US VS G7

[Altair]

There is an irony in the progressive crowd that loves to love China (eg. Thomas Friedman) with its real authoritarianism, but can't stand Trump on the basis of his being "authoritarian" (which by definition he is not).

I have no more welcome for China as a big player than I did for the USSR.  The Chinese peoples and their essential values (except for a certain amount of chauvinism) are wonderful; their government is an abomination.  I too look forward to the US ending its current turmoil; but Trump is a symptom, not a cause, of the underlying cultural war.

I don't love China, but I can appreciate the game that their government is playing.

Same way I can shake my head at how the current US leadership is playing right into their hands.

 

[daftandbarmy]

Just have to love that basic dictatorship, eh? If only the rest of us weren’t so damn democratic.

“Dictators ride to and fro upon tigers which they dare not dismount. And the tigers are getting hungry.” ~ Winston Churchill

When they fall off, you'll be able to hear the screaming from here.

 

[Altair]

https://www.huffingtonpost.ca/entry/30-billion-dollar-fund-eyed-trade-war-begins_us_5b3865ece4b08c3a8f6b10a9

But Trump, who has attacked Harley-Davidson for plans to move some production to its overseas plants to avoid retaliatory European tariffs, is looking to save “my farmers” from the trade war he launched. Rural support was critical to his presidential victory. Unhappy farmers could spell trouble for midterm elections.

Agriculture Secretary Sonny Perdue said last month at a Chicago convention that the Commodity Credit Corporation is a “tool” he’s considering to comply with Trump’s instructions to “craft a strategy to support our farmers against retaliatory tariffs. The program, which was started to help farmers during the Great Depression, allows the Agriculture Department to borrow as much as $30 billion from the U.S. Treasury that could be used to buy crops from farmers that would go unsold in a trade war.

Needing to save the farmers from the trade war he decided to begin, the american president now needs to pump out 34 billion in relief to those farmers.

Same economics at work here.

 

[Altair]

https://www.msn.com/en-ca/news/world/mps-voice-outrage-at-repulsive-donald-trump-broadside-against-theresa-may/ar-AAA1259?li=AAggNb9

 
Donald Trump’s incendiary newspaper interview on the eve of his first official visit to the UK, in which he took aim at Theresa May’s Brexit plans and suggested Boris Johnson would make a great prime minister, has been met with outrage by MPs, who have accused him of “disrespecting” the nation and suggested Theresa May should show him the door.


Trump, who is due to meet Theresa May for bilateral talks at her Chequers residence on Friday, was heavily critical of the Brexit deal and called into question any future UK-US trade deal. “If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal,” he told the Sun.

Justin Trudeau in good company, seems like it's leader of host nation beware.

 

[PPCLI Guy]

https://www.huffingtonpost.ca/entry/30-billion-dollar-fund-eyed-trade-war-begins_us_5b3865ece4b08c3a8f6b10a9

Needing to save the farmers from the trade war he decided to begin, the american president now needs to pump out 34 billion in relief to those farmers.

Same economics at work here.

So, government subsidies of business?  To compete with another nation?  Sounds unfair to me....

#cognitivedissonance

 

[Altair]

https://business.financialpost.com/news/economy/trump-hits-back-at-canada-allies-and-china-for-retaliatory-tariffs-with-wto-complaint?video_autoplay=true

The Trump administration is hitting back at a number of countries for what it considers unjustified retaliatory tariffs that were imposed as a response to the steel and aluminum duties the U.S. applied on its closest allies in the name of national security.

The U.S. Trade Representative said it launched formal challenges against China, the European Union, Canada, Mexico and Turkey at the World Trade Organization on Monday. They come in response to retaliatory measures taken by these countries on American-made products earlier this year.

“The actions taken by the President are wholly legitimate and fully justified as a matter of U.S. law and international trade rules. Instead of working with us to address a common problem, some of our trading partners have elected to respond with retaliatory tariffs designed to punish American workers, farmers and companies,” U.S. Trade Representative Robert Lighthizer said in an emailed statement.

Now that is rich.

The USA is going to the WTO saying that tariffs put on their goods is not legal.

 

[Altair]

https://www.theguardian.com/business/2018/jul/16/imf-trump-trade-war-global-economy-us-tariff-weo

Rising trade tensions between the United States and the rest of the world could cost the global economy $430bn (£324bn), with America “especially vulnerable” to an escalating tariff war, the International Monetary Fund has warned.

Delivering a sharp rebuke for Donald Trump, the Washington-based organisation said the current threats made by the US and its trading partners risked lowering global growth by as much as 0.5% by 2020, or about $430bn in lost GDP worldwide.

