Technology Trump’s Trade War With China Pierces the Heart of Michigan

03:26  13 july  2018
03:26  13 july  2018 Source:   nytimes.com

Trump says China could face more than $500 billion in U.S. tariffs

  Trump says China could face more than $500 billion in U.S. tariffs Trump says China could face more than $500 billion in U.S. tariffs.Load Error

“There’s Japanese owners, there’s Chinese owners,” said Roy Pierce , an autoworker who, for more than 20 years, has helped make interiors for vehicles like the Jeep Wrangler and Ford F-150 at a facility in Port Huron, Michigan U.S. and China Expand Trade War as Beijing Matches Trump ’ s Tariffs.

The official, Wang Huning, a Communist Party strategist who has spent much of his career sizing up the United States as a geopolitical rival, wanted to know whether President Trump was serious about a trade war with China

China says it won't give in to U.S. 'blackmail' on trade tariffs

  China says it won't give in to U.S. 'blackmail' on trade tariffs China fired back at President Donald Trump’s latest tariff escalation, saying it won’t yield to “blackmail.” Vice Minister of Commerce Wang Shouwen said he’s baffled at how the U.S. administration appeared to put a trade war on hold after talks in May, only to slap tariffs on Chinese imports a few days later.“If one party does not honor its words, talks cannot succeed,” Wang said in an interview in Geneva on Wednesday. For negotiations to succeed, “no party should point a gun at the other party,” he said.© Bloomberg Chinese Vice Minister of Commerce Wang Shouwen. Wang Shouwen on July 11.The U.S.

US President Donald Trump reckons trade wars are "good" and easy. Mr Trump also wants to cut the trade deficit with China - a country he has accused of unfair trade practices since before he became president.

Amid fears of an escalating trade war between the United States and China , President Trump tweeted Sunday morning that he and President Xi Jinping of China will “always be friends, no matter what happens with our dispute on trade .”

DETROIT — China’s flag flies high above Henniges Automotive, alongside those of Germany, Mexico, Canada and other nations, reflecting the global nature of Michigan’s auto industry and, increasingly, its reliance on Beijing.

Henniges, which produces sealing products for cars, was bought in 2015 by the Aviation Industry Corporation of China, a state-owned company that has snapped up other investments in the Detroit area, including the automotive supplier Nexteer, which sits just across Interstate 75 from Henniges. Over the past several years, Beijing has steadily pumped billions of dollars’ worth of investment into Michigan, buying crumbling factories, building new ones and supporting more than 10,000 jobs in the state.

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  Tesla prices shoot up $20,000 in China as US trade war begins China bumped up its tariff on electric cars by 40 percent in retaliation to US tariffs on Chinese imports.Tesla cars became considerably more pricey in China over the weekend, according to the Wall Street Journal. The Model X is now priced at $140,100, for instance, over $20,000 more than the $117,100 it previously sold for. The Model S, at $128,400, is also roughly $21,000 more expensive than it previously was, the Journal reports.

WASHINGTON — President Trump ’ s recent threat to impose tariffs on as much as 0 billion worth of Chinese goods appeared to be the first volley in what looked like a full-scale trade war with the nation’s greatest economic adversary.

Trump : Trade Wars Are Easy to Win. Also Trump : We Lost the Trade War with China . The president spits knowledge about a 0 billion something.

But where Michigan sees an economic partner, President Trump sees an “economic enemy” — one intent on overtaking America’s competitive edge by stealing technology, trade secrets and jobs from domestic companies. As Mr. Trump tries to punish China with tariffs and other restrictions, Michigan is caught in the cross hairs, with its ability to remain competitive and develop emerging technologies like autonomous vehicles, robotics and artificial intelligence highly dependent on ties to international markets, including China.

“The automotive industry is a global industry,” said Michael O’Kronley, a top executive at A123 Systems, an electric vehicle battery maker purchased out of bankruptcy by the Chinese company Wanxiang in 2013. “If you’re going to supply products into that, you need to be global.”

