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China Trade War - Tarrifs, Tarrifs and more Tarrifs

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  1. #71

  2. #72

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    I don't think they need to dump. Perhaps slow down the buying significantly?


  3. #73

  4. #74

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    Another article . . .

    Although called "rare", they are actually found relatively abundantly in the Earth's crust, according to the US Geological Survey.

    However, there are relatively few places in the world that mine or produce them.

    Extraction is both difficult and potentially damaging to the environment.

    Chinese mines account for around 70% of global output.
    Another country would surely be willing to destroy their environment to move up the economic food chain and provide these minerals. And given China's climb up the economic ladder, they would eventually want to stop the mining at some point. This trade war will just move up the timeline.

    https://www.bbc.com/news/world-asia-48366074

  5. #75

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    Quote Originally Posted by shri:
    I don't think they need to dump. Perhaps slow down the buying significantly?
    What difference would that make? China's trade surplus is in USD, they have to stash them somewhere. If they put them in the bank, the bank will just buy USD treasury notes with the cash. If they use them to buy oil, the oil exporting countries will just buy treasury notes with the USD cash. The EU doesn't have enough supply, their yield is already negative for 10 year bills. And in any event, they'd just put the USD into US treasury notes as well.
    Even selling them wouldn't make much difference I think. The US could just print more dollars to gobble them up, bringing the dollar value down and making goods sold in RMB even less attractive than they are already are with the tariffs. In any event, China doesn't hold that big of a percentage overall. I think only about 2% off all outstanding treasury notes.


    Quote Originally Posted by huja:
    Another article . . .


    Another country would surely be willing to destroy their environment to move up the economic food chain and provide these minerals. And given China's climb up the economic ladder, they would eventually want to stop the mining at some point. This trade war will just move up the timeline.

    https://www.bbc.com/news/world-asia-48366074
    Didn't they try that in 2010 when they had a beef with Japan and found it made virtually no difference? Rare earth isn't rare and China doesn't produce 70% of it because nobody else has them, only because they are the cheapest. In 2010 US production of rare earth picked up the difference and they seized again in 2015.
    shri and hullexile like this.

  6. #76

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    I think China has 5% of the US Treasuries issued... more than 2% but ultimately they're not a big enough gorilla to seriously disrupt the system even if they sold them all.

    hullexile likes this.

  7. #77

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    Quote Originally Posted by TheBrit:
    I think China has 5% of the US Treasuries issued... more than 2% but ultimately they're not a big enough gorilla to seriously disrupt the system even if they sold them all.
    Thanks. You are right. China holds 1.1 out of 22 trillion, or pretty much exactly 5%.

  8. #78

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    Quote Originally Posted by mrgoodkat:

    Didn't they try that in 2010 when they had a beef with Japan and found it made virtually no difference? Rare earth isn't rare and China doesn't produce 70% of it because nobody else has them, only because they are the cheapest. In 2010 US production of rare earth picked up the difference and they seized again in 2015.
    For years, China has led mining efforts of rare earth minerals, becoming the world's largest producer because of its loose environmental restrictions and low processing costs.
    But he [Andrew Coflan, an analyst at Eurasia Group] calls the threat from China "overblown," more disruptive than existential, and "mostly the result of domestic nationalistic media voices rather than a key tool in the toolkit in Beijing."

    He says the United States could potentially turn to itself, Australia, Brazil or even Russia to substitute rare earths. It would also have to address a scarcity of post-mining processing facilities because they are primarily in China.

    Last year, the United States resumed domestic mining at its only facility, which had previously gone bankrupt. A mineral known as the main source of rare earths, called bastnaesite, was mined in Mountain Pass, Calif.
    China can only play a rare earths embargo card once, both analysts say. The move backfired after the country banned the export of rare earths to Japan in 2010. The World Trade Organization later forced China to scrap its export quotas. China's move also led to increased illegal production.
    Good memory, @mrgoodkat

    Me: Probably not Russia. Long-term, at least.

    https://www.npr.org/2019/05/29/72785...ce=twitter.com

  9. #79

  10. #80

    Rare earth is not rare, but China does have the richest rare earth mines: it is not only a willingness to disregard the environment.Another issue is refining capacity - US has one company that mines rare earth in US, but they still send the ore to China.

    hullexile likes this.

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