Tag Archives: China

LEAKED: Trump’s Next Shoe to Drop on US-China Trade, by Wolf Richter

Intellectual property theft is rampant in China, and the Trump administration may be preparing a series of punitive measures. The effects would dwarf the repercussions of the steel and aluminum tariffs. From Wolf Richter at wolfstreet.com:

This is the big one. It makes steel and aluminum tariffs look like a game.

If this is true – it was leaked by a “source familiar with international trade” to the Nikkei Asian Review and isn’t based on a White House announcement – then it’s going to add a lot of fuel to the already heated trade dispute between the US and China, and may ultimately make the steel and aluminum tariffs look like a game.

To punish China for its intellectual property theft, including IP infringements such as counterfeiting, and to retaliate against Chinese investment rules that require technology transfers to Chinese partners in order to set up shop in China, the Trump administration is considering a proposal by the Office of the US Trade Representative (USTR) that would impose:

  • Tariffs on a large variety of Chinese products, including tech products and consumer goods like clothing.
  • Restrictions on investment by Chinese companies in the US, the first impact of which we have already seen by Trump’s order yesterday blocking all Chinese takeovers of large US tech companies.
  • And limits on visas for certain Chinese nationals.

The USTR also urged US allies, including Japan, to implement similar measures and synchronize their policies, according to the “source familiar with international trade,” cited by the Nikkei Asian Review.

Germany, Japan, and other countries have long fumed over the required technology transfers to Chinese partners. At the same time, Chinese companies, often state-owned, have been on a shopping spree in Germany, going after robotics know-how and other industries, which has caused a lot of soul-searching in the business community in Germany. Japan too “has long opposed China’s intellectual property practices,” as the Nikkei put it. Now the USTR has asked these countries to do something about it.

To continue reading: LEAKED: Trump’s Next Shoe to Drop on US-China Trade


Inflated Threats: China and Russia Aren’t Nearly as Dangerous as We’re Meant To Believe, by Danny Sjursen

China is a mountain of malinvestment sitting on a mountain of debt. Russia is a demographic disaster. While both countries swing a lot of weight in their own territories, they are not, according to Danny Sjursen, the threat to US security that they are sometimes portrayed. From Sjursen at antiwar.com:

“[Rome] pretends to aspire to peace but unerringly generates war…there was no corner of the known world where some interest was not alleged to be in danger…Rome was always being attacked by evil-minded neighbors…the whole world was pervaded by a host of enemies.” ~ Joseph Schumpeter (1918)

Some readers will barely finish reading the title of this piece before the ad hominem attacks commence. They’ll surely label me a Putin crony or a China apologist before reaching the second paragraph. Such is life in this age of militarism, hyper-partisanship and American hysteria. Sure, Russia has been accused of meddling in the 2016 elections; and, yes, China is flexing its muscles in the South China Sea and investing heavily across Eurasia and Africa. Maybe its even fair to consider Russia and China as competitors on the world stage. Still, none of that justifies war or the threat of war. The U.S. has seen darker days (like two world wars and a Cold War nuclear showdown) and there’s little cause for panic. Instead, the rhetoric of the Pentagon’s National Defense Strategy (NDS), which refers to China and Russia as “revisionist powers,” reads like 1950s anti-Soviet-alarmism.

President Trump lacks anything close to a consistent foreign policy doctrine or dogma, which, well, can be both a good and a bad thing. His generals, on the other hand – Mattis, Kelly, and McMaster – are all hyper-interventionists bent on perpetual American exceptionalist hegemony. And, for these true believers, there are only two countries standing in the way of a new Pax Americana: China and Russia. Seriously, read the NDS summary and you’ll see what I mean. Look, I don’t know exactly what occurred between the Trump campaign and Russia in 2016 – honestly, no one does. But for me, the Trump team’s hardline defense rhetoric and combative posture towards the twin Eurasian powers of China and Russia, has never jived with the MSNBC-Russia gate-collusion narrative. Of course, I could be wrong.

