China May Cancel Trade Talks if Trump Extends Tariffs

After Trump reached out to China offering trade talks, he then gave the go-ahead for more tariffs. China may back out.

On September 13, the Trump administration reached out to China with an offer for more trade talks.

The WSJ reported the "Trump administration said it sensed a new vulnerabilityand possibly more flexibilityamong Chinese officials pressured by U.S. tariffs imposed earlier this year and threats for more."

I inaccurately commented Trump Gets Cold Feet on More Tariffs: US Proposes More Talks With China.

My view was similar to the WSJ take. Trump lashed out at the WSJ.

On September 14, I noted Trump Tells Aides to Proceed With $200 Billion in Tariffs on China.

The consensus opinion now is that more tariffs will be announced Monday or Tuesday.

Who's Bluffing Whom?

Understandably, Beijing is balking at the Trump administrations pressure tactics as China Weighs Skipping Trade Talks After U.S. Tariff Threat.

> Faced with fresh threats of tariffs from Washington, China is considering declining the Trump administrations offer of trade talks later this month, according to officials with knowledge of the discussions.

> The White House plans to announce within the next few days tariffs on as much as $200 billion in Chinese goods, The Wall Street Journal reported Saturday, in a move designed to further squeeze Beijing before another round of negotiations proposed by the U.S. The pressure tactics, however, arent sitting well with Beijing, which has repeatedly said it wouldnt negotiate under threat.

> China never said it doesnt want to negotiate with the U.S., Yang Weimin, a former senior economic adviser to President Xi Jinping, said Sunday. But the U.S. side has to show sincerity toward resolving the trade dispute. Added a current senior official who advises the leadership on foreign-policy matters: China is not going to negotiate with a gun pointed to its head.

Counter-Threat

> In response to the pressure from Washington, some Chinese officials involved in advising the leadership are proposing to step up the trade fight a notch by restricting Chinas sales of materials, equipment and other parts key to U.S. manufacturers supply chain. Such restrictions could even apply to Apple Inc.s iPhones, which are assembled in the mainland, officials said, without elaborating. Apple didnt immediately respond to a request for comment.

> China can adopt export restraints as a way to hit back at the U.S. in addition to retaliatory tariffs, former Finance Minister Lou Jiwei told a gathering of Chinese and American academics and business executives Sunday.

Pressure Tactics

Trump seems to think that countries will respond to pressure. Of course, that assumes Trump is thinking at all, which is clearly debatable.

Whether or not Trump is thinking, history shows that countries do not respond to pressure.

Venezuela, Iran, Iraq, Russia, and Turkey are proof enough.

Going back further, one can look at our counterproductive policies on Cuba (still ongoing) and let's not forget the war in Vietnam which the US lost.

A friend comments "You can also add Rhodesia (now Zimbabwe) which faced brutal sanctions in the 1960's as did South Africa. Both attempts failed."

Tolerance For Pain

Yes, Trump can inflict more damage on China than the other way around. But unlike China, the US has something called elections.

If voters are dissatisfied with results, US leaders do not stay in power. Similar conditions do not apply in Cuba, Iran, Venezuela, or Turkey where the system is rigged even if people do get to vote.

Losing vs. Losing More

One does not win by losing less than the other guy. Nor does one win with tactics that may cost heavily in midterm elections.

Mike "Mish" Shedlock

Comments (18)
No. 1-9
gliderdude
gliderdude

Would think Trump delays major action until after elections. Lots of hot air verbiage by Art of the Dealster. China has short term advantage of devalued yuan and American consumers advancing purchases over tariff fears. They would be foolish to hand him victory before elections, or at all for that matter. Note the Trumpsters love of taxes that are biased to the lower 66% and away from the rich.

Irondoor
Irondoor

Read some Chinese history. They starved millions (on purpose) during Mao's reign of terror just to harvest grain to pay off foreign debts. They burned houses and anything else they could find to fire their rudimentary backyard kilns to make materials for "steel" production so as to be in control of their supply or to sell to generate foreign exchange. People were living and dying outdoors with no clothes or food just to satisfy the "cadres" and their quotas, all of which came down from Mao and his senior people.

This is the mentality of the Chinese now joined with their desire for world domination by any means necessary. They will resort to whatever tactics necessary, which will eventually include the takeover, by violence/war, of Taiwan to show us and the world that there is nothing that can be done about it short of nuclear conflict. How are we going to penetrate the "nine-dash line" to come to the rescue of Taiwan?

China considers itself the "middle kingdom" and that the world revolves around it. They are not going back to being second-class citizens of Eurocentric domination. And, this includes ethnic Chinese living all over the world. Do you think they are fully assimilating and swearing allegiance to their foreign home? Nope. They send their children to Chinese classes, have Chinese names as well as "John and Sue", speak Chinese at home, write Chinese characters, etc. Do you wonder why so many Chinese are working in Silicon Valley? That's where the technology their masters in mainland China need exists and they are instructed to steal it. Many are caught with the information by the FBI trying to leave the US bound for China. But many more are successful, similar to the few Mexican illegal aliens who are caught and the millions who have made it through.

They are geared for the long haul, and like John Kerry recently told the Iranians, they will just need to wait out the Trump years and then return to business as usual with the next President.

Our country is literally being ripped apart by squabbling over stupid PC issues while the Chinese are laughing all the way to the trade bank and Mexican cartels take hundreds of millions in drug money out.

Trump is trying to renegotiate a few trade deals and slow down illegal immigration. What does he get for it? Non-stop hatred. What's his problem? He's the wrong man for the right job.

Kinuachdrach
Kinuachdrach

Long time ago, I read a book on Chinese history written by an admitted anti-communist Chinese author. However, his point was -- Don't get too worried about the Chinese communist government, because it won't last. 3,000 years of Chinese history show a repeated cycle of the central government losing the Mandate of Heaven, and provinces breaking away, leading to periods of raging civil war, until eventually a victor in the civil wars becomes strong enough to reimpose central authority. Again and again!

If we could ever get the facts, my guess is that the Chinese property bubble is worse than the Australian version. Incredibly, an ordinary apartment in multistory block in a third tier Chinese city costs about the same as a good condominium in an upscale part of Dallas. If trade-reducing actions of the Chinese government rock that property market, the Mandate of Heaven is likely to crumble.

Both the Chinese government and the US Administration have got strengths and weaknesses. They are both playing their hands in a process known as real world negotiations. Don't get too excited about mid-game speculation in the Wall Street Journal.

0327trader
0327trader

China has been directly and indirectly stealing intellectual property for many years. The nation has been dishonest with its dealings with many nations including ours. President Trump is the first individual to call out their behavior. Google has agreed to develop algorithms for the Chinese government to use against their citizens. If you think actions are necessary, I fully support the actions of our POTUS against the Chinese government. This not the time for weak kneed individuals and others that have watched and profited from the Chinese actions of aggression. Individuals like Mish have come up with no actions or solutions to counter this aggression. STFU or propose a better solution. I believe Mish and people who support his non-tariffs actions are jellyfish.

thimk
thimk

good commentary , but can anyone tell me exactly what we are demanding from china. ? details seem sketchy. Also why hasn't the trumpster targeted Chinese visas? 300k in our colleges.