China Trade War?

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I’ve been hearing things like the US will lose a trade war with china and Trump cannot possibly be serious. I understand the panic which is why I wanted to take a look at the details.

Top 10 things China buys from Us
1. Soybean $10.82 b
2. Semiconductors – 6.9 b
3. aircraft parts – 5.75 b
4. plastic 3.73 b
5. passenger cars – 3.43 b
6 copper 3.32 b
7. paper – 3.04 b
8. organic chemicals – 2.75 b
9. aluminum 2.21 b
10. industrial materials 3.99b

Top 10 things US buys from china
1. computers – 39.37b
2. household stuff – 32.61b
3. pc accessories – 28.32 b
4. toys – 27.81b
5. cotton clothing – 17.15 b
6. textile clothing -17.31 b
7. telecom equipment 16.62 b
8. tv vcr etc 15.31b
9. furniture 13.56 b
10. footwear 13.20 b

In a trade war the most at risk US industry is our precious soybean industry. Of course we all know that the US will collapse without this. For China its computers.

I understand that the soybean industry is important to some farmers. We just have to realize that before China we were already exporting the soy to Japan, Korea, and other asian countries. The market is still there we just need to divert into it.

I want you to take a look at the products in each category. US products sold to china are mostly raw material to make a finished product while china ships out finished products to sell to the US.

Suppose china put in a tariff. They buy the US products and their production cost increases. Even if they were to sell it to another market they would have to charge a higher price. Or they can cease buying from the US and we have to find another buyer for soybean. Suppose the US stop buying these products and get them from another country? Do you think the computer industry in China is more important than the soybean industry in the US? Remember China is not the only country that produces electronics. I can name 5 other countries who would love to sell us their stuff without thinking whereas I cant name many other countries who can take the volume of goods that the US does.

Conclusion – A trade war will be over so fast it will make your head spin

 

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