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US needs deal more than China ahead of 2020 [Copy link] 中文

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Post time 2019-9-20 11:47:16 |Display all floors
1.  Jodi Xu Klein is an award-winning business journalist with 20 years of experience.  She joined the Post in 2017, after a decade based in the US reporting for The Wall Street Journal and Bloomberg.  She was part of the Time Magazine team that won the Henry R. Luce Award, breaking the China SARS story.

The following are excerpts from Jodi Xu Klein's 14 September 2019 article headlined "US needs a trade war deal more than China does heading into 2020, says MUFG economist".

(Begin excerpts)
The United States is likely to be in greater need to strike a trade truce with China than the other way around as the 2020 election and a possible economic slowdown weigh heavily on US President Donald Trump, an economist at Mitsubishi UFJ Financial group said on Friday.

“Clearly, [Trump] doesn't want a S&P 500 correction of 10 per cent in the middle of a re-election campaign next year,” Derek Halpenny, research lead of Europe Global Markets at Mitsubishi UFJ Financial Group (MUFG), said in an interview with the South China Morning Post.

And that pressure is only going to “increase as we get closer to the re-election”, he said.

The Trump administration has in recent days made goodwill gestures to China ahead of a fresh round of talks after a trade deal between the two countries stalled in May....

Despite Trump’s repeated claim that China “badly” wants a deal, “the recent concessions, in my view, were initiated by the US”, said Halpenny.

The implementation of the next stages of tariffs – in October and again in December – will have a bigger impact on US consumers and on the economy as a whole, he said.

The US manufacturing Purchasing Managers’ Index fell to 49.1 per cent in August, the lowest reading in more than three years. Any reading below 50 per cent signals a contraction.

Investor appetite for US securities is deteriorating, Halpenny said. “There is a cost of the Trump behaviour,” he added.

“So at some point he'd like to solve the US-China trade conflict with either a truce or kind of a partial deal.”

Both sides seem to be open to such an interim truce when they meet next month. China’s top trade negotiator, Vice-Premier Liu He, told business leaders in Beijing that “the whole world is expecting to see progress in China-US trade relations”.

On Thursday, Trump also acknowledged he was open to an interim deal. “I’d rather get the whole deal done,” he said, but an interim deal is “something we would consider, I guess”.

MUFG, a Tokyo-based financial services firm, recently cut China’s 2020 economic growth forecast to 5.8 per cent, down from the 6 per cent growth it predicted for this year. Even so, “we don’t think that would compel China to give up more in trade negotiations”, Halpenny said....  (End excerpts)

Source:  scmpdotcom

2.   Well, after reading the article -- a "halpenny" for your thoughts?

Trump has bragged that his tariffs will help win a trade war, claiming repeatedly that China is "now paying us billions of dollars in tariffs".  He boasted:  "We're winning big because we have created an economy that is second to none."

Despite his endless bragging, it is not surprising that Trump will try to get "a truce or kind of a partial deal” that will smooth his way for his reelection in 2020.  However, it will be a one-side deal or concession for China to purchase a lot of soybeans and other agricultural products.  The only so-called "concession" or "gesture of goodwill" by Trump may be just the delay of more tariffs.

Trump is now "a lame-duck president" or a "bounced cheque".  Any concrete concession made by him could be thwarted immediately by bipartisan extremists like Nancy Pelosi and Latino Republican Senator Marco Rubio through legislations.

Don't be mistaken, however, that Trump is less extremist than other US nationalists.  What's uppermost in his mind now is definitely his reelection in 2020.

According to the 22nd Amendment of the U.S. Constitution, a president can serve only two terms or 8 years in office.  If he could be reelected in 2020, he would have no worry to escalate the trade war to whatever way he likes.

Moreover, any Chinese concession or "gesture of goodwill" could be viewed by those traitors or "soulless zombies" in Hong Kong as weakness, and this could embolden them to escalate the riots there.

Donald Trump's infamous Hitler-style rabble-rousing chants:  "Lock her up!  Lock her up!"

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Post time 2019-9-20 13:25:33 |Display all floors
Trump is trying to bluff it out claiming China wants a deal badly. In actuality, China seems to be stonewalling any deal with him.

However, he will be welcome to sign business contracts with the Chinese after he steps down as POTUS.
Believe it or not, it's true.

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Post time 2019-9-20 14:51:54 |Display all floors
"What's uppermost in his mind now is definitely his reelection in 2020."

You contradict yourself: if Trump is a "lame-duck president" then he wouldn't have the opportunity for winning a second term of office.

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Post time 2019-9-20 22:26:08 |Display all floors
Newtown Post time: 2019-9-20 14:51
"What's uppermost in his mind now is definitely his reelection in 2020."

You contradict yourself: i ...

My great friend, if you were a powerful eunuch in the Ming Dynasty, you would surely like to have a "lame-duck emperor".

