China Breaks Off Trade talks. Says America Needs to Show Sincerity Before Talks Resume.

LostMarbels said:

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The Real Reason American Jobs Are Going to China

The U.S. trade deficit with China was $419 billion in 2018. The trade deficit exists because U.S. exports to China were only $120 billion while imports from China were $540 billion.

Current trade deficit live, as in 05/18/2019 @ 2:24 PM EST:
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$13,000,000,000 decrease in deficit in one year. And it is still falling.

We are saving, or, making money by not even conducting trade with them.

Tariffs: (also live, and current to the time of post)
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Combined, the savings from the deficit, and the tariff income is $78,000,000,000. That is more money than profit on goods we have EVER exported to China in a year. That tariff income alone is more money than our exports.

What do we need to come to the table about?

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You seem to be confused. There is no "profit," unless you count the tariffs -- that are paid by Americans to the US government -- as "profits." That we are buying less from China is not a "profit" -- at best it is just spending less.

To use an analogy, you buy things for your home from Charlie. Then, one day, Charlie upsets you so you quit buying the things for your home from him. Does not buying from Charlie increase your "profit?" No, it just means Charlie has lost income. In fact, you may have lost income, as Charlie has also quit buying things from you. You can argue that Charlie is hurt worse but there is no "winner" here, per se. And you likely are losing money from not buying from Charlie -- beyond his not buying from you -- as you likely are still buying goods from others (maybe Karen, or Victor, or Ira -- or some combination), just possibly not getting the favorable deals that you got from Charlie.

Sure, maybe you'll start making some of the things yourself; or, to take this back to nations -- maybe we'll start making things again in the US. Of course, it takes some time to build factories and get them working. Additionally, the goods are likely to be more expensive (the reason the jobs moved away originally, US labor is expensive compared to labor in Asia). Last, quality may not be as good, particularly for the first several years, as the new workers in these factories will not have the experience of the workers in China.

The fact is, there is no profit from not trading with China. In fact, there are some clear expenses -- such as paying farmers for crops that farmers cannot sell, since China is no longer buying them. That isn't to say that the trade war is necessarily a bad thing, if it brings production back to the US, but it isn't "profit" and will likely lead to higher prices (with the increased labor costs, as well as the costs of building new factories).

LostMarbels said:

Title of OP:
China Breaks Off Trade talks. Says America Needs to Show Sincerity Before Talks Resume.

Who do you think 'we' is?

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Not to be trusted, according to your article.

The biggest question is what goods are you all talking about? Electronics? Ok, I would dare to say we are fine if they stop making consumer goods. So we don't get the brand new tv or phone we want. Also laptops, remote controls, PC's, tablets, appliances, and the like. So what goods from China is America absolutely dependant on? As in critically must have for infrastructure and running the county?

SimplyMe said:

The fact is, there is no profit from not trading with China.

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I went as far back as 1985. We have not made a dime for decades 'trading' with China. What profit? We have paid them trillions of dollars for the honor of also paying them for their goods.

Foreign Trade - U.S. Trade with China

LostMarbels said:

The biggest question is what goods are you all talking about? Electronics? Ok, I would dare to say we are fine if they stop making consumer goods. So we don't get the brand new tv or phone we want. Also laptops, remote controls, PC's, tablets, appliances, and the like. So what goods from China is America absolutely dependant on? As in critically must have for infrastructure and running the county?

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Are you suggesting that consumers stop consuming?

LostMarbels said:

I went as far back as 1985. We have not made a dime for decades 'trading' with China. What profit? We have paid them trillions of dollars for the honor of also paying them for their goods.

Foreign Trade - U.S. Trade with China

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If you want to make more money, sell them more stuff. How does a tariff accomplish this?

LostMarbels said:

So what goods from China is America absolutely dependant on? As in critically must have for infrastructure and running the county?

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One that I can think of off the top of my head is rare earth metals.

"China accounts for over 95 percent of the world’s production of rare earths."

"Rare earth metals are used to manufacture everything from electric or hybrid vehicles, wind turbines, consumer electronics and other clean energy technologies.[1] The elements are also important to national governments because they are used in the defense industry.[2] Twenty percent of rare earth demands are for use as permanent magnets.[2] Permanent magnets can be used for a variety of applications including serving as essential components of weapons systems and high performance aircraft."