To continue reading: Inflated Threats: China and Russia Aren’t Nearly as Dangerous as We’re Meant To Believe


Pentagon Official: China’s Hypersonic Missiles Could Threaten US Navy’s “Entire Surface Fleet”, by Tyler Durden

Russia (see Ten Percent, SLL) is not the only country with hypersonic missiles. From Tyler Durden at zerohedge.com:

As we have discussed previously, “hypersonic aircraft and missiles are being developed and tested by the United States, Russia, and China at an accelerating pace. While the race for hypersonic technologies has certainly flourished among global superpowers, who realize that the first to possess these technologies will not just revolutionize their civilian and military programs, but will also dictate the future path for civilizations on planet earth.”

According to the Washington Examiner, Undersecretary of Defense for Research Michael Griffin presented last week at the McAleese-Credit Suisse Defense Conference in which he warned, “when the Chinese can deploy tactical or regional hypersonic systems, they hold at risk our carrier battle groups. They hold our entire surface fleet at risk. They hold at risk our forward deployed land-based forces.”

Griffin emphasized that Beijing has administered “20 times as many of hypersonic weapons tests as has the United States over the last decade.” He stated Beijing is spending billions to develop and test non-nuclear versions of hypersonic weapons that could render the United States Navy’s nuclear-powered aircraft carriers unprotected against a hypersonic strike.

In December 2017, Reuters reported that Griffin was nominated by President Donald Trump to be Under Secretary of Defense for Research and Engineering. The U.S. Senate confirmed his nomination on February 15, 2018, which means he has been on the job for less than two weeks and has already declared — developing hypersonic weapons is his “highest technical priority.”

Griffin stressed that Beijing is transforming into a global superpower and America’s worst enemy, while President Xi Jinping modernizes the People’s Liberation Army (PLA) with railguns, hypersonics, and stealth fighter jets. Detailed in the beginning paragraph, the American empire could unquestionably be dethroned if countries like Russia and China field hypersonics before Washington.

To continue reading: Pentagon Official: China’s Hypersonic Missiles Could Threaten US Navy’s “Entire Surface Fleet”

Doug Casey on the Coming War With China

Trade barriers often hurt the country that imposes them more than the ostensible target. They can also lead to wars: when goods don’t cross borders, armies do. From Doug Casey at caseyresearch.com:

Justin’s note: Donald Trump may have just started a war.

If you read Tuesday’s Dispatch, you know that I’m talking about a trade war. You see, Trump just slapped a 25% tax on steel imports and a 10% tax on aluminum imports.

He did this because he wants to put American businesses first. But this plan may end up doing more harm than good. And that’s because Trump’s tough stance on trade could spark a global trade war. It could even lead to a shooting war with one of the most powerful countries on the planet.

You might find that hard to believe. But Doug Casey told me why this might happen during a recent phone call…

Justin: Doug, what do you think about Trump’s approach to trade?

Doug: Well, let me start off by saying the government should have zero to do with the economy in general, and trade in particular. No subsidies, no duties, no quotas—nothing of the sort. Most people don’t understand that import duties punish the whole country to “help” some uneconomic industry or group. At the same time, it allows them to persist in the practices that make them uneconomic.

And yes, I understand the chances of the government butting out are about zero. But it’s critical to voice correct principles, even if they’re disregarded.

Of course, Trump is correct in putting America first, as opposed to subsidizing other countries. But import duties don’t put America first. They damage it. The Smoot-Hawley tariffs were what really set off the last depression, because foreigners could no longer sell to us. That destroyed their economies, resulting in business failures and high unemployment.

Duties are always a disaster. When you have a duty on things from a foreign country, you violate all kinds of economic laws. You are, in effect, putting yourself under embargo. That’s number one.

