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US-China Trade Talks, Long-term Challenges – Classiarius Viewpoints

US - China Trade Tensions - It Will Only Get Worse - Classiarius Viewpoint

The problem with the main stream media is that it is a system that has an ongoing need for a short-term politically driven rationale for all the problems we face. They are looking at the 72 hour or the short-term story for this month. Historical facts and long-term outcomes are seldom discussed as the media machine must have a series of stories that are driven by emotion.

We at Classiarius are looking at the real problems in the US – China trade deficit and the realities that come from it. The so-called “trade solution” is a structure discussion, not a shopping cart to purchase goods and cure the problem. It will take years for the US and European companies to penetrate the closed and government controlled Chinese economy, even if China says will buy $1.2 trillion dollars of goods from the US.

The government of China controls the line from the US product makers to the Chinese consumer – that control is never challenged. This does not address the more important issue, the Chinese government control of the technology transfer, the forced transfer of the products`s details, and materials. China is in fact strong-arming European, and US firms for their R&D results and company secrets. European firms will not give secrets to IBM but is happy to give them to another government, does this make sense?

There are other problems arising in this trade war. That is the trade routes near Japan, India and Thailand. Our previous audiovisual packages point to the problem of China taking islands in the South China Sea. This practices that supports the China Nine-Dash Line of protection for what is says is its territory will only trigger flashpoints with the governments of Vietnam, Thailand, Philippines, and others in the region. China is expanding and it could, in the end, stop all trade in Asia. This is a growing concern – control over trade routes. The US has countered with strong relationships with India, Japan, and Australia as they have joint naval exercises in the region.

The conversation is now moving to traded markets – the Chinese now have less interest in the US Bond market. Because of the trade deficit, China has accumulated a mountain of US bonds, $1.3 trillion to be exact. Now with less trade in goods, China will not be as interested in buying US Treasuries …. who will be the substitute buyers of US bonds?

The trade issue is a long, very long-term problem that will last for years. And it will lead to confrontations between the US and China.

Team Classiarius

Classiarius

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