China offered a trade alliance with EU against the US – and was rejected


Never one to act without a long-term strategic plan, Beijing’s approach to cozy up with Europe may have an entirely different motive than isolating Trump: China’s offer at the upcoming summit to open up reflects Beijing’s concern that it is set to face tighter EU controls. Just like in the US, the European Union is seeking to pass legislation to allow greater scrutiny of foreign investments."

Said otherwise, China is suddenly scrambling because it realizes that unless it locks up Europe, it may well be Trump who succeeds in convincing Brussels to sign a bilateral deal with the US, at the expense of cracking down even more on China, a move which would send China’s annual GDP growth well below 6% as Beijing loses full access to its biggest trading partner.

Summarizing Europe’s position, a third diplomat told Reuters quite simply that “we don’t know if this offer to open up is genuine yet,” adding that “it’s unlikely to mark a systemic change.”

To be sure, European envoys say they already sensed a greater urgency from China in 2017 to find like-minded countries willing to stand up against Trump’s “America First” policies. And yet, according to the Reuters report, Europe is not one of those “like-minded countries.”

Almost as if everything that is publicly taking place on the international stage is nothing but a spectacle, one in which everyone’s true motivations are 180 degrees the opposite of what is stated."  Zerohedge & SF


 So, the Europeans don't want to play on the Chinese team against Trump and the US economy?  How strange …  Perhaps they realize that the Chinese Communist Party controls all those companies that Europe trades with and that the CP China has the same ambitions vis a vis Europe that it has against everyone else.

There is a defeatist attitude in much of the US trading and financial communities with regard to Trump's struggle to create a level playing field in international trade, a playing field that would effectively eliminate the long term trade privileges that the US has granted the world since the end of WW2.

The Democrats are hoping that the US loses the tariff struggle with China and all others.  Bill Maher said they should pray for a recession as a way to defeat Trump in November and 2020.  Ah, sorry, he would not pray for anything.  That was just rhetoric on his part.  But in the money, money before everything side of the population there is also a great sighing and wincing in the face of actual UNHAPPINESS on the part of the Chinese.

Well, pilgrims, look at the graph above.  The Chinese sell incredible amounts of this and that to entities in the US and buy much smaller amounts of that and this in the "Land of the Free and the Home of the Brave."  As a recovering business person I can tell you with some certainty that if you are as dependent on your usual  buyers as the Chinese are on us you are really vulnerable to the political entity that sets trade and economic policy for your buyers.  This relationship is not really reciprocal in the circumstance of the massive imbalance in China/US trade. 

As an example we have the matter of soy beans.  The Chinese buy huge amounts of soy beans from US suppliers.  The argument is made that the Chinese could switch to Brazilian sources.  Brazil is the only supplier in the world equivalent to the US in capacity, but Brazil could not easily increase production capacity to cover large Chinese purchases and Brazil's present customers in the world would still need soy beans.  US suppliers are now exploring future sales into those markets.  In truth there are only so many soy beans in the world. This situation is typical of many China-US trade  issues.

The US has the big guns in this confrontation.  If Trump does not give up he is like;y to win.  What would the win look like?  I suspect it would be a pathway to Chinese abandonment of outright mercantilism and a long term  road plan moving toward zero/zero/zero. in the way that Trump called for in Quebec.  pl

This entry was posted in As The Borg Turns, China, The economy. Bookmark the permalink.