Number two, the revenue on import duties goes to a government. It feeds the beast. This revenue makes the government bigger and stronger. So, it’s bad from that point of view as well. It always impresses me as strange when people talk about “we” in reference to the State, or the government. The State is a discrete entity—like General Motors, or the Catholic Church, or the Boy Scouts. It doesn’t care about you; it cares about itself. But, unlike those other organizations, it uses guns to enforce its will. You want to deny resources to it as a moral principle.

To continue reading: Doug Casey on the Coming War With China

Why Is the GOP Terrified of Tariffs? by Patrick J. Buchanan

We send foreign countries pieces of paper, they send us stuff. Sounds like a good scam, but Patrick Buchanan disagrees. The US is manufacturing as much as it ever has, but with a lot fewer people. The US is also growing as much food as it ever has, but with a lot fewer people. Rising manufacturing productivity and agricultural productive explain both phenomena. Neither trend is going to reverse no matter how many tariffs we slap on foreign manufactured and agricultural goods. In the next article, Bill Bonner pinpoints the number one factor responsible for the US slide from net exporter to net importer. Patrick Buchanan was part of the administration that made it happen. From Buchanan at buchanan.org:

From Lincoln to William McKinley to Theodore Roosevelt, and from Warren Harding through Calvin Coolidge, the Republican Party erected the most awesome manufacturing machine the world had ever seen.

And, as the party of high tariffs through those seven decades, the GOP was rewarded by becoming America’s Party.

Thirteen Republican presidents served from 1860 to 1930, and only two Democrats. And Grover Cleveland and Woodrow Wilson were elected only because the Republicans had split.

Why, then, this terror of tariffs that grips the GOP?

Consider. On hearing that President Trump might impose tariffs on aluminum and steel, Sen. Lindsey Graham was beside himself: “Please reconsider,” he implored the president, “you’re making a huge mistake.”

Twenty-four hours earlier, Graham had confidently assured us that war with a nuclear-armed North Korea is “worth it.”

“All the damage that would come from a war would be worth it in terms of long-term stability and national security,” said Graham.

A steel tariff terrifies Graham. A new Korean war does not?

“Trade wars are not won, only lost,” warns Sen. Jeff Flake.

But this is ahistorical nonsense.

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The U.S. relied on tariffs to convert from an agricultural economy in 1800 to the mightiest manufacturing power on earth by 1900.

Bismarck’s Germany, born in 1871, followed the U.S. example, and swept past free trade Britain before World War I.

Does Senator Flake think Japan rose to post-war preeminence through free trade, as Tokyo kept U.S. products out, while dumping cars, radios, TVs and motorcycles here to kill the industries of the nation that was defending them. Both Nixon and Reagan had to devalue the dollar to counter the predatory trade policies of Japan.

Since Bush I, we have run $12 trillion in trade deficits, and, in the first decade in this century, we lost 55,000 factories and 6,000,000 manufacturing jobs.

Does Flake see no correlation between America’s decline, China’s rise, and the $4 trillion in trade surpluses Beijing has run up at the expense of his own country?

The hysteria that greeted Trump’s idea of a 25 percent tariff on steel and 10 percent tariff on aluminum suggest that restoring this nation’s economic independence is going to be a rocky road.

In 2017, the U.S. ran a trade deficit in goods of almost $800 billion, $375 billion of that with China, a trade surplus that easily covered Xi Jinping’s entire defense budget.

To continue reading: Why Is the GOP Terrified of Tariffs?

‘Descent Into Hell’: China Warns of Potential War With US Over Taiwan, by James Holbrooks

China is making unfriendly noises about US overtures to Taiwan. From James Holbrooks at theantimedia.org:

It’s no secret that for Beijing, the most sensitive issue within Sino-American relations is that of Taiwan, the semi-autonomous island territory that China considers to be a breakaway province. Now, a political move made by the U.S. on Taiwan has Beijing warning of the possibility of military action.

