How Donald Trump is losing the trade war he started.

[FIVR]

Donald Trump started a trade war with china by repeatedly tariffing Chinese goods such as Aluminum and Steel. "His" idea, according to him, was that tariffs would force the Chinese to the negotiating table, where he would be at a position of strength and could then negotiate to remove all tariffs. Unfortunately for us, Trump and his advisors were wrong. The Chinese aren't negotiating at all and have instead put tariffs on US goods. These tariffs have driven up the price level and have resulted in more capital expenditure by firms which has resulted in reduced earnings. The stock market is just starting to reflect the new economic reality of the Trump Tariff Economy.

I just came upon an article by Bloomberg that shows things are actually going worse for Donald's plans than anyone thought possible. It deftly explains why a country should never put a dotard in charge of its economic policy.

Maersk CEO Reveals ‘Ironic’ Twist in U.S. Trade War With China

The man running the world’s largest container-shipping company says he has access to data that shows Donald Trump has so far failed to wean the U.S. off Chinese imports.


Soren Skou, the chief executive of A.P. Moller-Maersk A/S, says Chinese exports to the U.S. actually grew 5-10 percent last quarter. Meanwhile, U.S. exports to China fell by 25-30 percent.


“It’s an ironic development,” Skou told reporters in Copenhagen on Wednesday. “But after Trump has turned up the volume, the U.S. has only increased their imports from China even more.”



There are two reasons behind the development, Skou said.



Firstly, the U.S. economy is doing well so consumers there have more money to spend on imports, he said. Secondly, a lot of the really big U.S. companies are hoarding Chinese imports to buy as much as possible before tariffs kick in, he said.
“When we talk to our customers, we hear from many of them that they want to bring in a lot of goods before the end of the year,” Skou said.
Maersk transports about a fifth of the world’s seaborne manufactured goods, so the company is in a unique position to gauge changes in global trade flows. Given Maersk’s reliance on free trade, Skou hasn’t shied away from criticizing Trump’s tariffs in the past.
Read more: Tariffs Will Hurt U.S. Much More Than Rest of World, Maersk Says
Part of the problem is that Trump is fighting an “asymmetric” battle, because China has a lot more clout than the U.S. when it comes to telling corporations how to act, Skou said.
“Donald Trump can’t tell Nike, Walmart and The Home Depot that they can’t import from China,” he said. “So they will continue to import and will work on solutions and they may be hit a bit on their margins.”
“Meanwhile, the Chinese state-controlled companies don’t need many signals from Beijing to lower their imports from the U.S.,” Skou said.
Read more: Maersk Raises Lower End of Forecast Range as Sales Pick Up
The Maersk CEO also warned that China is having an easier time finding substitutes for U.S. products than the U.S. is in replacing Chinese imports.
“The large U.S. importers aren’t considering building new factories in the U.S.,” he said. “What they are considering is whether they can buy in Vietnam, Bangladesh or India.”
According to Skou, that should leave Trump with little choice but to strike a deal with China, which he says may come “within the next quarters.”
But even if there’s a trade deal between China and the U.S., Skou says Maersk will prepare for lower trans-pacific trade next year.
“There will be a price to pay for container lines in 2019,” he said. “What we plan for now, is that we have to take out a lot of capacity on trans-Pacific trade next year. There will be a high level of inventory build-up which needs to be brought down again and that will affect volumes.”

 

[Engineer]

Trade wars are easy. /cheeto

https://twitter.com/x/status/969525362580484098

 

[FIVR]

The crux of the problem:

“Donald Trump can’t tell Nike, Walmart and The Home Depot that they can’t import from China,” he said. “So they will continue to import and will work on solutions and they may be hit a bit on their margins.”
“Meanwhile, the Chinese state-controlled companies don’t need many signals from Beijing to lower their imports from the U.S.,” Skou said.
The Maersk CEO also warned that China is having an easier time finding substitutes for U.S. products than the U.S. is in replacing Chinese imports.
“The large U.S. importers aren’t considering building new factories in the U.S.,” he said. “What they are considering is whether they can buy in Vietnam, Bangladesh or India.”

