Experts: China preparing counter-measures for Trump's trade-war

[DetlefK]

http://www.dailykos.com/stories/2016/12/22/1613630/-China-Tells-Trump-s-Fools-Want-A-Trade-War-We-ll-Start-By-Targeting-Republican-States

“Their objective will be to parry what Trump does with targeted reprisals in areas of U.S. vulnerability.”

Among China’s likely targets, say trade experts: Boeing Co. aircraft and U.S. farm exports from Midwestern Republican states. Canceled Boeing orders would hurt U.S. shareholders, labor unions and the U.S. trade deficit, prompting pressure on the new administration, said Derek Scissors, an economist at data provider China Beige Book International. As of last month, China is awaiting delivery of 292 Boeing jets.

Blocking soybean or other U.S. food exports would prompt action by Republican Senators whose constituents lack a large manufacturing base,

...

Beijing also could look to pressure U.S. multinationals such as General Motors Co., which relies on China as its largest sales market. “Some companies that already invest in China, we’re likely to push them to lobby Trump,” Ms. Cheng said.

…

To retaliate, China also could make use of informal trade barriers—making health claims against American food products, for example—that are highly technical and difficult to counter in the WTO but hurt U.S. exporters, some experts said.

…

“Even if U.S. companies move back to the U.S., it doesn’t mean manufacturing jobs will come back since U.S. companies will use automation to save money,” said Ms. Cheng

[AgadorSparticus]

1. And so it begins.

[FarCenter]

2. Through October, in 2016 we bought $380.8 billion of Chinese goods, and sold them $92.0 billion.

So far our trade balance this year is a deficit of $280.0 billion.

If we shrink our imports by $150 billion, we'll be better off even if we export nothing to China.

http://www.census.gov/foreign-trade/balance/c5700.html

[DetlefK]

3. And these $150 billion of goods will be replaced by what exactly?

[FarCenter]

4. US manufactured goods

Alternatively we can use our smartphones for 4 years instead of 2.

[DetlefK]

5. What I meant was: How many kilotons of food, clothing, plastic-stuff and electronics is that?

The charger-cable for your smartphone? Made in China.
That cheap decorative shit on your desk? Made in China.
Your shoes, shirt and pants? Made in China.
What about the wheels of the office-chair you are sitting on? Made in China.

[FarCenter]

7. It's not the cheap crap I'm worried about - China has hollowed out US high-technology industries

The China toll
Growing U.S. trade deficit with China cost more than 2.7 million jobs between 2001 and 2011, with job losses in every state

...

Within manufacturing, rapidly growing imports of computer and electronic products (including computers, parts, semiconductors, and audio-video equipment) accounted for 54.9 percent of the $217.5 billion increase in the U.S. trade deficit with China between 2001 and 2011. The growth of this deficit contributed to the elimination of 1,064,800 U.S. jobs in computer and electronic products in this period. Indeed, in 2011, the total U.S. trade deficit with China was $301.6 billion—$139.3 billion of which was in computer and electronic products.

Global trade in advanced technology products—often discussed as a source of comparative advantage for the United States—is instead dominated by China. This broad category of high-end technology products includes the more advanced elements of the computer and electronic products industry as well as other sectors such as biotechnology, life sciences, aerospace, and nuclear technology. In 2011, the United States had a $109.4 billion deficit in advanced technology products with China, which was responsible for 36.3 percent of the total U.S.-China trade deficit. In contrast, the United States had a $9.7 billion surplus in advanced technology products with the rest of the world in 2011.

http://www.epi.org/publication/bp345-china-growing-trade-deficit-cost/

[DetlefK]

9. That's not an industry you can make appear out of thin air.

You need a market.
You need a product-design. (Something that doesn't infringe on existing patents.)
You need the employees. (Top-notch people who know IT, electronic engineering and physics.)
You need the money. (And we all know what US banks think of lending money post-2009.)
You need the equipment.

The equipment for making microchips isn't something you can just get anywhere. There are only so many companies manufacturing and selling the equipment for manufacturing microchips.

Setting this up will take time. Years. You can't just crash into a full boycott and say "starting today, we produce everything ourselves."

[FarCenter]

11. You have to start somewhere, and inaction due to fear of Chinese retribution is not the answer

We have the market - the stuff is being sold in the US.

We have the product design in many cases - e.g. Apple smartphone. We probably are short in the ability to design the automated factories needed for production, although in many cases, that is also designed in the US and a number US companies provide this type of stuff. US companies have the patent - they sell them to their Irish subsidiary, which then charges the other subsidiaries for their use, funneling corporate profits to Ireland where they get preferential tax treatment.

Employees is a problem. But after Sputnik, we placed an emphasis on science and engineering education, and it worked.

Money is a problem. We need to decrease consumption increase investment. The Chinese, with a much lower GDP/capita have a much higher saving rate.

Most microchip manufacturing is done by South Korea, Taiwan, and Japan, with the US and China trailing. But the equipment comes at least in part from companies like Applied Materials and Lam Research in the US. Other equipment comes from the EU and Japan.

[mainer]

6. Interesting how they're targeting GOP states/voters.

This is a canny retaliation. I wonder if they'll keep blue states untouched.

[Calista241]

8. That goes both ways.

And Trump has 1000 ways to affect American companies without going all out on tariffs.

Say we want to make sure all the cargo ships aren't carrying drugs in their containers, and each ship gets 2 or 3 days inspection. Such an action would be read loud and clear in American boardrooms.

China can hurt specific industries of ours, and they can stop buying debt (which I'm not sure they still do, I'd have to check), but we can absolutely crush their economy.

[yortsed snacilbuper]

10. We still grow our own food,

I wouldn't eat any food from China, the rest of the junk I don't need.