China Threatens With Furious Retaliation In Growing Trade Wars

Tyler Durden's picture




 

Last week it was the Fairness Distributor In Chief threatening China with WTO action over its unfair duties on US car imports. Before that it was Europe trying to protect its crumbling trade at all costs with its primary trade partner. Now, it is China's turn to retort to the world's beggars, and all those who just happen to ravenously import its iWares with the reckless abandon of a gadget junkie. FT reports: "Beijing has threatened swift retaliation against a range of European Union industries if Brussels presses ahead with an investigation into government subsidies granted to two Chinese telecoms equipment companies. The Chinese threat was delivered at a meeting with EU trade officials in Beijing late last month that was arranged at the behest of Chen Deming, China’s commerce minister, to try to defuse a brewing trade dispute that is straining commercial relations between the two sides. Instead, it collapsed into acrimony, with the Chinese warning their EU visitors that they would respond to any investigation of Huawei and ZTE Corp by probing subsidies granted to European agriculture, automotive, renewable energy and telecoms companies. “Put it this way: it’s not like they went for a beer after and watched football,” one person briefed on the meeting said." None of this is new: recall China Lays Out Conditions Under Which It Will Bail Out Europe; Does Not Want To Be Seen As "Source Of Dumb Money" in which  Li Daokui "added that Beijing might also ask European leaders to refrain from criticising China’s currency policy, a frequent source of tension with trade partners." Looks like we can scrap those "China bails out Europe" (ignore the fact that the Chinese economy itself is imploding for a second) rumor in perpetuity.

From FT:

Karel De Gucht, the EU trade commissioner, declined to comment. An EU official sought to play down the meeting, saying that Brussels would wait to see what level of co-operation the Chinese would provide in an effort to ward off a formal trade complaint.

 

Nonetheless, concerns about the Chinese reaction – and pressure from worried member states – appear to have put on ice a case that once seemed imminent, according to several EU diplomats. They said it was now unlikely that Mr De Gucht would act before September.

 

In the meantime, both sides are bracing for another trade confrontation in the solar industry. European solar companies have been preparing a complaint accusing Chinese competitors of using improper government subsidies to underprice them, and requesting punitive tariffs. That complaint could materialise as early as this week, according to people familiar with the matter, and could also trigger Chinese retribution.

 

Combating Chinese government subsidies has been one of Mr De Gucht’s top priorities. The cutting-edge telecoms equipment industry, in which Huawei and ZTE have quickly gained market share, would be a signature case.

Yet it is one thing for bureaucrat to sabre rattle, it is something totally different for idiotic trade war proposals to get traction with corporations:

Mr De Gucht’s case has been undermined by a lack of support from European telecoms companies – Ericsson, Siemens-Nokia, and Alcatel-Lucent – which fear that any action from Brussels could harm their own business interests in China’s fast-growing market.

 

In an effort to get around that, he has drawn up plans to launch the complaint at the commission’s initiative – and not based on a complaint from a company – setting a new precedent in EU trade defence.

 

Trade analysts in Brussels said that some member states had also expressed reservations about the case after receiving complaints from Beijing. Germany is understood to be wary of igniting a trade war with China before a planned visit by Chancellor Angela Merkel in August.

And now that China has told Europe what it can do with its empty threats, it is time for it to shift its attention to the US.

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Mon, 07/09/2012 - 07:45 | 2598201 OhOh
OhOh's picture

"accusing Chinese competitors of using improper government subsidies to underprice them, and requesting punitive tariffs"

 

Wow, as if all the "fixes" that go on into the US/EU pot are invisible to him.

Mon, 07/09/2012 - 07:48 | 2598207 NewThor
NewThor's picture

Zerohedge inspired me to cut together a little video about the LIBOR. 

I thought you should know. 

 http://youtu.be/VO6XqbOWyJY

God bless Everyone.

Mon, 07/09/2012 - 07:54 | 2598218 Oh regional Indian
Oh regional Indian's picture

It's about time someone called the massive subsidy emperor NAKED.

Agricultural subisdies are the cruellest cut of them all, causing crops to be burnt and milk to be tossed into fields and streams.

What to speak of US AID and Japan AID and European AID. Trojan aid if there ever was such.

Of course the Chinese see ZTE etc. as valuable spy arms, electronic eves-droppers, ultimately communication system disruptors. 

Deal with it or cut western world subsidies first, no?

Ratchet global tension, 2 notches UP>

ori

omens-in-america

Mon, 07/09/2012 - 08:04 | 2598243 Bobbyrib
Bobbyrib's picture

Good thing we can't afford to give anymore aid. Our country is bankrupt.