General Motors now sells many more cars in China than it does in the United States, and the largest exporter of cars from the United States by value is not an American brand, but BMW. By some calculations, the car with the highest proportion of United States and Canadian-made content is the Honda Odyssey — and even that includes roughly a quarter of foreign-made parts. Companies — and their workers — say they recognize there are certain risks from sharing their technological secrets with Chinese competitors, but they say it is no longer a choice whether Michigan, the automotive capital of North America, should engage with China, the world’s largest auto market.

Trump has attacked Canada, Europe, and Mexico for their trade barriers — here's how tariffs in every country measure up

  Trump has attacked Canada, Europe, and Mexico for their trade barriers — here's how tariffs in every country measure up President Donald Trump defends his new tariffs by claiming other countries are "taking advantage" of the US. But other major economies do not maintain much higher tariff levels than the US. The US, Australia, Canada, and Japan all have average applied tariff levels under 5%, while the European Union and Mexico are not much higher.The US is more protectionist by other trade measures than its allies.President Donald Trump has said that the current trade battles with key US allies are necessary because other countries are "taking advantage" of the US.

WASHINGTON — If a trade war with China erupts, Michigan could be among the hardest hit states in the U. S . On Tuesday, President Donald Trump gave new life to the prospect of a trade war , saying he is again considering a 25% tariff on billion worth of Chinese imports

A supporter holds an American flag with a Purple Heart medal pinned to it as President Trump But there's a lot of disagreement about whether President Trump ' s hefty tariffs are the right weapon for fighting back. There are two ways Americans are highly likely to get hurt in a U.S.- China trade spat.

“You can’t separate the two,” Jerry Xu, former president of the Detroit Chinese Business Association, said of China and Michigan. “You’re going to kill the industry if you try.”

The inevitability of foreign ties has even filtered down to the industry’s rank-and-file workers, who — after witnessing years of layoffs and plant closings — say it matters less who owns their company than that it continues to survive.

“There’s Japanese owners, there’s Chinese owners,” said Roy Pierce, an autoworker who, for more than 20 years, has helped make interiors for vehicles like the Jeep Wrangler and Ford F-150 at a facility in Port Huron, Mich., near the Canadian border. “As long as they’re making it here, I can’t complain. It’s still paying our wages.”

Michigan is one of the industry’s global hubs, home to more than three-quarters of all automotive research and development that occurs in North America. The Detroit area boasts two major testing sites for autonomous vehicles, sprawling compounds of interstates, guardrails, and mock pedestrians and bicyclists that companies and researchers use to test their technology. At the University of Michigan, a driverless vehicle shuttles students around the campus.

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US protectionism is in accord with the spirit of the times – but it won’t have a happy ending.

David Pierce . If there’ s a trade war between the U. S . and China , don’t blame Donald Trump : China started it long before he became president. Even free traders and internationalists agree China ’ s predatory trade practices—which include forcing U. S . business to transfer valuable technology to

Global competition is stiff, however. China’s progress on both autonomous and new energy vehicles is booming, in part thanks to generous subsidies and government funding, restrictions on gasoline cars, and regulations that require Chinese automakers to produce a certain number of low-emission cars per year. Last year, China accounted for more than half of the electric vehicles sold globally, according to the International Energy Agency. Although many in Michigan say China is on equal footing or still behind the United States in technological development, they do not expect that edge to last long.

To stay competitive, Michigan has spent much of the past decade trying to woo foreign investment from Beijing alongside longstanding investors from Japan, Europe and South Korea. In early May, as the Trump administration prepared to roll out tariffs and investment restrictions against China, Rick Snyder, Michigan’s Republican governor, welcomed more than 150 potential Chinese investors to tour Detroit, Ann Arbor and Grand Rapids.

While Washington was projecting a hostile climate, Mr. Snyder told the delegation that Michigan was “open for business.” In each of the past seven years, Mr. Snyder has traveled to China to visit entrepreneurs and solicit investment.

