Drudge Retort: The Other Side of the News
Wednesday, June 19, 2019

US and China will resume trade talks ahead of a meeting between their leaders at a G20 summit next week, US President Donald Trump has said. Mr Trump said on Twitter he had a "very good" call with Chinese President Xi Jinping and their teams would start talks before they met in Japan.

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The trade war is so yesterday.

It's the currency war that is coming into focus of late.

#1 | Posted by LampLighter at 2019-06-19 11:43 AM | Reply

It's the currency war that is coming into focus of late.

It's a war Trump is unprepared for.

It's a war we're going to lose.

#2 | Posted by ClownShack at 2019-06-19 11:46 AM | Reply


Forgot the link (actually, didn't forget it, I pressed the submit button too soon).

In any case:

‘Currency war' fears rise as Trump slams Draghi's hint at more ECB stimulus
www.marketwatch.com

...President Donald Trump has never hesitated to criticize the U.S. Federal Reserve and the chairman he appointed, Jerome Powell, for, in Trump's view, tightening monetary policy too aggressively. Now, European Central Bank President Mario Draghi's is on Trump's bad side for signaling that more monetary stimulus might soon be on the way in the eurozone.

Trump's hostile response on Twitter to Draghi's signal that the ECB could move to loosen the spigots as early as next month is stoking fears that a potential U.S. trade war with its major trading partners could also be accompanied by a currency war, as policy makers work to cheapen their currencies in what's often is described as a race to the bottom in an effort to enhance the appeal of their wares to foreign buyers. ...


Pres Trump has stated he wants a cheap dollar so that US goods appear to be more appealing to overseas buyers. But it is difficult to have a cheap dollar when Europe and China may be lowering their currencies' value.

#3 | Posted by LampLighter at 2019-06-19 11:47 AM | Reply

"It's the currency war that is coming into focus of late.
It's a war Trump is unprepared for.
It's a war we're going to lose."

I don't see how China wins in a currency war if we lose one. We may be impoverished but then who are they going to sell their products to? China needs a replacment market and I just don't know where they will find one.

#4 | Posted by danni at 2019-06-19 11:58 AM | Reply


@#2 ... It's a war Trump is unprepared for. ...

If I look at this situation more from a strategic vantage point, and not a tactical one, here's the opinion I form...

Pres Trump's aides may have expected this currency volley in the economic war with Europe and China, but I doubt if Pres Trump himself did. Pres Trump is, at best, a tactical thinker --- one thing at a time, one result at a time.

Pres Trump's one thing is currently tariffs. They can be effective plus they help reduce the federal deficit, an aspect he has noticed.

Could Pres Trump's aides have been pushing him to go deeper into a trade war knowing that a currency war might ensue,and that would give Pres Trump the opportunity to make a lot of noise about a new Fed chair who will check Pres Trump for polyps?

That thought has crossed my mind...

#5 | Posted by LampLighter at 2019-06-19 12:29 PM | Reply

I don't see how China wins in a currency war if we lose one. We may be impoverished but then who are they going to sell their products to? China needs a replacment market and I just don't know where they will find one.

#4 | POSTED BY DANNI AT 2019-06-19 11:58 AM | REPLY

True. This is a battle we can win and it is long overdue. Trump is providing subsidies to farmers and industry that have
been affected by it. Dems and Repubs have been promising for years to address this but never did. It would be a big deal if we end tariffs all together.

#6 | Posted by fishpaw at 2019-06-19 12:42 PM | Reply


@#6 ... This is a battle we can win ...

World trade is not a zero sum game.

Anyone who thinks so has lost before they have even started.

#7 | Posted by LampLighter at 2019-06-19 12:44 PM | Reply

The nations of the EU, China, Japan, S. Korea all have "tariffs" to protect their manufacturing but they call them VAT. My only problem with Trump's tariffs is how he enacted them, it needs to be done by Congress so, in effect, Trump should be campaigning against the Republicans in the Senate right now. If he sincerely believes in tariffs that is what he would be doing right now, the totally different view on economic policies between Trump and the Republican Party are remarkable. Trump gained the Presidency by running on the economic policies of Bernie Sanders. Rust belt blue collar workers were wanting tariffs for decades since Reagan. Trump finally gave them Bernie's economics which Hilary argued against. Trump was more of a Democrat than Hilary and blue collar workers listened to him.

