Something re the art of war
That, it is good, easy, sure win, or some such, according to suspect Bloomberg but irrespective, makes intermediate sense
In order for team America to win, teams Brazil and Saudi Arabia has to be able to similarly win if in same situation
And all assuming republican support base do not suffer mind-clarifying losses during the senseless and fruitless attack
Am thinking that the Canadian yelping, Japanese whimpering, European shouting, Russian indifference, and China calm tells one all one needs to know. A guess.
bloomberg.com
The Art of Trade War (Hint: China Wrote the Book)How Xi Jinping could subdue the enemy without fighting.
More stories by David FicklingMarch 7, 2018, 2:13 PM GMT+8
As the world's largest economies stumble toward an all-out trade war, President Donald Trump is tweeting in all-caps, but carrying a small stick.
We are on the losing side of almost all trade deals. Our friends and enemies have taken advantage of the U.S. for many years. Our Steel and Aluminum industries are dead. Sorry, it’s time for a change! MAKE AMERICA GREAT AGAIN!
— Donald J. Trump (@realDonaldTrump) 8:10 AM - Mar 5, 2018
After White House chief economic adviser Gary Cohn announced Tuesday he's resigning, the Trump administration is considering tariffs on a range of Chinese imports from shoes and clothing to consumer electronics, people familiar with the matter told Andrew Mayeda and Jennifer Jacobs of Bloomberg News. China " will take necessary measures" if its interests are harmed, Vice-Foreign Minister Zhang Yesui said Sunday.
Which side has the divisions best-arrayed to bring victory in this conflict?
One lesson from real warfare is that battles tend to be won and lost on the home front -- and in that respect, the U.S. is laboring under a significant handicap. Its major imports from China are overwhelmingly consumer goods, where the predictable effect of tariffs will be to increase costs to American citizens, as Gadfly's Tim Culpan points out. The largest categories are computers, phones, knitwear, other clothing, and toys.
Trading PlacesChina accounts for more than a one-third share of U.S. imports of most consumer products
Source: International Trade Centre
Note: 2016 figures. Shows trade categories in which U.S. imports from China were worth at least $5 billion.
It won't be easy for U.S. retailers to replace these goods. In every one of the consumer sectors where Chinese exports to the U.S. were worth more than $5 billion in 2016, China accounted for more than one-third of U.S. imports by value. Global supply chains can't source from rival regions fast enough to avoid a tax on shoppers' wallets, should further tariffs be imposed.
The ideal solution, from Trump's perspective, would be for domestic production to come to the rescue -- but that horse has long bolted.
In clothing manufacturing, the U.S. production-line workforce has shrunk by more than 90 percent since 1990, and the electronics industry has lost almost 40 percent of its jobs. With China itself seeing industries quitting for cheaper locations in South and Southeast Asia and Africa, the chances of those jobs coming back to the U.S. are slim.
Made in AmericaThe U.S. electronics and apparel workforces have cratered over the past three decades
Source: Bureau of Labor Statistics
Note: Shows January data for non-supervisory roles.
By contrast, China imports mainly intermediate products and parts from the U.S., led by soybeans, aircraft, cars, integrated circuits and plastic. The cost of any retaliatory tariffs on those products will pass through a number of producers before any citizens feel it in their hip pockets -- and dictatorships don't have to worry so much about popular backlash, anyway.
If Xi Jinping chooses to fight back, watch what happens to the semiconductor industry. A quarter of U.S. chip exports go to China, but that constitutes just 3.8 percent of the People's Republic's total imports of integrated circuits. A relatively small shift in Chinese business patterns could deliver a devastating blow to one of America's most successful export trades.
Pressure PointsMost Chinese imports from the U.S. are in business-to-business categories
Source: International Trade Centre
Note: 2016 figures. Shows all export categories where Chinese annual imports from the U.S. were worth more than $5 billion.
Soybeans, too, could come in the firing line. China swallows up more than 60 percent of America's exports of the legume, but that trade accounts for only 12 percent or so of Chinese consumption, at least as measured by domestic production plus imports. 1 Putting levies on those imports will turn up the heat at a time when global soybean prices are at a two-year high, raising pressure on the processors and farmers who use soy for animal feed -- but prices for pork, the most critical end-use sector in China, have been declining for 12 straight months, so they could afford to rise a little.
Food FeedSoybean prices are surging. Pork prices are slumping
Source: Bloomberg, Gadfly calculations
The smarter move for China might be to stand pat. Despite Xi's boasts at Davosand elsewhere, the country's record on free trade is dismal, a potential handicap if matters degenerate into a wider trade war. The better policy would be to let Trump raise costs for American consumers with ill-advised tariffs; refuse to retaliate; then pose as the innocent victim.
Governments in Washington's sphere of influence, motivated by strategic investments in the likes of Deutsche Bank AG and Brazilian utility CPFL Energia SA and taken aback by Trump's aggressive stance, may be persuaded to regard Beijing as the friendlier ally.
That would be the greater victory for a Chinese president without term limits and with a view to posterity: To subdue the enemy without fighting, as the Chinese philosopher Sun Tzu wrote, is the supreme art of war.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
China barely exports any soybeans -- 114,000 metric tons in 2017, according to U.S. Department of Agriculture estimates, compared with 159 million tons of domestic output and 96 million tons of imports.
To contact the author of this story:
David Fickling in Sydney at dfickling@bloomberg.net
To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net |