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  China just recorded the largest trade surplus with the US on record <p>In what will do little reduce trade tensions between the two sides, China's trade surplus with the US jumped to $US28.97 billion, larger than the $US24.58 billion recorded in May.</p>China's trade surplus increased sharply in June, including with the United States.

Setting aside the economic insanity of starting a large-scale trade war with America’ s largest trading partner, the Trump gambit carries very real risks for his domestic plans. China ’ s proposed countermeasures take aim at the heart of Trump country — the areas where soybean

Donald Trump has appointed a China critic to a key trade body. And with this appointment, it would appear that Mr Trump has no qualms about announcing to the world that he' s not afraid of a trade war with China .

The overtures have paid off. Oakland County, a Detroit suburb home to many auto suppliers, ranks third nationally among American counties in terms of the number of jobs that depend on Chinese investment, according to tracking by MacroPolo, a Chicago-based think tank. Chinese firms have also flooded into Wayne County, which includes downtown Detroit, to buy up defunct office buildings and vacant factory space.

Larry Williams, the president of Henniges, said a cash infusion from the Aviation Industry Corporation of China allowed his company to expand abroad and add jobs at its American facilities, including its Michigan headquarters. That investment was a key to the company’s remaining competitive globally, he said, since major automakers like Ford, Volkswagen and Daimler now standardize their products internationally and will no longer do business with suppliers that can compete in only one market.

“I don’t think they’re coming here to steal technology or steal intellectual property,” Mr. Williams said of the Chinese. “I think they’re coming here to learn, but not to take it back to China and forget about North America. They want to create global companies.”

The acquisition by AVIC, a state-owned company that supplies planes and weapons to the Chinese military, was reviewed by the interagency Committee on Foreign Investment in the United States, which vets foreign deals for national security risks. Mr. Williams said he feared that, in today’s climate of rising suspicions toward China, the deal would be subjected to even more intense scrutiny.

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  This American Cargo Ship Is Racing to China to Beat a Huge New Tariff on the Soybeans it's Carrying A ship carrying U.S. soybeans is steaming toward northern China in a race to beat a 25 percent tariff.&nbsp;Peak Pegasus is expected to arrive in Dalian on Friday, the same day that China is scheduled to impose tariffs on imports from the U.S., according to shipping data compiled by Bloomberg and a person familiar with the matter. If it arrives as scheduled, it should be able to clear customs before the tariffs are imposed, according to the person, who asked not to be identified because they’re not authorized to speak to the media. Ship-tracking data currently shows it arriving at about 5 p.m. local time.

Trump escalates trade war with 0 billion in proposed new Chinese tariffs. The move comes a day after China responded matched Trump ' s proposed tariffs with billion of its own, targeting small aircraft and soybeans.

China has warned that it does not want a trade war with the US, but will not sit idly by if its economy is hurt. Zhang Yesui, spokesperson for China 's National People's Congress, made the comments amid controversy over Donald Trump ' s announcement of tariffs on steel and aluminium imports.

The Trump administration has taken a far more pessimistic view of Chinese investment, particularly in technology and manufacturing, and is supporting legislation that would make it harder for foreign companies to invest in American companies like Henniges. Peter Navarro, a top trade adviser to Mr. Trump, has argued that China’s trade surplus with the United States has given it vast financial resources to buy up American companies, a process he describes as “conquest by purchase.” Other White House officials have said that some loss in Chinese investment, especially in sensitive technologies, is nothing to be dismayed about.

“There are a lot of areas where we do not want Chinese investment: militarily sensitive things, some areas of high tech,” Wilbur L. Ross Jr., the commerce secretary, said. “There are lots of areas where we do welcome it, and that’s the prerogative of any country.”

Mr. Trump’s trade policies are beginning to chill Chinese investment. To pressure Beijing to change its trade practices, the president has put tariffs on tens of billions of dollars’ worth of Chinese products and threatened hundreds of billions of dollars more, especially goods that feed into the “Made in China 2025” plan to cultivate high-tech industries. He has also proposed expanding government reviews of foreign investment.

