The United States lost the trade war Trump started with China

[beijingwalker]

The United States lost the trade war Trump started with China
Bill Gindlesperger
May 11 2021

In 2018 then President Donald Trump tweeted how “trade wars are good, and easy to win.” That was the start of his imposing tariffs on about $360 billion of imports from China.

Nearly 3 years later and it turns out Donald Trump was wrong on both counts. Trade wars are not good and we lost.

In 2020 to make matters worse, Donald Trump ignored the coronavirus as it infected nearly 1 in every 10 Americans, killed half a million Americans, and initiated the steepest economic downturn since the Great Depression.

Consequently, Donald Trump struck out with the largest slate of tariffs and sanctions that he could muster against China’s technology companies. His charade as a big tough leader failed miserably.

The problem is that Donald Trump’s bullying doesn’t work against China. The reason is obvious to any rational observer. China’s economy is too big and too important to the world economy to be simply pushed out of the way.

Meanwhile, China was standing strong against Donald Trump’s tariffs. Once China got control of its own spread of the coronavirus, China took economic advantage. China is the only country large enough to meet the demand for medical equipment, work-from-home computers and medical equipment. This expanded China’s trade surplus with the U.S. despite Donald Trump’s blow-hard tariffs.

In 2016 Donald Trump had vowed to “start reversing” the U.S. goods trade deficit with China. For all of Donald Trump’s blustery, the U.S. deficit with China has not declined but has substantially increased since then. This is due to China swinging back at Donald Trump’s tariffs with their own retaliatory tariffs as well as reducing its imports of U.S. products… like soybeans, aircraft, motor vehicles and microchips.

Cutting through the rhetoric, Donald Trump’s trade war with China occurred as Chinese exports splurged. This comparison followed the last two years of the Obama Administration when Chinese exports were on the downward slope. The raw truth is that China’s total shipments grew each year after Donald Trump took office.

Donald Trump believed without data that tariffs would help companies move production back to the U.S. In a 2019 tweet Donald Trump “ordered” companies to “immediately start looking for an alternative to China.” The effect of the tweet was little more than a puff of hot air.


Donald Trump claimed in 2019 that tariffs had enlarged the U.S. economy, while causing China’s economy to have its “worst year in over 50.” The facts were different. During the Trump Administration China grew substantially at or above 6% in both 2018 and 2019. Meanwhile the trade war with China cost the U.S. a substantial amount over the same period.

The hardest part to swallow about the trade war with China was Donald Trump’s big lie about who pays for the tariffs. Chinese exporters generally didn’t lower prices to keep their goods competitive after the tariffs were imposed. On the other hand, U.S. imposed duties were mostly paid by U.S. companies and consumers.

The tariffs imposed by Donald Trump during his trade war with China resulted in an income loss for U.S. consumers of about $16.8 billion in 2018 alone. Donald Trump's trade war on China was a failure in every possible way.

Donald Trump’s promises were a smoke screen for his failures.

He promised to revive the Rust Belt by bringing jobs home from China. It didn’t happen.

He promised to harness unfair competitors. It didn’t happen.

He promised to enhance intellectual property protections. The only changes China made to its protection of U.S. intellectual protection rights were in China’s own interests.

He promised to gain commitments from China on fair market competition of state-owned enterprises. That didn’t happen either.

The one thing that Donald Trump accomplished was to push China into self-sufficiency and to minimize its dependency on U.S. materials, products, food stuffs, and intellectual property.


Donald Trump's ultimate lie to farmers was a doozy. The Trump Administration promised to reward U.S. farmers, manufacturers and other business owners who had taken it on the chin by Donald Trump's ill-conceived trade war tariffs. These tariffs were in fact a tax on American businesses.

Donald Trump had promised that his trade war would rein in the U.S. trade deficit, boost American exports and slow China's rise as a global superpower. But what really happened is that the trade war reduced economic growth and cost the U.S. 245,000 jobs. Not to mention that foreign investment to the U.S. fell 49% in 2020 alone. Meanwhile, the U.S. goods and services trade deficit increased astronomically.

Now that the facts are in, it is clear that Donald Trump ran the country the same way he ran his many failed business ventures. Poorly.

Trump failures include these Trump-owned businesses and initiatives: Trump Airlines; Trump Vodka; Trump Mortgage; Trump, The Game; Trump Clothing Company; Trump Casinos; Trump Steak; Trump Magazine; GoTrump.com; Trump University; Trump Hotels; Trump Ice Skating Rink in Central Park; Trump’s U.S./China policy; Trump’s reelection campaign; and Trump’s present failure to hide his IRS tax records from prosecutors.

To avoid being taken to the cleaners by a master grifter, It is better to look at Trump’s real-life failures than his silver-tongued promises.

The United States lost the trade war Trump started with China

Donald Trump promised his trade war with China would be good for America. But it wasn't, and here's why.

www.publicopiniononline.com

 

[dbc]

Of course the US lost the war..a YoY decline of 67 Billion USD in Chinese imports ..