They are so critical that they are some of the few things exempt from the Trump tariffs. But China could just decide not to sell them to us any more, as they did with Japan a few years ago when there were tensions there.

zephcom said:

There is a reason why 'trade wars' include the word 'war'. When a nation decides to go to 'war', the very very first step a nation needs to do is convince its population that a war is the right way to solve a particular problem. If a nation does NOT secure the backing of their people for the war, it will lose said war.

America has not done that critical first step. If I'm going to have to do without new consumer goods just because a know-nothing ignorant president issued a tweet one morning that he wants to raise tariffs, I'm not going to be happy. And HE is going to be the one I focus my anger at.

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I disagree -- Donald has declared a trade war, and his followers dare not question him.

zephcom said:

I thought that was the gist of my post. The nation, as a whole, has not been prepared for a trade war. Only those people who will blindly follow him are backing it.

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Fair enough -- but Donald has never cared a whit about the nation as a whole -- only those people who blindly follow him.

essentialsaltes said:

One that I can think of off the top of my head is rare earth metals.

"China accounts for over 95 percent of the world’s production of rare earths."

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Our current reserve is the 7th largest in the world at 1.4 million metric tons, and we are currently the 3rd largest producer of rare earth minerals in the world. The US didn’t have any rare earth mining in 2017. We stopped mining it around 2015 due to imposed Obama era mining restrictions.

Current production:




Trump signs executive order to expand critical minerals production, says it will end America’s ‘vulnerability’

https://www.doi.gov/sites/doi.gov/files/uploads/2017minerals.eo_.pdf

The ramp up is already on going.

Molycorp (NYSE:MCP)

With headquarters in Greenwood Village, Colorado, Molycorp claims to be one of the leading manufacturers of custom engineered rare earth and rare metal products in the world. The company produces materials from 13 different rare earths, plus yttrium, at a purity level of nearly 100 percent.

Currently, Molycorp is operating the Project Phoenix at its Mountain Pass site in California, which is a rare earth resource and production facility. The project, an expansion and modernization of the Mountain Pass mine, is intended to transform the asset into a technologically advanced rare earth production facility.

US Rare Earths (OTCBB:UREE)

The mineral exploration, mining and claims acquisition company is based in Plano, Texas, and was formerly known as Colorado Rare Earths. It has rare-earth mining properties in Colorado, Idaho and Montana, which together span more than 16,000 acres.

One of its assets, the Diamond Creek Project in Idaho, was recently evaluated for its estimated resources. Researchers found a number of individual rare earth elements present in notable quantities, including cerium, neodymium, lanthanum and yttrium.

Rare Element Resources (TSXV:RES)

Rare Elements Resources is a mineral resource company based in Lakewood, Colorado. Its main asset is the 100-percent-owned Bear Lodge Project located in Wyoming. According to the company website, this property has one of the largest disseminated rare earth element deposits in North America. Bear Lodge hosts both high-grade, light rare earth and heavy rare earth.

A 2012 study of the project determined its measured and indicated resources have increased by 65 percent since the previous year to reach 14.7 million tons at an average grade of 3.22 percent total rare earth oxides. Additionally, the inferred resource estimate rose to 31.4 million tons at 2.68 percent total rare earth oxides.

Texas Rare Earth Resources (OTCMKTS:TRER)

Based in El Paso, Texas Rare Earth’s flagship project is named Round Top. A preliminary economic assessment done in 2011 describes a tertiary rhyolite intrusion containing both heavy and light rare earth elements. Total rare earth element oxides (REO) are pegged at 299,500,000 kilograms of rare earth oxides graded 0.064 percent in the measured and indicated categories, with an inferred resource of 430,598,000 kg. The company announced a heap leach scoping study in July 2013 confirming recoveries of up to 79.9 percent.

Niocorp Developments Ltd. (TSXV:NB)

Niocorp, formerly Quantum Rare Earth Developments Corp., is developing the Elk Creek Carbonatite, which according to Niocorp, is the only primary niobium deposit in the United States. While niobium is not a rare earth element, the deposit also contains a high-grade rare earth deposit 2.5 kilometers from the niobium deposit. Historic total rare earth oxide (TREO) intercepts include 54.9 m of 3.30 percent, contained in 155 m of 2.70 percent.

LostMarbels said:

The biggest question is what goods are you all talking about? Electronics? Ok, I would dare to say we are fine if they stop making consumer goods. So we don't get the brand new tv or phone we want. Also laptops, remote controls, PC's, tablets, appliances, and the like. So what goods from China is America absolutely dependant on? As in critically must have for infrastructure and running the county?