Although all economies would suffer from further escalation, the US would find itself “as the focus of global retaliation” with a relatively higher share of its exports taxed in global markets. “It is therefore especially vulnerable,” the fund said.

For all the talk of the Canada being unable to win, how many people are talking about the Americans inability to win a trade war?

 

[Altair]

https://nationalpost.com/news/world/americans-blast-absurd-auto-tariff-proposal-in-written-submissions-to-u-s-government?video_autoplay=true

Absurd.” “Ridiculous.” “Devastating.” “Outrageous.” “Enormously Stupid.”

From ordinary Americans to small factory owners and the big-three U.S. car makers, the message to the United States Commerce Department is clear: imposing a 25-per-cent tariff on cars imported from Canada and elsewhere for national security reasons would be a misguided, job-killer of a policy.

The overwhelming majority of more than 2,200 written submissions made to the department either criticize the auto-tariff idea President Donald Trump has floated, or plead for exemptions for items from used parts to antique cars.

Americans not blaming Canada for this trade war. Seems to be a common theme. Interesting.

It's as if they know whos fault this is exactly. The American Presidents fault.

 

[Loachman]

I will tend to agree with that. I cannot see any sense in it at all. The interesting plot twist has yet to materialize and, this time, likely will not.

Anyway, I need groceries, and it grows late.

 

[Altair]

https://www.cnn.com/2018/07/19/politics/trade-war-dairy-farmers-utah/index.html

Times have been difficult for Gibson and dairy farmers across the country the past couple years. Dropping milk prices and a disappearing labor force have forced thousands of US dairy farms to close.
"We have 160 dairy farms in Utah right now," Gibson explained. "It's a very real possibility that by the end of this year, we could have 100."
With looming trade wars on the horizon after President Donald Trump's proposed tariffs, Gibson fears foreign buyers of American milk will find other markets to buy from and never return. The administration has placed numerous tariffs on Chinese goods in recent months, with the latest round announced earlier this month affecting goods such as fruit and vegetables, handbags, refrigerators, rain jackets and baseball gloves.
"I hope that one morning President Trump's just going to wake up and send out that 3:30 in the morning tweet that says tariffs are gone," said Gibson. "But the problem I have is once he sends that tweet, are the buyers across this world going to come back to American agriculture? Or are they going to be so upset at us over this whole mess that we don't get our customers back?"

Salient point really.

 

[Altair]

https://www.bloomberg.com/view/articles/2018-07-19/donald-trump-is-pushing-europe-into-asia-s-embrace

With friends like these, it’s wise to look around for some new ones.

Donald Trump has called the EU a “foe” and advised British prime minister Theresa May to sue the rest of the bloc over Brexit. The U.S. president has already levied tariffs on European steel, and is threatening to do the same on lots of other products, including cars. So it’s hardly a surprise that Europe’s leaders are turning eastward in search of new allies.

This week, the EU has signed a landmark trade deal with Japan, known as JEFTA, which will make it easier for European food producers to sell their products into Japan while further opening up European markets to Japanese carmakers. There was also a rapprochement with Beijing. For the first time since 2015, the yearly EU-China summit ended with a joint statement, as well as limited progress toward a bilateral investment treaty.

China EU, EU Japan, the TPP, CETA, a lot of trade deals happening without the USA being involved.

Influence definitely waning.

 

[Altair]

https://www.google.ca/amp/s/www.cnbc.com/amp/2018/07/20/trump-were-playing-with-the-banks-money-on-markets-gain-since-el.html

President Donald Trump said the stock market rally since his election victory gives him the opportunity to be more aggressive in his trade war with China and other countries.

“This is the time. You know the expression we’re playing with the bank’s money,” he told CNBC's Joe Kernen in a “Squawk Box” interview aired Friday.

A crying shame for everyone who isn't heavily invested in the stock market who, when they lose their jobs,  wage growth,  or the potential of work in the future.

Bur the president is correct, for the wealthy on wall street,  there is a bit of a cushion built up that can be sacrificed trying to win a global trade war.

Given his background, I can see why he would be concerned about those types.

 

[daftandbarmy]

Bur the president is correct, for the wealthy on wall street,  there is a bit of a cushion built up that can be sacrificed trying to win a global trade war.

Or, of course, anyone with a public service pension....

 

[Altair]

Or, of course, anyone with a public service pension....

True.

They can be counted as the "banks money" that the president is going on about.

