The Unz Review: An Alternative Media Selection
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
 BlogviewEric Margolis Archive
Trade Wars Are a Fool's Game
🔊 Listen RSS
Email This Page to Someone

 Remember My Information



=>

Bookmark Toggle AllToCAdd to LibraryRemove from Library • BShow CommentNext New CommentNext New ReplyRead More
ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
AgreeDisagreeLOLTroll
These buttons register your public Agreement, Disagreement, Troll, or LOL with the selected comment. They are ONLY available to recent, frequent commenters who have saved their Name+Email using the 'Remember My Information' checkbox, and may also ONLY be used three times during any eight hour period.
Ignore Commenter Follow Commenter
Search Text Case Sensitive  Exact Words  Include Comments
List of Bookmarks

According to the great military thinker, Maj. Gen. J.F.C. Fuller, ‘the object of war is not victory. It is to achieve political goals.’

Too bad President Donald Trump does not read books. He has started economic wars against China, Russia, Iran, Cuba and Venezuela without any clear strategic objective beyond inflating his ego as the world’s premier warlord and punishing them for disobedience.

Trump’s wars are economic. They deploy the huge economic and financial might of the United States to steamroll other nations that fail to comply with orders from Washington. Washington’s motto is ‘obey me or else!’ Economic wars are not bloodless. Imperial Germany and the Central Powers were starved into surrender in 1918 by a crushing British naval blockade.

Trade sanctions are not making America great, as Trump claims. They are making America detested around the globe as a crude bully. Trump’s efforts to undermine the European Union and intimidate Canada add to this ugly, brutal image.

Worse, Trump’s tariff war against China has damaged the economy of both nations, the world’s leading economic powers, and raised tensions in Asia. The world is facing recession in large part due to Trump’s ill-advised wars. All to prove Trump’s power and glory.

Trump and his advisors are right about China’s often questionable trade practices. I did 15 years of business in China and saw a kaleidoscope of chicanery, double-dealing, and corruption. A favorite Chinese trick was to leave imports baking in the sun on the docks, or long delaying them by ‘losing’ paperwork.

I saw every kind of craziness in the Wild East Chinese market. But remember that it’s a ‘new’ market in which western-style capitalism is only one generation old. Besides, China learned many of its fishy trade practices from France, that mother of mercantilism.

China indeed steals technical and military information on a mass scale. But so does the US, whose spy agencies suck up information across the world. America’s claims to be a victim are pretty rich.

What Trump & Co don’t understand is that China was allowed into America’s Greater Asia Co-Prosperity Sphere by the clever President Nixon to bring it under US influence – just as Japan and South Korea were in the 1950’s. China’s trade surplus with the US is its dividend for playing by Washington’s rules. If China’s trade bonus is stripped away, so will China’s half-hearted acceptance of US policies. Military tensions will rise sharply.

In China’s view, the US is repeating what Great Britain did in the 19th century by declaring war to force opium grown in British-ruled Burma onto China’s increasingly addicted people. Today the trade crop is soya beans and wretched pigs.

ORDER IT NOW

Trump’s ultimate objective, as China clearly knows, is to whip up a world crisis over trade, then dramatically end it – of course, before next year’s elections. Trump has become a master dictator of US financial markets, rising or lowering them by surprise tweets. No president should ever have such power, but Trump has seized it.

There is no telling how much money his minions have made in short or long selling on the stock market thanks to insider information. America’s trillion dollar markets have come to depend on how Trump feels when he wakes up in the morning and watches Fox news, the Mother of Misinformation.

It staggers the imagination to believe that Trump and his minions actually believe that they can intimidate China into bending the knee. China withstood mass devastation and at least 14 million deaths in World War II in order to fight off Japanese domination. Does the White House really think Beijing will cave in over soya beans and semi-conductors in a daft war directed by a former beauty contest and casino operator? China’s new emperor, Xi Jinping, is highly unlikely to lose face in a trade war with the US. Dictators cannot afford to retreat. Xi can wait it out until more balanced minds again occupy the White House.

Trade wars rarely produce any benefits for either side. They are the equivalent of sending tens of thousands of soldiers to be mowed down by machine guns on the blood-soaked Somme battlefield in WWI. Glory for the stupid generals; death and misery for the common soldiers

This fool’s war of big egos will inevitably end in a face-saving compromise between Washington and Beijing. Get on with it.

(Republished from EricMargolis.com by permission of author or representative)
 
• Category: Economics • Tags: China, Donald Trump, Free Trade 
Hide 62 CommentsLeave a Comment
Commenters to Ignore...to FollowEndorsed Only
Trim Comments?
    []
  1. ‘This fool’s war of big egos will inevitably end in a face-saving compromise between Washington and Beijing.’
    I agree with much of what Eric Margolis says, but unfortunately I do not share his optimism about compromise. The pattern of history suggests it is very unlikely war between the US and China can be avoided. And it will be world war.
    https://www.ghostsofhistory.wordpress.com/

    • Replies: @Svevlad
    , @Alistair
  2. Alistair says:

    It’s too bad that President Trump doesn’t read history books; there is nothing new in his trade wars against the rest of the world; the economists call it “Mercantilism” which had led Europe into bloody colonial wars in 18th and 19th centuries, cumulated in the WWI and WWII.

    China certainly knows how to deal with the Trump Mercantilism; last month, for the first time in recent history, China began imposing 5% tariff on the U.S Crude export to China – as a general WTO rule; Raw materials aren’t subject to tariff treatment because there is no any transformation done on them – but China imposed 5% tariff on the U.S Crude import as a way to put American crude in disadvantage versus the Iranian exported Crude to China; and that’s just the beginning of the global alliance in the trade war against the U.S.

