2019年2月28日星期四

Nobody's going to win the trade war but you

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FEBRUARY 28, 2019
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How to Profit When China and the United States Both Lose This Trade War
By Matt Piepenburg, Special Contributor, Money Morning

At this very moment, U.S. and Chinese trade representatives are meeting in the hopes of establishing a "memorandum of understanding" against the backdrop of a potentially escalating trade war in which the United States already has a 10% tariff on over $200 billion worth of Chinese imports.

The deadline is, in theory, tomorrow, March 1. Trump, citing "good progress," has said he's willing to move the deadline for the tariff hammerblow back, though it could very well fall tomorrow.

But as of now, nothing has changed: The world's two top trading powers are hoping to avert the "mutually assured destruction" of a continuing trade war while simultaneously seeking to save face in their politicos' respective postal codes.

The United States was on the pointy end of a $375 billion trade deficit back in 2017; we imported more than $506 billion worth of Chinese products, while they imported just $130 billion of ours. It was initially easy to understand Trump's frustrations with such an imbalance.

Then again, if the United States wants to hate China for not buying enough U.S. widgets, from iPhones to blue jeans, then we should also hate U.S. CIOs at places like Apple, GE, Nike, and AT&T.

After all, these companies "offshored" the manufacturing of "American" products to China for cheaper labor. This ultimately worked to the detriment of U.S. workers and the benefit of U.S. executive salaries. Disaffected U.S. voters of all stripes and persuasions are beginning to catch on to this.

Meanwhile, China's dictator, Xi Jinping, is more than aware of the problems inherent in keeping 1.4 billion citizens from losing faith in a schizophrenic economy, where the Shanghai Composite Index crashed to five-year lows in September against the S&P 500's all-time highs.

In short, there's a lot at stake from D.C. to Beijing. Neither leader wants to lose credibility at home; both leaders are looking to score a political and economic "win" on the global stage.

For those of us not named "Trump" or "Xi," who actually have to live in weakening, debt-soaked domestic economies, the downside is abundant...

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Washington

Here's Everything Trump's Up Against at the Hanoi Summit
Our Bill Patalon believes that despite denuclearization talks in Vietnam, North Korean President Kim Jong Un is more "Goodfella" than a "good fella," just like in the classic Scorsese flick. Here's why Washington should tread carefully... Full Story

Must See

Trouble at Sea: This Real-Life Game of "Battleship" Could Develop into WWIII
BREAKING: A Chinese destroyer nearly struck a U.S. Navy vessel in this international trade channel. China claims the presence of American ships threatens its sovereignty and security - but our satellite images reveal an even bigger threat. Get a closer look...

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