At the same time, the US Trade Rep has stated that US-tariffs on China represent leverage over Beijing.
To summarize recent escalation:
First Round of Fed Hike has started. Goal is to reduce consumer demand, with China’s economy as its main target.
More Fed Hikes are expected over the next few months, which will have major cumulative effects on China
NATO has “joined the game” highlighting China as a strategic challenge for the world
US is continuing the China Tariffs, aware that it gives good leverage over Beijing
Blacklist of Chinese companies remains in place. China has been cut off from TSMC semiconductors for 3 years now - and its really feeling the sting now
China has yet to vaccinate its population with mRNA type vaccine.
While Xi is doing a victory lap in Hong Kong, the pressure is amping up in China. The communist plenary session is in November - expect to see economic and military escalation against China in the near future.
Still it is a question as to what November will look like, and if China will try to invade Taiwan. Hypothetically, based on Russia’s buildup in December 2021, it took about 2-3 months to position its military - that would put potential Chinese troop buildup starting in end of August. The Allied forces must continue to do things via trade and military deterrence to prevent an invasion from happening.
Bad signal. China has not made any concessions to earn any such drop in tariffs. They are still a genocidal oppressive dictatorship threatening War and imprisoning it’s own people under horrific policies — which by the way is the same country that plunged the entire planet into a 2 year lockdown.
If the tariffs drop at this point, it can only mean that the tariffs are no longer useful and have run their course — meaning further escalation awaits.
China is begging every day for the Trump Tariffs to be dropped. This suggests that the US tariffs on Chinese goods is working extremely well.
China exhausts itself continuously claiming that the China tariffs hurt the US consumers but as the economic landscape has evolved, it would seem that removing them at this stage would yield little improvements for US consumers. Thus the US has been in a year long period of “mulling”. “Strategic mulling” is an interesting tactic, I just hope the US can stand strong against China’s incessant demands.
Examples like this from Chinese propaganda outlets:
China meanwhile tries very hard to emphasize this point daily – sometimes several times a day across different articles in the same propaganda outlet.
On the US side of things, Diplomat suggests “its too little, too late”.
The Trump Tariffs should merely serve the purpose of steering capital & investments away from China. Bringing back jobs to the US is not the primary goal. The primary goal is to contain an increasingly aggressive China and maintain a Free and Open Indo-Pacific.
They wouldn’t knock down inflation but would wallop American businesses, workers and national security.
The Section 301 tariffs were a response to decades of Chinese intellectual-property theft and other unfair trade policies
Beijing is currently engaged in an all-of-society push for global economic and military pre-eminence. Government-subsidized Chinese companies dominate several strategic sectors, including the renewable-energy supply chain and commodities such as steel and rare-earth metals, and the resulting profits and technology are being funneled into a multibillion-dollar overhaul of the People’s Liberation Army. Now outfitted with the world’s largest army and navy, the PLA is using its newfound power to threaten U.S. interests and allies
Chinese intellectual-property theft costs the American economy between $225 billion and $600 billion a year. China is the world’s top source of counterfeit and pirated goods; in 2020 alone, $1.03 billion of fake products from China were intercepted at the U.S. border. The FBI estimates it opens a new economic-espionage case against Chinese actors every 12 hours, and its China-related economic espionage caseload has increased 1,300% over the past decade.
One can only hope the Biden administration makes the choice that supports American workers, businesses, and fair trade across the world.
US Commerce Department says Russia Sanctions are template to counter China
Pelosi schedule to visit Taiwan again in August (previous visit canceled due to covid); Biden says “military thinks its not a good idea”
China threatens “grave consequences” over Pelosi visit to Taiwan
EU VP and delegation visited Taiwan this week
Taiwan Han Kuang drills scheduled next week as preparation in case of Chinese invasion
US “strategic mulling” of dropping tariffs persists, annoying China
China maintaining Zero-Covid policy as a weapon against US trade war. US is calling China’s hand, strategically delaying progress on tariffs, leading China to draw out their covid policy even more. How much pain is China willing to endure in order to strain US supply chains?
