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China Trade War Escalates

Tyler Durden's picture





 

Just one month after we discussed ArcelorMittal's 'demand' that Europe seek sanctions against China's steel tariffs (following unfair 'tit-for-tat-wine' Chinese trade practices, after EU solar panel tariffs), Reuters reports that the EU is indeed to press the WTO to rule against Chinese duties on imported steel. While history never repeats, it merely rhymes, this episodic collapse in economies, markets, and trade is now showing signs of the same desperation as during the Great Depression as intervention, devaluation, and now protectionism are brought to bear to save the domestic economy at all costs. The EU joins Japan in this rapidly escalating trade war with Beijing as they believe "retaliation by the Chinese is now recognized," something not allowed under WTO rules, "and so they have a good chance to win." This will not help either trade relations with the world's 'growth' engine or the credit-crunched nation's massive glut of commodities (and commodity-backed credit lines).

 

Via Reuters,

The European Union plans to lodge a case with the World Trade Organization against Chinese duties on specialized steel tubes, EU sources said on Tuesday, opening another front in a rapidly escalating trade conflict with Beijing.

 

The move will allow the EU to join a related complaint filed by Japan against Chinese duties in December.

 

...

 

It follows China's decision last week to investigate alleged dumping of EU wine in apparent retaliation against the EU imposing provisional duties on Chinese solar panels, the biggest trade case the EU has launched.

 

WTO rules prevent members from leveling tit-for-tat sanctions, instead requiring proof assembled via a thorough investigation that a country's industry has suffered damage before any duties can be imposed.

 

...

 

"The Commission is quite confident that retaliation by the Chinese is now recognized, so they think they have a good chance to win," the source said.

 


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Tue, 06/11/2013 - 09:02 | Link to Comment francis_sawyer
francis_sawyer's picture

The bar!... They took the whole fucking bar!...

Tue, 06/11/2013 - 09:05 | Link to Comment i-dog
i-dog's picture

So Europe thinks the German court will approve their purchase of the Mega-Heidelberg printing press? Who needs trade when you can just print money...but isn't this just a few days premature?

Tue, 06/11/2013 - 10:02 | Link to Comment Smegley Wanxalot
Smegley Wanxalot's picture

I think it would be cheaper for both the ECB and the Fed to have their currency notes printed in China by slave labor there. They could even save the shipping costs by delivering it locally to the Chinese corporate plantations directly rather than passing it thru the middlemen in Europe and North America.

Tue, 06/11/2013 - 09:07 | Link to Comment insanelysane
insanelysane's picture

Over?  Was it over when the Germans bombed Pearl Harbor?

Tue, 06/11/2013 - 10:25 | Link to Comment onceinalifetime
onceinalifetime's picture

You have a mistake. It was the French people.

Tue, 06/11/2013 - 09:07 | Link to Comment Sudden Debt
Sudden Debt's picture

they did build that bar... and loan us the money to use the bar....

Tue, 06/11/2013 - 09:10 | Link to Comment SheepDog-One
SheepDog-One's picture

Easy to fix, just put the Chinese on double secret probation.

Tue, 06/11/2013 - 09:16 | Link to Comment francis_sawyer
francis_sawyer's picture

Put Neidermeyer on it ~ He's a sneaky little shit...

Tue, 06/11/2013 - 10:45 | Link to Comment The_Dude
The_Dude's picture

Food fight!

Tue, 06/11/2013 - 09:53 | Link to Comment smlbizman
smlbizman's picture

this just in.....china has responded to eu.....fruck you round eyes.....

Tue, 06/11/2013 - 09:04 | Link to Comment Dr. Engali
Dr. Engali's picture

Currency wars, trade wars, and then world wars. Nothing ever changes.

Tue, 06/11/2013 - 09:09 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Correct, and in this era, China is the new Germany, with a massive manufacturing base and manipulated yuan to protect.  Look for the purge of all westerners to commence shortly.

Tue, 06/11/2013 - 09:09 | Link to Comment insanelysane
insanelysane's picture

Nothing ever changes?  Turkey and Syria seem to be some new venues.

Tue, 06/11/2013 - 10:32 | Link to Comment Urban Redneck
Urban Redneck's picture

Where have you been the last couple thousand years?

Tue, 06/11/2013 - 09:16 | Link to Comment Element
Element's picture

 

 

You forgot the War of the Worlds

 

The Spirit of Man (No Nataniel) - Jeff Wayne's War of the Worlds
https://www.youtube.com/watch?v=yJAVFZxNgAA

 

love that Les Paul ...

Tue, 06/11/2013 - 09:22 | Link to Comment Meme Iamfurst
Meme Iamfurst's picture

 

 

 

But Doctor...you forget about the bond market.  Who will buy the bonds now that China is seen as the bad boy everywhere.  Tell me our guys aren't smart when it comes to manulipilation guilt.

China sould get over the 'Nixon era Globalism" ( which just might be dead anyway) and do as America did in the late 40's to early 60'...build your country and to hell with the world.  You don't get pissed when a door closes on you, you simply make sure spare parts are no longer available.

Tue, 06/11/2013 - 09:56 | Link to Comment kralizec
kralizec's picture

Economic wars are not serious...until the shooting starts.

These are not serious yet.

Tue, 06/11/2013 - 12:13 | Link to Comment GCT
GCT's picture

+1 Doc!  You forgot about what the USA or Europe will do if China decides to dump all of their bonds.  Maybe that will be the start of WAR!.

Tue, 06/11/2013 - 09:04 | Link to Comment espirit
espirit's picture

Guess we'll see who can hold their breath the longest, lol.

