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Friday, August 03, 2018

Trumping China

We should have known China was in trouble last fall when Time magazine ran a piece, "How China’s Economy Is Poised to Win the Future."

The background was President Trump's Asiatic tour. I praised the tour as Trump's triumph. Time, well...

"But the most important stop will be in Beijing, where President Trump will meet President Xi Jinping for the first time since the Chinese leader heralded a 'new era' in global politics at his pivotal party congress in October. Trump will try to project strength while calling for closer cooperation on North Korea and on resolving trade disputes. But he arrives at a moment when China, not the U.S., is the single most powerful actor in the global economy," Time said.

How did I end "Trump the Establishment"?

Oh yeah, "Never bet against Donald John Trump."

Those who feud with President Trump are doomed.

That was last November. President Trump was getting his ducks in a row with Asian governments.

Eight months later, Kim Jong Un is pulling the plug on his nuclear program, the U.S. economy is growing at an annual rate of 4.1%, and the Chinese stock exchanges are tanking.

"The latest flare up in global trade tensions is taking a toll on stock markets. The Shanghai Composite index fell 2% on Thursday as investors reacted to the latest threat by the United States to hike tariffs on Chinese exports," CNN Money reported on Thursday.

"The Trump administration confirmed it was considering increasing the rate of proposed tariffs from 10% to 25% on goods from China worth $200 billion."

The U.S. markets did OK, however, with NASDAQ up 1.24%.

Hmm. Maybe you can win a trade war.

"Investors are becoming increasingly concerned about how the slowing Chinese economy will fare in a major trade spat with the United States," CNN Money.

Well, we know how the U.S. economy is doing. We're 4 for 4, as in 4% growth and 4% unemployment.

China, well, call it the Time magazine curse. Bill Sarubbi at Forbes magazine offered investment advice.

"The Chinese stock market is likely to bottom in the spring of 2019," he wrote.

"The Shanghai market has been in the news. First, politics have attracted the attention of investors  worldwide. The question of trade sanctions has coincided with market turbulence. We still do not know what the eventual outcome will be. President Trump has used his statements and positions as bargaining chips in the past, so the ‘trade war’ could end at anytime. The question of intellectual property and the military developments in the South China Sea still hang over this market."

Patti Domm of CNBC was blunt: "China's stock market, the worst in the world, peaked in January and could remain weak until US trade spat ends."

We know not when it will end, but we know how it will end. Red China will capitulate. Just as Kim Jong Un did. Just as NATO did. Just as the European Union did.

President Trump wins, America is great again, and the only losers are the Democrats and the Never Trumpers.

"It’s not easy finding someone struggling because of the China trade war here at home," Kenneth Rapoza wrote in Forbes.

"A few privately held machine tool companies are having a hard time because of tariffs on steel and aluminum. It’s been well reported elsewhere. Soy farmers are worried that China won’t buy their beans. They’ll know more when the harvest starts in October about how they’ll redirect exports. Meanwhile, China is either dipping into its own supply or buying more expensive soybeans from Brazil. China is importing inflation at a time when their central bank is considering cutting interest rates."

Red China tried to bury the United States in trade debt. And it worked for a couple of decades. Then we wised up and elected a tough negotiator as president.

I am not adding China to the Trump Schadenfreude List just yet. But they are on notice.

###

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Trump the Press covers the nomination.

Trump the Establishment covers the election.

Fake News Follies of 2017 covers his first year as president.

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10 comments:

  1. And it wouldn't be appropriate to add China to the list. China, as a nation, is not anti-Trump---they are just an adversary.

    It's not schadenfreude when you beat an opponent. It's just winning.


    ReplyDelete
  2. That’s why ALL of my current investment holdings are U.S. based. Big stocks, small stocks, bonds, all American. Any major dude with half a heart could have told you that when Mr. T was elected, U.S. markets would lead and the rest of the world could choose (or not choose) to follow. China chose, poorly. International stocks, bah! Forget about the rest, buy American, it’s best.

    ReplyDelete
  3. The Time Magazine curse results are as consistent as the results of those that fued with PDJT.

    ReplyDelete
  4. The Conservative Tree House has been running some good articles on how President Trump has the Chinese by the short and curlies and has been giving them a nice twist. Here is the latest installment:

    https://theconservativetreehouse.com/2018/08/02/understanding-phase-ii-of-the-u-s-vs-china-trade-confrontation/#more-152478

    - Elric

    ReplyDelete
  5. Don,

    What would it take to add China to the TSL?

    ReplyDelete
    Replies
    1. I have been talked outof it as China respects President Trump.

      Delete
  6. I've thought for many years that importing so much cheap shit from China was dumb. It needs to stop. We make better stuff here at home anyway.

    ReplyDelete
  7. After the EU trade agreement and the EU agreed to buy more soybeans. Trump said, “SOYBEANS! Soybeans are very important!” Now we know who he was speaking to.

    ReplyDelete
  8. I have a solid seat on the Trump Train, all the way until the end of the line.
    I believe farmers have already sold the soybeans standing in their fields this year. Don't they sell them on the futures market?

    ReplyDelete
  9. Time magazine really oughtn’t to ask for whom the bell tolls.

    ReplyDelete