Friday, July 6, 2018

Pepe Escobar — Tariffs ‘kick off 50-year trade war’ with China

The tariff tussle that began today is linked to Beijing's ambitious 'Made in China 2025' and Belt and Road strategies, which will transform the global economic and geopolitical landscape; this rivalry could last for decades, some experts have said.
First "shots" fired in the Thucydides trap that seems to be springing? Will the struggle for dominance be over quickly, or last perhaps for the rest of the century?

Asia Times
Tariffs ‘kick off 50-year trade war’ with China
Pepe Escobar
Tyler Durden

See also

Zero Hedge
Russia Joins Global Trade War - Imposes Tariffs On US Energy, Mining Imports
Tyler Durden

See also

Beat the Press
Does the U.S. Have a Lot of Leverage with China? Mr. Arithmetic is SkepticalDean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C


Matt Franko said...

Tom, any info on what currency the Chicomms are going to impose their tariffs in? Are they going to use USD too?

Matt Franko said...

iirc Dalio is short....

Matt Franko said...

BofA: “40% crash”

Citi: “full-on global bear...”

Dalio bearish....

Tom Hickey said...

Don't know, Matt, but tI think they would see it as self-defeating to use the USD rather than the CNY.

They really need to bite the bullet and float. Then all the US could do is bitch about the PBOC not intervening to support the currency, which is, of course, just nonsense.

If China handles this right, it could have a similar effect as sanctions on Russia in forcing them to ramp up the domestic economy, which at the top of their list now anyway.

Tom Hickey said...

Regardless of how correct their analysis is, when the big guns fire off warnings like this, it has an effect on confidence and expectations. Market prices are quite subjectively determined at the margin, whereas fundamentals prevail in the long haul.

Dalio is an influencer and knows it, so it's a good bet he is short when he says something like this publicly.

Ryan Harris said...
This comment has been removed by the author.
Matt Franko said...

If they floated it it would rally as their people wouldn’t put up with the shitty terms of trade their leadership is imposing on them via the fix...

Then also maybe they would all stop wanting to move here..,

Tom Hickey said...

Matt, their strategy was to use the same strategy that the US used when Britain was the dominant power to get up to speed.

They are about up to speed now based on their 5-year plans and need to focus on building out their domestic economy.

That's already happening.

Tom Hickey said...

@ Ryan,

Right. The US needs to get busy rebuilding the soft power it has decimated with imperialistic interventionism and turn attention to the West hemisphere, which is its natural (geographic) area.

No brainer.

Tom Hickey said...

@ Clint

I suspect that the rise of central banking grew of the realization that the monetary system is essentially a credit system rather than a commodity system. The bankers and finance people would have figured this out rather than the monarchs, whose thinking, as far as I can see, was dominated by metalism so they believed themselves limited by the amount of metals through could obtain.

The original cbs were privately owned and operated, which would have given the banking and financial system effective control. Owing to the changing times, that is, chiefly late-stage feudalism and nascent capitalism, which began first as trade, the financial and commercial interests had enough power to work this based on their understand of credit.

But the details need to be ferreted out.