    Trump Administration’s trade strategy is the old Mercantilism which had been tried and failed during the bloody era of 18th and 19th centuries in Europe – only to end in the aftermath of WWII, and upon implementation of GATT – “The General Agreement on Tariffs and Trade” in 1947 – GATT has been ultimately replaced by the WTO in 1995 – the US is the founding member of the GATT and WTO, to which China has joined in 2001.

    Trump should read more about the past trade wars which have led to actual military confrontations between the old colonial powers.

    • Replies: @Eileen Kuch
  3. Svevlad says:
    @peter mcloughlin

    Well, it’s gotta give somewhere. The thing is, both WW1 and WW2 were fought for imperial ambitions… China nor Russia don’t have them (they went through enough cycles to figure out that the only way to remain strong is to NOT go full imperialism)

  4. Jamie_NYC says:

    “Trade Wars are Fool’s Game” – ok; so what strategy do you propose in dealing with China? Roll over and play dead?

    • Replies: @d dan
    , @Macon Richardson
  5. Alistair says:
    @peter mcloughlin

    There won’t be a war, simply because you just don’t make war with your Banker; unless the U.S defaults on its debt to the Chinese which is unlikely because Uncle Sam owns a large printing factory, so, it won’t run out of the FIAT money any time soon.

    • Replies: @nokangaroos
    , @Realist
  6. botazefa says:

    If the tariff disproportionately impacts disloyal US offshore manufacturing – a front end corporate asshole tax is one way to describe it…

    I’m sorry but what’s not to like about the tariffs?

    • Agree: davidgmillsatty
  7. @Alistair

    Technically, the Constitution forbids the gubmint default – not that that matters.
    That they even THINK of paying the Chinese off with Imperial bonds shows how far they are already detached from reality.

    Strategically, the similarity to a century ago is uncanny.
    – Japan´s major weaknesses – apart from import dependence – were lack of manpower and industrial capacity; thanks to the on-child policy China boasts 80 million surplus trained males of fighting age – and don´t get me started on the industry. Plus their geostrategic base is well nigh unassailable. A blockade would kill South Korea and Taiwan first.
    – The newfound US love affair with intermediate-range nukes has nothing to do with Europe or Russia; it is the tacit admission their sexy carrier battle groups are as strategically worthless as their sexy battleships were 1940.
    – The US of today are far less – for lack of a better term – “whole” than the US of 1940.
    Think of Little Britain in the Malvinas crisis – hysteria is not the mark of an empire at peace with itself.

    The only thing keeping an uneasy peace is the economy; if it tanks …

    • Replies: @davidgmillsatty
  8. d dan says:
    @Jamie_NYC

    “ok; so what strategy do you propose in dealing with China? Roll over and play dead?”

    America’s problems begins at home. So, start solving our own domestic problems and improve our competitiveness rather than blame China, e.g. like improving the education, improving the infrastructure, improving the healthcare, improving the political system…

    • Replies: @animalogic
  9. d dan says:

    Blaming China for “stealing” our tech, for the so-called “forced” tech transfer, for currency “manipulation”, for its state “subsidies”, for abusing WTO rules, for “unfair” treatment of foreign companies, and for the sun rising in the East… are favorite ways for politicians to deflect from their own incompetence. They are also the favorite ways for China-haters to bash China. But they will not solve a single American problem, which is basically due to the lost of competitiveness of American economy and American workers.

    If China really commits those “sin”, why do Germany, Japan, South Korea, Taiwan, etc have HUGE trade surpluses with China? These are high-waged, high-tech economies as well. Why do these countries keep on investing in China, even today (after the trade war starts)? Ever wonder why does China steal tech from America only and not from these countries?

  10. A123 says:

    Step #1: Identify the Problem

    The author does OK here:

    Trump and his advisors are right about China’s often questionable trade practices. I did 15 years of business in China and saw a kaleidoscope of chicanery, double-dealing, and corruption. …. China indeed steals technical and military information on a mass scale.

    ____

    Step #2: Fix the Problem

    The author missed the boat here badly. He suggests that surrendering to China’s abuses is a valid solution.

    The facts cannot be disputed. China was reaping disproportionate and unearned benefits from the unequal trade relationship. Trump’s equalization of trade rules is impacting Chinese elite exploiters that took advantage of the U.S.

    Rebalancing of trade to equality and fairness is benefiting U.S. workers who will be voting Republican in 2020. Here are the facts (1):

    The simple fact is that Americans are not only working but they are making more money today than they have in the past. The household median income rose to a record $61,372 in 2017, as more Americans are benefiting from wage gains earned. The 2018 number will be reported in October, and given the on-going 3.2 percent year over year increases reported by the Bureau of Labor Statistics, it is obvious that 2018 and 2019 will have been even better years for American’s pocketbooks.

    The Chinese people have much more to lose in a trade war. Hopefully, their out of touch leaders will not start one. However, Globalist elites often do things that are not in the interests of their people.

    PEACE 😇
    ____

    (1) https://www.breitbart.com/economy/2019/09/06/rick-manning-jobs-report-blows-away-recession-fears-as-trump-economy-continues-to-soar/

    • Replies: @d dan
    , @animalogic
  11. “China indeed steals technical and military information on a mass scale.”??

    China hasn’t stolen significant IP from anyone.

    China ranks #6 in Economic Espionage Act (EEA 1831 and EEA 1832) convictions in the past 20 years and has a clean TRIPS record.

    There are documented cases of significance anywhere and nothing that China has taken has been costly to the US.

    China is ahead of the US in basic STEM research, citations, innovations and in most technologies because China spends three times more than the US annually on R&D. That’s the awful truth our politicians are trying to conceal.

  12. d dan says:
    @A123

    “He suggests that surrendering to China’s abuses is a valid solution…..” – typical ignorant anti-China shill. If China is abusing anyone or anything, please explain why do Germany, Japan, South Korea, Taiwan… all have huge trade surpluses with China. Some of their trade surpluses are larger proportional to their GDP compare with China’s trade surplus with US. And these are advanced high-waged, high-tech economies too. Why does China want to abuse ONLY America firms and not others?