While I certainly do not agree with the agricultural subsidies I can tell you they were put in place to stabilize prices (so US farmers wouldn't overproduce). Now the world's population is vast enough to sustain what we produce. We should get rid of the subsidies.

Mon, 07/09/2012 - 08:13 | 2598263 eddiebe
eddiebe's picture

So what if the U.S. is bankrupt, since when has that sopped them from giving'foreign aid' to anyone? Where have you been getting your information?

Mon, 07/09/2012 - 10:11 | 2598541 Jay Gould Esq.
Jay Gould Esq.'s picture

Engage people with what they expect; it is what they are able to discern and confirms their projections. It settles them into predictable patterns of response, occupying their minds while you wait for the extraordinary moment -- that which they cannot anticipate.  - Sun Tzu.


Mon, 07/09/2012 - 08:14 | 2598267 Oh regional Indian
Oh regional Indian's picture

Bobby, the crueller cut is that most places had populations that could have been supported by local agriculture.

It's when the subsidisers required the local agriculture system to be destroyed/poisoned, creating a perpetual market for the AID-givers products that the problems begin. 

US Beef to Japan is a classic case in point.

In fact, the human population BOOM has been purely due to mis-managed (on purpose) agri-distribution.

For centuries now, ever since truly global supply-chains came into existence.

ori

Mon, 07/09/2012 - 10:15 | 2598556 BigInJapan
BigInJapan's picture

Do you actually know anything about Japanese agricultural subsidies, or do you pull these references out of your ass, ad hoc? Beef???

Japanese agricultural subsidies add up to about USD 27 Billion a year, whereas Americans subsidize to the tune of 80 Billion, give or take.

 

While you're at it, tell us about how great agriculture is doing in India. Don't forget to leave out the suicides, now.

Tue, 07/10/2012 - 00:19 | 2601136 Oh regional Indian
Oh regional Indian's picture

BIJ, I do. What does the sad state state of Ag in India have anything to do with this? Oh yes, we too have had dumping, long time, forced switch to chemical agriculture, mechanized farming subsidies through tractor sales (American tractor companies financing), now GMO coming...

 

So, yes, I do. Do you know how Beef became SUCH a staple in Japan? Do you?

ori

Mon, 07/09/2012 - 09:35 | 2598437 BigJim
BigJim's picture

  While I certainly do not agree with the agricultural subsidies I can tell you they were put in place to stabilize prices (so US farmers wouldn't overproduce).

Think how rich we'd all be if Uncle Gorilla protected consumers from all the other sectors 'overproducing'! Cars, computers, books, housing, electricity, shoes... the list is literally endless!

I hate getting cheap stuff, don't you? It makes us all sooooo much poorer when goods are produced and consumed, rather than the ideal, which of course is for them to be produced and then immediately destroyed in situ.

Wake me up when FDR & Keynes are disinterred and their bodies burnt in public for crimes against humanity (and logic).

Mon, 07/09/2012 - 22:45 | 2600951 Bobbyrib
Bobbyrib's picture

4 Red arrows? Keynesians and/or hypocrites?

Mon, 07/09/2012 - 08:30 | 2598296 Quinvarius
Quinvarius's picture

People that don't understand how agriculture subsidies are structured blame them for their shitty losing trades in ag commodities and make up nonsense about massive throwing away of food.  Ag subsidies for a year cost less than we were paying for a week in Iraq.  They are good bang for the buck and they keep farmers in business when bankers attack them.  They also stop mass starvation in the US which we would surely suffer if the farmers were not protected with a saftey net from the bankers.

Mon, 07/09/2012 - 08:36 | 2598314 overmedicatedun...
overmedicatedundersexed's picture

quinvarius, "They are good bang for the buck and they keep farmers in business when bankers attack them. They also stop mass starvation in the US which we would surely suffer if the farmers were not protected with a saftey net from the bankers"

how's the crop biz at monsanto? or do you work for conagra? seems i read that most of the gov cheese goes to mega corps, but don't let that get in the way.

Mon, 07/09/2012 - 09:02 | 2598348 Quinvarius
Quinvarius's picture

You heard?  Great research.  Go do some actual research on what ag subsides are.  Ag subsidies have absolutely nothing to do with the genetic seed business, which you attempted to imply.  Who gives a shit if someone has a giant farming business?  Are you a communist?  You prefer collective farms where you are forced to work because you live near them?  Again.  Look up what a farming subsidy actually is before you start repeating CNBC drivel.

