The Beginning Of Progress In The Trade War With China

It is no surprise that trade negotiations with China have moved slowly. President Trump is attempting to level a playing field that has been tilted for a long time. China has manipulated its currency to gain trade advantage, China has stolen intellectual property, and China has used slave labor to manufacture products at ridiculously cheap prices. We have looked the other way, ignoring human rights abuses. We have also looked the other way in terms of the censorship of speech in China. Google has helped develop a search engine that will meet the requirements of the Chinese censors. We have complied with things that are against our principles for the sake of money. The trade deal being negotiated is not going to change that, but at least it will be a beginning attempt to level the playing field.

Fox Business is reporting today that the U.S. and China agreed to a “phase one deal” in the trade war.

The article reports:

The deal, which has been agreed to in principle and will take three to five weeks to write, includes China agreeing to raise its agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services. The U.S. will not be raising tariffs from 25 percent to 30 percent on Oct. 15. A decision has not yet been made on the tariff increase scheduled for Dec. 15.

A comprehensive trade deal will have two or three phases, according to Trump. China’s trade team is calling the agreement a “pause” in the trade war, and not a deal.

China is not a free country, and the Chinese negotiators who are working out this trade deal will pay a high price if the deal is not totally acceptable to the leadership in China. The fact that a phase one deal has been reached is good news, but China does not have a great track record on keeping promises or abiding by trade agreements.

An Interesting Twist On The Game Of Baseball

Fox Business reported yesterday that Major Leage Baseball has announced that the New York Yankees will plan the Chicago White Sox at the “Field of Dreams” stadium located in the cornfields of Dyersville, Iowa. The temporary stadium seats 8,000. This will be the first ever Major League Baseball game played there.

The article reports:

“As a sport that is proud of its history linking generations, Major League Baseball is excited to bring a regular-season game to the site of Field of Dreams,” Commissioner Rob Manfred said. “We look forward to celebrating the movie’s enduring message of how baseball brings people together at this special cornfield in Iowa.”

This won’t be the first time that Major League Baseball has built a temporary stadium for just one game. Iin 2016, a 12,500-seat stadium was erected at Fort Bragg in North Carolina to give military members and their families a once-in-a-lifetime experience.

What a great idea!

 

 

Trying To Level The Playing Field Has Its Challenges

Fox Business posted an article today about the devaluing of the Chinese yuan. The devaluing of the Chinese currency (currency manipulation) has been used by China for decades to grow their economy at the expense of America. It has been used to lure manufacturing away from America, impact our trade balance, and generally work against the American economy. We have needed to combat this practice for decades, but no President had the courage.

The article reports:

The onshore Chinese yuan weakened to worse than seven per U.S. dollar, hitting its lowest level since 2008, as Beijing looks to cushion the blow from Trump’s tariffs. A weaker yuan makes Chinese goods cheaper for overseas buyers, which may be necessary as China just lost its spot as the US’s biggest trading partner.

Trade data released Friday by the Department of Commerce showed U.S. imports from China fell by 12% in the first six months of the year, allowing Mexico to supplant it as the U.S.’s biggest trade partner.

“China dropped the price of their currency to an almost a historic low,” Trump tweeted Opens a New Window. on Monday. “It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Last week, Trump said beginning Sept. 1 the U.S. would place a 10% tariff on the remaining $300 billion of Chinese goods. He went ahead with the announcement despite objections from his advisers.

The president warned he could “always do much more” with respect to tariffs, adding the 10 percent tax could go “well beyond 25 percent” if necessary. Earlier this year, the administration placed a 25% tariff on $250 billion worth of Chinese goods.

Weakening the yuan isn’t the only form of retaliation Beijing took on Monday. It also ordered state-owned enterprises to stop purchases of U.S. agricultural products, according to a Bloomberg report, citing people familiar with the situation.

That is a reversal from just last week, when Beijing said it had purchased several tons of U.S. soybeans Opens a New Window. as a gesture of a goodwill amid trade negotitations. Before the trade war began, China was the largest buyer of U.S. soybeans, accounting for 70% of all purchases, but their imports have fallen by 97% since the trade war began.