    America’s problems are made in America – from education, to welfare entitlements, to government regulations, to infrastructure, to over financialization, to political deadlock, to…. Blaming our problems to others is a typical technique of the swampy DC elites, but it will not solve a single problem we are facing.

    • Replies: @Smith
    , @ken
    , @A123
  13. Smith says:

    I don’t agree. America NEEDS to move the manufacturing base back to America, this is the premier solution to fix America.

    As long as America still outsources jobs, its people will still be poor and there will be problems.

    There’s a reason China applies tariff for imported foreign goods but cry each time tariff is made on their export goods.

  14. Smith says:
    @d dan

    All of these countries would start to have the exact same problems like the USA if they increasingly switch their manufacturing base to China and become dependent to China.

    I think Japan already catches on, but I hope the best for Occupied Germany and that Merkel goes soon.

  15. The entire frame of this article is incorrect. Trump has repeatedly said (ignored by media) he is a free trader — no tariffs at all he often offers. He has repeatedly said he wants trade agreements that don’t give away the American farm. Seems right for the president of US. These old agreements are globalist in nature. He is not engaging in “war”. He is (finally) a pro-American president. So sorry our globalist friends are unhappy over it.

    This article echoes the hyperbole and fake news from the enemies of Trump. The entertainment value of their freakout is getting better every day.

    I particularly like how much money Trumps friends are making from the trade not-war. Jeez, how much could it be???

    • Replies: @d dan
    , @PSBindy
  16. d dan says:
    @Greg the American

    “Trump has repeatedly said (ignored by media) he is a free trader — no tariffs at all he often offers. ”

    It is hard to imagined there are still people who believe Trump’s claim that he is a free trader (or believe any Trump’s claims at all, e.g. “trade war is easy to win”, “tariff is paid by China”, “Xi is my good friend”, “Kim is my good friend”…). Somehow, I tend to believe a dog can learn faster than many people in America.

    “Two things are infinite: the universe and human stupidity. And I am not even sure of the former.” – Albert Einstein

  17. nsa says:

    The crux of the “trade war” has nothing to do with manufacturing widgets or “stealing technology”. Rather, it has everything to do with the Chinese refusal to allow in the “foreign financial services sector” to skim and loot their domestic economy i.e. the joo scammers with their reverse mortgages, crappy annuities, ETFs, no down eight year car loans, payday loan sharking, title insurance ripoffs, mutual funds, student loans, derivatives, junk bonds, etc etc…..the whole panoply of financial skulduggery which is the hallmark of the New Jerusalem known as North America.

    • Agree: animalogic
  18. @Jamie_NYC

    The US rolled over and played dead over thirty years ago when it allowed it’s corporate oligarchs to offshore the entire US economy. That having been done, there is little at this very, very late date to do about it. The US is already a third world country; it will soon have a majority third world population. America is a banana republic–with one difference: no bananas.

    In any scenario involving rolling over and playing dead, there is a temporal sequence involved. One must come before the other. The US rolled over more than 30 years ago. Now’s a good time for playing dead. That’s a better trick for a dog than sitting up and begging. Trump’s tariffs will have us sitting up and begging in no time.

    Besides, every thing that politicians do is geared to re-election. Everything that Trump is doing is done for purposes of re-election. That is the sum of US policy.

  19. I get that you don’t like Donald Trump, but you’re wrong on the need for tariffs.

    The US built its prosperity and power on the basis of a tariff-protected manufacturing sector.

    Sure, there was a period, from the beginning of the 20thC until the 1970s when American industrial hegemony could prevail, and provide high wages, but this depended (mainly) on an absence of peer competitors.

    Under these conditions free trade worked in America’s interests and tariffs weren’t necessary. But by the 1970s Asian mercantilists were chipping away at US superiority.

    Without tariffs, the decline of US manufacturing will inevitably continue.

  20. @d dan

    Thanks d dan, I totally agree.
    You will not necessarily strengthen yourself by weakening your enemy.
    Trump’s tariffs cause it’s victims to methodically & strategically de-link from areas where the US can weaken them.
    This is not to suggest that Trump (& Obama) we’re not reacting to reality. The bottom line is that China is now a near peer competitor, & perhaps soon a peer competitor. Thus, the US emphasis on trying to derail China’s 2025 policy to become a leader in high tech. Near peer, peer competitor — the US finds both intolerable.
    Unfortunately, the US is unable to strengthen itself. Elites, neoliberalism, neo-conservatism etc , ie the corrupt PTB, mean that the US can NOT change to strengthen itself. Thus, the US’s ever more frantic, ugly, inept ploys to “control” the world.
    The continued relative decline of the US is baked in. The only questions concern the speed & intensity of that decline.

    • Replies: @d dan
  21. @A123

    Using any kind of total averaging of US wages will give a distorted picture. The FACT is that the bulk of wage increases have gone to the top 10%, especially the top 1%.
    Furthermore, China may take “advantage”, but why not ? It’s the US government, it’s businesses etc that rabidly off-shored to China in the 90’s & naughties. No one complained THEN (except US workers, but no one gives a fuck about them).

  22. TG says:

    You are both right, and missing the point.

    “Trade wars” do work. The United States from 1776 to around 1970 was strongly protectionist. All four presidents carved on Mt. Rushmore – and pretty much all the other ones until 1970 – were staunch protectionists. With a high protective tariff, they took the United States from a backwards agricultural colony to the world’s pre-eminent industrial and scientific power. As Alexander Hamilton called it, protectionism was the “American System.”

    The problem is that Trump is not really fighting a trade war. The deal is that our oligarchs have shipped the core of our industrial base to China. It’s not about protecting American industry from Chinese exports, because American industry is in China! Rather, it’s a conflict of American owned factories in China vs. Chinese owned factories in China. The American public does not have a dog in this fight.