Ag subsidies provide a safety net for farmers in a world where AG prices are set by bankers.  Of course bankers don't like it that they cannot force farmers off their land and steal their assets by forcing down grain prices.  So they make up a bunch of baloney about subsidies.  Don't fall for it.  And before you even go there, there is no federal subsidy for ethanol production that is given to ethanol producers.  It simply doesn't exist.

Mon, 07/09/2012 - 09:12 | 2598377 Seize Mars
Seize Mars's picture

Quinivarius

You lost me with the whole "people would be starving without government subsidies" thing. Please go over to vonMises.org, spend some time learning actual economics, and get that shit out of your system.

Mon, 07/09/2012 - 09:35 | 2598449 Quinvarius
Quinvarius's picture

I lost you because you don't understand how the system works.  You think food comes from Obama's magic ass and that bankers would never try to put farmers out of business for profit.  You are simply clueless.

AG subsidies provide a price floor and a safety net.  Their cost is minimal compared to their benefit.  People would be starving to death in America without them because food prices would go through the roof and we are in a the worst depression this country has ever seen.  20% of America is on food stamp already, bud.  WTF do you think is going to happen if food prices go up 4X?  Yes.  people will starve. 

WTF do you think would happen if we let the bankers, who can push grain prices to near zero due to access to free money to make margin, and who also hold the farmers loans, were allowed to beat on defenseless farmers?  Did you miss MF Global?  Did you miss the thirties? 

You are naive.  You want to save some money?  End the wars. 

 

Mon, 07/09/2012 - 09:59 | 2598526 overmedicatedun...
overmedicatedundersexed's picture

" WTF do you think is going to happen if food prices go up 4X? Yes. people will starve. "

quiny me boy,you never swum in the deep end did you? we are not for banksters busting small farmers and you know it. keep sucking on the states tit just like your avatar.

Mon, 07/09/2012 - 10:45 | 2598629 Seize Mars
Seize Mars's picture

I don't understand how the system works? Such a sweeping conclusion based on such little data. Well that seems to be your style. I'm not sure what you are saying about food coming our of someone's ass. I don't think that it does. I'm not sure what I said that would lead you to think that I believe the food-ass hypothesis. I don't.

I am naive? Again, how are we concluding this?

Anyways, listen. Bankers bad. People good. Wage and price controls cause poverty. Subsidies cause poverty. Please read Hazlitt "Economics in One Lesson," and I promise you will be happy you did. You will never argue in favor of subsidies again.

 

Mon, 07/09/2012 - 11:22 | 2598715 ParkAveFlasher
ParkAveFlasher's picture

Quinvarius makes good points.  The tendency to knee jerk on buzz words like "subsidy" needs to be controlled.  If the farmers were not guaranteed steady payment, why would they gaurantee steady harvests?  They could easily close up the barn and delve in more lucrative businesses.  Contrary to mass illusions, the mass of growers are not mom-and-pop hayseeds but in fact very well moneyed interests.

Mon, 07/09/2012 - 12:27 | 2598860 AnAnonymous
AnAnonymous's picture

They could easily close up the barn and delve in more lucrative businesses.

_______________________

Absolutely. And you'll find noone to stand for them.

Work is a hobby. Not a necessity.

At least, in US citizen economics, and the US citizen dream.

Mon, 07/09/2012 - 13:06 | 2598998 Seize Mars
Seize Mars's picture

So my words need to be controlled?

Yup, that should do it. Subsidies for farmers and speech control for me. I can see the prosperity zooming upward.

Mon, 07/09/2012 - 11:00 | 2598672 Arthur Borges
Arthur Borges's picture

The more insecure a national leadership feels about the security of its secrets, the less likely they are to resort to the military option when they have a hissy fit.

Mon, 07/09/2012 - 10:23 | 2598572 Jake88
Jake88's picture

thanks for the effort. still do not understand all the fuss. how is the LIBOR supposed to be determined? who is supposed to rig it?

Mon, 07/09/2012 - 08:26 | 2598291 AnAnonymous
AnAnonymous's picture

Wow, as if all the "fixes" that go on into the US/EU pot are invisible to him.
________________

They are visible but US citizen style here: do not adopt a profitable US citizen behaviour or do it at your risks.

US citizens want the monopoly on these behaviours.

Border hopping and settling illegally is 'american' but hey, do not go into a US citizen nation illegally shouting you have proven your 'americanness' by crossing illegally borders.

US citizens wont like it.

Mon, 07/09/2012 - 10:33 | 2598599 Kayman
Kayman's picture

AnAnonymous

Why don't you try handing out pamphlets in Tiananmen Square, denouncing your Communist Masters ?