 

[Cloud Cover]

Interesting statements in Bloomberg coming out of Japan about bilateral versus multi lateral trade:
https://www.bloomberg.com/news/articles/2018-07-22/abe-s-lieutenant-pours-cold-water-on-bilateral-japan-u-s-fta

Top Japanese Official Has No Interest in Trade Deal With Just the U.S.

One of Japan’s top policy makers indicated the government will continue to resist U.S. efforts to create a bilateral free trade agreement between the two nations.

"Japan is not going to do anything with any country that harms the national interest," said Chief Cabinet Secretary Yoshihide Suga. "With FTA negotiations too, we’ll handle them in that way."

During a wide-ranging interview in Tokyo on Saturday, Suga also said he expects Prime Minister Shinzo Abe to stand for re-election in September as leader of the ruling Liberal Democratic Party. If he wins that contest, which appears likely, Abe could remain PM until 2021, making him the nation’s longest serving post-war premier.


Suga’s comments came as officials from the Group of 20 countries meeting in Argentina pushed back against the Trump administration, which has shunned multilateral agreements and embraced tariffs.

At the G-20, Finance Minister Taro Aso pressed U.S. Treasury Secretary Steven Mnuchin to alleviate Japan’s concerns over trade, discussing U.S. tariffs on steel and aluminum, as well as possible levies on car and auto part imports.

Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer are expected to sit down for bilateral trade discussions later this month.

Suga said he knows the U.S. side is keenly interested in a bilateral trade deal, but Japan will continue to insist that the U.S. returning to the Trans-Pacific Partnership trade agreement is in the best interests of both countries. President Donald Trump pulled the U.S. out of the agreement during his first week in office.

 

[Altair]

Interesting statements in Bloomberg coming out of Japan about bilateral versus multi lateral trade:
https://www.bloomberg.com/news/articles/2018-07-22/abe-s-lieutenant-pours-cold-water-on-bilateral-japan-u-s-fta

Top Japanese Official Has No Interest in Trade Deal With Just the U.S.

One of Japan’s top policy makers indicated the government will continue to resist U.S. efforts to create a bilateral free trade agreement between the two nations.

"Japan is not going to do anything with any country that harms the national interest," said Chief Cabinet Secretary Yoshihide Suga. "With FTA negotiations too, we’ll handle them in that way."

During a wide-ranging interview in Tokyo on Saturday, Suga also said he expects Prime Minister Shinzo Abe to stand for re-election in September as leader of the ruling Liberal Democratic Party. If he wins that contest, which appears likely, Abe could remain PM until 2021, making him the nation’s longest serving post-war premier.


Suga’s comments came as officials from the Group of 20 countries meeting in Argentina pushed back against the Trump administration, which has shunned multilateral agreements and embraced tariffs.

At the G-20, Finance Minister Taro Aso pressed U.S. Treasury Secretary Steven Mnuchin to alleviate Japan’s concerns over trade, discussing U.S. tariffs on steel and aluminum, as well as possible levies on car and auto part imports.

Economy Minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer are expected to sit down for bilateral trade discussions later this month.

Suga said he knows the U.S. side is keenly interested in a bilateral trade deal, but Japan will continue to insist that the U.S. returning to the Trans-Pacific Partnership trade agreement is in the best interests of both countries. President Donald Trump pulled the U.S. out of the agreement during his first week in office.

America might need to realize that it isn't the overwhelming superpower of the global economy,  and that there are a lot of powerful trade blocs other that them around these days.

 

[PPCLI Guy]

America might need to realize that it isn't the overwhelming superpower of the global economy,  and that there are a lot of powerful trade blocs other that them around these days.

Like, say, China?

https://www.washingtonpost.com/news/theworldpost/wp/2018/07/23/china-world-order/?utm_term=.7e724a76819a

A Chinese world order
by Jonathan Hillman
July 23 at 10:51 AM

BUDAPEST — Earlier this month, 16 Central and Eastern European heads of state assembled around a single foreign power in Sofia, Bulgaria. The convening force was not the European Union, Russia or the United States, which historically have the deepest cultural, political and security ties in this region. Instead, China was at the center — as it increasingly is around the world.

Now in its seventh year, the “16+1” summit perfectly captures China’s deceptive brand of multilateralism. Bringing together many countries, it gives the outward appearance of inclusivity and consensus-building. Official statements at the summit affirmed support for the World Trade Organization and the United Nations, two genuine pillars of multilateralism that are increasingly under strain. “We need to uphold multilateralism,” Chinese Premier Li Keqiang told attendees.

