6 ms·

The trade-off feels wrong from a naive perspective. Huawei withholding tech can damage US tech competitiveness, whereas the US withholding soybeans... does what

The trade-off feels wrong from a naive perspective. Huawei withholding tech can damage US tech competitiveness, whereas the US withholding soybeans... does what? Raise the prices for soybeans in China? Make China go elsewhere for soybeans that the rest of the world can provide? Can the US similarly turn to alternative Huawei?

mlindner 7y ago
You've got it quite backward. First, China halted soybean sales, US never withheld soybeans. Secondly, US withheld licensing Huawei again for tech sales, as in it blocks US companies from selling to Huawei.
- JustARandomGuy 7y ago
  >China halted soybean sales, I'm sure it was a mistype, but China halted soybean purchases (not sales) from US soybean farmers and now possibly other agricultural products.
  - deleted 7y ago
    [deleted]
  - deleted 7y ago
    [deleted]
  - Scoundreller 7y ago
    According to: https://oec.world/en/profile/hs92/1201/ https://oec.world/en/profile/hs92/1201/ China imports 63% of traded soybeans. The US accounts for 38% of exported soybeans. Based on that alone, China is going to have to reduce its soybean consumption. This is beyond one of those silly games where one country puts up a wall, so everyone else just navigates around it and wastes money on shipping.
    - Junk_Collector 7y ago
      Soybeans account for about 2.5% of China's total imports and almost 10% of their imports from the US. Even though, on the whole, China exports a lot to the US and imports little (about 4 to 1 I think), China is a big food importer and the US is a big food exporter. When the US starts hitting Chinese companies with tariffs or through license restrictions, China doesn't have much space to retaliate because they have already closed off as much of their market as they can and only really import food in large quantities for consumption inside the country. They can't restrict imports of integrated circuits because we are doing that to them on our end and that basically leaves advanced medical technology and petroleum as strong retaliatory targets for China which China desperately wants. Of course, the consumer ultimately pays for tariffs, or scarcity in this case, so we can expect the costs of food to rise in China. Couple this with the slowing economy and the recent devaluing of Chinese currency it could be a squeeze on the Chinese middle class.
  - mlindner 7y ago
    Yes, fixed. Thanks. Edit: Apparently I can't edit it.
- deleted 7y ago
  [deleted]
thedudeabides5 7y ago
I’m pretty sure that’s the whole point. Who’s interest would it serve for the US to be entirely dependent technically from a company with published ties to the CCP state security apparatus.
tedk-42 7y ago
It's not an economic move, it's a political one. Trump needs votes from agricultural states like Ohio which would be severely impacted by these export cuts.
- reaperducer 7y ago
  You're almost right. According to this past Sunday's New York Times, the play here is that Trump raised tariffs on China this time because it refused to stop selling fentanyl to the United States. Naturally, this will be a big play in rural states where it's a big problem. For some reason, the Times was the only place I saw this reported. Every other medium I looked at just glossed it over as "Evil Trump is raising tariffs on China and that means your iPhone will cost more!"
  - rgbrenner 7y ago
    Google says the fentanyl part was on npr, wsj, reuters cnbc, bloomberg, etc. Trump even tweeted it. But oddly I didn't hear about this until your post. So thanks for mentioning it.
    - mbreese 7y ago
      Completely agree -- I didn't hear about it either until this post -- and I'm in an area of the country where this would be important news. But that's the problem with so much noise, when there is a sliver of signal, it just gets lost.
  - dirtyid 7y ago
    China rescheduled fentanyl in response to Trump on May 1st. https://www.whitehouse.gov/briefings-statements/statement-chinas-class-scheduling-fentanyl/ https://www.whitehouse.gov/briefings-statements/statement-ch... One month later: "Most fentanyl is now trafficked across US-Mexico border, not from China" https://wjla.com/news/nation-world/most-fentanyl-is-now-trafficked-across-us-mexico-border-not-from-china https://wjla.com/news/nation-world/most-fentanyl-is-now-traf... Because Mexico is importing fentanyl precusors from China and taking over distribution like everyone predicted. Not much more China can do, you can't exactly ban basic chemistry.
reaperducer 7y ago
the US withholding soybeans... does what? There was a piece about this on the radio a few months ago. It's actually a big deal. My memory isn't exact, because of the passage of time, but essentially, China needs America's soybeans because it can't grow enough of them on its own. And it needs the soybeans to feed its livestock in order to feed its people. The natural thought is, "China can just buy soybeans elsewhere." Which is true. Except that there are not enough countries producing soybeans for export to fill the quantity that China requires. A more important problem for China is seasonality. When America's soybeans are ready to harvest, Brazil's soybeans are just being planted, and vice versa. So it leaves China eventually in a position where it can't/won't get soybeans from the U.S., Brazil doesn't have any soybeans to send, and none of the other countries can make up the defecit. Therein lies the rub.
- petre 7y ago
  Totalitarian governments do not care too much about their people or what they're eating. For them people are mere means of production, just like tractors or medieval peons. They only care about exports and hard currency. If soybeans are used to feed what becomes exported goods (cattle, beef?), then it's a problem. If there's a shortage of soy sauce, no so much of a problem. Most of that would go to exports anyway, while the majority of Chinese people will use something else in their food.
- User23 7y ago
  Soybeans are literally a commodity. Some third country will just buy the US soybeans and sell them to China. Edit: Commodities are fungible. They are things like gold, pork bellies, soybeans, and so on where there is no meaningful difference based on where they were produced. Buyers from some third country will buy soybeans from the USA, relabel them as originating in their country, and flip them to China for a profit. Trade circumvention is nothing new[1]. The US seller doesn't even have to be complicit, once they deliver to the third party they have no control over the labeling and they're not liable to care much either. Edit: Regarding 5G hardware: "The basic idea is that there is little differentiation between a commodity coming from one producer and the same commodity from another producer. A barrel of oil is basically the same product, regardless of the producer. By contrast, for electronics merchandise, the quality and features of a given product may be completely different depending on the producer."[2] So, no, 5G hardware is not a commodity. [1] https://agmetalminer.com/2017/05/24/what-is-trade-circumvention-hint-its-certainly-nothing-new/ https://agmetalminer.com/2017/05/24/what-is-trade-circumvent... [2] https://www.investopedia.com/terms/c/commodity.asp https://www.investopedia.com/terms/c/commodity.asp