Checkmate, Navarro


And finally, the predicted "happy ending" (Trump Surrenders):

According to Skou, that should leave Trump with little choice but to strike a deal with China, which he says may come “within the next quarters.”
But even if there’s a trade deal between China and the U.S., Skou says Maersk will prepare for lower trans-pacific trade next year.
“There will be a price to pay for container lines in 2019,” he said. “What we plan for now, is that we have to take out a lot of capacity on trans-Pacific trade next year. There will be a high level of inventory build-up which needs to be brought down again and that will affect volumes.”

 

[skooma]

I'm no economist but I don't think this is going as planned for the orange clown. Of course, he'll blame someone else should he be brought to his knees. We'll see I guess.

But I notice food prices up, gas prices suck still and NAFTA 2.0 is hung up. Dotard indeed.

 

[GodisanAtheist]

In a way, I'm glad Trump is doing this now, so everyone can collect data and see how it plays out (badly) so we can go back to functional economic policy; with the opportunity to brush everything off as "Eh Trump, mistakes were made" with foreign powers.

I do think we need to be careful in how we engage with China, they're government is pragmatic and utilitarian to a fault (human rights violations) but in this case America gets to call the mulligan on Trump!

 

[Engineer]

Pence doubles down....says US in no rush to end trade war.

https://finance.yahoo.com/news/pence-apos-sharp-china-attacks-081215287.html

 

[Bitek]

The article makes good points which were pretty obvious before the start of this thing.

Finding another soybean or pork supplier is pretty easy, but there are not that many factories for power tools, electronics, and low cost/decent quality consumer goods that fill the shelves at Walmart.

However, I'll start the countdown for some Slow-witted Trumpo to tell us we're winning bc the Chinese stock market is down.

 

[interchange]

Even with the tariffs, a strong dollar/weak Yuan is going to keep us at a trade deficit. The tariffs would only decrease the total trade, although we're not seeing that as people try to get goods in ahead of tariffs.

But other than the word "deficit" sounding bad, there really isn't a problem with this. There is a problem with intellectual property protection.

 

[Commodus]

The article makes good points which were pretty obvious before the start of this thing.

Finding another soybean or pork supplier is pretty easy, but there are not that many factories for power tools, electronics, and low cost/decent quality consumer goods that fill the shelves at Walmart.

However, I'll start the countdown for some Slow-witted Trumpo to tell us we're winning bc the Chinese stock market is down.

As I like to note, people forget that the hesitance to bring manufacturing to the US isn't so much about labor costs as it is flexibility and access to resources.

In China, there's a legion of people who have just the right amount of qualifications to work at factories, and they're frequently available on short notice. Need to ramp up production for the holiday? We'll have 3,000 extra people working on it in a few weeks. You'd be thankful if you could even find 3,000 people for the job in the US, and it'd likely take months to bring them all in.

And then there's resources. Yeah, you could move manufacturing to the US, but many of the part suppliers would still be in China and surrounding areas. So you gain some manufacturing jobs, but might raise costs and create supply vulnerabilities by having to ship all those parts overseas.

 

[Indus]

Pence doubles down....says US in no rush to end trade war.

https://finance.yahoo.com/news/pence-apos-sharp-china-attacks-081215287.html

Who's the more foolish? The fool or the fool that follows him?

 

[Engineer]

Who's the more foolish? The fool or the fool that follows him?

There are many, many fools in the US.

 

[realibrad]

Even with the tariffs, a strong dollar/weak Yuan is going to keep us at a trade deficit. The tariffs would only decrease the total trade, although we're not seeing that as people try to get goods in ahead of tariffs.

Its more than just the exchange rate. Not every country that we have a stronger dollar than do we have deficits with. Its probably not super important to anyone else here though as to why.

But other than the word "deficit" sounding bad, there really isn't a problem with this. There is a problem with intellectual property protection.

For sure there are people that hear the word and think its inherently a negative, and you are right in that its not. We get cheap goods which we can use to improve our lives in many ways.

But, the deficit does have another effect that many seem to also think is bad which is not. The standard of living in China is much lower and as such, cost of production is also much lower. By allowing China to produce goods so cheaply, we create the incentive to move production outside of the US. That then takes the job from the US and moves it to China. Again, its not as simple as that, but, its a common gripe with people on both sides.

 

[Bitek]

As I like to note, people forget that the hesitance to bring manufacturing to the US isn't so much about labor costs as it is flexibility and access to resources.

In China, there's a legion of people who have just the right amount of qualifications to work at factories, and they're frequently available on short notice. Need to ramp up production for the holiday? We'll have 3,000 extra people working on it in a few weeks. You'd be thankful if you could even find 3,000 people for the job in the US, and it'd likely take months to bring them all in.