Those actions, combined with tighter restrictions by the Chinese government on money flowing outward, are stemming Chinese investment in the United States. It plummeted more than 90 percent between the first half of 2017 and the first half of 2018, to its lowest level in seven years, according to tracking by Rhodium Group.

He Xian, a lawyer for the firm Butzel Long who helps arrange Chinese investments in Michigan, said the tariffs are actually encouraging some Chinese companies to move their operations to the United States, especially if they are seeking to supply to the American market. But many other Chinese clients that depend on international ties are choosing to invest elsewhere because of tariffs and other barriers, as well as growing antagonism toward China more generally.

Trump defends tariff moves as allies strike back

  Trump defends tariff moves as allies strike back President Trump is defending his plans to levy billions of tariffs on the nation's closest trading partners even as U.S. allies retaliate one-by-one.Load Error

The Trump administration is trying to calm worry of a possible trade war with China after a week of threatening the country with tariffs on imports that total 0 billion and accusing it of stealing U. S . intellectual property.

One of Butzel Long’s clients, a Chinese entrepreneur who was planning to set up a $10 million research and development facility in Michigan, recently chose to go to Germany instead because of concerns over new regulations on licensing and technology transfer. Another Chinese company Mr. Xian worked with had been planning to import 5,000 tons of beef a year from Michigan — a win for the Trump administration, which reached a deal last year to finally open the Chinese market to American beef. But in recent months, the Chinese company decided to give up on the deal, seeing the threat of a 25 percent Chinese tariff on American beef as too great a risk.

“We need predictable, stable policies,” Mr. Xian said. "Without certainty, nothing can happen.”

The auto industry is facing other pressures from the president’s trade agenda. His administration is investigating the national security threat posed by imported autos and auto parts, which could result in sweeping tariffs for the industry. Steel and aluminum tariffs levied by the administration earlier this year are raising material costs for car companies, while the president’s threats to withdraw from the North American Free Trade Agreement would put the industry’s most valuable export markets at risk.

The Trump administration has pointed to a rising share of imports in the American automobile market and falling numbers of manufacturing jobs as evidence that the industry needs help — though many economists attribute these trends in large part to the irreversible processes of globalization and automation. The administration also sees the auto market as a key to reducing what it sees as an unsustainable trade deficit.

Mr. Ross said at an investment forum in June that the trade deficit “really has two sets of origins.”

“One is a geographic one, that’s called China,” he said. “The other is a product one, that’s called automotive. If we don’t solve those two, we will not be able to do much to fix the trade deficit.”

But to many Michigan firms that have benefited from ties to China, the strategy appears counterproductive to America’s long-term growth.

As members of the United Automobile Workers, the industry’s main labor union, gathered for their constitutional convention in downtown Detroit, they acknowledged a wariness of foreign takeovers, but said investment from abroad had benefited them and their colleagues in the past.

Dominic Miccichi, a 24-year-old autoworker from Tiffin, Ohio, said that a Chinese company, Ningbo Jifeng Auto Parts, was bidding to take over his plant, Toledo Molding and Die, by buying its current German owner, Grammer.

Mr. Miccichi admitted that the idea of American companies being bought up by the Chinese “puts a bad taste in your mouth,” but said that the deal actually might benefit his fellow workers by bringing the plant more money and more opportunities for expansion.

“We lose a lot of business because we’re not global,” he said of his factory near Toledo. “We used to make the interior of the Wrangler. That’s gone.”

“We’re anxious, but it could be a good thing,” he said of the deal.

Follow Ana Swanson on Twitter: @AnaSwanson.

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Correction: July 12, 2018

This article has been revised to reflect the following correction: An earlier version of this article misspelled the given name of an Ohio autoworker and his hometown. He is Dominic Miccichi, not Domonic, and he is from Tiffin, not Tiffen.

Trump defends tariff moves as allies strike back .
President Trump is defending his plans to levy billions of tariffs on the nation's closest trading partners even as U.S. allies retaliate one-by-one.Load Error

Source: http://ca.pressfrom.com/news/technology/-83473-trump-s-trade-war-with-china-pierces-the-heart-of-michigan/

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