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Trade War & Recession News and Discussions

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#741
Jessica

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2-year/10-year U.S. Treasury yield curve inversion deepens, flashing 'red'

Source: Marketwatch


The yield gap between the U.S. 2-year and 1-year Treasury note inverted further on Tuesday as bond market participants grew increasingly worried about the economic outlook in the face of President Trump’s international trade policies.

What are Treasurys doing? The 10-year Treasury note yield slipped 6 basis points to 1.484%. The 2-year note rate was down 2.3 basis points to 1.528%, while the 30-year bond yield slumped 7.7 basis points to 1.963%.

The spread between the 2-year note and the 10-year note stood at negative 4 basis points, Tradeweb data show.

The yield curve’s slope is usually positive as investors demand more compensation to own long-term debt against inflationary pressures or monetary policy uncertainty. An inversion of the yield curve, or a negative yield spread, thus points to widening concerns about the health of the economy and is seen as a usually reliable indicator of a coming recession.

 

Read more: https://www.marketwa...tion-2019-08-27



#742
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China insists it is unaware of calls to Trump and says tariffs are 'extreme pressure' and 'not const

Source: CNBC


One day later, China is still insisting no phone calls took place over the weekend that President Donald Trump claimed showed its willingness to talk again.

"I have not heard of this situation regarding the two calls that the U.S. mentioned in the weekend," Chinese Foreign Ministry spokesman Geng Shuang said at press conference on Tuesday. He had denied on Monday that the calls had taken place.

"Regretfully, the U.S. has further increased the tax rate on China's exports to the U.S. This extreme pressure is purely harmful to both sides and not constructive at all," Geng said, according to a CNBC translation.

On Monday, Trump said at the G-7 summit in France that China in recent phone conversations expressed its desire for a deal. His comment renewed hopes for a resolution between the world's two largest economies, pushing the market higher as the Dow Jones Industrial Average gained more than 250 points Monday.

 


Read more: https://www.cnbc.com...s-to-trump.html



#743
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Retailers howl as U.S. trade agency locks in 15% tariffs on September 1

Source: Reuters


The Trump administration on Wednesday made official its extra 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15, prompting hundreds of U.S. retail, footwear, toy and technology companies to warn of price hikes.

The U.S. Trade Representative's office said in an official notice that collections of a 15% tariff will begin at 12:01 a.m. EDT (0401 GMT) Sunday on a portion of the list covering over $125 billion of targeted goods from China.

This initial tranche includes smartwatches, Bluetooth headphones, flat panel televisions and many types of footwear.

U.S. Customs and Border Protection will also start collecting a 15% tariff on Dec. 15 on the remainder of the $300 billion list, including cellphones, laptop computers, toys and clothing, USTR said in the Federal Register filing.

 

Read more: https://finance.yaho...-142112350.html



#744
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Trump blames companies impacted by his trade war

Source: Politico



President Donald Trump on Friday appeared to accuse companies of falsely claiming that they've been hurt by his escalating trade war with China, instead saying they're mismanaging their businesses.

“If the Fed would cut, we would have one of the biggest Stock Market increases in a long time. Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management...and who can really blame them for doing that? Excuses!” Trump wrote on Twitter Friday.

Trump’s comments come just days before the U.S. is set to impose new tariffs on China in two rounds, with the first due to start on Sept. 1. The 10 percent tariff on approximately $112 billion of Chinese goods would likely raise prices for consumer items like electronics and shoes.

In one example of corporate America complaining about Trump's trade war, the Footwear Distributors and Retailers of America wrote a letter to the president this week stating that the planned tariffs would drive up costs for consumers.

 


Read more: https://www.politico...ade-war-1479012



#745
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^ Yeah, that's a good strategy. Blame your footsoldiers for screwing up a battle after leading them into an utterly compromised position. That'll end well.
 

India GDP Growth Crashes To Six-Year Low Of 5% In April-June Quarter

The Indian economy continued to slow down in the April-June quarter, as private consumption in the economy weakened further. Gross domestic product rose by 5 percent in the first quarter of 2019-20 compared to 5.8 percent in the previous quarter, showed data released by the Central Statistics Office on Friday. In gross value added terms, the economy grew at 4.9 percent in the April-June period.


And remember my friend, future events such as these will affect you in the future.


#746
Yuli Ban

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China’s manufacturing slumps for fourth successive month

As the trade war with the United States continues to gather pace, manufacturers in China remain gloomy about their prospects, with the sector activity contracting for the fourth successive month in August.

