Bill Jencks

Obama's Tire Tariff Could Help the U.S. Win a Trade War with China

mna...In answer to your question, the WTO, IMF etc are all covert, American run institutions with large offices in Washington. It has also been well argued that the WTO is not an impartial economic organization, through the influence of such as the Washington Consensus on its rules regs and policies.

I wrote an article on the Washington Consensus some time ago which might help to prove these points:
slowsmile.hypocrisy.co.../

For all these biased reasons, I very much doubt that the Chinese can win their current case at the WTO tribunal.

Obama's Tire Tariff Could Help the U.S. Win a Trade War with China

Howard,

I certainly agree with you on those three points. But, President Obama appears to be still spending rashly. Even notable economists like Krugman are saying that he should actually be spending more!! When will they admit that America has accrued ENOUGH debt?

My consternation lies in why have there been no plans laid, as yet, to balance the deficits and pay back the massive government debts. Surely this is one economic point which, if not adequately tended, could bust America. Currently there is no overt attempt by the US governemnt to balance its budget or to balance its money supply. As for balancing trade, how is getting into a painful trade war with China going to help this problem?

The current monetary policies of Obama are so economically illogical at the moment, I am seriously coming to believe that he actually wants to bust the dollar and, with it, the American economy.

After all, US Government planners aren't that dumb, are they?

Obama's Tire Tariff Could Help the U.S. Win a Trade War with China

"The issue at stake between the United States and China is GDP, which as Adam Smith pointed out is the real "wealth of nations". Balanced trade would lead to investment in American production which would enhance America's GDP. Growing trade deficits would keep us in a state of perpetual depression. "

This statement is very peculiar. GDP is indeed the wealth of Nations, but is it good for that wealth to be wholly dependent on foreign credit feeding insatiable US debt, as compared with China, whose economy is wholly based on production with the reward of savings? Do you regard America's current deficits as no problem then? Do you regard America's national debt of $12 trillion OK? Do you regard America's Fiscal Debt of £65 trillion trivial and manageable? It is also mainly US govt. Keynesian policies that are creating all this unmanageable debt, not just trade with China.

Hardly a balanced economy, in fact Adam Smith's jaw would probalby bounce off the ground and hit the ceiling if he saw America's economic state today.

Obama's Tire Tariff Could Help the U.S. Win a Trade War with China

Howard,

Thanks for your comments. Your most telling argument was:

"I am not so pleased as you that the United States gains moral highground when it engages in unilateral free trade with China. I would rather see economic high ground."

Personally, I don't see how you can seperate them. But, in your case, what about the law of precedent?

If America has been actively protectionist for the last 25 or so years -- which she has, and well before China's moves -- discreetly applying its own self-serving economic rules and regs via institutions like the WTO and the IMF to "help under-developed countries" for decades via The Washington Consensus(Google it sometime -- it's harsh, blatantly protectionist regs and policies will surprise even you), then how can you blame China for adopting her own discreet protectionist policies in reply? If your still in doubt, a read of "Super Imperialism: The Economic Strategy of American Empire" by Michael Hudson would, perhaps, fullly clarify the one-sided economics of America's intent over the last quarter century.

After all, China has had plenty of time to learn and copy The Master here, right? Like I said, there's a precedent here that has been set a long time ago by the US.

Therefore, how can you complain about China's protectionist policies, when the American government has been protectionist for decades now?

Or is it to be one economic law for America and another for the Rest of the World?

Obama's Tire Tariff Could Help the U.S. Win a Trade War with China

Also you mention America insisting on "balanced trade". Really? According to whose rules -- America's? What about the "free market" -- which is something not seen in the world for about the last 100 years.

And what about the so-called no-protectionist-policy agreement at the last G20 in London. I might also add that the G20 agreement and Obama's agreement to it succeeds and comes after the WTO agreements with China in 2001, therefore nullifying its clauses.
Obama's officials at the last G20 also worked very hard to support non-protectionist policies.

Obama has plainly broken this G20 agreement by instituting self-serving protectionist policies on China.

Therefore Obama's world leadership dwindles in the eyes of the rest of the world because Obama can't keep his word.

That's how it will be seen outside America by China, Russia, the Mid-East states and probably Europe.

Good for America?

Obama's Tire Tariff Could Help the U.S. Win a Trade War with China

I'm afraid your dreaming wildly.

My evidence covers more than just tires:
slowsmile.hypocrisy.co.../

Also in the news, a Chinese Treasury official on a visit
to China openly advised the Chinese to diversify out of Dollars
into other currencies and gold. He thought "this was a good
idea..."

Evidence from Reuters:
www.reuters.com/articl...

I think China is winning the war, don't you?

Will China Continue to Buy U.S. Debt?

Between 2002 and 2004, the dollar value went down by 24%. Between 2004 and 2006 the dollar value went down a further 12% - and between 2002 and now, dollar value has probably depreciated by 50%.

So - IN JUST 7 YEARS - dollar value has dropped a massive 50%.

So here we have the US government's desperate sell of US Treasuries to keep her debt and economy afloat, and then, on the other side we have China, Japan and other US Treasury purchasing countries wondering whether these longterm US Treasuries will be worth anything at all at maturation in 10, 20 or 30 years.

Who is the US Govt. trying to kid?

Will China Continue to Buy U.S. Debt?

China has already said that their purchase rate for US Treasuries will be reverting to pre-Bailout levels - ie will be muxh less than now. And with US Fiscal Debt continuing to skyrocket towards Mars, I would say this is a bad turn of events for America.

Add to this that China has been purchasing fairly large quantities of gold in the last several months(spot gold has gone up 20% since Oct 2008), and I think we might have an inkling in what direction China is headed with her "savings".

But I still read tracts of opinion like, "...Ah, but China must support the American Debt, otherwise she will lose her biggest market !!"

China is, at the moment, gearing up to her domestic market(which consists of 1.3 billion people, 4 times the population of the US) and at the same time will decouple from the dollar and switch her external markets to India, The Middle East and Europe(as a whole a far larger market than America) instead of the US.

The fact is without China, or some other idiot paying the US Debt, the dollar and the American Economy will collapse - and this is a fact. The US government has lost control of its own dollar internationally, causing a huge weakness in America's influence and the reason for this is simple.

The US government has either forgotten or simply refuses to look after its own huge fiscal debt. This is clearly apparent in US fiscal policy.

After all, why the hell should ANY country pay another country's debt for them?

Laughable.