Or better yet.  Start your own "ZeroHedge" in China.

Then, my little mouse, you will be somebody.

Mon, 07/09/2012 - 12:23 | 2598848 AnAnonymous
AnAnonymous's picture

I am waiting for US citizens to start an Abraham Lincoln brigade to help overthrow tyrants in Bahrain and Saudi Arabia. Bahrain is marching tanks on their own population Tiananem square style while the Saudis are shooting lethal ammo.

Dont miss the opportunity. Many US citizens lament they missed the Tiananmen square opportunity.

Bahrain and the Saudis provide a repeat. Seize the opportunity.

Mon, 07/09/2012 - 12:35 | 2598881 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous, drooling as he typed, said:

I am waiting for US citizens to start an Abraham Lincoln brigade to help overthrow tyrants in Bahrain and Saudi Arabia.

Made me laugh.

AnAnonymous, as the founding father and number one patriot of US citizenism, you need to form such a brigade and you must lead it in battle. (I recommend you use Easter Island as a staging area.)

Only then can you assure your place in the imaginary history of AnAnonymousistic Chinese citizenism.

Mon, 07/09/2012 - 12:38 | 2598895 AnAnonymous
AnAnonymous's picture

Yeah, yeah, right...

Abraham Lincoln is an imaginary character.

The Abraham Lincoln brigade is an imaginary brigade.

'Americanism' does not exist.

'Americans' do not exist.

This is where 'Americanism' leads people to: denying the most obvious and inventing fantasy to avoid coping with reality.

'Americanism' has promoted human thought.

Mon, 07/09/2012 - 12:47 | 2598913 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous responded timidly:

Yeah, yeah, right...

Abraham Lincoln is an imaginary character.

The Abraham Lincoln brigade is an imaginary brigade.

'Americanism' does not exist.

'Americans' do not exist.

Ah, but in the world you create, you merely need to will it to make it so.

This is where 'Americanism' leads people to: denying the most obvious and inventing fantasy to avoid coping with reality.

Waooo! You mean to tell me that, even in your fantasy world of US citizenism, you lack the courage, the backbone, the very mettle to lead your US citizenism brigade into glorious battle?

You talk a big game, but when the rickshaw meets the road, you lack mettle. With a leader like you, your US citizenism credo is not long for this world.

Mon, 07/09/2012 - 12:52 | 2598934 AnAnonymous
AnAnonymous's picture

Ah, but in the world you create, you merely need to will it to make it so

________________

Wooooo, now, I created the world Lincoln lived in, the Abraham Lincoln lived in, 'Americanism' has been expressing itself into.

More examples of what kind of fantasical claims US citizenism leads to.

Mon, 07/09/2012 - 13:04 | 2598990 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous said:

Wooooo, now, I created the world Lincoln lived in, the Abraham Lincoln lived in, 'Americanism' has been expressing itself into.

Your admission is quite telling. It seems like the inside of your head is blobbing up to be bigger than the outside of your head. This will make it more difficult for you to push all blame off onto a convenient exterior.

More examples of what kind of fantasical claims US citizenism leads to.

When it comes to making US citizenism claims, you are the most fantasticalest.

Mon, 07/09/2012 - 13:10 | 2599012 AnAnonymous
AnAnonymous's picture

The rejection of such a claim that I invented Abraham Lincoln, the Abraham Lincoln brigade? Quite a telling admission indeed.

Mon, 07/09/2012 - 15:03 | 2599449 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous, talking backwards, said:

The rejection of such a claim that I invented Abraham Lincoln, the Abraham Lincoln brigade? Quite a telling admission indeed.

Embracing the claim is a very much funny way of rejecting it. The rejection is imaginary in your confusioned brainpan.

Now, lacking the mettle, lead your brigade away from battle vigorously.

Mon, 07/09/2012 - 12:53 | 2598947 AnAnonymous
AnAnonymous's picture

your US citizenism brigade into glorious battle?

___________________

US citizenism brigade? More strawsman. The Abraham Lincoln brigade.

Running away much?

Mon, 07/09/2012 - 13:07 | 2599006 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous, while scurrying like a rodent, said:

US citizenism brigade? More strawsman. The Abraham Lincoln brigade.

Yes, sure, whatever. It's your fantasy, so do what you like with it.

Running away much?

With you as brigade leader, they will be running away always.

Mon, 07/09/2012 - 13:13 | 2599033 AnAnonymous
AnAnonymous's picture

Abraham Lincoln, the Abraham Lincoln Brigade is now my fantasy.

