Generational Dynamics World View

[John J. Xenakis]

** 08-May-2019 World View: Details of US-China trade deal collapse emerge

According to a new report, the current US-China trade deal crisis
began late Friday last week, when China sent the Trump administration
an edited version of the 150-page draft trade agreement that they had
been negotiating for months. The edits reversed all of China's
commitments in the areas of theft of U.S. intellectual property and
trade secrets; forced technology transfers; competition policy; access
to financial services; and currency manipulation.

It's becoming increasingly clear what happened. During the months of
negotiations, the Chinese negotiators had made numerous commitments to
end China's illegal trade practices. On Friday, China threw out all
its commitments.

This is from the Reuters report:

Quote: "The diplomatic cable from Beijing arrived in
Washington late on Friday night, with systematic edits to a nearly
150-page draft trade agreement that would blow up months of
negotiations between the world’s two largest economies. ...

The [edited] document was riddled with reversals by China that
undermined core U.S. demands. ...

In each of the seven chapters of the draft trade deal, China had
deleted its commitments to change laws to resolve core complaints
that caused the United States to launch a trade war: theft of
U.S. intellectual property and trade secrets; forced technology
transfers; competition policy; access to financial services; and
currency manipulation.

U.S. President Donald Trump responded in a tweet on Sunday vowing
to raise tariffs on $200 billion worth of Chinese goods from 10 to
25 percent on Friday – timed to land in the middle of a scheduled
visit by China’s Vice Premier Liu He to Washington to continue
trade talks.

The stripping of binding legal language from the draft struck
directly at the highest priority of U.S. Trade Representative
Robert Lighthizer - who views changes to Chinese laws as essential
to verifying compliance after years of what U.S. officials have
called empty reform promises.

Lighthizer has pushed hard for an enforcement regime more like
those used for punitive economic sanctions – such as those imposed
on North Korea or Iran – than a typical trade deal.

“This undermines the core architecture of the deal,” said a
Washington-based source with knowledge of the talks."

The Chinese have a three-millennia belief that they have a mandate
from heaven, and that you and I and everyone else in the West are
barbarians and vassals. The Chinese Communist Party (CCP) have built
their entire economy on the principle that it's OK to steal anything
they want from the barbarians because, after all, we're just
barbarians.

I want to emphasize that the Chinese people are not at fault here.
The same, identical Chinese people have thrived in Taiwan and colonial
Hong Kong. The governments of Taiwan and colonial Hong Kong have been
far superior to the pathetic CCP, which is committing genocide and
ethnic cleansing of Uighurs, is violently cracking down on Buddhists
and Christians, demolishing churches and temples, and is pathetically
terrified of the cartoon character Winnie the Pooh because Xi Jinping
looks like him. The great Chinese people in China are being crushed
and victimized by the evils of the CCP, which is why the Chinese
people in Taiwan are ten times wealthier and happier than the Chinese
people in China.

The gloves are really coming off now. Both the Chinese and American
negotiators are playing hardball. Right now, it appears that on
Friday massive new tariffs will be placed on Chinese imports. China
will retaliate with tariffs on American goods.

Possible scenarios:

• US-China negotiators will reach a new agreement quickly (not
  likely)
  
  
• Trump will postpone the new tariffs
  
  
• The tariffs will go into effect on Friday (likely)
  
  
• The tariffs will continue for months (likely)
  
  
• The Chinese economy will be hurt (likely)
  
  
• The Chinese economy will be devastated (unlikely but possible)
  
  
• The American economy will be hurt, but only in pockets
  
  
• The tariffs will trigger a stock market panic (unlikely but
  possible)
  
  
• The stock market will mostly discount the new tariffs in the next
  few weeks (likely)

So there you go, people. Place your bets!

---- Sources:

-- Exclusive: China backtracked on nearly all aspects of U.S. trade
deal - sources
https://www.reuters.com/article/us-usa-t...SKCN1SE0WJ
(Reuters, 8-May-2019)