mlindner 7y ago

You've got it quite backward. First, China halted soybean sales, US never withheld soybeans. Secondly, US withheld licensing Huawei again for tech sales, as in it blocks US companies from selling to Huawei.

JustARandomGuy 7y ago
>China halted soybean sales, I'm sure it was a mistype, but China halted soybean purchases (not sales) from US soybean farmers and now possibly other agricultural products.
- deleted 7y ago
  [deleted]
- deleted 7y ago
  [deleted]
- Scoundreller 7y ago
  According to: https://oec.world/en/profile/hs92/1201/ https://oec.world/en/profile/hs92/1201/ China imports 63% of traded soybeans. The US accounts for 38% of exported soybeans. Based on that alone, China is going to have to reduce its soybean consumption. This is beyond one of those silly games where one country puts up a wall, so everyone else just navigates around it and wastes money on shipping.
  - Junk_Collector 7y ago
    Soybeans account for about 2.5% of China's total imports and almost 10% of their imports from the US. Even though, on the whole, China exports a lot to the US and imports little (about 4 to 1 I think), China is a big food importer and the US is a big food exporter. When the US starts hitting Chinese companies with tariffs or through license restrictions, China doesn't have much space to retaliate because they have already closed off as much of their market as they can and only really import food in large quantities for consumption inside the country. They can't restrict imports of integrated circuits because we are doing that to them on our end and that basically leaves advanced medical technology and petroleum as strong retaliatory targets for China which China desperately wants. Of course, the consumer ultimately pays for tariffs, or scarcity in this case, so we can expect the costs of food to rise in China. Couple this with the slowing economy and the recent devaluing of Chinese currency it could be a squeeze on the Chinese middle class.
- mlindner 7y ago
  Yes, fixed. Thanks. Edit: Apparently I can't edit it.
deleted 7y ago
[deleted]

thedudeabides5 7y ago

I’m pretty sure that’s the whole point. Who’s interest would it serve for the US to be entirely dependent technically from a company with published ties to the CCP state security apparatus.

