Trade War Dashboard, 8/22/18

Keeping you up to date on the ongoing trade war.  Links to related articles and our background videos below.

 

Summary:

 

  • Focus on China continues: Donald Trump said he isn’t in a hurry on NAFTA. Commerce Department said report on auto industry will be delayed.  But preparation for additional tarrifs against China continue.  For China continues to be the main focus of the trade effort. 
  • Political rumblings in China: Direct criticism of government policies is highly restricted in China.  But still prominent scholars have managed to questions aspects of how China’s government has handled the trade conflict with the US.  No great challenge to the leadership at this point but an indication that political pressures could play a role in China as well. 
  • Economic Impact: It is still early in the trade war so direct impact limited. More bad news for soybeans.  Lobster and natural gas are feeling the effects.  Autos are worried. 
  • Political fall out: Congressional hearings demonstrate that most business organizations are wary of using tariffs to address trade issues.

 

Comment:

For now it seems everything else is on the backburner and China is in the cross hairs.  As we’ve mentioned before, many thought this should have been the approach from the beginning.  Given that the focus has shifted to China almost exclusively, it is interesting that we are beginning to see both economic and political pressures building in China.  Not that China is about to cave to US demands.  China’s position is far from that weak.  But China’s economic policies of the past decade might finally be catching up to China, at just the wrong time for them.  More in our blog this week:

 

China’s Weaknesses Beginning to Show

http://chinalearningcurve.com/chinas-weaknesses-beginning-to-show/

 

ARTICLES

 

Focus on China

The main theme of the trade war continues to be a focus on China, with NAFTA, the EU and other issues, while not off the table, taking a back seat for now. Not that an agreement with China is likely in the near term, so other issues could eventually heat up again. 

 

U.S. Moves Toward New Tariffs on China Despite Fresh Round of Trade Talks

https://on.wsj.com/2w1WJqC

 

Trump Says He Is in ‘No Rush’ to Renegotiate Nafta

https://on.wsj.com/2MpwvJ4

 

Trump Auto-Tariff Timetable Likely to Slip Amid Europe, Nafta Talks

https://on.wsj.com/2PoTdyV

 

Trump doesn’t expect much from China trade talks this week

https://reut.rs/2MFwUX2

 

 

 

Political rumblings in China

Last update we mentioned that weakness in the Chinese economy could play a role in the trade conflict.  More bad news relative to consumer spending doesn’t help China’s position.  Now there are starting to be signs of political discontent, which, while muted in China, could play a role over time. 

 

Trump’s Trade War Is Rattling China’s Leaders

https://www.nytimes.com/2018/08/14/world/asia/china-trade-war-trump-xi-jinping-.html

A century on, China still lacks the drive for scientific truth, editor says

https://sc.mp/2PbkWTB

 

                Middle class won’t help China spend its way out of trade war

https://sc.mp/2B26ZEm

 

Trade War Impact

Natural Gas, autos, lobster, and soybeans

 

It’s becoming impossible to import US lobster in China

https://qz.com/1354619/lobster-is-the-perfect-example-of-trumps-trade-war-backfiring/

China’s New Trade Strategy: Threatening U.S. Companies

http://fortune.com/2018/08/13/china-apple-trade-war-tariffs/

Auto industry caught in the trade war crosshairs

https://www.cnbc.com/2018/08/12/auto-industry-caught-in-the-trade-war-crosshairs.html

Middle East LPG cargoes amid trade war with US

https://bit.ly/2wgNaDA

Soybean and pea farmers scramble as China and European trade missions cancel visits

https://cnb.cx/2ORbS5i

 

 

Political Fall-out: Farmers are concerned, Republican and congressional opposition

Congressional hearings week of 8/20 likely to show many business groups oppose tariffs. 

 

Business Beg for Tariff Relief as Trade War Rolls On

https://wapo.st/2BAIz53