Yes the US lost big time ..all hail mighty China

“The trade war has had a more enduring negative impact [on Chinese imports] than the pandemic,” said Adam Slater, the lead economist for Oxford Economics. “The effects of the pandemic are starting to wear off, but the longer-term impact of the trade war remains.”

WSJ News Exclusive | U.S. Tariffs Drive Drop in Chinese Imports

U.S. tariffs have led to a sharp decline in imports from China and significant changes in the types of goods Americans buy from China, new data show, with purchases of furniture, telecommunications gear, apparel and other goods shifting to other countries.

www.wsj.com

 

[beijingwalker]

Of course the US lost the war..a YoY decline of 62 Billion USD in Chinese imports ..

Yes the US lost big time ..all hail mighty China

“The trade war has had a more enduring negative impact [on Chinese imports] than the pandemic,” said Adam Slater, the lead economist for Oxford Economics. “The effects of the pandemic are starting to wear off, but the longer-term impact of the trade war remains.”

WSJ News Exclusive | U.S. Tariffs Drive Drop in Chinese Imports

U.S. tariffs have led to a sharp decline in imports from China and significant changes in the types of goods Americans buy from China, new data show, with purchases of furniture, telecommunications gear, apparel and other goods shifting to other countries.

www.wsj.com

US overall trade delined last year, with every country, a clear sign of US declining, China was the only major economy to have grown in 2020. Exports rose 3.6% .

US...

U.S. trade deficit hits record high in 2020: The Biden administration must prioritize rebuilding domestic manufacturing

The U.S. Census Bureau reported recently that the U.S. goods trade deficit reached a record of $915.8 billion in 2020, an increase of $51.5 billion (6.0%). The broader goods and services deficit reached $678.7 billion in 2020, an increase of $101.9 billion (17.7%). The U.S. goods trade deficit...

www.epi.org

Of course the US lost the war..a YoY decline of 67 Billion USD in Chinese imports ..

"Although the U.S. trade deficit with China fell by $34.4 million (10.0%) in 2020, China’s total trade surplus with the world increased 27% in 2020 to $535 billion"

 

[dbc]

US overall trade delined last year, with every country, a clear sign of US declining, China was the only major economy to have grown in 2020. Exports rose 3.6% .

US Imports 2019 = 3.11 Trillion Dollars
US Imports 2020 = 2.87 Trillion Dollars

a decline of 24 billions dollars mostly due to low oil prices and COVID.

Chinese exports rose because of COVID in 2020 that pot of gold is fast depleting.
the decline of 67 billion $ in Chinese imports is offset by an increase in US imports from Vietnam, Japan, India, S Korea, Taiwan, Indonesia and Bangladesh.

The trend will accelerate projected to hit 147 billion $ this year tariffs are forcing more companies to leave China.The EU is considering emulating the US, US treasury collected 61 billion in Chinese tariffs since the trade war began and the EU want some of that action as well.

 

[VCheng]

US Imports 2019 = 3.11 Trillion Dollars
US Imports 2020 = 2.87 Trillion Dollars

a decline of 24 billions dollars mostly due to low oil prices and COVID.

Chinese exports rose because of COVID in 2020 that pot of gold is fast depleting.
the decline of 67 billion $ in Chinese imports is offset by an increase in US imports from Vietnam, Japan, India, S Korea, Taiwan, Indonesia and Bangladesh.

The trend will accelerate projected to hit 147 billion $ this year tariffs are forcing more companies to leave China.The EU is considering emulating the US, US treasury collected 61 billion in Chinese tariffs since the trade war began and the EU want some of that action as well.

What is more important is that the supplier chain will take some time to move on to several other countries. Once that process is well advanced, the number will really pop.

 

[dbc]

What is more important is that the supplier chain will take some time to move on to several other countries. Once that process is well advanced, the number will really pop.

yeah let’s make every one rich, Pakistan, Bangladesh and Vietnam et al. the Chinese can get rich building more bridges and sky scrappers - it is their niche anyway.

 

[beijingwalker]

How China Won Trump’s Trade War and Got Americans to Foot the Bill

How China Won Trump’s Trade War and Got Americans to Foot the Bill

U.S. President Donald Trump famously tweeted that “trade wars are good, and easy to win” in 2018 as he began to impose tariffs on about $360 billion of imports from China. Turns out he was wrong on both counts.

www.bloomberg.com

 

[VCheng]

yeah let’s make every one rich, Pakistan, Bangladesh and Vietnam et al. the Chinese can get rich building more bridges and sky scrappers - it is their niche anyway.

It will take some time, but this ship will change course to more welcoming waters. It will be fun to see how the Chinese pay for maintaining all they are building in the coming decades. Building infrastructure is easy. Maintaining it is not.

 

[beijingwalker]

Building infrastructure is easy

You can try and see how easy it is.

 

[VCheng]

You can try and see how easy it is.

Sure, but try and maintain what you are building after a few decades first. It is far more difficult.

 

[beijingwalker]

Sure, but try and maintain what you are building after a few decades first. It is far more difficult.

Saying building infrastructure is easy . Easier said than done is more like it.