#8 | Posted by danni at 2019-06-19 01:13 PM | Reply

My only problem with Trump's tariffs is how he enacted them, it needs to be done by Congress...

#8 | POSTED BY DANNI

I completely agree.

#9 | Posted by JeffJ at 2019-06-19 01:18 PM | Reply

Danni, I agree with much of #8 but what needs to be kept in mind is that Trump's tariffs were always intended to be temporary, if they need to be made permanent to protect strategic industries then you are correct, Congress has to enact them.

Because several clients of mine are in Hong Kong, I scan the South China Morning Post every day, and it is clear from a Hong Kong perspective that the tariffs are really starting to bite into Chinese production now that the stockpiling is over. There is still a ways to go to get to a deal considering China's reluctance to undertake some internal reforms, but since we import 5x what we export to China, along with manufacturers moving their operations to Vietnam and other ASEAN nations, at some point China is going to have to accept some of the USTR's core demands.

#10 | Posted by Rightocenter at 2019-06-19 01:31 PM | Reply

"I completely agree."

Even the part where I say Trump should be campaigning against the Republicans in the Senate? They are roadblocking anything which would be good for the American people, they passed tax cuts for the 1% but won't even throw crumbs to the working class. Putting -------- like Rick Scott into the Senate is just unconscionable by Republicans in Florida. I sincerely hope the GOP takes a beating in 2020, they "richly" (get it?) deserve it.

#11 | Posted by danni at 2019-06-19 01:35 PM | Reply

"if they need to be made permanent to protect strategic industries then you are correct, Congress has to enact them."

Unless you think other countries are planning to drop their Vat any time soon then I would say we need to make tariffs permanent. We built our economy based on tariffs, tariffs supported our federal government for the first 100 years of our nation's history, it was crazy voodoo economics that caused us to drop tariffs. It's time to undo Voodoo economics permanently.

#12 | Posted by danni at 2019-06-19 01:39 PM | Reply


@#10 ... what needs to be kept in mind is that Trump's tariffs were always intended to be temporary ...

Irrespective of Pres Trump's recent declaration that the trade war with China is progressing exactly how he expected it to progress, I think that Pres Trump was caught off-guard with China reticence to give in without a fight. In other words, I think Pres Trump underestimated China's willingness and fortitude to make significant demands of the United States in return for China yielding to Pres Trump's demands.

How many times has Pres Trump said that an upcoming meeting with China would result in an agreement? I remember two times, at least.

Pres Trump was caught unawares by the level of China's push back.


#13 | Posted by LampLighter at 2019-06-19 01:44 PM | Reply


Feds held rates steady.

#14 | Posted by LampLighter at 2019-06-19 02:16 PM | Reply

"This is a battle we can win "

one thing you smug internet know-it-alls seem to have forgotten but still display here daily; stoicism is dead in America

it's a sad joke when the same people who melted down over OBAMAs imaginary "dictatorship" claim they can win a fight that requires stoicism, sacrifice, and some character.

Americans are soft. Especially the ones on the internet pretending to be tough
we cant win, because you are a miserable -----

#15 | Posted by ChiefTutMoses at 2019-06-19 02:25 PM | Reply

Trump thinks he is going to alter the Chinese view of economics and that might be a worthy goal but it is going to be much harder than he thinks to accomplish it and it is going to take longer than he has time left in the Presidency. Xi knows that all he has to do is wait out Trump's term in office and then things will likely return to the way they were unless the Republicans lose the Senate so, I would expect, Russian and Chinese hackers will be trying to help the Senate Republicans in 2020 but probably not Trump. McConnell is banking on it. That much is obvious by his refusal to pass bills to protect our elections. The Chinese would benefit by keeping the free trade Republicans in the Senate and getting rid of the President who enacts tariffs against them. If Trump wins in 2020 then the Chinese lose, if the Democrats win the Senate then the Chinese lose.