$BDI hasn't collapsed completely yet, or has it?

Tue, 06/11/2013 - 09:53 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

http://www.bloomberg.com/quote/BDIY:IND/chart

It appears to be in a state of perma-collapse.  Down about 95% from peak.  

Tue, 06/11/2013 - 09:05 | Link to Comment ebworthen
ebworthen's picture

Rust never sleeps.

Tue, 06/11/2013 - 09:06 | Link to Comment Truther
Truther's picture

Fuck. Get it over with. The EU needs a lesson learned. Buckle up.

Tue, 06/11/2013 - 09:27 | Link to Comment Meme Iamfurst
Meme Iamfurst's picture

 

 

Speaking of 'fuck'.  Notice how you clicked on this story and those GOOGLE spy pricks, shove ads for Chinese hookers on both side of the page?  Fucking pimps.

Tue, 06/11/2013 - 11:00 | Link to Comment JimBowie1958
JimBowie1958's picture

lol, those ads run on what you have most often recently searched for on your PC.

Guess you are probably on the clock as well

Tue, 06/11/2013 - 09:08 | Link to Comment SheepDog-One
SheepDog-One's picture

Can you believe some bearded cueball lookin Princeton lip-quiverer runs this entire fuckin clownshow?

I'm goin fishin.

Tue, 06/11/2013 - 09:10 | Link to Comment BandGap
BandGap's picture

What a great fucking idea. Hit the pistol range and then go fishing.

Tue, 06/11/2013 - 09:12 | Link to Comment espirit
espirit's picture

Grass never sleeps, gotta mow.

Tue, 06/11/2013 - 09:12 | Link to Comment falak pema
falak pema's picture

Now I know why Hollande went to Japan so fast after his visit to CHina (the two trips were so telescoped that he addressed the Japanese people as "the chinese people" in a speech). 

He didn't get what he wanted in China as the EZ started the solar panel clamp down just after leading to "vino nein" from china in tit rubbing tat; whence running wild in Japan to catch that ferry on the protectionist tour of WTO.

My, Mount Fuji, fuku sushi and sanctions against China all in one breath.

Tue, 06/11/2013 - 09:18 | Link to Comment magpie
magpie's picture

Francois declared it's partytime for Chilean, South African, Australian and American wine growers.

Tue, 06/11/2013 - 09:14 | Link to Comment Oldwood
Oldwood's picture

Nothing is more sustainable than corruption. It will survive as long as cockroaches.

Tue, 06/11/2013 - 09:19 | Link to Comment francis_sawyer
francis_sawyer's picture

Prostitution ~ the oldest profession in the world... I's how 'governments' are possible...

Tue, 06/11/2013 - 09:21 | Link to Comment kurzdump
kurzdump's picture

Wake me up when China sanctions the import of USD, everything else is irrelevant.

Tue, 06/11/2013 - 09:28 | Link to Comment youngman
youngman's picture

This is the begining of the end...trade wars....who has more to lose.the exporter..or the importer.....??????

Tue, 06/11/2013 - 09:32 | Link to Comment IamtheREALmario
IamtheREALmario's picture

Buyers' remorse?

The interdependencies between China and the West have already been established and it would take at least 5 years to unwind, if done at a pace that would not send the world tumbling into war and hardship. The west no longer has enough manufacturing to support the needs of its people and the Chinese government needs the west to be able to maintain the dependency balance in its own country.

I am sure that China too understands that it has created the classic dependency environment in its own country as well. Businesses are dependent on banks, exports and bringing workers to the cities; cities are dependent on the farmers and imports of food and energy; banks are dependent on the will of businesses and government; the farms are dependent on a stable government and cities to buy their products; the government is dependent on keeping the balance to be able to maintain power. One leg fails, the government fails and there is mutually assured destruction. (aside ... people wonder why the US supports farms the way it does. If farms fail and people go hungry then the government fails)

Globalization is all about creating a system of interlocking dependencies. If one leg crumbles, the interdependencies crumble and there is mutually assured destruction. Governments then try to pin their incompetence, corruptness, psychopathy and/or laziness on some convenient bogey man and go to war (burying the evidence under a mound of corpses).

Tue, 06/11/2013 - 09:56 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"the Chinese government needs the west to be able to maintain the dependency balance in its own country."

Depends on how much gold they have accumulated.  Gold-backed yuan or BRICs currency = they don't need the USD.

Tue, 06/11/2013 - 10:13 | Link to Comment IamtheREALmario
IamtheREALmario's picture

I never once said anything about the US dollar. China does not need the dollar.

However, what will they do with all of the people if they are not manufacturing for the west? What will the businesses do? What will the banks do? What will the farmers do? If the people do not have jobs then they get angry and cannot buy food. The Chinese government will fail.

People do not understand that the dependency model is by design. The ancient Romans used it to expand their empire. They wanted a system of dependencies. Portions of the empire that were not dependent felt that they had the right and ability to pull away from the empire. In those parts, the army was required to keep them weak. Why does the US hate people such as preppers? They are not dependent on the US government.

Tue, 06/11/2013 - 09:33 | Link to Comment Bogdog
Tue, 06/11/2013 - 11:24 | Link to Comment Aegelis
Aegelis's picture

Looks like two kids have finished exchanging words, now they're shoving each other.  No teachers around but a crowd is starting to gather.  I wonder what's going to happen next?

Tue, 06/11/2013 - 11:26 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The whole world is waking up to the fact that China has been in an active trade war with the West for twenty years.  It's twenty years too late.

 

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