively began in July and phased in over a number of months.

China’s “implemented and ‘proposed’ tariffs” would affect $110 billion of imports. That does not mean the US exports stop. It means they will be levied a tariff which will effect the profit margin.

The economist’s reports both extrapolate the outcome as an annual loss. A year has not yet occurred.   In fact, there is only two months of trade numbers in 2019 to analyze. Certainly one can extrapolate based on previous data… right? Yes and no.

It is like a poll wherein a random sample of 1000 Democrats all residing in New York are sampled and the results will determine the US Presidential election…

Example:   During Obama’s reign trade data is available on a monthly basis.   At the end of 2008 when Obama came into office, the US trade deficit with China was roughly $268 billion.   By the end of 2016 when Obama left office, it was $347 billion. Before any tariffs had any measurable impact, by the end of 2017 the deficit had climbed to $375 billion.

This ‘non-important’ deficit has climbed every single year since it began in 1986. Since 2000, it has quadrupled. And not one sitting President did a damn thing.

Suddenly, with two measurable months of data available for 2019, the media is calling Trump’s trade war a calamity.

In actuality, the value of imports for January and February of 2019 were down 10% and 20% respectively compared to the previous year – before any tariffs were imposed.

Lets look at another trading partner – Germany.

When Obama came into power that deficit was roughly $28 billion. By the time Obama left office that deficit had spiked to nearly $65 billion. It torched at $68 billion by the end of 2018, well before Trump’s tariffs took effect. The first two months of 2019, the deficit had lowered nearly 10%.

Even in the world of an Economist, 2 months is clearly not enough of a data set to make any conclusion or opinion.   And yet they do. Why?

Obviously it is an attempt to discredit Trump and provide fodder for Democrats who are bent on finding fodder because they are frustrated with the incorrigible corruption, instead of truth.

What this also reveals is the larger picture in which both the US Federal Reserve and the World Bank are colluding in this massive demonization of all things Trump.     It also reveals that these institutions have provided absolutely no guidance or stipulations or concern for the annual increase in US trade deficit for the last 30 years.

Which technically is a reflection on their incompetence. Economic Policy is their mainstay. Their existence. So obviously they did not have the US in their sights for at least 30 years.

Why?
1) According to it’s own website, the World Bank’s field of study is on ‘Developing Countries’.   So why did they commission a report on Trump’s China trade – two well developed countries outside of the scope of their jurisdiction?

2) The second part of these reports claims that US agriculture farms have been hit hard by Trump’s tariffs.   But the agriculture business isn’t the mom and pop farm of a hundred years ago. Mainstream media have been sounding the alarm on the changing face of farms for a decade or two.

Statistics: Most small farms are ‘hobby farms’.   Tax incentives during the Bush and Obama years gave wealthy elites the ability to classify their compound acreage in the middle of such places as Long Island and the Hamptons as farmland, take a tax benefit, and produce enough to feed a cat.

Secondly, ‘large farms make up less than 4% of all farms and account for more than 66% of all sales. And that number continues to edge higher.   They are corporate farms.

And third, the Federal government continues to subsidize small farms up to $20 billion annually.

The value of agricultural exports to China is roughly $23 billion, which represents about 5% of all production in US.

It isn’t just the US Swamp that is fearful of Trump. It is The Swamps that exist globally.   He has turned their power off. He has broken the rules. He does not recognize their structure. And he wants to fix the chaos that they have so dedicatedly created for well over a hundred years.

Certainly there have been a few anomalies in the US; Kennedy, surely. But his fate and that of his brother reveal how determined the International Swamp is to maintain their brotherhood as is.

Lastly, the Federal Reserve Bank:   What is their job? Primarily – to address ‘banking panics’. Secondarily to manage money supply.   In 2012 when Obamanomics was considered an economic catastrophe the response of the Federal Reserve was not to commission economist papers, but to ‘do something’ to leverage that catastrophe. They have no business commissioning reports – outside of their Banking duties.

Trump recently threatened to take down the Federal Reserve; his animosity for that corrupt regime has been no secret.

The Enemy of my Enemy is My Friend.

Trump has been in office two+ years. He has fought for The People while being verbally attacked, legally attacked, his family in jeopardy, his life threated, and still he rose for us.  They are – running scared.

CHINA Trade War – Unraveled

Communist China – is telling the EU to come together and work against the US in the trade war that is rapidly escalating…   Germany now wants to be acting mediator to resolve the conflict on behalf of China and the US.   And while Germany appears to agree that China has had an unfair advantage for years – and everyone was afraid to do anything – they still negotiate from a position of fear, instead of rationale.  Which is why we are in this situation to begin with.

It’s like playing Chess without a Queen or King…  what’s the point?

The deficit trade with China has been ignored for decades and now we have a President willing to narrow that gap, but the EU is still curled up in a ball of fear and ‘what ifs’.

It is a bizarre mentality that is willing to continually erode trade out of fear of retaliation when the continued spiral will only grow steadily until China is the wealthiest country – and global control has been attained.  It is the race between the ‘tortoise and the hare’.   In the end, if the EU was a bit more observant they might see that a positive result could occur wherein trade between the US and the EU could heighten leaving China on the outside…   In other words, trade would simply ‘shift’.