China meanwhile bleeds capital. Foreign direct investment has collapsed across China
China faces overseas debt crisis
Chinese run on banks over housing crisis, tanks on the streets in at least one area
US Official Sees Curbs on Exports to Russia as Template for China
Momentum from work on Russia can be used to counter Beijing
Estevez calls himself chief US technology protection officer
The US’s successful collaboration with 37 other nations that’s driven down exports to Russia serves as a blueprint for a new regime on tackling threats from China, the head of the Commerce Department’s Bureau of Industry and Security said.
Washington has imposed a wave of restrictions on exports to Russia since it invaded Ukraine in February, cutting President Vladimir Putin off from the majority of the technology needed to sustain the war. Countries joining the US in instituting the controls have included Japan, Australia, and European Union members.
US and China are in a race of “how low can you go”, wielding the weight of their recessing-economies against each other.
Who will tap out first? Will US tap out first under pain of supply chains, or will China tap out first under pain of dropping demand? Or will there be a Military confrontation before it gets to that?
Allied Nations expect to follow US lead on rate hikes, compounding the issues for China into a global one.
Biden-Xi call expected this week amid Pelosi’s potential visit of Taiwan increasing tensions.
Biden to discuss Taiwan and China Tariffs
Biden Admin has not announced a decision on Tariffs
some indications are that Biden might suspend some tariffs, but create new tariffs on other products
US Reagan Carrier and strike group departed Singapore on its way to the Taiwan Strait
Global Times claims China’s response to Pelosi visiting Taiwan will prompt “shocking military response”
Not much meat in the press call, but if one were to make some insights from it, it would appear the relationship is in dire straits for the Tariffs, which kickstarted this whole series of events, to barely be mentioned in the call. Very rough times ahead for US-China relations.
Q Hi. Thanks for taking my question. The readout you gave and the readout that was sent around doesn’t mention whether tariffs were discussed. I’d just like to ask that question. Did they get into that at all? Has there been a discussion of if the U.S. removed some tariffs, is China reciprocating by moving — removing some of the tariffs that it imposed in retaliation?
And now that this call has been completed, does that sort of clear the way for President Biden to make a decision on what he’s going to do about tariffs?
SENIOR ADMINISTRATION OFFICIAL: Great, thanks. Thanks so much. It’s funny when other stories push what has been the number-one story lower down the totem pole. I was waiting for that one.
Yeah, so the — on the question of tariffs, President Biden explained to President Xi, you know, President Biden’s core concerns with China’s unfair economic practices, which harm American workers and harm American families. But he did not discuss any potential steps he might take with President Xi. And I would — it would be wrong to believe that somehow a decision on any next steps was somehow waiting for this conversation.
From NPR:
Xi’s warning on Taiwan:
“Resolutely safeguarding China’s national sovereignty and territorial integrity is the firm will of the more than 1.4 billion Chinese people,” said the statement. “Those who play with fire will perish by it.”
Officials stated that Chinese leadership may have felt that the US was not taking China’s warnings seriously enough, hence the increasingly aggressive threats.
Xi’s warning on decoupling:
“Attempts at decoupling or severing supply chains in defiance of underlying laws would not help boost the U.S. economy,” the statement said. “They would only make the world economy more vulnerable.”
China’s commerce ministry said on Friday that a major new chips act passed by the U.S. Congress will distort the global semiconductor supply chain and disrupt international trade.
Today China announced Live Fire Exercises on the coast of Fujian. In the past, China has launched missiles over the Taiwan Strait into shipping lanes leading to Taiwan. US Military is watching developments closely. USS Reagan Carrier Strike Group is heading to the Taiwan Strait.
Amid a flurry of unconfirmed reports that Pelosi may visit Taiwan, the US has deployed ships to the Taiwan Strait. Now it’s also important to note that US ships, along with UK, Germany, Japan, Australia have actually been frequently deployed to the South China Sea since the COVID virus hit the world in 2020.
TSMC has come out to say that if Beijing invades, the chip fabs will be “non-operable” – this is a major issue for the world.
China’s Zero-Covid policy is gutting it’s long term expat communities, creating a labor shortage for Expert Talent. (Note that for a decade China has been poaching Experts in all fields from around the world, offering them very high salaries for access to know-how) The exodus of field experts can be seen as similar to the Jewish exodus of Intelligentsia to the United States in the lead up to WWII.