    Our elites betrayed us by shipping our industries to China, and they figured they would get massive profits from all that lovely cheap labor and to hell with regular Americans. They figured that China would be a nice docile colony, but the Chinese had other ideas. They want to take control of these industries for their own benefits, and cut our own elites out of the picture. And now our elites are panicking. And it couldn’t happen to a nicer bunch of back-stabbing traitors.

  23. Realist says:
    @Alistair

    …Uncle Sam owns a large printing factory, so, it won’t run out of the FIAT money any time soon.

    But it will run out of people who want it. The days of the US dollar’s reign are numbered.

  24. Jmaie says:

    “China was allowed into America’s Greater Asia Co-Prosperity Sphere by the clever President Nixon to bring it under US influence – just as Japan and South Korea were in the 1950’s.”

    Both Japan and south Korea were occupied by US troops in the 50’s, I doubt they were “allowed” in…

  25. ken says:
    @d dan

    Is there a benefit to being pro-China?

    • Replies: @d dan
  26. ken says:

    “Imperial Germany and the Central Powers were starved into surrender in 1918 by a crushing British naval blockade.” So your argument is to resupply your combat opponent for a fairer fight?

  27. A123 says:
    @d dan

    America’s problems are made in America – from education, to welfare entitlements, to government regulations, to infrastructure, to over financialization, to political deadlock, to…

    These are issues but not the main ones, with the exception of ‘Common Core’ education making our children math illiterate.

    America’s #1 problem under the Globalist uni-Party (B. Clinton, G. W. Bush, Barak Hussein) was submissiveness to foreign whims. Followed by #2: The belief that manufacturing policy, labor policy, trade policy, and security policy were four different and unrelated things.

    The reason why Chinese exploiters (among other countries) descended on the U.S. is that U.S. ‘leaders’ made it easy. And, Trump remains burdened by establishment inertia including appointments made by these droogs.
    ____

    Trump still has a long way to go to fix the damage done to this country, and given deep state resistance there are a limited number of things that he can contest simultaneously. He has chosen industrial policy and manufacturing as one of the points of engagement. Sensible, as higher wage blue collar employees voting Republican is a good step towards moving the ‘neocon’ war mongers out to their proper home in the Democrat party.

    The further he can push the Dems towards wacky elitism the more room there is for Republicans to return to their Main Street roots. As an added bonus, the Dems are full-on embracing ‘Crazy’ as a defining characteristic.

    PEACE 😇

    • Replies: @d dan
  28. d dan says:
    @A123

    “America’s #1 problem under the Globalist uni-Party (B. Clinton, G. W. Bush, Barak Hussein) was submissiveness to foreign whims.”

    Blaming our problems to other American citizens (past Presidents or CEOs of global companies) are not the solutions either, especially when their actions have already been done and can’t be undone. These people did what they thought are the best for their jobs – I suspect if you, me or most people were in the same positions, we likely would make the same or similar decisions.

    The key for now is to increase the competitiveness of the economy and the workers – which means solving a bunch of domestic problems – from education, to healthcare, to fiscal debts, to infrastructure, to government regulation, to over financialization, to over militarization, …. i.e. American problems are made in America. As I said before, other advanced countries (Germany, Japan…) can do that, so why not America?

    “Ordering” American firms to quit China (a.k.a. Trump-style) would not increase our competitiveness. Neither do forbidding Huawei through the so-called national “security” excuses (it would not increase our 5G R&D, and may even make US companies more complacent). Neither do tariff (it would only restructure global supply chain, and left America isolated). Neither do starting a civil war by blaming each other (GOP, Democrats, CEOs, free traders, past Presidents, Jews, …).

    • Replies: @A123
  29. d dan says:
    @ken

    “Is there a benefit to being pro-China?”

    It is so sad that not wanting to have a hostile relation with China is being considered as “pro-China” by many Americans.

    Just to indulge you, there is no benefit to being “pro-China”. In fact, there are plenty of disadvantages of being so, especially in America.

  30. ken says:

    By the same token it can be said that a person is permitted to be anti-China, but not be hostile towards China.

    • Replies: @d dan
  31. d dan says:
    @ken

    “By the same token it can be said that a person is permitted to be anti-China, but not be hostile towards China.”

    Of course, you can. It is called freedom of speech, isn’t it? But most of the views I read in American media are both anti-China and hostile towards China.

    BTW, there are also many possible financial rewards for being anti-China and hostile towards China today. At least Steve Bannon may want to hire you. 😉

    • Replies: @ken
  32. A123 says:
    @d dan

    These people did what they thought are the best for their jobs – I suspect if you, me or most people were in the same positions, we likely would make the same or similar decisions.

    Barack Hussein was the worst President this country ever had. He achieved the impossible, redeeming Nixon’s legacy by making Watergate look like a kiddie prank. A broken clock is right twice a day… So, there may be occasional instances where Barack accidentally made the correct choice. There are no substantial decisions made by Barack Hussein that I would repeat.
    _____

    The key for now is to increase the competitiveness of the economy and the workers – which means solving a bunch of domestic problems …

    -1- China bans (or excessively tariffs, or imposes a negative social capital rating) superior U.S. products so they cannot be purchased by Chinese consumers.
    -2- China steals U.S. IP and undercuts U.S. companies by having near zero development cost.
    -3- Chinese firms receive subsidies to ‘grow their market share ‘ and bankrupt U.S. Competitors, so they can reap the rewards later. The Rare Earth mineral mining industry is an excellent example of #3.

    Please, explain how your solution “Increasing U.S. Competiveness” can fix these problems rooted in Chinese government “No Competition Allowed” policies.
    _____

    Your suggestions have merit for long term U.S. Competitiveness in equal and fair trade. Education needs to be taken away from the SJW ultra-Globalist left and return to emphasizing real skills and abilities. We also need more opportunities for non-university track apprenticeships and professions.