 

[TigerOfMysore]

It will take some time, but this ship will change course to more welcoming waters. It will be fun to see how the Chinese pay for maintaining all they are building in the coming decades. Building infrastructure is easy. Maintaining it is not.

Dude - I know you are in the zero sum game mindset, but please have some integrity.
So per your logic the fact that US is not building any meaningful infrastructure is because they are smart enough to realize "it is easy to build but difficult to maintain". So best not to build!!

Or is your argument that the existing infrastructure the US has is decaying because it is difficult to maintain. In both those propositions it is not China that looks dumb but the US. They are either not building or not maintaining. Both a loosing proposition.

In terms of China I have extensively travelled in China. It coastal cities were breath-taking. Even its Tier 2 cities some the size of New York have an infrastructure un-paralleled in the world. Gosh even Hong Kong puts New York to shame.

You are correct however to say that maintenance will be a bear but I am confident that China will figure that out. Also China is currently in a build out stage, and each of their projects do take into account maintenance financing. No project is built without that contingency. So I am sorry you are grabbing at straws here.

Lastly keep in mind Chinese economy is build on an exports engine, where the US economy is built on a consumption engine. When inflation hits the US, which it will, consumption will drop and so will the US economy. Lastly China still has a ton of consumption muscle to be built. In the next 30-50 years not only will China be the center of manufacturing, but also the center of consumption (which it already has become in large measure). It has within it a market potential the size of US and Europe combined. The last 300 years of West ascendency is a abberation in human history, which will come back to its norms, with China as "Middle Earth", and there is nothing anyone can do about it.

My advice is learn Mandarin!!!

 

[VCheng]

So per your logic the fact that US is not building any meaningful infrastructure is because they are smart enough to realize "it is easy to build but difficult to maintain". So best not to build!!

Where did I say that? US infrastructure has to meet its needs, not a dick measuring contest from the other side of the world with a four times larger population.

 

[TigerOfMysore]

Where did I say that? US infrastructure has to meet its needs, not a dick measuring contest from the other side of the world with a four times larger population.

You did not say that. But clearly anyone who knows what is happening in the US, knows that there is no meaningful infrastructure investment happening in that country, WHY?. And if you have lived and travelled in that country you would know that its infrastructure is collapsing. Even the most ardent Right wingers who always bleed red/white and blue will say that. Look at what happened to the electric grid in the South especially Texas. It collapsed. Look what happened in the North East a few months ago - electric system collapsed for days/weeks in places like CT, MA and elsewhere.

In Pakistan we complain about a few hours outage here and there. In the US major areas of the country like the NorthEast loose electricity for days because the infrastructure collapses. It is old, its is falling apart. Travel to Michigan - it is a war zone. Detroit and its outlying areas. Flint, Philly, you name it. Dont look at the small bubbles in and around cities - the majority of America is crumbling. BTW I am not cheering for it. I hope America gets its act together as I have always believed that a strong America is as important for the World as a strong China. It keeps both honest.

America's infrastructure is decaying — here's a look at how terrible things have gotten

America's infrastructure is desperately in need of investment, according to the American Society of Civil Engineers.

www.businessinsider.com

 

[dbc]

Dude - I know you are in the zero sum game mindset, but please have some integrity.
So per your logic the fact that US is not building any meaningful infrastructure is because they are smart enough to realize "it is easy to build but difficult to maintain". So best not to build!!

Or is your argument that the existing infrastructure the US has is decaying because it is difficult to maintain. In both those propositions it is not China that looks dumb but the US. They are either not building or not maintaining. Both a loosing proposition.

In terms of China I have extensively travelled in China. It coastal cities were breath-taking. Even its Tier 2 cities some the size of New York have an infrastructure un-paralleled in the world. Gosh even Hong Kong put New York to shame.

You are correct however to say that maintenance will be a bear but I am confident that China will figure that out. Also China is currently in a build out stage, and each of their projects do take into account maintenance financing. No project is built without that contingency. So I am sorry you are grabbing at straws here.

Lastly keep in mind Chinese economy is build on an exports engine, where the US economy is built on a consumption engine. When inflation hits the US, which it will, consumption will drop and so will the US economy. Lastly China still has a ton of consumption muscle to be built. In the next 30-50 years not only will China be the center of manufacturing, but also the center of consumption (which it already has become in large measure). It has within it a market potential the size of US and Europe combined. The last 300 years of West ascendency is a abberation in human history, which will come back to its norms, with China as "Middle Earth", and there is nothing anyone can do about it.

My advice is learn Mandarin!!!

Do you have any facts to contribute to your wall of text? Assets depreciate over time, this is offset by revenue and amortized over many years of use with maintenance. Capital investments that do not generate sufficient returns consume state funds for upkeep and results in non performing loans and contribute to deficit spending. China’s share of non performing loan far exceeds any other nation on earth.

In 2020 Chinese banks officially disposed off 466 billion dollars in NPLs..unofficially who really knows...

2020: Chinese banks dispose $467b in non-performing assets

China's banking sector disposed of 3.02 trillion yuan ($466.6 billion) in non-performing assets in 2020.

news.cgtn.com

learn economics it’s more useful than Mandarin.