No "Surrender" - China Escalates Trade Tensions By "Delaying" Deal Reviews

Remember yesterday when The Trump administration confidently proclaimed victory in the US-China trade wars, explaining that they believe the threats are working.

“China basically surrendered [with the Xi speech] and he [Trump] is probably going to put even more pressure on them before he accepts whatever their bottom line becomes,” said a person familiar with White House views.

Administration officials argue the Chinese are already bending to the U.S.’s will:

“It was the most conciliatory thing we’ve heard since the whole discussion began,” said a White House official. “Up to then, it was mean, nasty, cruel name-calling.”

China vehemently denied this acquiescence and this morning have struck back, albeit subtley.

The Wall Street Journal reports that unidentified people familiar with the matter say that China is holding up deal reviews that could clear the way for U.S. companies Qualcomm and Bain Capital to make multi billion dollar acquisition of semiconductor companies.

The delay could end up quashing Qualcomm’s planned $44 billion acquisition of Dutch semiconductor company NXP Semiconductors NV, a deal widely seen as critical to Qualcomm’s future, according to one person familiar with the matter.

And both companies' share prices are sliding...

WSJ notes that China is the only country that has not yet signed off on that deal, along with Toshiba Corp.’splanned $19 billion sale of its chip unit to a consortium led by U.S. private-equity firm Bain Capital. Neither deal is likely to move forward amid the looming trade war, the people said.

“The review process is basically on pause because of the trade tension,” a senior Toshiba official said. “We’ve been afraid of that.”

Stalling these deals is another possible leverage point for China as it seeks to fend off the Trump’s administration’s plans to impose tariffs on up to $150 billion in Chinese goods in response to what it says are unfair trade practices.

While markets had seemed ready to shrug off any looming trade war - which The Fed's Kashkari called "enormously bad" for the US economy - it seems we are not even out of the first inning in this fight...

Comments

HillaryOdor libfrog88 Fri, 04/13/2018 - 12:26 Permalink

Banksters have no power without the state.

The problem is people believing the consequentialist ideas that sacrificing some of your freedom makes you more free.  Of course this is impossible.

There are virtuous cycles and vicious cycles.  That's it.  The ends never justify the means. 

A society founded on corrupt ideas (like institutionalized theft aka taxation) can only become more and more corrupt over time.   There is no other possible outcome.  This is why no society can resist collapse forever.  None has ever been built on a moral foundation.  People always surrendered to a state. 

America cannot be reformed.  It is impossible.  The state must be abolished to let decent people build a decent society if you want it to last.

In reply to by libfrog88

TemporarySecurity Four Star Fri, 04/13/2018 - 11:52 Permalink

Love the graphs that you keep putting up, they argue more for why we need free trade, even unilaterally, rather than the nationalistic fair trade.

Trade deficit begins around 1970, life is better for most in the US since then.  Drastically better, now the complaint about being poor is not being able to buy a 50" flat screen TV.

The other graph shows the countries with they highest and lowest tariffs the highest are shit holes the lowest are the various countries I would consider living in.

Maybe you should reconsider the whole deficit being a problem thing from your own graphs you are putting out.  Unless you idea of heaven is Nigeria.

In reply to by Four Star

JLarryL Fri, 04/13/2018 - 11:06 Permalink

Since January 26 the Dow's daily chart has been tracing out a descending triangle. Today the index touched a key point right at the top edge of the triangle, and it's currently being rejected there.

This market is being steadily distributed. If the dam breaks it could go minus 3000 on the down side.

earleflorida Fri, 04/13/2018 - 11:08 Permalink

while trump fucks over Syria,...

china will fuck over Taiwan (and, probably invade), if Trump invades Syria fighting Russia and Iran

oh, the horror of a, 'kabuki theatre `tragedy' :)  

BritBob Fri, 04/13/2018 - 11:20 Permalink

Playing bluff?

The stakes are high but who has the best hand?  US - China trade The U.S. trade deficit with China was $347 billion in 2016. The trade deficit exists because U.S. exports to China were only $116 billion while imports from China were $463 billion. Only one winner.

WTFUD Fri, 04/13/2018 - 11:33 Permalink

Bain Capital - Mitt (the shit) Romney - sold out American manufacturing - also Nikki (badass, in a stenchy way) Haley is his Neocon Plant in Trump's Administration - remember that meeting at Trump Tower H/Q.

Consuelo Fri, 04/13/2018 - 11:44 Permalink

It is delusional to think the Chinese don't understand the risks to their economy by escalating this farce, nor have understood it for years.   The acceleration of trade friction with the U.S. simply accelerates China's alternative plans which have been underway for quite some time.  Sure they must not lose face, but is our posturing any different in our own way?    There is no doubt that President Trump is attempting to rectify an unbalanced situation, but that situation has existed for 30+ years...   You can't slam a loaded truck into 1st gear when traveling at 60 mph and not expect parts to go flying however... 

green dragon Fri, 04/13/2018 - 13:47 Permalink

Russia will be able to make products without the permission of rights holders in the United States and US-supporting countries.

This regulation is present in the draft law, which provides for retaliatory measures to anti-Russian sanctions. Measures of influence include "exhaustion of the exclusive right to trademarks in respect of the products included on the list determined by the Government of the Russian Federation, the rights owners of which are citizens of the United States and other foreign states or organisations under the jurisdiction of the United States and other foreign states, as well as organisations, the capital of which directly or indirectly, inter alia through third parties (dominant participation of more than 25% in the capital), involves organisations under the jurisdiction of the United States and other foreign countries."

According to First Deputy Chairman of the State Duma Committee, Mikhail Emelyanov, it means that Russia "will be able to produce these products ourselves once we have the technology, without the permission of the rights holder."

"That is, we punch the Americans in the stomach, because all the successes and, and above all, the domination of the Anglo-Saxon and Western world is ensured precisely by the right of intellectual property, and we are striking a blow to this right," Interfax quotes Emelyanov as saying.

Earlier, Pravda.Ru reported that the draft law providing for retaliatory measures in response to US sanctions was submitted to the State Duma.

William Dorritt Fri, 04/13/2018 - 15:07 Permalink

China will never respect IP or trade deals,

they know the US if full of chumps and will attempt to outlast Trump waiting for the next chump.

End all trade with China.