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I initially used to think China might have more leverage against any potential trade war agains the US, as: 1. The Chinese had option of imposing high tariffs

I initially used to think China might have more leverage against any potential trade war agains the US, as: 1. The Chinese had option of imposing high tariffs on politically significant US agricultural products, like soyabean, which are not very large in $ value, but affect a lot of areas. 2. Since some swing states are highly influential in US elections, the Chinese always had the option of imposing tariffs which impact the swing states mostly. Both of these thoughts arose from the fact that as a democratic country, the US would have to take into account both short and long term trade prospects. Now reading this article, it seems being a predominantly export driven economy and having a huge trade surplus with the US, the Chinese don't really have that much leverage.

raws 8y ago
Yeah their leverage ends up being limited but even if they had focused their tariffs on soy beans, it would have hurt them more than not given the Importance of the us in their imports.
MarkMc 8y ago
Trump has countered the soybean attack by handing out subsidies to soybean farmers.
- duxup 8y ago
  For now, I belive the subsidies are only going to last a while. Granted considering the current administration's lack of care for deficit spending.... they probabbly would just dial up more subsidies after a while.
- cuboidGoat 8y ago
  Meantime, other soybean manufacturers will dial up production, so when the tariffs are dropped by China, the US soybean manufacturers will be selling to an oversupplied market, dropping the price. And given the US subsidies will almost certainly go when the Chinese tariffs do, the risk to the US soybean industry has only been postponed, rather than countered.
  - 394549 8y ago
    > Meantime, other soybean manufacturers will dial up production, so when the tariffs are dropped by China, the US soybean manufacturers will be selling to an oversupplied market, dropping the price. I don't think so. Doing some Googling, it looks like China's soybean imports (100 million tons) could be more than satisfied by the production of Brazil and Argentina (139 million tons). US production is 108 million tons. Soybeans are fungible, so instead of other producers ramping up soybean production, I think we'll see production stay constant while trading relationships reconfigure around the tariffs. For instance: China can replace American soybeans with Brazilian ones, and American soybeans will then go to wherever the Brazilian soybeans were going to previously. https://www.worldatlas.com/articles/world-leaders-in-soya-soybean-production-by-country.html https://www.worldatlas.com/articles/world-leaders-in-soya-so... https://www.world-grain.com/articles/10955-china-soybean-imports-forecast-to-fall https://www.world-grain.com/articles/10955-china-soybean-imp...
    - cuboidGoat 8y ago
      China, according to those links, purchases 60% of all global soybean exports. Looking up the figures, about another 30% is the EU, with 10% for everybody else. Now, the EU is increasing their US soybean imports, but they cannot make up the shortfall even if they wanted to, and are only really increasing their imports from the US because US soybeans are currently cheaper than South American ones. Also, the EU are not really that interested in helping the US on this one without first getting concessions in the ongoing EU vs US trade war. Out of this, the EU have so far managed to get Trump to promise to drop much of the EU trade war in return for the EU buying more US soybeans, which is something the EU were going to do anyway and as I said before, will only cover a fraction of the reduction in US exports to China. Also, the EU continuing not to target US soybeans exports is all rather dependent on Trump keeping to his word on not continuing the EU part of his trade war, if he restarts it, those reassurances are going to leave the table.
  - sonnyblarney 8y ago
    Not quite. The demand for Soybeans globally has not changed. Tariffs in China really will just mean that buyers and sellers will shift around. Chinese will now buy Soy from Brazil, thus avoiding tariffs, and rather than buying more expensive Soy beans from Brazil (because of more demand), those other buyers will shift to buy from the US. Chinese tariffs on commodity goods won't have an effect if there a good number of buyers and suppliers.
- chongli 8y ago
  What a strange phenomenon. So essentially Trump is subsidizing the Chinese government.
SubiculumCode 8y ago
Point number two has been preoccupying my brain the last few months. Our system of electing presidents tend to hinge on several swing states, and in those states, a few key districts, and this means that our elections are vulnerable to foreign influence much more so than if, say, presidents were elected by popular vote. Protecting elections may mean ending winner take all electoral college system.
- macintux 8y ago
  > Protecting elections may mean ending winner take all electoral college system. I think 2016 proved that the electoral college is not supplying the adult oversight that the founders intended.
  - SubiculumCode 8y ago
    That may or may not be, but in the end it is a different question than the one I raised. One might have an electoral college system without a state by state winner take all, which can lead to particular districts in particular states having outsized influence on the national election, and as such presents itself as a manageable target for foreign influence campaigns. This seems, to me, a national security risk that should be mitigated...and is much easier to mitigate than, for example, depending on efficient removal of foreign state-powered advertising campaigns.
  - someone454 8y ago
    Or maybe it is, and the adults actually won.
    - panzagl 8y ago
      If I don't like the outcome the system must be broken...
    - sv123 8y ago
      Nope
    - int_19h 8y ago
oh-kumudo 8y ago
Well for both countries the export to each other is only a fraction of their economy...China is not what it is used to be.
- mistermann 8y ago
  Exports / Imports, % of GDP, 2016 Source: National Accounts at a Glance https://data.oecd.org/trade/trade-in-goods-and-services.htm https://data.oecd.org/trade/trade-in-goods-and-services.htm Imports | Exports China 17% | 20% US 15% | 12% China seems to be at a fair disadvantage on exports dependence, but you're right, China is far less export dependent than one might think. The devil is in the details of course, but I'd venture a guess that US imports would tend to be more discretionary than China's, but who knows.
  - throwaway2048 8y ago
    Keep in mind much of china's trade with other nations is based upon the presence of US corporation's manufacturing and supply chains.
makomk 8y ago
Based on the figures I could find, China imported $130 billion dollars worth of goods from America last year, of which $12.3 billion was soya beans. The most likely reason they imposed high tariffs on soya beans is precisely because they had so few actual options. (I know the media portrayed it as some kind of genius move at the time, but that's been looking increasingly dubious. It's not clear that they will be able to feed their livestock at reasonable prices.)
- bluGill 8y ago
  To a large extent the tariffs were imposed just before China traditionally started importing from Brazil, so for several months they had little effect on actual supply (a few ships did get turned away, but for the US it was slow season). Brazil has ended their shipments, and China is turning to other countries which are selling at inflated prices and then buying from the US. Don't paint the above as good for the US - things are bad for farmers, they are selling below what the cost would have been. I'm pointing out that the picture is (as always) complex.
- 394549 8y ago
  Also, soybeans are a fungible commodity. As China buys up non-American soybeans, American exports will (with effort) be redirected to the customers who were originally planning to buy non-American soybeans that the China bought. The tariffs will be more of a hiccup for American farmers. On the other hand, most of China's exports aren't fungible commodities, so it will have more difficulty finding substitutes for the reduced demand caused by American tariffs.
liftbigweights 8y ago
> Now reading this article, it seems being a predominantly export driven economy and having a huge trade surplus with the US, the Chinese don't really have that much leverage. You shouldn't be basing your opinion on opinion news articles. Just 2 years ago, the nytimes was telling us the world was headed to economic armageddon with no end in sight. Look at us now. One day the news tells you Trump is going to start ww3 with china and the next you'd think china is weak and have to submit to Trump's demand. > Both of these thoughts arose from the fact that as a democratic country, the US would have to take into account both short and long term trade prospects. If that was the case, we wouldn't have the rust belt. We wouldn't have the collapse of detroit. We wouldn't have NAFTA or trade with China. Most americans were never for lopsided trade with china or mexico or even canada. I think foreigners have an idealized view of the US, democracy and how things work. Trade with china for the last 40 years was basically "wage arbitrage" ( which some might call exploitation of cheap chinese labor ). US corporations moved production to china to use the abundant and cheap labor. The reason why we didn't have tariffs on "chinese" imports is because most "chinese" imports to the US are actually american goods. Or it's a sino-american partnership/company. This is why Trump is getting so much backlash from corporate america. The tariffs hurt american goods.

