Trade Talks With China End in Impasse and Threats from China

If you thought Trump would bully China into an agreement you thought wrong.

The New York Times reports U.S.-China Trade Talks End in an Impasse.

The United States and China ended trade talks in Beijing on Sunday without any announced deals and with Chinese officials refusing to commit to buying more American goods without a Trump administration agreement not to impose further tariffs on Chinese exports.

“If the United States introduces trade measures, including an increase of tariffs, all the economic and trade outcomes negotiated by the two parties will not take effect,” China said in a statement distributed by the state-controlled news media.

The apparent impasse left the Trump administration with the issue of what to do about China’s industrial policies. It also left unresolved an awkward issue for both sides: the Chinese telecommunications company ZTE, which had violated sanctions against North Korea and Iran.

Can't Lose

Trump Nonsense

All sides lose in a trade war. One does not win a trade war by losing less.

For a collection of still more charts on the absurdity of NAFTA bitching, please see Dear NAFTA Bashers: You Need New Charts.

True Source of Trade Imbalance

Trump is clueless about trade and barking up the wrong tree.

Mike "Mish" Shedlock

Comments
No. 1-25
pi314
pi314

Realist - People signed stupid deals all the time. E.g. Seniors lost money to scammers etc. You are naïve to believe that everyone who signed a deal with the Donald got a good deal. Need I say more?

Kinuachdrach
Kinuachdrach

Realist – Yes, when two individuals freely come to a deal, it is by definition a fair deal. However, when someone makes a deal on behalf of other people, we run into the “Agency Problem”. Wretchard on the Belmont Blog discusses this from time to time – the interests of the Agent making the deal can be quite different from the interests of the people on whose behalf he makes the deal.

Good example – the Clinton grifters. When Bubba made the deal effectively to give the Chinese billions of dollars worth of US research effort on rocket guidance for next to nothing, it was a bad deal for the US population. But it was a good deal for the Clinton Foundation. Similarly with Hillary Rodman Clinton and the Uranium One deal with Russia – bad for the US population, good for the Clintons personally.

Remember that most of the individuals in the DC Swamp making trade deals on behalf of the US people are Ivy League graduates – credentialed rather than educated – with little real world experience and a perspective that owes much to the Gramscian march through the institutions. Generally, they are agents without any personal skin in the game.

And even if a one-sided deal made sense at one point in time (eg diverting global economic growth from the US to China to encourage world peace), it may no longer make sense years later (eg when the US economy is hollowed out and workforce participation is declining).

Real free trade makes sense – unilateral free trade, only occasionally and for limited periods of time.

Realist
Realist

Snow dog. The US govt debt is a result of excess govt spending, and has almost nothing to do with trade. : Pi. How many deals have you signed where you knew you would lose as a result. Yes, the future is uncertain, and deals can end up being bad, but no one willingly signs a deal where they know they will lose.

truthseeker
truthseeker

Mish I have stayed away from this discussion since last time I pushed a little too hard I guess as you became so upset with me I thought u were going to kick me off your blog. Everybody is so critical yet no one has a plan to deal with this most serious problem. I support Trump because he is at least trying to do something, so that all who criticize him need to show us their own plan. He’s not going about this the right way, that’s obvious. He should seek the advice of a small number of economists, including you I would hope, to come up with a realistic plan and take it before the American people only after he gets support of a handful of conservative Democrats.I remember the G~7 Plaza Accords when the Reagan administration tried and was somewhat successful to secretly bring down the dollar without lowering interest rates. Today the world has changed so much so that would b almost impossible. Anyway lets pretend we r able to push the dollar down by 50~60% over say 2 year period. At this point we would hopefully have a large pricing advantage so that Trump would have to use, if possible, an executive order to stop Corporate America from simply raising their prices and begin stock buybacks to get their options up all over again. Maybe they could come up with some kind of incentives that would reward companies that increase market share by hiring new workers to push their products using new equipment r software to increase productivity, fire up research and development . These r just some ideas I had which may be totally unrealistic. I’m happy to see some of the your regular guys who understand this problem much better I do and r coming up with some good ideas which is encouraging.

pi314
pi314

@Realist - Someone is beyond stupid here. LOL. AOL-Time Warner deal is just one example.

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