The US is not alone in its trade deficit with China.  The EU deficit is also a significant number hitting over $175 billion in 2016 comprised mostly of ‘industrial products including machinery, transport and appliances.  Exports have tripled since 2006 rising from roughly 60 billion to 160 billion, while imports have risen from about 195 billion to 350 billion.   Trade with the US is considerably more with the US exporting valued at $501 billion and imports at $592 billion.  The EU thus has a surplus with the US of roughly $92 billion.

Seems a rather logical conclusion that trade with the US is much more valuable than China.  Trade with the US could grow to cover any deficiencies with China, and everyone would be happy… except China.

While the US and China trade with the EU are overall relatively neck-and-neck, the US provides a surplus.  The question remains, do you, the EU, support a Communist state or a Democratic state?

China is the largest export economy in the world generating a $736 billion surplus.   Its main exports include:  computers, broadcasting equipment, telephones, circuits and light fixtures.   Top imports are:  circuits, oil, gold and iron ore.   The US is its largest export partner and Hong Kong is its largest import partner.

From a purely business standpoint, the numbers put China on the defensive.

The argument is the fact that China holds the key in their ownership of US Treasuries which currently stands at roughly 7% of total US debt.   What is not so widely discussed is the fact that during the Obama administration, China quietly divested 97% of its US holdings.  Of the $14,34 trillion of US government debt, $4,64 trillion was intragovernmental, meaning that the government borrows from one pocket to give to another pocket. Sort of the classic Ponzi Scheme we put people in jail for.

A shell game of ‘guess where the money  is’ is how the government has routinely claimed that Social Security is funded – albeit by ‘debt’.  Debt for which there is no return because we continue to operate at a deficit in trade and spending!

Because that’s the game of how to destroy the US and gain global power.

So what Trump is doing is trying to unravel that absolute destructive mess decades of corrupt Presidents have created at the behest of the global elite.   And it won’t be fun, and it won’t be pretty, and sometimes it will hurt, but from an economic standpoint it is the ONLY solution.  

Macron Trade Deal Bust?

Macron is trying to eek out a new trade relationship with India claiming that the exodus of the UK means France will be the winner of the EU. But apparently he forgot to ask Merkel, because behind the UK at $8.6 billion, Germany ranks second at $7.2 billion in 2016 for the EU.   In addition, the UK provides a huge surplus of trade to India which I imagine they will not want to put at risk.   By contrast, China represents their biggest deficit at $51.6 billion.   The largest export items from China to India include: electronic equipment, machinery, furniture, and apparel.  

Problem? Is France even competitive?

India has been ramping up its nuclear program recently, including a push to build 10 new reactors with its inked partner – Russia. Macron is beeming after a handshake to expedite the construction of one nuclear facility in Jaitpur, which is situated on a seismic zone… Oops!  Villagers are not too happy about being forced to hand over their land to the Indian government for this project especially after the catastrophic meltdown at the Japanese facility in 2011.

France has also asked India to support them militarily given India currently has the largest military manpower in the world, and France is more than happy to continue to provide more fighter jets to counter the threat from China in the Indian Ocean. At the center of the India/China dispute is an area that borders Bhouton, India and China, Doklam. China and Bhouton each claim the area belongs to them and historically, like everything else, it is complicated and unclear/muddy. India claims they are acting on behalf of Bhouton in fighting China. And Bhouton recently declared they no longer were giving India the right to negotiate on their behalf.

But India isn’t quite willing to let it go.

Doklam is a notable trade route that was exploited by the British when they occupied parts of India in the 19th century.

France is gearing itself up for a trade war, but can it compete with China? Easy answer – No.   Instead, what they are doing is ramping up tensions between the two with a military antagonist.

January, Macron was in China wooing president Jinping with promises of ramping up trade between the two and putting on the table French wine, cheese, meats, and the Airbus for which sales have been less than robust.

Economists have conjectured that Macron’s China visit was about deriding Trump and the US as benign and lost trading partners for which he, Macron, was ready, willing and able to fill. But Macron was always a big fan of Xi Jinping, in fact last August, he was adamantly anti-China trade due to the significant deficit France incurred.

The EU trade deficit with China was $200 billion last year. The power that China wields in trade is the weapon of choice.   In 2016, China’s military spending was roughly $146 billion.   Despite increases in spending since 1980, the budget as a percentage of GNP has declined sharply to a mere 1% or about 1/3 of the US although China’s has significantly larger active personnel.

While the US has plundered its funds for the purpose of warring other countries, China has behaved liked a tortoise slowly enriching itself via trade.

If Macron was serious before, or serious now, it is unknown.   Given the derision between the EU and the US, the EU and Russia, and the EU and China, they are left to pick.   And for now, the pickings seem to be slim.

As for the US: The fastest growing import is pharmaceuticals. The main suppliers include: Ireland, India, Germany and France.   But the top $$$ import is electronic equipment from: China, Mexico, Japan, and South Korea leading the market. If our trading ‘allies’ really wanted to inch out China, they would be offering discounts to curb those deficits.   If the US really wanted to hit China, they would put tariffs on Electronic Equipment and Machinery.

FYI:   The value of Mexico’s imports of electronic equipment and machinery to the US is roughly half of that of China – yet Mexico remains rife in poverty…