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Tuesday, June 19, 2018

Proof Trump's tariffs will work

President Trump's warning that he will slap $200 billion in tariffs on Chinese goods led to a small decline in stock trades in New York. The Standard and Poor 500 index was down 0.4%.

However, China's stock market plunged. It was down overall by 5% at one point. Some stocks recovered. Many did not.

"China Rout Has 1,023 Stocks Plunging 10% in One Day," read the headline at Bloomberg.

This shows China has a heckuva lot to lose if we ever cut off trade, while America has everything to gain by a renegotiation of our trade deals.

The Chinese economy already was precarious.

"With Washington and Beijing threatening tit-for-tat moves over import tariffs, investors are worried a trade war will act as a brake on China’s economy and hollow out an already deflating equity market," Bloomberg reported.

"Selling intensified last week after data showed weak spots in China’s economy. Rising corporate defaults and the government’s financial deleveraging campaign are also undermining sentiment. But the death of buy-the-dip is all the more dramatic at a time when company profits are rising, a sign that investor pessimism may be snowballing beyond repair."

Chairman Xi is overplaying his hand. That $365 billion-a-year trade surplus with the United States keeps his regime afloat.

"China on Tuesday said it will retaliate 'forcefully' after President Donald Trump threatened duties on $200 billion in Chinese imports, and another $200 billion after that if Beijing retaliates. It follows last week’s publication of the U.S.’s final list of $50 billion in tariffs, and China’s statement over the weekend that all recent agreements on trade would become void," Bloomberg reported.

OK, nullify China's trade agreements with the United States. We'll buy steel from Lorain and Granite City, Illinois.

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18 comments:

  1. Wow. That is some power information.
    Thank you Don :)

    ReplyDelete
  2. The MSM was acting like it was Black Friday this AM.

    0.4% drop. Fortunes lost, lives ruined! Oh, the horror of it all!

    Uh, not. *Yawn*

    ReplyDelete
    Replies
    1. Hahaha job!! My sentiments exactly.

      Delete
    2. It's just devastating when people selling the USA short get cut off at the knees, isn't it?

      Why no. Actually it's quite refreshing!

      Delete
  3. The following cut and paste from the conservative treehouse has been placed here to SHOW that the US govt DOES have mechanisms to address unfair trading practices (not that any of them would actually do their job if Trump werent potus).
    .
    Have been disgusted with US govt for decades of NOT protecting the US workers and NOT defending US industry!!!!!!!

    (Man crush on Surber)


    From the U.S. Dept. of Commerce – Today, Secretary of Commerce Wilbur Ross announced the affirmative preliminary determination in the first antidumping duty (AD) trade case the Federal government has initiated since 1985. This historic self-initiated AD investigation concerns imports of common alloy aluminum sheet from China.

    This investigation, and the companion countervailing duty investigation, was initiated by the Enforcement and Compliance division of the Commerce Department’s International Trade Administration under the authority granted to the Secretary in the Tariff Act of 1930, as amended. The CVD investigation reached a preliminary determination in February 2018 and is still being adjudicated.

    “The Department of Commerce will do everything in its power to stop the flow of unfairly subsidized or dumped goods into U.S. markets,” said Secretary Ross. “We will continue to strictly enforce U.S. laws to defend American workers, industries, and communities from the scourge of unfair and unbalanced trade.”

    ReplyDelete
  4. "OK, nullify China's trade agreements with the United States. We'll buy steel from Lorain and Granite City, Illinois."

    And River Rouge, Michigan. Make Zug Island Great Lakes Steel Again!

    -Mikey NTH

    ReplyDelete
    Replies
    1. Zug Island, according to Wiki, the neighborhoods around this area comprise six of the ten most polluted zip codes in Michigan ... residents cite air quality samples containing lead and high levels of methyl ethyl ketone, large numbers of cancer and asthma cases, and foul smells with "sparkly" dust that must be removed with toilet cleaner.[2] Interviewed separately, residents of the area say the foul smells are strong enough to cause dry heaves. Yeah, lets haul in the coke and run those blast furnaces so all those Detroit-area steelworkers remaining can start sweating again.

      Delete
  5. We'll know when things have turned when Chinese undergrads aren't buying some of the best houses available to live in for eighteen months, and aren't making left turns from the right lane in their McLarens.

    ReplyDelete
    Replies
    1. You make a good point, LOL.

      But keep in mind that you can amend the saying "China has more Honor Students than the US has students" to something like "Even in a crashed economy China will have more rich people than the US". And if the China economy crashes, they will, if anything, be MORE aggressive in sending kids to the US to practice English and potentially set up a bolt hole in case of serious disruption.
      JimNorCal

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    2. They also have a lot MORE people than we do. And the "rich" there do not know from one day to the next if they will be able to keep their riches. Of course our legal system is such that many "rich" people here don't know if they will keep all their riches, but at least ours is seen as messed up in many ways. Still better than living in a Communist nation any day..

      Delete
  6. 20 years ago, experts were predicting that in 10 years, China's economy would collapse. 10 years ago, experts were predicting that in 10 years, China's economy would collapse. Third time is a charm???

    ReplyDelete
    Replies
    1. Yeah, they're clearly living off our largesse. Or should that be spelled "stupidity." Especially in the political class.

      Delete
  7. Hi everyone.
    I need you all too know a few things.

    I have a lot going on in my life at the moment. Personally serious medical issues. Serious family issues. Potentially legal issues. And maybe even financial and habitat issues (I think those will work out without direct intervention). But all of a sudden I have a bunch of stuff on my plate. I just will not be able to keep up. So please, everyone... If you see something you think is important... Please give me a summary if you can. Thank you.

    ReplyDelete
  8. Negative stock market runs are here today, gone the other way tomorrow, so we need a more positive measure before declaring success from imposing inefficient government methods.

    As for restarting old-fashioned blast furnaces in Granite City and at the really ugly slag-infested old plant polluting downtown Lorain and the south shore of Lake Erie will never solve the rust-belt problem. Unionists know that this is fake but they won't tell Don.

    ReplyDelete
  9. Message: Don't (mess) with Donny Two Scoops.

    ReplyDelete
  10. Trump already saying he's prepared to double that to $400 Billion.

    Weird, I'm still not tired of winning! You? Didn't think so.

    ReplyDelete
  11. Kick them out of the WTO after Trump shows the rest of the world they are paper tigers.

    ReplyDelete
    Replies
    1. China is overextended, just like Japan in the 1980-1990's/

      Delete