In its short history of 243 years, the American Empire had been fighting against many countries for global supremacy.  In the beginning, the US imperialists fought against the Red Indians to steal an entire country from them.  Then they fought against the British Empire for independence.

Later they fought against the French Empire and Spanish Empire for supremacy in the Western Hemisphere.  During World War II, they fought against Nazi Germany to prevent them from conquering Europe.  They also fought against Japan in World War II for supremacy in the Pacific.

In the post-war period, they viewed the former Soviet Union as their main rival and enemy.  Following the disintegration of the Soviet Union, they regard China as their new enemy and main competitor (for at least 100 years, according to a book).

The Republicans (e.g Marco Rubio) and even the Democrats (e.g. Nancy Pelosi) do not mind to have a guy with sexual scandals to be reelected for another term because they can control him easily by passing legislations anytime.

As the bipartisan White nationalists are extremely xenophobic and Sinophobic, they like to see Donald Trump charging like Don Quixote against the "Chinese windmill" to “Make America Great Again”.

Furthermore, if Trump does something which both parties don’t like (e.g making concessions to China or Russia), they can use his sexual scandals or other frauds to impeach him.

In the case of Trump, as long as he can enjoy wealth and status, he does not mind to be controlled like a "wild horse" by the bipartisan nationalists.  Trump promised to resign from his companies after his election in 2016, but there is no record he has done so.

We can’t rule out the possibility that Trump can win another term in office.  As long as the stock market keeps moving upwards, as long as the US farmers can sell as lot of soybeans to China, Trump still stand a chance to be reelected in 2020.

He has a strong base of evangelical supporters, neo-Nazis, White supremacists and disgruntled White workers who believe their jobs have been "stolen" by China, Mexico and other countries.
Donald Trump's infamous Hitler-style rabble-rousing chants:  "Lock her up!  Lock her up!"

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Post time 2019-9-21 08:22:50 |Display all floors
reedak Post time: 2019-9-20 22:26
My great friend, if you were a powerful eunuch in the Ming Dynasty, you would surely like to have  ...

"We can’t rule out the possibility that Trump can win another term in office."

So the song remains the same regarding current events in USA in spite of your long history lesson.

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Post time 2019-9-21 08:24:21 |Display all floors
reedak Post time: 2019-9-20 22:26
My great friend, if you were a powerful eunuch in the Ming Dynasty, you would surely like to have  ...

"if you were a powerful eunuch in the Ming Dynasty"

The Ming Dynasty ended a few hundred years ago. I much prefer to keep my male appendages intact rather than becoming "a powerful eunuch"

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Post time 2019-9-21 13:53:25 |Display all floors
A: So now an interim deal that is actually a truce gets buried before it is even sealed by a tweet that demands there must be a total deal or there be no deal.


B: But that's just chumpy Trump for you. When he announced that, did he know one of his hawkish advisors had just earlier said if there is no total deal, decoupling would result even if there be no Cold War 2.0 which was mentioned in the same breathy threat?


In other words, despite denying that's their final intention, their final intention is to decouple the US from China totally in which they will ratchet up total tariffs and more technology sanctions, then follow up with financial markets sanctions.


But do they even know the result of trying to decouple two of the world's biggest economies? Do they even know what they are talking about in that egg room let alone coordinate their narrative to show they are on the same page among themselves?

A: For the interim deal, China has agreed to buy some US agro-products. In response, the US has only agreed to delay the additional tariffs by two weeks.


But, of course, that's a bluff offer because container ships would take more than that time to reach US ports and when they do, the tariffs would take effect again so there's no concession.


B: Exactly. How should any country let alone China respond to destructive threats softened only with empty responses? There is probably no one on this planet who is not already fatigued by Trump's antics.


However the looming global tragedy is this - he may actually unleash a total trade war on China despite knowing well enough such a move to cause the inevitable economic decoupling will hurt his US inasmuch other countries.


In fact, there is not a single trading nation in the world which is not hurt by the US hurting China.


A: One suspects he himself realizes he has achieved nothing positive either domestic or foreign so far for his presidency.


For instance, the one-time tax relief he initiated has only ballooned his country's debt and its impetus has receded which would explain his urgency to reduce the US interest rate.


He cannot claim credit when the US economy was only benefiting from previous economic policies which are however now raising the specter of cyclical downturns catalyzed by his trade war as already seen in the slowdown of the US manufacturing sector that had started him down the road of tariffs.


You know, his tariffs on China are paid by american consumers and assemblers besides giving an opportunity to other non-tariffed countries to raise their export prices to his US since they (a) know US consumers will buy on the basis on inelastic demand from wherever what have been displaced, and (b) they need to earn more now to cover their market loss in the future when the US will tariff them in turn for having a trade surplus with the US.  Therefore, is it any wonder since Trump became potus, the US trade deficit with the world has increased by 17% instead?