    However in the short term, eliminating inherently unfair and anti-competitive policies is an absolute and undeniable necessity. Unless this is done, the U.S. will be denied the financial strength to tackle the long term issues damaging U.S. competitiveness that you wish to address.

    PEACE

    • Replies: @d dan
  33. d dan says:
    @animalogic

    “The bottom line is that China is now a near peer competitor, & perhaps soon a peer competitor.” – I want to make an even stronger claim: that China has already surpassed America in many areas, e.g. in 5G, in infrastructure technology, in high-speed rail, in supply chain management, in industrial cost optimization, in quantum communication, in hypersonic research, in rare earth mineral refinement, in magnet engineering, …

    The smarter people in the west knows their future lies in China, or at least has strong link to China. Therefore, we should be friendly, or at least not hostile towards them. Unfortunately, most people decide to bury their head in the sand. It is much comforting to believe that we lose because the other guys cheat, rather than because we didn’t do it right or work as hard.

    “The continued relative decline of the US is baked in. The only questions concern the speed & intensity of that decline.” – Yes, it is extremely painful to watch this. And typical American responses to blame others instead of deep soul searching are accelerating the trend.

  34. @nokangaroos

    Of course the Constitution ensures that the federal government can never go bankrupt. It can mint all the coins it wants or print the paper equivalent of them. And when it mints coins it does not have to borrow from banks or people to mint them or tax the people in order to mint them. It simply mints them and spends them into the economy. And it could mint twenty two trillion dollars worth of coins tomorrow and pay off all of its debt without taxing or borrowing. And if it can do it with coins it can do it with paper equivalent which are called bills of credit.

    The federal government, because it can coin money or print the paper equivalent of coins, it does not have to budget like a household.

    The federal government could issue a couple of coins to China, declare its debt paid and China would be holding coins it could spend in the US or anywhere else people would take them.

    China is really not the US’ banker.

  35. d dan says:
    @A123

    “-1- China bans (or excessively tariffs, or imposes a negative social capital rating) superior U.S. products so they cannot be purchased by Chinese consumers.” –

    I think you are quite ignorant of what happens in China. American firms have make trillions from Chinese markets for decades. China don’t ban superior US products (it is a self-defeating strategy and does not help their own companies). Chinese tariffs is in line with what they promised to do when they were first admitted to WTO – which is averaging slightly below 10% as of 2018.

    If you are talking of “banning” of Google, Facebook…, that is more a political issue rather than economic reason – it requires a long explanation. But the gist is that China did not “ban” them. These firms decided they don’t want to/can’t comply with China’s domestic security/censorship laws, and therefore they quit the Chinese market.

    “-2- China steals U.S. IP and undercuts U.S. companies by having near zero development cost.”

    Nonsense. One of the iconic high tech US firm is Apple. But it is not complaining about China stealing nor about “forced” tech transfer. Neither do Microsoft nor GM. In fact, Apple just moved its high end Mac Pro manufacturing from US to China, even after the trade war started. Further, you have to ask why do Chinese ONLY steal US IP and not German IP, not Japanese IP, not Taiwanese IP… All these countries have trade surpluses with China. Finally, please keep yourself updated on how much China invests in R&D, how many patents they register, how many STEM Ph.D. they graduate (vs how many lawyers we graduate),… These are far from the “near zero development cost” you claim.

    “-3- Chinese firms receive subsidies to ‘grow their market share ‘ and bankrupt U.S. Competitors, so they can reap the rewards later. The Rare Earth mineral mining industry is an excellent example of #3.”

    Almost every country subsidies some firms. In US, we subsidies big farms, subsidies wall street with low interest rate, subsidies military contractors… In South Korea, e.g. they subsidies the semi-conductor industries… So, no, this is not the so-called “unfair” practice by China, nor is it unique to China, nor is it prohibited by WTO, nor is it target at US firms. It is just that American industrial policies are kidnapped by special interests. As I said, the problems lie in America, not China.

  36. A123 says:

    … why do Chinese ONLY steal US IP and not German IP, not Japanese IP, not Taiwanese IP…

    I’m sure that China tries to steal IP from everyone. In fact I already covered this ground up in #27. Since you apparently missed it, let me restate:

    #2: The belief that manufacturing policy, labor policy, trade policy, and security policy were four different and unrelated things. … The reason why Chinese exploiters (among other countries) descended on the U.S. is that U.S. ‘leaders’ made it easy.

    The reason that Germany, Japan, and Taiwan do better is they have government policies that actually protect their IP. Alas, the U.S. previously only gave lip service to IP protection.
    _____

    In fact you have accidentally proven my point for me. Let’s parse your full statement:

    Further, you have to ask why do Chinese ONLY steal US IP and not German IP, not Japanese IP, not Taiwanese IP… All these countries have trade surpluses with China

    Let me rephrase and add some context for clarity:
    — Countries that successfully protect their IP, such as Germany, Japan, and Taiwan, have surpluses with China.
    — Countries that fail to protect their IP, such as the U.S. have deficits with China.

    You own words suggest a viable course of action. One way to improve balance of trade with China is to better protect U.S. IP.

    PEACE

    • Replies: @d dan
  37. ken says:
    @d dan

    I am anti-China, but really have no means of being hostile towards them. I don’t believe China will become the mega super power that many believe it will. Communistic, totalitarian countries tend not to thrive in the long run. USSR was pretty scary circa 1978; what did they look like 15 years later? Their workforce is already shrinking and their central planning has been a disaster. We may have deficiencies here, but have never resorted to murdering 10s of millions of our citizens. I don’t need to be hostile towards them, they will implode. My kids attend elite, private college preps where 10-20% of the students are children of Chinese elites. To a man (or a boy) they would rather graduate college and stay here rather than return to China. Many on this site share the Lihn Dihn philosophy of an eclipsing America, but seldom realize what major shit holes other countries are. I can compare the worst 20% of USA to the most noble 20% portion of China (BTW did I mention they send their kids to school here. What is so deficient about Chinese schools?) to create a bleak outlook, but that doesn’t make it reality. The bottom half of China would prefer to be in Appalachia than where they currently reside.