But beneath the surface, China’s 16+1 format is fundamentally different from the multilateral practices and institutions it claims to uphold. China and its partners do not subscribe to a common set of rules that has any significant impact on their behavior. Nor is anything of consequence done by consensus. China’s multilateralism lacks depth, and it relies on stroking egos and dangling bilateral deals. Call it “flatteralism.”

Where this approach has benefits, they mostly accrue to China. Under the guise of broader participation, China favors governments where investment rules are less strict, ensuring Chinese companies are hired to build large projects. For example, Bosnia’s economy is roughly one-third the size of Croatia’s, but it is not subject to E.U. procurement rules that require open bidding. Last year, it received ten times as much Chinese investment, according to data collected by the Center for Strategic and International Studies.

There are practical and political advantages as well. These annual gatherings allow Chinese officials to efficiently lavish high-level attention on smaller economies. And when China comes to town, its summits are less board meetings than auditions. The 16 countries essentially compete for the attention of the one. China uses variations of this model elsewhere, positioning itself at the center of summits in Africa and Latin America. This is adept diplomacy, but it is not multilateralism.

Flatteralism also runs through Chinese President Xi Jinping’s signature foreign policy vision. Unveiled in 2013, China’s Belt and Road initiative aims to move Beijing close to the center of everything through new hard infrastructure projects, trade deals, cultural exchanges and a multitude of other connections. “Together, we can build a broad community of shared interests,” Xi told an audience of nearly 30 heads of state and representatives from more than 130 countries and 70 international organizations in Beijing last year.

The Belt and Road is a masterstroke in geopolitical advertising. Wrapping the effort in Silk Road mythology, Xi is effectively selling a Sino-centric order to the world. Rather than cringing at maps that depict all roads leading to Beijing, roughly 70 countries have signed onto the effort. The United Nations, WTO and other traditional standard-bearers of multilateralism have all expressed varying degrees of support for an effort that could further erode their effectiveness.

In practice, the Belt and Road is a sea of bilateral deals between China and participating countries, including many markets where few others dare to go. More than half of the countries participating in the Belt and Road have sovereign debt ratings that are either junk or not graded. China’s emphasis on building big-ticket infrastructure projects resonates with foreign leaders looking to impress at home and establish a legacy.

Ribbon cutting ceremonies are difficult for leaders to resist, and as the deals pile up, development can give way to dependency. In a former Sri Lankan president’s home district, major projects — including an international airport, a cricket stadium and a port — had three things in common: they used Chinese financing, Chinese contractors and his name. Now they are barely used, Sri Lanka has crushing debt, and China has control of the port.

Praise flows freely along the Belt and Road. China touts an “all-weather strategic” partnership with Pakistan, a “comprehensive strategic partnership” with Russia, a “comprehensive strategic cooperative partnership” with Vietnam and “strategic cooperative” relationships with a long list of neighbors. It has become the Baskin-Robbins of partnerships, offering flavors for everyone.

But what China has yet to offer is deep multilateralism at scale. Its closest attempt, the Asian Infrastructure Investment Bank, has attracted broad participation and adopted rules similar to those of the World Bank. But having lent only $5 billion to date, the AIIB is easily overshadowed by Beijing’s bilateral lending mechanisms. Over the next five years, the China Development Bank has committed to invest $250 billion in countries along the Belt and Road.

Less than a week after China’s 16+1 summit, NATO heads of state gathered in Belgium. Normally, a meeting of the world’s most powerful collective security alliance would provide a stark contrast to Beijing’s shallow summitry. But in the absence of strong U.S. support for authentic multilateralism, it is becoming more difficult to spot imposters.

 

[daftandbarmy]

Like, say, China?

https://www.washingtonpost.com/news/theworldpost/wp/2018/07/23/china-world-order/?utm_term=.7e724a76819a

Welcome to Planet China:


China’s belt-and-road plans are to be welcomed—and worried about

The “project of the century” may help some economies, but at a political cost

SHUNNING all false modesty, China’s leader, Xi Jinping, calls his idea the “project of the century”. The country’s fawning media hail it as a gift of “Chinese wisdom” to the world’s development. As for the real meaning of the clumsy metaphor to describe it—the Belt and Road Initiative (BRI)—debate rages.

The term itself is confusing. The “road” refers mostly to a sea route; the “belt” is on land. Countries eager for China’s financing welcome it as a source of investment in infrastructure between China and Europe via the Middle East and Africa. Those who fear China see it instead as a sinister project to create a new world order in which China is the pre-eminent power.