Back in January, the House of Representatives unanimously passed the Taiwan Travel Act, a bill aiming to significantly strengthen ties between U.S. officials and their Taiwanese counterparts. The bill reached the Senate floor on Wednesday, where it also passed without opposition. Now, all that’s required for the legislation to become law is Donald Trump’s signature.

Taiwan welcomed the bill’s passage. Speaking to reporters in the capital of Taipei, Premier William Lai said the U.S. is a “solid ally” of Taiwan and that the two sides’ ties can now become even stronger.

“We wholeheartedly anticipate that this law can in the future further raise the substantive relationship between Taiwan and the United States,” Lai said.

Unsurprisingly, China had an altogether different reaction — one that included a warning to its neighbor and a hint at military confrontation if things continue to progress in this manner.

“We are firmly against the act,” China’s state-run Xinhua News Agency quoted Taiwan Affairs Office spokesperson An Fengshan as saying. “We sternly warn Taiwan not to rely on foreigners to build you up, or it will only draw fire against yourself.”

The U.S. cut formal ties to Taiwan when it recognized Beijing as the Chinese capital in 1979. This event marked official acceptance of the “one China” policy, which regards Taiwan as a Chinese territory.

But Beijing has grown increasingly concerned over what it views as Taipei’s push toward independence since the election of President Tsai Ing-wen in 2016. This push, if it continues, would lead to the inevitable consequence of triggering the Anti-Secession Law that allows Beijing to use force to prevent the island from seceding,” China’s state-run Global Times wrote Thursday.

To continue reading; ‘Descent Into Hell’: China Warns of Potential War With US Over Taiwan

Change Is Coming: China Is Accelerating Its Plan For A Military Base In Pakistan, by Lawrence Sellin

China appears to be expanding its regional influence more than Russia. How the US responds will be an interesting question. From Lawrence Sellin at dailycaller.com:

On January 1, 2018, The Daily Caller published information — later confirmed in two separate reports, here and here — about a plan for a Chinese military base on the Jiwani peninsula in Pakistan, near Gwadar, a sea port critical to the success of the China-Pakistan Economic Corridor (CPEC).

According to noted national security correspondent Bill Gertz:

“Plans for the base were advanced during a visit to Jiwani on Dec. 18 by a group of 16 Chinese People’s Liberation Army officers who met with about 10 Pakistani military officers.”

“The Chinese also asked the Pakistanis to undertake a major upgrade of Jiwani airport so the facility will be able to handle large Chinese military aircraft. Work on the airport improvements is expected to begin in July.”

Sources now say the plan has been accelerated. Upgrade of the Jiwani airport is already underway. In addition, procedures are being formulated for the relocation of the local population to make way for Chinese military and other support personnel. The sensitivity and importance of this issue to China and Pakistan cannot be overstated. After the disclosures and the expected denials from both Islamabad and Beijing, Pakistani officials, as early as January 5, 2018, launched a leak investigation and it was jointly decided to advance the schedule for the Jiwani base.

Strategically, China’s Belt and Road Initiative (BRI) is their roadmap to geopolitical dominance. It is soft power with an underlying hard power, military component, the so-called “String of Pearls” bases and facilities.

A Chinese military base on the Jiwani peninsula will complement the Chinese base in Djibouti, which became operational in 2017. Both are located at strategic choke points. The Djibouti base is near the entrance to the Red Sea and the Suez Canal, while the Jiwani base will be within easy reach of the Strait of Hormuz, a combination, not only capable of dominating vital sea lanes in the Arabian Sea, but boxing-in U.S bases in the Persian Gulf and outflanking the U.S. naval facility on Diego Garcia.

There is concern that the Chinese will transform its 99-year lease of the Sri Lankan port of Hambantota into another naval base, the exact “debt-trap” method the Chinese used in Djibouti and after its acquisition of a 40-year lease of the Pakistani port of Gwadar. There are also continuing Chinese diplomatic efforts to gain access to the Maldives.

To continue reading: Change Is Coming: China Is Accelerating Its Plan For A Military Base In Pakistan