    • Replies: @davidgmillsatty
    , @d dan
  38. d dan says:
    @A123

    “Let me rephrase and add some context for clarity:
    — Countries that successfully protect their IP, such as Germany, Japan, and Taiwan, have surpluses with China.
    — Countries that fail to protect their IP, such as the U.S. have deficits with China.”

    So, how does Germany, Japan, Taiwan protect their IPs? They don’t have to launch a trade war against China to protect their IP, do they? So, how can you claim that it is China that is cheating?

    I suggest you watch the following video to update yourself about the latest IP situation in China. Note that the panel are American, not China, citizens. It includes an IP lawyer working in China for decades:

    or former American economist from WorldBank debunks the typical lies and misconceptions about China:

    For example, an expert in these video states that today, when a foreign firm sues a Chinese firm in Chinese IP court, 90% (or 80%, can’t remember exactly) of the time foreigner wins. I don’t know the corresponding rate in US court, but I am pretty sure it is not so high for foreigner in US.

    • Replies: @A123
  39. @ken

    China’s real problem is 1.4 billion people. Who knows what it might be able to achieve if it had a population similar to ours?

    Russia’s problem is the climate and the lack of people and population decline and a huge expanse making infrastructure very difficult.

    It is easy to say these countries have not yet achieved what the west has achieved but ascribing that failure to Marxism or socialism may be overlooking some other much more important reasons.

  40. d dan says:
    @ken

    Good to know your optimism in America. But China is communist in name ONLY. So I disagree with your prediction of USSR’s fate for China. Furthermore, Chinese leaders are very smart and competent (compare to US politicians). They study diligently the reasons for USSR’s implosion, as well as Japanese economic lost decades. That is on top of their close examinations of current problems and strengths in US and other western countries. In China, an “US expert” is someone who is fluent in English and likely several languages, studied in US, worked in US for years if not decades, read thousands of US books and papers. In contrast, a “China expert” in US is someone who read something from someone who read something from someone…. (after n times) who can read Mandarin.

    As for the Chinese students preferring US, this has a lot to do with US having a higher standard of living currently (i.e. pay higher), having a less competitive (K-12 or higher) educational environment (do you know it is easier to get into Harvard than to get into Peking U?), generous welfare, and more relaxed lifestyle (less competition). It is also an indication of Chinese people’s open mind to explore the world. I doubt it is due to the “superior” political system or American value (whatever it means) that you are alluding to.

  41. Smith says:

    d dan still refuses to engage the elephant in the room.

    Lack of manufacturing base = BAD.
    Move manufacturing base to foreign country = WORSE!

    Currently, the US government has done this and is trying to stop this, US corporations (who are now multinational) are abusing cheap chinese labor to prop them up and make US dependent on China.

    Solution = re-industrialize the US, pay a living wage for americans and nationalize all corporations who outsource/employ (illegal/legal) immigrants.

    This is the ONLY way US can be great again, and it has nothing to do with being anti-China.

    If China is indeed the future, we wouldn’t see CCP-shills flooding the internet, doomsaying every days so that Trump can stop the “trade war”.

    Also, all of the political elites in China are practically educated to the US, for an asian proverb, this is like nurturing tiger at home, it’s gonna bite you sooner or later. Deport them and all the dual citizen (israeli american, indian american, chinese american, hell even vietnamese american).

    It is funny as hell to see communists defending free trade and service economy while capitalists ask for re-industrialization though.

  42. Smith says:

    This is why you are getting spammed 24/7 about muh TRADE WAR BAD.

    The truth about China’s “patriots”, they all have australian, canadian or american passport while singing praise about Mother China or the CCP.

    “Because I love China, I’ll get adopted by an Australian daddy” – Xu Xiaodong, the spartan helmet guy i.e. the MMA guy who goes around beating fake kung fu masters.

    Solution: deport all chinese, make them actual patriots instead of whining about racism in Australia/Canada/America/Vietnam/Japan/Phillipines/Hong Kong/whatever place chinese migrate to. Let them whine about racism in China.

  43. Manhattan’s financial traitors did sell America’s manufacturing down the Yangtze river, and there is no painless corrective.

  44. A123 says:
    @d dan

    So, how does Germany, Japan, Taiwan protect their IPs? They don’t have to launch a trade war against China to protect their IP, do they?

    There are things that the U.S. can and should do to stop the “go forward” issues:
    — End ‘birthright ‘ citizenship
    — Prohibit Confucius Institutes at U.S. universities
    — Restrict non-US citizen enrollment in STEM degree programs
    — Eliminate STEM related visas such as H-1B and OPT

    Germany, Japan, and Taiwan have none of these built in ‘easy target’ policies, which serves them well in IP protection. Without an embedded source of new IP thieves, China (and other countries) will have a much harder time stealing U.S. IP.
    ___

    That being said. You are posing a fallacious “either-or” choice scenario. The two paths are not mutually exclusive. The U.S. can simultaneously:
    A) Make internal policy changes to reduce future theft, and
    B) Take external policy steps to reduce harm from past thievery

    The only thing the U.S. can control is ending the era of Chinese exploitation masquerading as trade.

    Chinese leadership must now make a choice:
    — If China wants fair trade, there will be fair trade.
    — If China wants a trade war, there will be a trade war.