US citizens know no limits. And they are ruling the world.

There is of course no connection between the simultaneity of US citizen rule and the current state of the world.

It cant be when US citizens are so helpless in coping with reality they have to claim Lincoln and the Lincoln brigade are fantasy.

Mon, 07/09/2012 - 15:08 | 2599479 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous, admitting his US citizenism, said:

Abraham Lincoln, the Abraham Lincoln Brigade is now my fantasy.

I see...please continue.

There is of course no connection between the simultaneity of US citizen rule and the current state of the world.

It cant be when US citizens are so helpless in coping with reality they have to claim Lincoln and the Lincoln brigade are fantasy.

You are the one claiming the fantasy of Lincoln and the Lincoln brigade. This confession of yours, that you are a US citizen who is helpless in coping reality, is a big first step on the road to recovering your mental health.

Please do not shit on the side of this road.

Mon, 07/09/2012 - 12:25 | 2598854 AnAnonymous
AnAnonymous's picture

AH, yes, about the US citizen economics.

Guys in China are already very interested in them, they are building ghost towns US style, and are looking actively to ape any US citizen trick like reserve currency and stuff

They do not need my help, they are doing fine already. But they could appreciate the hand of a US citizen well versed in US citizen economics.

Mon, 07/09/2012 - 12:39 | 2598899 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous gave us today's lesson in Chinese citizenism:

Guys in China are already very interested in them, they are building ghost towns US style, and are looking actively to ape any US citizen trick like reserve currency and stuff

They do not need my help, they are doing fine already. But they could appreciate the hand of a US citizen well versed in US citizen economics.

Ah, ah, you are being far too modest. Guys in China do need your help. When it comes to US citizens well versed in US citizen economics, the world looks to you as the only possible choice.

Mon, 07/09/2012 - 12:46 | 2598912 AnAnonymous
AnAnonymous's picture

Speaking on the behalf of the world, humanity is very US citizen.

Keep up the good work exhibiting the eternal US citizen nature.

Mon, 07/09/2012 - 12:52 | 2598941 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous said:

Speaking on the behalf of the world, humanity is very US citizen.

So now you speak for the world? How US citizenish of you.

Keep up the good work exhibiting the eternal US citizen nature.

No need to, as nobody can compare to your US citizen exhibitionism.

Mon, 07/09/2012 - 12:55 | 2598954 AnAnonymous
AnAnonymous's picture

the world looks to you as the only possible choice.

_____________________

And that quote was written by a US citizen.

US citizenism, managing to state something and deny it the second later.

Hooked on power.

Mon, 07/09/2012 - 13:11 | 2599019 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous said:

And that quote was written by a US citizen.

US citizenism, managing to state something and deny it the second later.

Yes, yes, we are wise to your US citizenism ways. Nevertheless, you will continue, as you are compelled to entertain us with your gyrations.

Hooked on power.

More likely: hooked on your visits to the Peoples Liberation Opium Parlour.

Mon, 07/09/2012 - 07:47 | 2598202 moskov
moskov's picture

EU wants to carbon tax every plane that flies past the EU. The most disgusting tax ever and EU thinks it can tell China what to do.

EU can fuck itself and we don't need your stinking Euro and Tax Nazis. Cry me a river and not even USSR can defeat China

Mon, 07/09/2012 - 07:51 | 2598211 GetZeeGold
GetZeeGold's picture

 

 

Don't hold back....tell us what you really think.

 

Mon, 07/09/2012 - 07:49 | 2598210 moskov
moskov's picture

Market? What Market? EU are too poor to become a market now. Sleep with you LV bags and feed them to your own folks

Mon, 07/09/2012 - 07:53 | 2598216 GetZeeGold
GetZeeGold's picture

 

 

Actually the EU is pretty tough.......they just extended the extensions. Maybe you haven't heard yet?

 

Mon, 07/09/2012 - 08:02 | 2598237 moskov
moskov's picture

Most of the Europe had Chinese blood and silver in their hands 100 years ago. They deserve what they have got today from being arrogant as hell. Keep scapegoating somebody else for your own corruption. You are calling Chinese communist? Yeah right! Deal with it!

Mon, 07/09/2012 - 08:11 | 2598261 GetZeeGold
GetZeeGold's picture

 

 

Maybe we should just call them socialists?

 

Mon, 07/09/2012 - 08:18 | 2598271 i-dog
i-dog's picture

Why not just call them 'Chinese'? At least it would be accurate....

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