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Resistors and capacitors.

Also ball bearings. Most things manufactured, for that matter, we either buy solely from China or buy enough that it's going to hurt a lot to lose their supply.

You might have missed where I pointed out that the DoD has been buying Chinese-made computers and other devices since the late 90s.

LostMarbels said:

I went as far back as 1985. We have not made a dime for decades 'trading' with China. What profit? We have paid them trillions of dollars for the honor of also paying them for their goods.

Foreign Trade - U.S. Trade with China

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In order to get realistic figures you would have to figure in how much we made exporting products which contain materials and components imported from China.

TLK Valentine said:

Are you suggesting that consumers stop consuming?

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No, but common household goods and luxury items will be coming from differnt sources. Or you will pay more to buy Chinese.

TLK Valentine said:

If you want to make more money, sell them more stuff. How does a tariff accomplish this?

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By plugging a $418 billion dollar hole. No business, or country in this case, can sustain a 450% yearly loss to revenue. Any company would immediately stop selling that product, and pay millions just to pull it off the market.

TLK Valentine said:

I disagree -- Donald has declared a trade war, and his followers dare not question him.

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His followers know he has been working to this end since day one. The plan is already in place, but never Trump.

zephcom said:

I think the point is that what Trump is doing is not going to get us to that place before we lose everything. If China shuts us down tomorrow, we are done. We simply can not ramp up that kind of production before we go under.

We don't have the labor pool needed for that kind of production. We don't have the factories built for that kind of production. We don't have anything in place to pick up the slack.

And Trump is picking a fight with China instead of putting money toward training our people for manufacturing or building factory space. We simply don't have the infrastructure in place to replace what China provides us with if they just slam the door on us.

I don't think anyone here thinks it isn't important for America to become more self-sufficient. It is just that nothing Trump is doing will get us to that point.

It isn't -just- the money. It is preparing America to take on a work load that we unloaded onto China a generation ago. There are laws that need changing, we need to change our perception of capitalism, we need to rebuild our infrastructure, we need to train our workers, we need to provide health care to our workers (we don't have as many as China has so we need to keep them healthy) and THEN we need to tell China we don't need them anymore.

Trump has everything backwards. And we will fail because we aren't prepared. And China KNOWS we are not prepared. If they pull the plug on us before we are ready, we lose.

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Yes.

China and Russia have been exploiting our romanticism and destabilizing the US for a generation also. China is more econ, Russia attack the moral and social foundation.

No one really cares, especially since we are *in* it - It either isn't happening, or It won't happen. We are a young nation used to "winning," and getting what we want... the rest of the world can be very patient when they want something.

RDKirk said:

Resistors and capacitors.

Also ball bearings. Most things manufactured, for that matter, we either buy solely from China or buy enough that it's going to hurt a lot to lose their supply.

You might have missed where I pointed out that the DoD has been buying Chinese-made computers and other devices since the late 90s.

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Trump agreed to a $2 trillion budget to address this issue along with other infrastructure needs. But never Trump. Dems in congress will not budge.

However imports from others such as Taiwan, Korea, Vietnam, South Korea, Malaysia, Singapore and Japan among others are on the uptick. Taiwan now has the highest growth in the region, with March 2019 3/12 growth of 15%, the third consecutive month of double-digit growth.

We are currently shifting markets and the trade war is boosting US electronics production.

US electronics production has been showing steady growth while China’s is decelerating. The three-month-average change in US electronics production versus a year ago (3/12) in March 2019 was 6.2%, the 12th consecutive month of growth.
Trade War boosting US electronics production

zephcom said:

America has not done that critical first step. If I'm going to have to do without new consumer goods just because a know-nothing ignorant president issued a tweet one morning that he wants to raise tariffs, I'm not going to be happy. And HE is going to be the one I focus my anger at.

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Yeah, here inlies the problem, most dems are so busy trying to get at Trump, they have no idea what he has already done in the first place.

Secondly, I personally do not care how angry someone gets about creature comforts, if we can secure our own technological needs for our country. This is the same country that has been installing bots, spyware, and malware into crucial components used in our military and infrastructure. Considering that, I realy don't care of someone gets a sweet deal on a tv. We need to produce our own if for nothing less than security and independence.