raws 8y ago

Yeah their leverage ends up being limited but even if they had focused their tariffs on soy beans, it would have hurt them more than not given the Importance of the us in their imports.

MarkMc 8y ago

Trump has countered the soybean attack by handing out subsidies to soybean farmers.

duxup 8y ago
For now, I belive the subsidies are only going to last a while. Granted considering the current administration's lack of care for deficit spending.... they probabbly would just dial up more subsidies after a while.
cuboidGoat 8y ago
Meantime, other soybean manufacturers will dial up production, so when the tariffs are dropped by China, the US soybean manufacturers will be selling to an oversupplied market, dropping the price. And given the US subsidies will almost certainly go when the Chinese tariffs do, the risk to the US soybean industry has only been postponed, rather than countered.
- 394549 8y ago
  > Meantime, other soybean manufacturers will dial up production, so when the tariffs are dropped by China, the US soybean manufacturers will be selling to an oversupplied market, dropping the price. I don't think so. Doing some Googling, it looks like China's soybean imports (100 million tons) could be more than satisfied by the production of Brazil and Argentina (139 million tons). US production is 108 million tons. Soybeans are fungible, so instead of other producers ramping up soybean production, I think we'll see production stay constant while trading relationships reconfigure around the tariffs. For instance: China can replace American soybeans with Brazilian ones, and American soybeans will then go to wherever the Brazilian soybeans were going to previously. https://www.worldatlas.com/articles/world-leaders-in-soya-soybean-production-by-country.html https://www.worldatlas.com/articles/world-leaders-in-soya-so... https://www.world-grain.com/articles/10955-china-soybean-imports-forecast-to-fall https://www.world-grain.com/articles/10955-china-soybean-imp...
  - cuboidGoat 8y ago
    China, according to those links, purchases 60% of all global soybean exports. Looking up the figures, about another 30% is the EU, with 10% for everybody else. Now, the EU is increasing their US soybean imports, but they cannot make up the shortfall even if they wanted to, and are only really increasing their imports from the US because US soybeans are currently cheaper than South American ones. Also, the EU are not really that interested in helping the US on this one without first getting concessions in the ongoing EU vs US trade war. Out of this, the EU have so far managed to get Trump to promise to drop much of the EU trade war in return for the EU buying more US soybeans, which is something the EU were going to do anyway and as I said before, will only cover a fraction of the reduction in US exports to China. Also, the EU continuing not to target US soybeans exports is all rather dependent on Trump keeping to his word on not continuing the EU part of his trade war, if he restarts it, those reassurances are going to leave the table.
- sonnyblarney 8y ago
  Not quite. The demand for Soybeans globally has not changed. Tariffs in China really will just mean that buyers and sellers will shift around. Chinese will now buy Soy from Brazil, thus avoiding tariffs, and rather than buying more expensive Soy beans from Brazil (because of more demand), those other buyers will shift to buy from the US. Chinese tariffs on commodity goods won't have an effect if there a good number of buyers and suppliers.
chongli 8y ago
What a strange phenomenon. So essentially Trump is subsidizing the Chinese government.

