The shine seems to be coming off of the meeting with Xi and Trump. Key deputy in China says China will not be bullied or oppressed. Xi comments that denounced US protectionist trade practices. So I guess it's okay for everything in the US to be made in China and very little in China to be made in the US.
Sell beans. The down trend should continue soon.
I expect no deal any time soon. Possibly even until after the 2020 elections, at which time a reelected president Trump would have a strong hand. In order to get a deal sooner, Trump would have to make a weak deal (IMO), which he might choose to do just to get it behind him.
As for trade balances, it is very much a characteristic of FREE markets that trade is NOT balanced with all countries. Hard to imagine an American worker taking $250 (rural) to $500 (urban) per month as Chinese workers do. Trump demanding a balance is either ill informed or more of his usual bluster.
Is there a true conservative out there in MF land to back me up on that calculous?
You are correct that trade will never be 100% balanced in a free market, which is Trump's stated objective (Free Market), but you are laboring under a massive misconception if you are saying, as it appears you are, that labor costs are the final determinant in production location. If that were true, all cars in the world would be made in China and India.
Labor cost may not be everything, but cheap goods we buy at Walmart will never be made here with the large differential in labor costs. Car manufacturing is a different case.
Based on Trump's rhetoric, I don't think he is interested in free markets. He wants "targets" for trade balances. (unless he's lying)
It's a balancing act. Labor costs for large items are offset by transportation costs. Taxes, regulations are a few of the things that government can control to offset some of it.
But it all comes down to businesses competing to get the best product for the lowest cost to it's consumer. 1000's of factors figure in to the equation. Labor is a big one, but certainly not the only one. Not even the only big one.
Would one or more of those here that back the trade war tell me what a "Win" in this trade war will look like?
I think we have had a moving target on this thing since it started but am interested in seeing what the backers of the trade war think.
Labour costs will never be the same, even within a country, let alone country to country
What Trump should be doing is hammering away at the artificial trade barriers that make our products taxed at their border. That is usually called a customs excise tax or some other kind of tax on imported goods. Most countries have an excise tax which in a perfect world would not exist.
If these duties taxes etc were eliminated at least then it comes down to who produces for the least cost. Trump wanting the trade deficit to be equal shows how little he knows, and why china has some claim to dispute Trumps tit for tat war. However, once all taxes, tariffs etc are removed then Trump should call it a win for America as china does erect massive taxes, duties to cover most all imported goods, they don't want to compete with domestic production.
And of course china has to stop the stealing info about foreign investment that includes technology that they steal as part of the contract
Trump might need a lesson in trade issues, or maybe not. How can we know?? As mentioned above trade will never be equal dollar for dollar, but the import barriers need to go
Some compromise on dollar amounts with trade barriers might be a win-win that solves the problem.
China needs to say they had a win in something or they will never bring this thing to an end. Ditto for Trump.
However, I am not holding my breath..
What I am willing to say is that this will cause a lot of pain for a lot of people. Suck it up only goes so far, until it hits your pocket book and you just can't afford the pain any longer. Sorry, but some folks have to support a family and sucking it up does not put food on the table or pay the rent etc.