WHO IS WINNING THE TRADE WAR? HINT, IT’S CHINA

Even as trade talks regarding the duties imposed on the first $250 worth of Chinese exports have fizzled, Trump has threatened to impose a 10% duty on another $300 billion in Chinese goods.

Trump said China broke its promise to buy American farm products.

But China did not back down.  They devalued their currency, the Yuan which makes Chinese products cheaper, defeating Trump’s tariffs.

Two events have already happened that may be irreversible.  China has made major trade deals for South America food, specifically grains.  China may never come back to the American market, certainly not to the extent it did before the tariffs.  Many American farmers are going to go bankrupt.

Two, when America refuse to sell chips to ZTE and barred Huawei from doing business in American, China invested $5 billion dollars to build a city that does only one thing: build chips.  Very soon, China will be building better chips, faster chips, cheaper chips than America.  China will take much of America’s business which will never return.

America has uses it power as the reserve currency of the world to threaten, cajole and fine companies who don’t provide America with what it wants..

Soon, the Chinese Yuan will be the reserve currency, then, America will los all leverage on other companies or countries to conform to US interests.

As for the current situation…62% of the products slated for tariffs are consumer goods like wearing apparel, foot wear, toys and cell phones.  By one estimate, an iPhone will cost $75 to $100 more.

The Dow dropped by 2.9 percent on the news of the continuing, and escalating, trade war.

Some ratings companies have raised the chance of recession from 35% to 50% for next year.

When China is face with a threat or ultimatum, they get their back hairs up.  Any compromise now will make it look like a Chinese surrender.  And that is smoothing Xi Xinping will never accept.

Trump is becoming more unhinged each day. But the ultimate cost will not be paid by him, but by the American consumer.

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