It’s War !!!
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IMF issues warning on the US-China trade war
“China has many reforms that it could carry out that would be in its own interest and in the interest of countries around the globe. But China feels they can’t take those steps, as they put it, with a gun to their head, in the midst of trade tensions…Trade barriers if they are sustained could lead to a fragmentation of the global economy. If this [trade dispute] leads to stalemate, China may decide to reorientate its economy not to trade with the US. To accept sustained trade barriers … could lead to a slowdown [for the global economy],” he said.
https://www.theguardian.com/business/2018/dec/11/imf-financial-crisis-david-lipton
If another financial crisis takes place, the USA will go belly up
I don’t know how reliable Vanity Fair is (not much I suspect) but the headline of this story is amusing:
Trump Official Threatens Peasant Revolt in China If Xi Doesn’t Cut a Deal
https://www.vanityfair.com/news/2019/01/wilbur-ross-trade-war-little-villages
Donald Trump has not discovered the hot water yet. Peasant and industrial workers revolts in China have taken place for many years, it is not due to bourgeois protectionism. The western press does not make any mention of that type of situation because most western capitalists have an investment in China, they only made propaganda against Chinese workers oppression when Mao Tse Tung was in power before the agreement made with Richard Nixon and Bill Clinton
Peter Hudis who is a Marxist Humanists and had travelled frequently to China, and compiled Rosa Luxembourg works on China, have written a couples of articles about the Chinese workers discontent and revolts, and he said that China workers revolts are boiling up, he said that China is a future incubator of workers revolts, and the Trotsky Socialist Party have written also several articles about the Chinese peasants workers revolts which have been taken place since 2001
https://www.marxists.org/history/etol/newspape/news-and-letters/2000s/2005-01-02.pdf
https://www.wsws.org/en/articles/2005/06/chin-j20.html
The Communist Voice Journal has written several articles about Chinese workers uprising and the so-called privatization of peasants lands in China which have created protests among the peasants
A Trade War POW?
Huawei, the Chinese telecommunications giant, was charged with a series of crimes by the US on Monday, in an escalation of hostilities between the world’s biggest economic powers. The US justice department said Huawei had based its global expansion on “lies and deceit”. It accused the firm and its executives of stealing trade secrets, laundering money, obstructing justice and defrauding banks to elude US sanctions. Matthew Whitaker, the acting attorney general, said criminal offending at Huawei went “all the way to the top of the company”. He announced that grand juries in Seattle and New York had issued indictments on 23 criminal charges.
Kirstjen Nielsen, the US homeland security secretary, said Huawei had operated a scheme that had been “detrimental to the security of the United States” by undermining sanctions against Iran. The company and its chief financial officer, Meng Wanzhou, are also accused of defrauding banks and lying to the US to get around economic sanctions on Iran. She is accused of personally making a presentation to a “major banking partner” in which she “repeatedly lied” about the company’s relationship to the subsidiary, Skycom. They claimed to have sold an Iranian subsidiary but had actually sold it to themselves.
The charges are likely to raise tensions between China and the US amid a trade war between the world’s two biggest economies. They were unveiled shortly before trade talks between American and Chinese officials were due to resume.
we have a trade war but this one now uses real war legislation
“An executive order issued by the US president, Donald Trump, on Wednesday declared a national economic emergency that empowers the government to ban the technology and services of “foreign adversaries” deemed to pose “unacceptable risks” to national security, including from cyber-espionage and sabotage….Trump’s executive order invokes the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the US. The order directs the commerce department, working with other government agencies, to draw up a plan for enforcement within 150 days.
Now, a smart phone is a national threat. The real threat is the international and national competition
Things go from bad to worse.
Chinese companies have stopped buying U.S. agricultural products, China’s Commerce Ministry said
The U.S. Treasury Department announced late on Monday that China was manipulating its currency, knocking the U.S. dollar
U.S. stocks plunged to their worst loss of the year Monday and investors around the world scrambled to sell on worries about how much President Donald Trump’s worsening trade war will damage the global economy.
China is buying all their agricultural products from Russia, Argentina and Brazil. Some USA farmers are carrying a red head cap which reads: Make my potatoes, and soybean great again. They have lost their biggest customer which was China, and they do not know if they are going to get it back. Capitalist peace is war too
No resolution in sight in this trade war. The Dow Jones Industrial dropped over 600 points (2.3%).
No resolution in sight in this trade war. The Dow Jones Industrial dropped over 600 points (2.3%).
One of these days it is going to drop to the fall to the floor and it is not going to go up. The USA doesn’t have the industrial might to compete with China, the old days of the post war are gone forever
On the other hand, China does require the spending power of America, both industrial-level and individual consumers. Imports from China were $540 billion in 2018
China has bought so many U.S. Treasury notes that it is the largest lender to the U.S. government. As of April 2019, the U.S. debt to China was $1.1 trillion. That’s 27% of the total public debt owned by foreign countries.
China can’t afford to let America collapse. It would be shooting itself in the foot.
If China started selling its Treasury holdings or even merely cut back on its Treasury purchases it would also be disastrous if China. In fact, China is buying almost as many Treasurys as ever.
If China were to stop buying Treasurys, interest rates would rise. That could throw the United States into a recession. But this would mean the U.S would buy fewer Chinese exports.
China pegs its yuan currency to the dollar using a modified fixed exchange rate. When the dollar loses value, China buys dollars through U.S. Treasurys to support it.
U.S. companies that can’t compete with cheap Chinese goods must either lower their costs or go out of business. Many businesses reduce their costs by outsourcing jobs to China or India. Outsourcing adds to U.S. unemployment. Other industries have just dried up. U.S. manufacturing, as measured by the number of jobs, declined 34% between 1998 and 2010. As these industries declined, so has U.S. competitiveness declined in the global marketplace.
https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277
I think the USA is already in a recession
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