SubiculumCode 8y ago

Point number two has been preoccupying my brain the last few months. Our system of electing presidents tend to hinge on several swing states, and in those states, a few key districts, and this means that our elections are vulnerable to foreign influence much more so than if, say, presidents were elected by popular vote. Protecting elections may mean ending winner take all electoral college system.

macintux 8y ago
> Protecting elections may mean ending winner take all electoral college system. I think 2016 proved that the electoral college is not supplying the adult oversight that the founders intended.
- SubiculumCode 8y ago
  That may or may not be, but in the end it is a different question than the one I raised. One might have an electoral college system without a state by state winner take all, which can lead to particular districts in particular states having outsized influence on the national election, and as such presents itself as a manageable target for foreign influence campaigns. This seems, to me, a national security risk that should be mitigated...and is much easier to mitigate than, for example, depending on efficient removal of foreign state-powered advertising campaigns.
- someone454 8y ago
  Or maybe it is, and the adults actually won.
  - panzagl 8y ago
    If I don't like the outcome the system must be broken...
  - sv123 8y ago
    Nope
  - int_19h 8y ago

oh-kumudo 8y ago

Well for both countries the export to each other is only a fraction of their economy...China is not what it is used to be.

mistermann 8y ago
Exports / Imports, % of GDP, 2016 Source: National Accounts at a Glance https://data.oecd.org/trade/trade-in-goods-and-services.htm https://data.oecd.org/trade/trade-in-goods-and-services.htm Imports | Exports China 17% | 20% US 15% | 12% China seems to be at a fair disadvantage on exports dependence, but you're right, China is far less export dependent than one might think. The devil is in the details of course, but I'd venture a guess that US imports would tend to be more discretionary than China's, but who knows.
- throwaway2048 8y ago
  Keep in mind much of china's trade with other nations is based upon the presence of US corporation's manufacturing and supply chains.

makomk 8y ago

Based on the figures I could find, China imported $130 billion dollars worth of goods from America last year, of which $12.3 billion was soya beans. The most likely reason they imposed high tariffs on soya beans is precisely because they had so few actual options. (I know the media portrayed it as some kind of genius move at the time, but that's been looking increasingly dubious. It's not clear that they will be able to feed their livestock at reasonable prices.)

bluGill 8y ago
To a large extent the tariffs were imposed just before China traditionally started importing from Brazil, so for several months they had little effect on actual supply (a few ships did get turned away, but for the US it was slow season). Brazil has ended their shipments, and China is turning to other countries which are selling at inflated prices and then buying from the US. Don't paint the above as good for the US - things are bad for farmers, they are selling below what the cost would have been. I'm pointing out that the picture is (as always) complex.
394549 8y ago
Also, soybeans are a fungible commodity. As China buys up non-American soybeans, American exports will (with effort) be redirected to the customers who were originally planning to buy non-American soybeans that the China bought. The tariffs will be more of a hiccup for American farmers. On the other hand, most of China's exports aren't fungible commodities, so it will have more difficulty finding substitutes for the reduced demand caused by American tariffs.

liftbigweights 8y ago

> Now reading this article, it seems being a predominantly export driven economy and having a huge trade surplus with the US, the Chinese don't really have that much leverage. You shouldn't be basing your opinion on opinion news articles. Just 2 years ago, the nytimes was telling us the world was headed to economic armageddon with no end in sight. Look at us now. One day the news tells you Trump is going to start ww3 with china and the next you'd think china is weak and have to submit to Trump's demand. > Both of these thoughts arose from the fact that as a democratic country, the US would have to take into account both short and long term trade prospects. If that was the case, we wouldn't have the rust belt. We wouldn't have the collapse of detroit. We wouldn't have NAFTA or trade with China. Most americans were never for lopsided trade with china or mexico or even canada. I think foreigners have an idealized view of the US, democracy and how things work. Trade with china for the last 40 years was basically "wage arbitrage" ( which some might call exploitation of cheap chinese labor ). US corporations moved production to china to use the abundant and cheap labor. The reason why we didn't have tariffs on "chinese" imports is because most "chinese" imports to the US are actually american goods. Or it's a sino-american partnership/company. This is why Trump is getting so much backlash from corporate america. The tariffs hurt american goods.