The article notes:

Over the weekened, The Trump administration pushed back against the idea the trade war was hitting the wallets of U.S. consumers.

“China has strategically gamed the tariffs by slashing their prices and by devaluing their currency,” White House trade advisor Peter Navarro told “Fox News Sunday.”

This trade dust-up with China may get ugly, but it is something that has to be done.

Some Comments On Today’s Events

The following interview is from Fox Business News:

We are watching the last of an attempted coup. The Deep State, which included the upper echelon of the Department of Justice, in collusion with the Hillary Clinton campaign and aided by the mainstream media attempted (and is continuing to attempt) to unseat a duly-elected President because they don’t like him and they lost. Actually it’s more serious than that. President Trump represents a serious threat to the current status quo that has enriched Washington insiders for generations. Rather than lose the gravy train they are accustomed to, Democrats and some Republicans want him gone. They are not particularly fussy about following the Constitution in accomplishing their goal. Hopefully those who participated in this attempted coup with be dealt with appropriately.

 

President Trump Has Reached A Trade Deal With Canada And Mexico

America has not done well in trade deals in the recent past. Our manufacturing sector has suffered for a variety of reasons–high taxes, bad trade agreements, energy costs, etc. The Trump administration has begun to address these issues, sometimes more successfully than others.

This past weekend, Fox Business announced that the United States and Canada confirmed that they had reached a deal on a “new, modernized trade agreement,” which is designed to replace the 1994 NAFTA pact.

The article reports:

In a joint statement the two nations said the new deal would be called the United States-Mexico-Canada Agreement (USMCA).

Canadian Prime Minister Justin Trudeau said following a cabinet meeting, “It’s a good day for Canada.”

…The agreements reportedly boost U.S. access to Canada’s dairy market and protect Canada from possible U.S. autos tariffs.

Trump’s administration has said Canada must sign on to the text of the updated NAFTA by a midnight Sunday deadline or face exclusion from the pact. Washington has already reached a bilateral deal with Mexico, the third NAFTA member.

If Canada did not sign a new deal, Trump had threatened to impose steep tariffs on all automotive imports.

…Trump blames NAFTA for the loss of American manufacturing jobs and wants major changes to the pact, which underpins $1.2 trillion in annual trade. Markets fear its demise would cause major economic disruption.

Negotiators from both sides spent two days talking by phone as they tried to settle a range of difficult issues such as access to Canada’s dairy market and U.S. tariffs.

As part of any agreement, Canada looks set to offer increased access to its highly protected dairy market, as it did in separate pacts with the European Union and Pacific nations.

Access to Canada’s dairy market was one of the sticking points of the negotiations. Canada places high tariffs on imported dairy products in order to protect its dairy farmers.

This agreement is another indication of the Trump administration’s desire to protect the interests of America. America is simply looking for a level playing field in trade agreements. This treaty is one more step in that direction.

Be Careful What You Believe Between Now And the Presidential Election

Yesterday Fox Business posted an article about the jobless claims data reported this week.

The article reports:

A sharp drop in the number of weekly jobless claims filed last week was caused by the failure of one large state to report all of its claims, a Labor Department spokesman confirmed to FOX Business.

Initial jobless claims, which are a measure of the number of people recently laid off, fell by 30,000 to a seasonally adjusted 339,000, the lowest level in more than four years.

But the Labor Department spokesman said the numbers were skewed by one large state that underreported its data. The spokesman declined to identify the state, but economists believe California is the only state large enough to have such a significant impact on the overall numbers.

Evidently, the state that did not report their numbers forgot to include that stockpile of unprocessed claims in their tally for this week (which is the first week of a new calendar quarter),

This is the equivalent of saying all of your bills are paid because you are haven’t gotten to the pile of bills you left on the kitchen table. We are truly in the silly season and need to discount at least ninety percent of what we read or hear from the media. Just for the record, the number will be revised upward, but at a time when no one is paying attention.

Enhanced by Zemanta