    PEACE

    • Replies: @d dan
  45. Yee says:

    I’ve always found it funny that when the US investments go to China, it’s “sell out America to build China”; when China invest in other countries, it’s “debt trap”…

    • Replies: @Smith
  46. @Alistair

    I fully agree with you, Alistair. It’s unfortunate that DJT doesn’t read history books. If he had done so, there wouldn’t be a trade war with China or any other country. This trade strategy of his is the old Mercantilism and there’s nothing new about it .. It had led Europe into colonial wars of the 18th and 19th Centuries and cumulated into World Wars 1 and 2.
    Yes, indeed, China knows how to deal with the DJT Mercantilism; last month, for the first time in recent history, China started imposing a 5% tariff on US crude oil export to China .. As a general WTO rule, raw materials aren’t subject to tariff treatment because there’s not any transformation done on them .. But China imposed a 5% tariff on US crude import as a way to put American crude at a disadvantage versus the Iranian exported crude to China; and that’s just the beginning of the global alliance in the trade war with the US.
    As you rightly said, DJT should read more about the past trade wars which had led to actual military confrontations between the old colonial powers. What he’s been doing is destroying the US economically with this old Mercantilism.

    • Replies: @Greg the American
  47. d dan says:
    @A123

    I will skip comment on your proposals regarding immigration, Confucius Institutes… Those are big topics and not directly related to the trade war in this thread.

    “You are posing a fallacious “either-or” choice scenario. The two paths are not mutually exclusive. The U.S. can simultaneously:
    A) Make internal policy changes to reduce future theft, and
    B) Take external policy steps to reduce harm from past thievery”

    Firstly, as I mention before, other countries have demonstrated that either
    1. China did not steal, or
    2. if China steals, you don’t need a trade war to protect IPs.
    So, trade war is neither effective nor necessary to stop IP theft.

    Secondly, if you watch the video links I posted, you will understand that China is willing to protect foreigners’ IP because they are the top dog in IP registration today. They have the motivation to do so.

    Thirdly, trade war has casualty – it harms many Americans and companies too. It hurts US reputation as unilateralist. It undermines WTO. You may not like WTO, but there is currently no replacement to it. Do you prefer total chaos in international trades?

    Finally, trade war is morally wrong. Besides depriving (or at least restricting) the rights of ordinary Americans to decide what to purchase, trade war hits lower income more than the high income citizens. You basically are saying that low income shoppers in Walmart need to pay 25% (or whatever amount) higher because Apple and other corporations don’t have the mean to protect their IP. Don’t you think this is ridiculous?

    • Replies: @A123
  48. ANA says:

    ” Trump has become a master dictator of US financial markets, rising or lowering them by surprise tweets.”
    And buying or selling stocks or stock options immediately before those tweets.
    That’s why he changes his mind so often and for no apparent reason.
    And it’s all legal. Presidents are not subject to insider trading rules.
    That’s how they’re rewarded for making the rich richer.
    Being president may finally make Trump as rich as he always pretended to be.

    • Replies: @d dan
  49. @Eileen Kuch

    A lot of hyperbole in your statement, echoing the chamber. The numbers past vs present aren’t comparable, there is an awful lot of “free trade” still happening and Trump is doing “deals” left and right, there is no conclusion to the current China situation yet, and your predictions of the results are of course not happening at this time.

    Trump is not Pat Buchanon, he is simply negotiating the managed trade in a way that benefits America. He’s no idealist, but he’s made many statements in favor of open trade, and his efforts to deescalate at times with China (and others) reveal him. Kudlow is free trade.

    Trump is merely doing what any non-globalist American president ought to do, very much not rocking the boat, and very centrist in his approach.

  50. A123 says:
    @d dan

    It undermines WTO. You may not like WTO, but there is currently no replacement to it. Do you prefer total chaos in international trades?

    Various ‘global’ bodies have been rigged against the U.S. For some time. The U.N. And WTO being among the largest offenders. Forcing these organizations to become fair is necessary to create order out of the current chaos. Here is the reality check:

    — Supporting current WTO = Conducting Trade War and generating chaos
    — Fixing WTO = Preventing Trade War and eliminating chaos

    You cannot keep the current Pro-Trade War WTO and simultaneously avoid a trade war Chaos. If you want to avoid chaos, you need to propose serious measures to fixed known failed international bodies that are creating problems.

    I will skip comment on your proposals regarding immigration, Confucius Institutes… Those are big topics and not directly related to the trade war in this thread.

    These are the prime tools for infiltrating IP theft agents into U.S. Corporations:
    — You claim the U.S. needs to be more competitive and protect its IP without a trade war.
    — I offer measures that will make U.S. Citizens more competitive and protect U.S. IP.

    Suddenly you are interested in skipping the things you demanded a few posts ago. Your attempted evasion is quite obvious and this suggests your position is very weak.

    You basically are saying that low income shoppers in Walmart need to pay 25% (or whatever amount) higher because Apple and other corporations don’t have the mean to protect their IP. Don’t you think this is ridiculous?

    You are basically saying that some U.S. Citizens must be jobless, homeless, penniless, non-consumers because China (and other nations) have stolen those jobs via unfair, non-competitive trade practices. Don’t you think this is ludicrous?

    PEACE

    • Replies: @d dan
  51. d dan says:
    @A123

    “you need to propose serious measures to fixed known failed international bodies that are creating problems.”

    You know US is founding member of WTO and UN, and have tremendous influences in both of them, right? If Trump is serious about a rule-based order that is “fairer”, by all means propose reforms. I am very sure EU, Japan, China, South Korea, Canada, Mexico…. will prefer WTO reform than US unilateralism.

    “These are the prime tools for infiltrating IP theft agents into U.S. Corporations”

    Seriously, you think Confucius Institutes, STEM students, etc are primary tools for IP theft? FYI, there are Confucius Institutes in Germany too. China also have plenty of students in EU, in Japan, in South Korea… and yet these countries still can protect their IPs. It proves that these are NOT the “prime tools for infiltrating IP theft agents” as you claim.

