Andreas Mihardja, PhD from Georg-August University of Göttingen (1969) answered
In this trade war the losers is now the USA.
The USA is the supplier of the food products in China. China is not buying enough to offset the losses in the US agricultural sector. Before the trade war almost all the needs of China is supplied by the USA. By this trade war the farmers in the USA have NO buyers of their products and it now rotting on the fields. Also meat products export to China is curtailed in the demands and the Pig farmers and cattle ranches receive competition from Australia and South America.- result no sales
USA try to sell their LNG the product of their Shale oil that is now being cracked. Trade deals with China was already in the making and special LNG harbors are in the design phase or even at the implementation stages. All was scraped suddenly because Trump wanted more after the latest trade deal. - Result no sales [ China receive their energy from the Russian and the Central Asian countries ]
Boeing is preparing for a multi trillion sale to China. This is around 6400 commercial airplanes. This purchases is now on ice after Trump started the trade war. — Result the planes are not ordered yet and all is on ice. Airbus company that at this moment has no technical problems with their planes, is rubbing their belly. The sales could eventually go to Airbus. if Trump is re-elected.
In the case of the car industry, USA was supplying GM, Ford and other cars made in the USA to the Chinese public. Trump wants to stop this trend, but lucky Mary Barra is ignoring Trump and continue build GM plants in China. This sale is much larger than the US market. A boycott is in the making. EU automakers are producing electric cars in China and selling it like potato chips. Tesla is starting but is losing to BMW and others from the EU. If there was no trade war GM and Tesla will have the upper hand. The latest autoshow in China was an influx of many EU made cars. Angela Merkel is sponsoring it.and was visiting China 16x in the last 3 years. This means a lot.
Besides this EU is supplying China with machineries for the Electronic chip production. These companies are competing against US companies and the US is losing ground. If their is a good trade relationship China will not look for other suppliers because all could be supplied by the US. A single machinery for the Chip production cost as much as a Boeing airplane. The latest tool from ASML for the 7nm technology cost >100 million base price.
As you may observe - China is the customer of the world. It has enough money to buy and most of all it has enough money to spend. This is important in trade. The buying power of China is just half of the trade volume of China. Their export is the most profitable product for creating the money.
In the electronic world, the most money is made in the Cellphone industry. The hardware production is almost a monopoly of China in Shenzhen. In the software production China is not to strong yet. This is the monopoly of the USA. Trump is manipulating this field and forbid the sales of this products to China with the excuse of security. Result Google cannot sell their products. China is not sleeping and has now created it own OS with an open source [meaning the source code is free to obtain.] Huawei has created a new operating system to replace Google Android OS, the Harmony OS. That is just a start. The question is if the software APP industry is taking the offer. All depends on the sales volume of the OS. Android and Microsoft WIN is having the monopoly. Huawei OS, Harmony is now just like the Apple OS.
Still in the world of cellphones , Huawei has the 5G technology and US have not and has to buy from Huawei. Trump put pressure on Huawei thinking and hoping it would collapsed. He miscalculated and now the 5G is in the hands of China. Software people in the Silicon Valley US are putting this problem aside and are working on the Sixth generation since the fifth market is already destroyed by Trump. The US is also loosing 40 Billion/yr of sales to Huawei and this is now almost replaced in its entirely by made in Huawei incl. its microprocessor. Imagine this is just done in less than a year, showing the capacity of the Shenzhen community.. Lucky for the US the upgrade from 4G to 5G is now available w/o hardware replacements. the hit will not be that big.
China is the supplier of most assembling plants in the USA from the airplane to the household industry. Only missing one component in the chain of production is crucial and could stop any assembling line. In order to keep business alive there is no way out than buy it at a premium [with the 25% tariff]. China is also the world supplier of rare metals important for the electronic industry.
People are normally thinking of made in China are those dolls in Toysaurus or house hold products in Target or Walmart They don’t even now that their pencils, pens, erasers etc. are also made in China. They also never look at the inner part of their appliances. Almost all of the electronic parts are made in ShenZhen. The body part are all made in China. If you make an accident with your car and need a body part - well most of it are not coming from the manufacturer but all came from China [ask any collision shop].Have you check your in house lightning, your water supply fixtures yet or the bulbs in your house - well they are all made in China and not made in the USA. Sp if you need them what will you do - You the premium price with the 25% tariff.