#16 | Posted by danni at 2019-06-19 02:31 PM | Reply

How many times has Pres Trump said that an upcoming meeting with China would result in an agreement? I remember two times, at least.

Pres Trump was caught unawares by the level of China's push back.

I think everyone was caught by surprise when the Chinese first agreed to the framework of a new trade agreement and then walked back on it literally at the 11th hour.

Trump may be surprised but I guarantee you Lighthizer and the rest of the USTR were not by China's push back: at the start of the China sanctions Lighthizer said it was going to be "a long road", what I think was a surprise was the turnaround in May, since by all accounts the framework had been approved by Xi.

#17 | Posted by Rightocenter at 2019-06-19 02:54 PM | Reply

He look

The DR "deal making" expert is "surprised" by the 11th hour dealings

Just more evidence these internet cretins are just making ---- up as they go along

#18 | Posted by ChiefTutMoses at 2019-06-19 03:01 PM | Reply


@#17 ... I think everyone was caught by surprise when the Chinese first agreed to the framework of a new trade agreement and then walked back on it literally at the 11th hour...

From what I've read, Pres Trump backed out because he said the Chinese were changing what had already been negotiated. The Chinese said that they wanted the United States to be subjected to the same conditions as China was agreeing to.

The problem arose when the United States said they wanted new concessions from China. China said,~OK, but you have to agree to those same concessions.~

The US balked and said China was changing things after the fact.

Both sides were correct in their announcements.

The US, however, did not want to go with the "nothing is decided and agreed to, unless everything is decided and agreed to" approach that China wanted.

These talks are not easy.


#19 | Posted by LampLighter at 2019-06-19 03:39 PM | Reply

#20

This is classic Chinese negotiation tactics, I have been dealing with this on a business level for 20+ years:

The deal is hammered out with someone with apparent authority but they need to go to their boss/owner for "final" approval, they come back with major changes to hard fought deal points to buy time and save face and you have to walk away for a while until they are ready to finally agree. Patience is key for Western negotiators, the Chinese rightfully don't think we have it.

There are eight elements for Chinese negotiations:

Guanxi (Personal Connections)
Zhongjian Ren (The Intermediary)
Shehui Dengji (Social Status)
Renji Hexie (Interpersonal Harmony)
Zhengti Guannian (Holistic Thinking)
Jiejian (Thrift)
Mianzi ("Face" or Social Capital)
Chiku Nailao (Endurance, Relentlessness, or Eating Bitterness and Enduring Labor through Patience)

Vice Premier Liu, the Zhongjian Ren, handled everything for Premier Xi but it was Xi and the Politboro who ultimately have to approve the deal and thought they would lose Mianzi if they immediately agreed to the deal, so negotiations entered into the predictable Chiku Nailao phase.

I think that Lighthizer realizes that showing US patience is a sign of chiku nailao. The Chinese rarely make large concessions following persuasive talks without broader consultation with the leaders and thorough group decision making and social status (shehui dengji). Moreover, the Chinese are skilled in using delay as a persuasive tactic, so Lighthizer has realized that he has had to bide his time. This allows the Chinese to use the lulls in the negotiation cycle to consider any new information, develop more questions and ultimately save Mianzi.

In the end, the investment in time pays off once the Chinese have completed their negotiation cycle.

#20 | Posted by Rightocenter at 2019-06-20 12:16 PM | Reply | Funny: 1

I think everyone was caught by surprise when the Chinese first agreed to the framework of a new trade agreement and then walked back on it literally at the 11th hour.

Perhaps there was not enough Beautiful Chocolate Cake and Tomahawk Cruise Missiles?

I hear Beautiful Chocolate Cake and Tomahawk Cruise Missiles do wonders for livening up a negotiation.

#21 | Posted by donnerboy at 2019-06-20 03:42 PM | Reply

but what always has to be considered with the trump cartel is that all it takes is a bit of largesse from the chinese that would benefit a trump, think ivanka, or a business associate..something profitable for trump and america's interests could be negotiable. that's why intelligence isn't briefing them...they're traitors

#22 | Posted by 1947steamer at 2019-06-20 06:19 PM | Reply

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