The manufacturing purchasing managers’ index (PMI), released by the National Bureau of Statistics (NBS) on Saturday, stood at 49.5 in August, down from a reading of 
49.7 in July
, and below analysts’ expectations. The median result of a survey of analysts by Bloomberg expected a reading of 49.6.


And remember my friend, future events such as these will affect you in the future.


#747
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'They're on,' Trump says of tariffs set to kick in on Sunday

Source: Associated Press

By PAUL WISEMAN and ANNE D'INNOCENZIO today



WASHINGTON (AP) — Expect a direct hit on many U.S. consumers from President Donald Trump’s latest round of tariffs on Chinese imports. He had no intention of pulling back on import taxes set to kick in Sunday.

“They’re on. They’re on,” the president told reporters Friday before departing for a weekend stay at Camp David.

Americans were largely spared from higher prices in his previous rounds of trade penalties. No longer. The 15% tariffs on $112 billion in Chinese imports will apply to items ranging from smartwatches and TVs to shoes, diapers, sporting goods and meat and dairy products.

For the first time since Trump launched his trade war, American households faced price increases. Many U.S. companies said they would be forced to pass on to customers the higher prices they had to pay on Chinese imports.

 


Read more: https://www.apnews.c...7982cfa8de43064


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#748
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China starts to impose additional tariffs on some US goods

Source: CNBC



China on Sunday started to impose additional tariffs on some of the U.S. goods on a $75-billion target list, with effect from 4:01 a.m. GMT.

The extra 5% and 10% tariffs were levied on 1,717 items of a total of 5,078 products originating from the United States. Beijing will start collecting additional tariffs on the rest of the items from Dec. 15.

Beijing started levying a 5% tariff on U.S. crude oil from Sunday, the first time U.S. oil has been targeted since the world's two largest economies started their trade war more than a year ago.

 


Read more: https://www.cnbc.com...e-us-goods.html



#749
Yuli Ban

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Trump was so angry after China's trade retaliation that he wanted to double tariffs

  • President Trump wanted to double tariff rates on Chinese goods last month after Beijing’s latest retaliation in the trade war before settling on a smaller increase, three sources tell CNBC.
  • Trump was outraged after he learned Aug. 23 that China had formalized plans to slap duties on $75 billion in U.S. products in response to new tariffs from Washington on Sept. 1.
  • Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer then enlisted multiple CEOs to call Trump and warn him about the impact such a move would have on the stock market and the economy.


Regardless of if China can back up this retaliation, they've ultimately edged out Trump and the USA in a critical way by calling our bluff and putting on a show of strength. Everything about Trump's reaction tells me he was not prepared for this, or perhaps he even thought it wouldn't happen. The USA is flustered and has to respond, and we also have to repurpose our economy to dig into a protracted trade war when so many of us believed that China was close to capitulating. Even if they are, the mindset has changed. Businesses have to prepare, and that can cause its own damage (see: Brexit preparations). What's more, Trump's ego is easily roused, and he'll be apt to consider drastic measures. Even if he doesn't take those measures, put your brain into the head of an investor of a company whose livelihood depends on the stability of the global markets. The US president could, at a whim, double or even triple tariffs on a massive source of trade and income to your own business, which would cripple you. You need to know what he's going to do, but he's not going to tell you until he's already done it. The Chinese don't have that problem because most of their businesses are state-run to begin with, meaning this eventuality is built in.

It's like the Sega president coming out at E3 1995 and announcing that the overpriced, yet-to-be-released Sega Saturn has actually already been released and your store is just now learning about it— you're going to be pissed and not do business with them and instead go with the other guy, even if you don't like the other guy. If it's the difference between compromising your morals and going out of business, most capitalist companies are going to go with the former for what should be a blatantly obvious reason. It's like a vegan-raised lion being offered a choice between eating its cornered owner or starving to death.

 

 

China has the ultimate wild card, a contempt for intellectual property rights. They can copy and sell all our medicines and medical technology. Africa is going to be a big market, a market that can't afford to pay the added expense that research adds to the production of a new drug.
Trump's position is a lot weaker than he thinks. China has the philosophical principles that would enable them to crush us by stealing our intellectual property. Intellectual property is all America has now and it all depends on maintaining market myths.
 