    “You are basically saying that some U.S. Citizens must be jobless, homeless, penniless, non-consumers because China (and other nations) have stolen those jobs via unfair, non-competitive trade practices.”

    When did I say that? When did I said China “have stolen those jobs via unfair, non-competitive trade practices.”? What I said is US needs serious domestic reforms to prevent its citizens from becoming jobless…

    —————-

    I have presented plenty of evidences, arguments and counter-examples to prove that trade war is pointless in protecting IP. I believe I have the majority of knowledgeable experts in the world agreeing with me, and future events will prove me right. But I feel that you are not open to new info and new arguments. So I will rest my case. Good luck to your pursuit of the truth.

    • Replies: @A123
  52. A123 says:
    @d dan

    I accept your surrender. The facts show, and everyone understands, that your falsehoods were clearly and soundly defeated today.

    You unwillingness to engage on measures that would improve U.S. Competitiveness and protect U.S. citizens, U.S. jobs, and U.S. IP conclusively proves that you do not care about these things. We regrettably score you as a shill for Chinese government interests. Perhaps you will have better luck deceiving the unwary tomorrow.

    PEACE

    • Replies: @d dan
  53. Smith says:
    @Yee

    Because it’s true. Chinese claim equity of projects that the host countries cannot pay e.g. Sri Lanka.

    Also, chinese ALWAYS use their own source of chinese labor and chinese material.

    Chinese project ABROAD are a way to consume chinese materials and giving jobs to chinese.

  54. Yee says:

    “Smith”,

    I don’t waste time talking to sub-con Indians, especially when they pretend to be other nationalities than their own…

    • Replies: @Smith
  55. Smith says:
    @Yee

    Unz, where everyone is a hive mind, anyway, I’m Mr. Smith from the Matrix and I accept your surrender.

  56. d dan says:
    @A123

    “I accept your surrender….We regrettably score you as a shill for Chinese government interests….”

    Sigh. Another narrow minded American that starts to call name to fellow citizen who disagree.

    • Replies: @A123
  57. d dan says:
    @ANA

    “And buying or selling stocks or stock options immediately before those tweets.”

    Not just by tweet. I suspect he will try to time a trade deal with China close to his re-election. That will of course, create a big stock rally at the “right time”. But as you say, it is totally legal, and it is what all Presidents do.

  58. Paul says:

    China does not think trade wars are a fool’s game. They have been winning a trade war many years.

  59. A123 says:
    @d dan

    I again offer to engage on measures that would improve U.S. Competitiveness and protect U.S. citizens, U.S. jobs, and U.S. IP. These measures include giving U.S. Citizens first shot at U.S. STEM degrees and U.S. STEM jobs.

    — Why are you so narrow minded that you refuse to engage?
    — Why do you falsely misconstrue U.S. Citizens holding U.S. Jobs as a “trade war”?

    PEACE 😇

  60. Smith says:

    China is LOSING the trade war, and they admit it:

    http://www.globaltimes.cn/content/1164391.shtml
    >Experts said that the move, ahead of the next round of high-level trade consultations scheduled in early October, is a reciprocal goodwill gesture or olive branch to Washington in response to Trump administration’s decision to delay imposing higher tariffs on $250 billion of Chinese goods from October 1 to October 15.

    >”Exempting the additional tariffs on US pork, soybeans and other agricultural products will ease pressure on China’s stretched domestic supplies, while making the US side get to know China’s sincerity in the coming trade talks,” said Song Guoyou, director of Fudan University’s Center for Economic Diplomacy.
    Their own tabloid, their own admission!

    China is ALREADY starving due to the lack of food! The absolute state of Beijing!

  61. PSBindy says: • Website
    @Greg the American

    Hello Greg the American. Your position seems to parallel mine. I don’t see this economic dispute with China as a trade war per se, but rather a realignment of initial overly favorable trade agreements.

    China has benefitted greatly. That’s fine. But now they are an economic power and our trade relations should reflect the more equal nature of our two economies.

    I’m a first cohort Boomer. 1st CAV ’69-’70, uneducated but I try to keep up. If anyone disagrees with my position that this is a realignmentof conditions that were operative near a half century ago please explain what I am missing. Thanks

  62. Matslinger says: • Website

    One thing has never changed… an abundance of useful idiots (or cowards) who continue
    to sustain (the ruse) “as advertised”…. Trump has no policy ! he (((may))) have had one before
    his third month in office, but there is no remnant of one now… Trump is a transducer
    with wires emanating from his ass…. on the other end of the wires are controllers with a
    microphone…. tell it like it is, or don’t tell it at all….

    https://www.google.com/search?q=israel+supreme+court&sxsrf=ACYBGNS2wTu2nRS6hmSonoSHTJ7h3lxBWQ:1568566037416&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjZ3d3ro9PkAhWJ_J4KHbHxDMIQ_AUIEigC&biw=1067&bih=501&dpr=1.35#imgrc=0N0nvfPOarRvGM:&spf=1568566040573

Current Commenter
says:

Leave a Reply - Comments on articles more than two weeks old will be judged much more strictly on quality and tone


 Remember My InformationWhy?
 Email Replies to my Comment
Submitted comments become the property of The Unz Review and may be republished elsewhere at the sole discretion of the latter
Subscribe to This Comment Thread via RSS Subscribe to All Eric Margolis Comments via RSS
Personal Classics
Bin Laden is dead, but his strategy still bleeds the United States.
Egyptians revolted against American rule as well as Mubarak’s.
“America’s strategic and economic interests in the Mideast and Muslim world are being threatened by the agony in...
A menace grows from Bush’s Korean blind spot.
Far from being a model for a “liberated” Iraq, Afghanistan shows how the U.S. can get bogged down Soviet-style.