tedk-42 7y ago

It's not an economic move, it's a political one. Trump needs votes from agricultural states like Ohio which would be severely impacted by these export cuts.

reaperducer 7y ago
You're almost right. According to this past Sunday's New York Times, the play here is that Trump raised tariffs on China this time because it refused to stop selling fentanyl to the United States. Naturally, this will be a big play in rural states where it's a big problem. For some reason, the Times was the only place I saw this reported. Every other medium I looked at just glossed it over as "Evil Trump is raising tariffs on China and that means your iPhone will cost more!"
- rgbrenner 7y ago
  Google says the fentanyl part was on npr, wsj, reuters cnbc, bloomberg, etc. Trump even tweeted it. But oddly I didn't hear about this until your post. So thanks for mentioning it.
  - mbreese 7y ago
    Completely agree -- I didn't hear about it either until this post -- and I'm in an area of the country where this would be important news. But that's the problem with so much noise, when there is a sliver of signal, it just gets lost.
- dirtyid 7y ago
  China rescheduled fentanyl in response to Trump on May 1st. https://www.whitehouse.gov/briefings-statements/statement-chinas-class-scheduling-fentanyl/ https://www.whitehouse.gov/briefings-statements/statement-ch... One month later: "Most fentanyl is now trafficked across US-Mexico border, not from China" https://wjla.com/news/nation-world/most-fentanyl-is-now-trafficked-across-us-mexico-border-not-from-china https://wjla.com/news/nation-world/most-fentanyl-is-now-traf... Because Mexico is importing fentanyl precusors from China and taking over distribution like everyone predicted. Not much more China can do, you can't exactly ban basic chemistry.

reaperducer 7y ago

the US withholding soybeans... does what? There was a piece about this on the radio a few months ago. It's actually a big deal. My memory isn't exact, because of the passage of time, but essentially, China needs America's soybeans because it can't grow enough of them on its own. And it needs the soybeans to feed its livestock in order to feed its people. The natural thought is, "China can just buy soybeans elsewhere." Which is true. Except that there are not enough countries producing soybeans for export to fill the quantity that China requires. A more important problem for China is seasonality. When America's soybeans are ready to harvest, Brazil's soybeans are just being planted, and vice versa. So it leaves China eventually in a position where it can't/won't get soybeans from the U.S., Brazil doesn't have any soybeans to send, and none of the other countries can make up the defecit. Therein lies the rub.

petre 7y ago
Totalitarian governments do not care too much about their people or what they're eating. For them people are mere means of production, just like tractors or medieval peons. They only care about exports and hard currency. If soybeans are used to feed what becomes exported goods (cattle, beef?), then it's a problem. If there's a shortage of soy sauce, no so much of a problem. Most of that would go to exports anyway, while the majority of Chinese people will use something else in their food.
User23 7y ago
Soybeans are literally a commodity. Some third country will just buy the US soybeans and sell them to China. Edit: Commodities are fungible. They are things like gold, pork bellies, soybeans, and so on where there is no meaningful difference based on where they were produced. Buyers from some third country will buy soybeans from the USA, relabel them as originating in their country, and flip them to China for a profit. Trade circumvention is nothing new[1]. The US seller doesn't even have to be complicit, once they deliver to the third party they have no control over the labeling and they're not liable to care much either. Edit: Regarding 5G hardware: "The basic idea is that there is little differentiation between a commodity coming from one producer and the same commodity from another producer. A barrel of oil is basically the same product, regardless of the producer. By contrast, for electronics merchandise, the quality and features of a given product may be completely different depending on the producer."[2] So, no, 5G hardware is not a commodity. [1] https://agmetalminer.com/2017/05/24/what-is-trade-circumvention-hint-its-certainly-nothing-new/ https://agmetalminer.com/2017/05/24/what-is-trade-circumvent... [2] https://www.investopedia.com/terms/c/commodity.asp https://www.investopedia.com/terms/c/commodity.asp