In this trade war the losers is now the USA.
The USA is the supplier of the food products in China. China is not buying enough to offset the losses in the US agricultural sector. Before the trade war almost all the needs of China is supplied by the USA. By this trade war the farmers in the USA have NO buyers of their products and it now rotting on the fields. Also meat products export to China is curtailed in the demands and the Pig farmers and cattle ranches receive competition from Australia and South America.- result no sales
USA try to sell their LNG the product of their Shale oil that is now being cracked. Trade deals with China was already in the making and special LNG harbors are in the design phase or even at the implementation stages. All was scraped suddenly because Trump wanted more after the latest trade deal. - Result no sales [ China receive their energy from the Russian and the Central Asian countries ]
Boeing is preparing for a multi trillion sale to China. This is around 6400 commercial airplanes. This purchases is now on ice after Trump started the trade war. — Result the planes are not ordered yet and all is on ice. Airbus company that at this moment has no technical problems with their planes, is rubbing their belly. The sales could eventually go to Airbus. if Trump is re-elected.
In the case of the car industry, USA was supplying GM, Ford and other cars made in the USA to the Chinese public. Trump wants to stop this trend, but lucky Mary Barra is ignoring Trump and continue build GM plants in China. This sale is much larger than the US market. A boycott is in the making. EU automakers are producing electric cars in China and selling it like potato chips. Tesla is starting but is losing to BMW and others from the EU. If there was no trade war GM and Tesla will have the upper hand. The latest autoshow in China was an influx of many EU made cars. Angela Merkel is sponsoring it.and was visiting China 16x in the last 3 years. This means a lot.
Besides this EU is supplying China with machineries for the Electronic chip production. These companies are competing against US companies and the US is losing ground. If their is a good trade relationship China will not look for other suppliers because all could be supplied by the US. A single machinery for the Chip production cost as much as a Boeing airplane. The latest tool from ASML for the 7nm technology cost >100 million base price.
As you may observe - China is the customer of the world. It has enough money to buy and most of all it has enough money to spend. This is important in trade. The buying power of China is just half of the trade volume of China. Their export is the most profitable product for creating the money.
In the electronic world, the most money is made in the Cellphone industry. The hardware production is almost a monopoly of China in Shenzhen. In the software production China is not to strong yet. This is the monopoly of the USA. Trump is manipulating this field and forbid the sales of this products to China with the excuse of security. Result Google cannot sell their products. China is not sleeping and has now created it own OS with an open source [meaning the source code is free to obtain.] Huawei has created a new operating system to replace Google Android OS, the Harmony OS. That is just a start. The question is if the software APP industry is taking the offer. All depends on the sales volume of the OS. Android and Microsoft WIN is having the monopoly. Huawei OS, Harmony is now just like the Apple OS.
Still in the world of cellphones , Huawei has the 5G technology and US have not and has to buy from Huawei. Trump put pressure on Huawei thinking and hoping it would collapsed. He miscalculated and now the 5G is in the hands of China. Software people in the Silicon Valley US are putting this problem aside and are working on the Sixth generation since the fifth market is already destroyed by Trump. The US is also loosing 40 Billion/yr of sales to Huawei and this is now almost replaced in its entirely by made in Huawei incl. its microprocessor. Imagine this is just done in less than a year, showing the capacity of the Shenzhen community.. Lucky for the US the upgrade from 4G to 5G is now available w/o hardware replacements. the hit will not be that big.
China is the supplier of most assembling plants in the USA from the airplane to the household industry. Only missing one component in the chain of production is crucial and could stop any assembling line. In order to keep business alive there is no way out than buy it at a premium [with the 25% tariff]. China is also the world supplier of rare metals important for the electronic industry.
People are normally thinking of made in China are those dolls in Toysaurus or house hold products in Target or Walmart They don’t even now that their pencils, pens, erasers etc. are also made in China. They also never look at the inner part of their appliances. Almost all of the electronic parts are made in ShenZhen. The body part are all made in China. If you make an accident with your car and need a body part - well most of it are not coming from the manufacturer but all came from China [ask any collision shop].Have you check your in house lightning, your water supply fixtures yet or the bulbs in your house - well they are all made in China and not made in the USA. Sp if you need them what will you do - You the premium price with the 25% tariff.
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