And then there's resources. Yeah, you could move manufacturing to the US, but many of the part suppliers would still be in China and surrounding areas. So you gain some manufacturing jobs, but might raise costs and create supply vulnerabilities by having to ship all those parts overseas.

Quite right.

It's labor markets, supply chains, raw material and component suppliers, and the logistical infrastructure needed to execute efficiently.

Throwing a few % in tariffs on top of the price is not going to fix decades of national malinvestment and inattention in that space.

All that's going to happen is that manufacturers are going to be pressured to prioritize cost cutting and efficiencies to make back the margins plus pass on costs where they can.

Where's all these tariff tax monies going? Being dedicated to an infrastructure and education fund? Or dumped into the general fund to help cover lost revenues through tax cuts for the rich?

Lemme guess...

 

[K1052]

By the looks of things China is permanently reorienting their ag commodity purchases away from the US. An enormous amount of infrastructure built to ship soy to Asia has just been rendered worthless. Farmers are taking losses on their crop and trying to store the rest hoping prices rebound and it doesn't spoil.

So winning.

 

[zinfamous]

In a way, I'm glad Trump is doing this now, so everyone can collect data and see how it plays out (badly) so we can go back to functional economic policy; with the opportunity to brush everything off as "Eh Trump, mistakes were made" with foreign powers.

I do think we need to be careful in how we engage with China, they're government is pragmatic and utilitarian to a fault (human rights violations) but in this case America gets to call the mulligan on Trump!

We've been collecting four decades-worth of data regarding republican malfeasance wrg to destructive, wasteful economic policy. But they still argue for the same proven bullshit, again and again.

Just who are these people that you expect to learn and lead based on actual data?

 

[Bitek]

By the looks of things China is permanently reorienting their ag commodity purchases away from the US. An enormous amount of infrastructure built to ship soy to Asia has just been rendered worthless. Farmers are taking losses on their crop and trying to store the rest hoping prices rebound and it doesn't spoil.

So winning.

Well Iowa had it's chance to push back.... and re-elected Steve King. Best wishes with those policies.

Don't come asking for a bailout if this blows up in your face.

Deere and Cat are going to try and pass on the costs of the steel tariffs too, so retooling the farm equipment for new crops is going to be a kick in the ass.

 

[SlowSpyder]

FUD

 

[Bitek]

We've been collecting four decades-worth of data regarding republican malfeasance wrg to destructive, wasteful economic policy. But they still argue for the same proven bullshit, again and again.

Just who are these people that you expect to learn and lead based on actual data?

We elected Trump after W was the last R. Trump was basically promising the same sorts of policies, just Greaterer (and with racism as the special sauce.)

America said, "well, had enough of this peace and prosperity business. Don't like butter mails. Let's try the economic choas thing again."

 

[K1052]

Well Iowa had it's chance to push back.... and re-elected Steve King. Best wishes with those policies.

Don't come asking for a bailout if this blows up in your face.

Deere and Cat are going to try and pass on the costs of the steel tariffs too, so retooling the farm equipment for new crops is going to be a kick in the ass.

Early reports on the "aid" that Trump sent farmers is that it's extremely slow in coming, inadequate, and is a one time deal.

Wait till all this soy capacity piles into corn next year and crashes those prices lol.

May the farmers faith in Trump be everlasting.

 

[Jhhnn]

Well Iowa had it's chance to push back.... and re-elected Steve King. Best wishes with those policies.

Don't come asking for a bailout if this blows up in your face.

Deere and Cat are going to try and pass on the costs of the steel tariffs too, so retooling the farm equipment for new crops is going to be a kick in the ass.

Iowans flipped two out of four districts blue, as well.

 

[Bitek]

Iowans flipped two out of four districts blue, as well.

Yes they did, so there is some hope for sanity. I don't think we've felt the pain yet tho, so there may be more in 2020.

 

[brandonbull]

This seems to give a different spin on losing:
https://www.yahoo.com/finance/news/china-paying-most-trump-apos-134813450.html

 

[hal2kilo]

This seems to give a different spin on losing:
https://www.yahoo.com/finance/news/china-paying-most-trump-apos-134813450.html

You seem to be under the impression that China is a liberal democracy and actually cares what damage they inflict on their own people. Will have little effect.