One cause of confusion is that the BRI is not a single plan at all. A visitor to its website would click in vain to find a detailed explanation of its aims. There is no blueprint of the kind that China’s leaders love: so many billions of dollars to be spent, so many kilometres of track to be laid or so much new port capacity to be built by such-and-such a date.

Chinese maps show the belt and road as lines that trace the routes of ancient “silk roads” that traversed Eurasia and the seas between China and Africa (see Briefing). That was the original conceit, but these days China talks about BRI as if it were a global project. The rhetoric has expanded to include a “Pacific Silk Road”, a “Silk Road on Ice” that crosses the Arctic Ocean and a “Digital Silk Road” through cyberspace.

To the extent that this is all about building infrastructure, the idea is welcome. Trillions of dollars’ worth of roads, railways, ports and power stations are needed in countries across Asia, Africa and Europe. China’s money and expertise could be a big help in spreading wealth and prosperity.

China says anyone can join in. Countries such as Azerbaijan and Georgia, which stand to benefit immensely from better connections to the world, are wildly enthusiastic. One of China’s motives is to strengthen security on its western flank by helping Central Asian countries prosper—thereby, it hopes, preventing them from becoming hotbeds of Islamist terrorism. Everyone would benefit from that, too.

But there are worries. The BRI is bound up with the growing cult around Mr Xi. State media call it “the path of Xi Jinping”. It has become shorthand for China’s overseas aid, state-led investment abroad and for Mr Xi’s much-ballyhooed “great-power diplomacy with Chinese characteristics”. China urges other countries to praise the BRI, so that their words can be relayed back home as propaganda. Few Chinese dare offer open criticism; that makes mistakes more likely.

The citizens of countries hosting BRI projects may come to regret their governments’ enthusiasm. Like all Chinese cash, the BRI billions come without pesky questions about human rights or corruption. Indeed, the terms are often shrouded in secrecy, raising fears that local politicians may benefit more than their people. Projects tend to require the use of lots of Chinese labour. BRI countries risk piling up dangerous amounts of debt, which some fear is designed to give China a strategic hold over them. Pakistan, one of the most important BRI countries, has just held an election in which candidates vied to take credit for Chinese investment; yet the debts are so large that, before long, Pakistan is likely to need an IMF bail-out.

Then there are possible security risks. In his metaphorical flights, Mr Xi sometimes speaks of his belt and road as a single thoroughfare, a “road of peace”. But what if the Chinese navy were to take advantage of ports such as Hambantota? This was repossessed by a Chinese state-owned firm after the Sri Lankan government struggled to repay the debts it had amassed to build it. Military planners worry that China could develop a string of such berths that its ships could use to extend their reach far beyond China’s shores.

Analysts in Asia and the West believe that China wants to displace America as the Asian hegemon. The BRI could end up furthering that plan, even if it is not its focus. China’s crude maps show the belt and road running through disputed territory, including the bitterly contested waters of the South China Sea where China has been busy building fortresses on reefs.

Some Asian countries, including India and Vietnam, are wary and most Western countries share their unease. Last year America’s defence secretary, James Mattis, said that: “No one nation should put itself into a position of dictating [BRI]”. In January France’s president, Emmanuel Macron, warned that the BRI “cannot be the roads of a new hegemony that will make the countries they traverse into vassal states.” He added: “The ancient silk roads were never purely Chinese…These roads are to be shared and they cannot be one-way.”

What should the world do about the BRI? For a start, it needs to keep some perspective. Even if China does hope to use it as a political tool to beat back Western influence, Beijing is bound to face difficulties, as projects go awry, debts go bad and people grow hostile to China’s presence. History suggests that simply doling out money will not, on its own, usher in a Pax Sinica.

The world can also use its influence to make the BRI more beneficial. Even China’s billions cannot finance everything on offer. Money coming from the West, from the European Union and from institutions such as the World Bank and the IMF should be lent according to international standards—including on such things as transparency, environmental safeguards, public procurement and debt sustainability. So long as they are good projects, let China include them in the BRI if it wants to.

Last is security. The way to assuage fears about the BRI’s threat to the balance of power is not by trying to frustrate China’s efforts, let alone by starting a trade war or by pulling America’s armed forces out of Asia, as President Donald Trump sometimes seems to contemplate. On the contrary, the balance of risks and benefits of the BRI is related to America’s commitment to Asia. If the United States is engaged, the world can mitigate the dangers of BRI and reap its rewards. If not, the risks will outweigh the benefits. The BRI is yet one more argument for America to stay in Asia.

https://www.economist.com/leaders/2018/07/26/chinas-belt-and-road-plans-are-to-be-welcomed-and-worried-about