Right now, China is still in a much weaker position, as they're facing both food shortages due to a disease affecting pork as well as a demographic crisis. They have to appear strong. Whereas the USA actually is strong. They can't keep depreciating the yuan without undermining their ability to invest and profit from international investments. If that goes on too long, it'll become a runaway cycle that could cause a currency crisis that would threaten to implode their financial system. And there's only so much repression they can do to keep the proles in line. I'm reminded of a tale from the Qin dynasty (notorious as possibly being the first totalitarian regime in history): workers were going to arrive late to work at the quarry. The punishment for showing up late for work? Death. The punishment for rebellion? Death. Well then, if they were going to die anyway... and within a few years, the Qin dynasty was no more.
 
The irony of history might actually make this a David vs. Goliath situation, because since China has more to lose, they're the ones who are going to fight with the most gusto while the USA will fight the entire thing thinking it's already won just because it is the USA, ignoring weaknesses that China exploits and assuming that our victory is preordained by God anyway so why worry? We don't need allies; we're the United Fuckin' States of America, Bitch! We ought to be able to snap our fingers and make China grovel and kowtow before us, begging for forgiveness. 
Pride cometh before a fall...
 
And the way things are being set up, it's entirely possible the USA and China will take each other out at around the same time.

And remember my friend, future events such as these will affect you in the future.


#750
Alislaws

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And the way things are being set up, it's entirely possible the USA and China will take each other out at around the same time.

 

And the rest of the world's economies would collapse hard in response probably. 

 

And then Russia will just occupy the entire middle east while everyone's distracted. Ooh maybe then they could stop selling oil to anyone they don't like (which is most countries at this point, given US influence is everywhere), thus solving global warming!

 

Putin could get a Nobel peace prize, the human race won't all starve to death when global crops fail, it'll be great all round!

 

(Except Human rights might go down the toilet, but that's going to be an inevitable result of not stopping climate change anyway)



#751
Yuli Ban

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^ I won't mind my new Russian overlords so long as they keep AI coming. That's sort of my one and only prerequisite for any governing power.


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And remember my friend, future events such as these will affect you in the future.


#752
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Washington, Beijing lay ground for trade deal talks; China buys U.S. soybeans

Source: Reuters

Business News
September 12, 2019 / 3:39 AM / Updated 19 minutes ago

Stella Qiu, Chris Prentice
5 Min Read



BEIJING/WASHINGTON (Reuters) - The United States on Thursday welcomed China’s renewed purchases of U.S. farm goods while maintaining the threat of U.S. tariff hikes as the world’s two largest economies prepared the ground for talks aimed at breaking the logjam in their trade war.

Lower-level U.S. and Chinese officials are expected to meet within days in Washington ahead of talks between top trade negotiators in early October, seeking to ease a dispute that for more than a year has rattled financial markets and fueled fears of a global recession.

Top-level negotiators last met face-to-face in China in July.

Washington is pressing China for an end to policies and practices including industrial subsidies and forced technology transfer. Meeting those demands would require structural change that it is unclear China would be willing to undertake.

 


Read more: https://www.reuters....SKCN1VX0NJ?il=0



#753
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U.S., China tariffs could lower global GDP by 0.8% in 2020: IMF

Source: Reuters

Business News
September 12, 2019 / 10:45 AM / Updated 11 minutes ago

Andrea Shalal 3 Min Read


WASHINGTON (Reuters) - Tariffs imposed or threatened by the United States and China could shave 0.8% off global economic output in 2020 and trigger more losses in future years, the International Monetary Fund said on Thursday.

IMF spokesman Gerry Rice said trade tensions were beginning to affect a world economy already facing challenges including a weakening of manufacturing activity not seen since the global financial crisis of 2007-2008.

Rice told a regularly scheduled IMF news conference that the global lender is to release a new revised economic outlook next month, but provided no details.

World economic activity remained subdued, with trade and geopolitical tensions causing uncertainty and eroding business confidence, investment and trade, he said.

 


Read more: https://www.reuters....SKCN1VX1WT?il=0



#754
caltrek

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^ I won't mind my new Russian overlords so long as they keep AI coming. That's sort of my one and only prerequisite for any governing power.

 

Oh, they will promise to keep the AI coming.  Then, when it is too late to turn back, they will pull the plug on AI and say "well, we decided we are going to stay in charge after all.  Dictatorship of the proletariat, and all of that."

 

Mind you, it is not as if there were nothing but saints running the U.S. government. Pick you poison.


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#755
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The main problem as I see it, and I might very well be totally wrong, is the basic difference in the two systems. One system was very food insecure in the middle of the twentieth century and turned to a highly authoritarian centralized government out of understandable desperation. The other never quite grew out of being a kleptocracy disguised as a free market system.  Part of that "disguise" involving genuine elements of free market practice.  China took several steps toward becoming a free market system, but still retained all too many of its centralized control aspects.  

