Thank you for that Osi, The USA is actually in a bigger mess...

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    Thank you for that Osi,

    The USA is actually in a bigger mess than Aus because the US has relied on high end manufacture (eg: aircraft, hi-tech equipment and Silicon Valley IT) but of course "Made in China 2025" has challenged/changed US competitive advantage in these high end products # & services.

    The US analysis linked below is lengthy & detailed and well worth reading because it addresses US deep seated fears that if the US does not take immediate and comprehensive action (not just balancing trade with China) that the US is in dire straits with respect to its high end manufacturing industry and its acces to these global markets.

    https://www.rubio.senate.gov/public/_cache/files/d1c6db46-1a68-481a-b96e-356c8100f1b7/3EDECA923DB439A8E884C6229A4C6003.02.12.19-final-sbc-project-mic2025-report.pdf

    IMO, Trump is doing the opposite to what the US needs when he cut the Jan 15th US/China trade deal. The deal give us suppliers preferred access to the Chinese market in ag & energy raw exports (wine is an exception) rather than US high end goods which ,up to 2015 , US Authorities assumed
    that US manufacturers would gain unfettered Chinese market access.

    While the Trump January deal puts money in farmers pockets , it simultaneously takes money out of the Battlers pockets who have to pay more for
    what was their Walmart bargains.

    our Government followed Trump in anti-China rethoric not realising that while Trump was running a $300 billion trade deficit with China , we were
    running a $45 billion USD ($61 billion AUD) surplus with China. Of course China is now dishing out a "Trump balance of trade" treatment to us
    which will balance our trade with China within a year. The first shots have been fired:
    (a) ag exports .........................................Minus $15 billion
    (b) Chinese inbound tourists ..................minus $10 billion
    (c) Chinese foreign students...................minus $5 billion
    (d) Wine:.................................................minus $2.5 billion

    That leaves $33.5 billion in future thermal coal, met coal , LNG etc.
    (all IMO only)

    Since the GFC, China demand for these exports have significantly increased our prices so logically the sudden drop off of Chinese demand will have the opposite effect, IMO. Domestic prices of beef & wine are already dropping with Tassie salmon soon to follow, IMO.

    Unlike the USA (as outlined in the above link) all we have to do is to add value to our raw ores & energy exports, diversify trade away from China dependance , improve our trade surpluses (the choice to do nothing will drop our marginal global surplus to a massive $50 billion+ deficit which will knock the bottom out of our AAA rating IMO.)
    & our GDP and distribute the wealth equitably (not to a handful of billionaires)
    Cheers
    MM

    # The US biggest manufactured product export is aircraft and Covid-19 will knock the ass out of that for at least 2 years, IMO.
 
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