Judging from their irresponsible threats, the US hawks already know all this as well. They are only shrink-wrapping themselves in their own pressure chamber which would explain why they continue to lash out irrationally and make threats which have irresponsibly hurt major economies in the world - in one bet that China would buckle first.  


But they are playing an ego game of chicken - which however has been losing its plumes to the depths of international irresponsibility for the agenda of personal aggrandizement.


Think about this - any country which buckles to the US hegemon today will be blackmailable, and can be threatened with 200-page demand draft agreements by it whenever they don't do what the US wants and by whichever party running it.  In short, forever.


To Trump's supporters and sycophants, the only meaning of Maga translates as "i can hit you but you cannot hit me in retaliation".  Might as well tie up the hands and machine-gun into the river. But then again, does anyone in the US realize the significance of what has just been mentioned here?


It is imperial overreach, sovereign servitude, and vassalage. It is dictatorship despite all its blandishments about democracy and freedom. It is not just destruction of human freedom but also tangential leverage on sovereign independence of other nations.  And given the US' horrendous record of waging wars with heavy collateral damage on innocents, it is also a hypocritical humanitarian disaster by one which has arrogated itself as peace-keeper but apparently not peace-maker. Indeed, behold the US of A today.


B: The problem started because of the word 'deal'. Trump wanted a deal which means he was at first approaching the matter as transactional, namely, this-for-that.  One suspects, it's also the shortest word he knows, and thus remember.


Then he raised the ante midway and it became existential threats bordering on national security to trigger sanctions and exclusions.


Now it is to be direct interference in the internal affairs of another country in order to control its economic and operating models, and direction and rate of progress with view to collecting charges, fees and oversight incomes in perpetuity besides holding it to ransom for any sign of independence.


But looking at what the US had done to Russia, Japan, Libya, Venezuela, Chile, Vietnam, Philippines and HongKong SAR amongst others, that's massively dangerous.


A: Yes, 'deal' is passive and short-termish. 'Relationship' is active and long-termish. Exercising a wiser perspective, a deal is only ephemeral and transitory. And, more importantly, no deal can be possible if it does not sit inside a relationship.


And no relationship leading to a deal can ever be done and sustained if one side makes threats on the other.


It only shows narcissistic domination and the US has quickly devolved from crewcut schoolyard bully to backalley canine attack dog.

What Trump and his ilk have done is to destroy a forty-year relationship in the hope of sealing a short-term deal in their favor that humiliates and threatens a 5,000-year old civilization without even making an attempt to update themselves on what have already been done by way of reforms let alone understanding the rationale behind why some of the challenges needs more time and accumulated achievements in order to be tackled by a country bigger, older, prouder, more precise, and wiser.
B: That the US refuses to see that must be attributed to some other agenda which would also explain its sudden subscription to unilateralist supremacy.


And it is showing this by controlling its north american neighbours of Canada and Mexico, cowing its post-WWII vassals of France and Germany, and stroking its lackeys in the UK and Poland - so that, with the entire Western Hemisphere under its thumbs, it can swing over to maintain locked-and-loaded military power in the Middle East in order to leverage the Sunni's of the arab world against the Shites of Iran so as to control the oil pigots that fuel the industries of the world.  Hence the attempt to overthrow Venezuela after the sanctioning of Russia, both major oil-producers.

And all that for? To keep the Eastern Hemisphere divided and contained, and thus beholden to the US.  Why? Because the future of this new century is in the Eastern Hemisphere where the populations are bigger, the industries are more hardworking, innovative and dynamic, and the economies and markets have the largest potential for growth, progress and sustainment of innovation.

After all, he who has been ahead after the british empire will want to maintain advantage over others by suppressive fire, asymmetric trickery and sanctimonious hubris.


A: Yet, US multinationals in China have continued to achieve super-normal revenue growths of 20% per annum despite the trade war started by Trump and almost all those surveyed said they have not been forced to transfer IP. Yet, no bellyaching US citizen has shown the remotest interest in the facts that China has been paying the most for IP royalties all these years in tandem with progress in her IP legal protection provisions.  If she has been massively stealing as was alleged, why even bother with paying billions in US dollars and punishing defaulters?  Now, shall we also talk about Xinjiang, HongKong SAR, 9-dashed line, surveillance and social credit, 100-year marathon, etc?!

B: What's the point? They have already made up their prejudiced minds to tar and tarnish China and any country which does not toe their line and satisfy their personal agendas. Not wanting to accept the consequence of their decisions, they are just playing their game of brinkmanship to satisfy their bloodlust for global power and supremacy.


A: Game? I know one better. Carlsen < Liren Sinalesque 2019 rapid-chess championship. In a most marvelous strategic conception, Ding won the attack by first sacrificing his Queen and then - retreating two pieces.  


B: Ah! out comes my trusty chessboard. Jusr heard from an american that China plays "go". But Trump eats its pebbles instead. What do you think?

A: Ah, too. But i rely on facts only. It can't be true. Or, can it?

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