 

It was never in the plan of destiny that U.S. corruption meeting Chinese corruption was going to be a good thing.  At best, it might help put off the starvation of a few million Chinese. Not an insignificant accomplishment.  Still, at what cost?

 

Jobs, jobs and more jobs. The theft of intellectual property rights.  A trade imbalance of positively embarrassing proportions. A reinforcement of the most authoritarian tendencies in the U.S. system. 

 

The one benefit that all free traders are quick to point out: lower cost of goods.

 

Great, we get to take advantage of Chinese slaves so that we can buy toys for our kids at a slightly cheaper cost.

 

Think, people, think. Please


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The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#756
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Auto workers union says it will strike GM at midnight

Source: CNN

190828132210-uaw-president-gary-jones-ex
 

New York (CNN Business)The United Auto Workers union said Sunday that its members at General Motors will walk out by midnight if the automaker does not meet its demands, setting the stage for the nation's first auto strike in 12 years. A union statement suggests the two sides are still very far apart in negotiations for a new contract.

As union officials met in Detroit Sunday morning, the union issued a new strike threat. If GM refuses to give even an inch to help hard-working UAW members and their families then we'll see them on the picket lines tonight," said the statement.

The union's contract with GM had expired at 12:01 a.m. Sunday but the union's 46,000 members at GM did not walk off the job at 31 GM factories and 21 other facilities across the nation at that time. There remained "significant differences between the parties on wages, health care benefits, temporary employees, job security and profit sharing," Terry Dittes, the union vice president leading the negotiating team, told membership in a letter late Saturday.

Those issues suggest it will be difficult to reach an agreement in time to avoid a strike, said Kristin Dziczek, vice president of industry labor and economics for the Center for Automotive Research, a Michigan think tank. "You can't solve one of those issues without solving all of them," she said. If the union goes on strike, it will be the largest by any union against any US business since the last time UAW members struck GM in 2007.

 


Read more: https://www.cnn.com/...rike/index.html



#757
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Top Commerce trade official resigns

Source: Politico

09/20/2019 11:25 AM EDT
 


Gilbert Kaplan, the Commerce Department’s top trade enforcement official, resigned Thursday, further underscoring the turmoil that has gripped the agency under the leadership of Secretary Wilbur Ross.

..........................................

Two people said Kaplan’s resignation was effective immediately. It is unclear what prompted Kaplan’s departure.
.............................................
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The broader Commerce Department has been said to be slipping into dysfunction under Ross, whose leadership has been questioned. Morale has been low as Ross hasn’t been seen leading the department but rather using Commerce’s functions as tools to curry favor with the president.

The administration has repeatedly touted an increase in trade enforcement since President Donald Trump took office with the initiation of 182 new trade investigations of unfairly traded imports, a 231 percent increase compared to the same period of the previous administration, according to Commerce.


Under Kaplan’s tenure, the agency has also taken measures to more aggressively counter China. That included the first self-initiated trade investigation in 25 years. U.S. companies are usually responsible for petitioning for duties. In another major policy shift, the department is looking at using undervalued currency as a criteria for imposing punitive tariffs..................

 





Read more: https://www.politico...resigns-1506540



#758
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China agriculture delegation scraps U.S. farm visit to Montana

Source: Reuters


CHICAGO (Reuters) - Chinese agriculture officials who were due to visit U.S. farm states next week have canceled their trip to Montana as the officials will return to China sooner than originally scheduled, the Montana Farm Bureau told Reuters on Friday.

The cancellation came as U.S.-Chinese trade talks were held in Washington and U.S. President Donald Trump said he wanted a complete trade deal with the Asian nation, not just an agreement for China to buy more U.S. agricultural goods.

 


Read more: https://www.reuters....a-idUSKBN1W523Q



#759
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The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#760
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GM strike enters 2nd week with no clear end in sight

Source: Associated Press

By TOM KRISHER today


NEW YORK (AP) — The strike against General Motors by 49,000 United Auto Workers entered its second week Monday with progress reported in negotiations but no clear end in sight.

Bargainers met all weekend and returned to talks Monday morning as the strike entered its eighth day.

A person briefed on the negotiations says they’re haggling about wages and profit sharing, new product for factories that GM wants to close, a faster route to full wages for new hires, and use of temporary workers. The person didn’t want to be identified because details of the bargaining are confidential.

Workers walked off their jobs early on Sept. 16, paralyzing production at about 30 manufacturing sites in nine states.

 


Read more: https://www.apnews.c...8ed80bf88cc0eeb







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