Xi Jinping urges “United Front” to step up operations at home and abroad. China is looking for all-hands-on-deck response to the Allied Forces.
China has also announced Live Fire exercises in the waters around Taiwan. (Chinese propaganda link)
“America stands with Taiwan”
Note that the quality of reporting from the South China Morning Post is changing, with more frequent CCP party agenda being pushed. China’s top priority is to win the trade war.
Chinese Communists continue begging the US to drop the tariffs. They whine “What is taking so long?”
As highlighted in previous posts, “Strategic Mulling” has been the Biden admin approach to China and the Tariffs issue. China is growing more and more impatient, and its possible they may reveal their hand which would offer the US an opening to counter.
Tariffs were just a short while ago the absolute top item on the agenda in talks between US and China. China has consistently cried and begged for the tariffs to be dropped, indicating their powerful effect on China’s economy (regardless of what the media has projected thus far).
Now as China continues to escalate tensions using aggressive military exercises and rocket launches, the US is about to respond with a series of large scale Taiwan Strait Transits. It will be a powerful show of force on China’s shores, and a method to research Chinese air/land/sea based detection systems up close.
These transits may include other forces such as Japanese, Australian, German, and British navies, with Philippines Navy continuing to deploy and monitor areas along the Bashi and Batanes Islands.
Also notable is China’s huge blunder of launching missiles into Japan’s Exclusive Economic Zone. These waters extend around the Japanese island of Yonaguni which is only 65 miles from Taiwan’s east coast.
Details listed on Japan’s Ministry of Defense website, categorized as Chinese Ballistic Missiles. This is the first time Chinese missiles have landed in Japan’s EEZ.
Very strong words from US Secretary of State Antony Blinken during Phnom Penh, Cambodia meeting:
U.S. Secretary of State Antony Blinken said Friday that China’s military exercises aimed at Taiwan, including missiles fired into Japan’s exclusive economic zone, represent a “significant escalation” and that he has urged Beijing to back down.
“I reiterated the points that we made publicly as well as directly to Chinese counterparts in recent days, again, about the fact that they should not use the visit as a pretext for war, escalation, for provocative actions, that there is no possible justification for what they’ve done and urge them to cease these actions,” he said.
Blinken said the U.S. stands in “strong solidarity” with Japan following the “dangerous actions China has taken.”
Both the US and China are creating documents which cement their positions on Taiwan.
US is processing/delaying the Taiwan Policy Act of 2022, a major addition which establishes Taiwan as America’s powerful non-NATO Ally. The policy is delayed due to China’s recent live-fire exercises around Taiwan - the Biden admin suggests to wait until tensions relax, but experts note that China’s live-fire exercises may become a new normal. The goal of the policy is to cement US position that they will defend Taiwan against Chinese invasion, and/or major Chinese disruption of trade in the Taiwan Strait.
China meanwhile has put together a “Whitepaper” outlining the “indisputable facts”, that Taiwan is part of China. With the Chinese Communist Party’s willful ignorance, twisted misinterpretation of history, and denial of US policies, China is doubling down on their false narrative to create a sick justification in their minds. China is leveraging this false notion which has been ingrained in Chinese psyche for decades.
US is rethinking steps on China tariffs in wake of China’s live-fire exercises around Taiwan.
I think this is a good political move to tie the two things together, if nothing else, at least to show that China is inhibiting their own requests for the US to drop tariffs.
Personally I don’t really think the US is changing their stance. This is merely a continuation of the “strategic mulling”. China has begged and begged, and the US has repeatedly said “I’ll have to get back to you on this at a later date”. This has turned China into a metaphorical child in the back seat of a car whining “are we there yet?!”
As the US and China continue to wield the weight of their recessing economies against eachother, we are seeing a slow trickle of data coming from China. Here is one example from Alibaba:
The e-commerce firm let go of over 9,241 employees during the June quarter. According to the reports, the company trimmed its overall headcount to around 245,700. The company reported a 50 percent drop in the net income to 22.74 billion yuan (USD 3.4 billion) in the June quarter, down from 45.14 billion yuan in the same period last year.
