Monday, November 14, 2016

are americans ready to consume less?

I'm fascinated to see how Trump responds. This will be how we get jobs back to America, but is the middle class willing to pay more for their trinkets? Are they willing to do without during the transition? Many of the raw materials in modern devices are primarily sourced from China - does Trump have alternative sourcing ideas? Will Trump create incentives to move industries back to the US before the trade war starts? Will China resort to the financial nuclear option - US Treasury bond dumping?
The Guardian | China threatens to cut sales of iPhones and US cars if 'naive' Trump pursues trade war
US president-elect Donald Trump would be a “naive” fool to launch an all-out trade war against China, a Communist party-controlled newspaper has claimed.
During the acrimonious race for the White House Trump repeatedly lashed out at China, vowing to punish Beijing with “defensive” 45% tariffs on Chinese imports and to officially declare it a currency manipulator.

“When they see that they will stop the cheating,” the billionaire Republican, who has accused Beijing of “the greatest theft in the history of the world”, told a rally in August.
On Monday the state-run Global Times warned that such measures would be a grave mistake.
“If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance and incompetence,” the newspaper said in an editorial.
The Global Times claimed any new tariffs would trigger immediate “countermeasures” and “tit-for-tat approach” from Beijing.
“A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”
“Making things difficult for China politically will do him no good,” the newspaper warned.

China’s foreign ministry has used more diplomatic language to caution Trump not to square up to Beijing.
Foreign ministry spokesperson Lu Kang told reporters last week: “I believe that any US politician, if he takes the interests of his own people first, will adopt a policy that is conducive to the economic and trade cooperation between China and the US.”

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