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Andy Grove makes this passionate plea for the dignity of workers in America in 2010. It is worth reading in 2020 what this founder of Intel Corp and pioneering spirit of Silicon Valley has to say. Andy Grove of Intel says there is something seriously wrong when the unemployment rate in the Bay Area is higher than the 9.7% national average for the USA. American companies have added jobs like crazy in Asia, but things are sputtering back home. Hon Hai has 800,000 employees and makes most of the electronic and computer products for American companies. Grove says startups are not the answer, unless they scale up and create jobs the way Intel did starting back in 1968, with a $3 million capital infusion by investors. The move from the first production model to mass production is critical, as companies hire thousands of people. Innovation and scaling up have to go together. He makes his point clearly by pointing out that Apple has 25,000 employees. For every Apple employee there are 10 employees in China working on Apple iMacs, iPods, iPhones. And he adds that the same 10 to 1 relationship applies to other U.S. tech companies. And here Grove asks the tough question by first posing an answer. He says it sounds like- no big deal, we keep the high paying jobs, we keep most of the profits, but what kind of society are we going to have with highly paid professional workers and lots of people unemployed? And he doesn't mention that there are a lot more young people unemployed. He says the US has become very inefficient at creating tech jobs, and it would be a great mistake not to act decisively early on. And adds that the investments in such areas as solar power and electric car batteries have to be made early on to maintain leadership in these areas. Grove faults academics like Alan Blinder and others who say loss of manufacturing jobs and whole industries was no big deal. The U.S. has forgotten the value of manufacturing jobs. He wants to see America focus on jobs and rebuild its industrial base. And less of transferring engineering knowhow and new technologies overseas, technology that can help bring innovation and scaling up of factories at home. In his view individual companies doing their own thing, in a misguided fashion that jobs don't matter, is not the answer to the situation we face. The industrial economies of Asia, China at the present day, have focussed on jobs and technology, and scaled up. Grove reminds readers of the situation in America in 1932, when jobless veterans demonstrating outside the White House in large numbers were dispersed by soldiers with live ammunition and fixed bayonets. This makes him shudder at the very thought of it, and brings back memories of his early years in Hungary, as a young man in 1956. Are we listening? ...

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It is hard to imagine that one is even writing about this, as shocking as it is- the 4 or 5 minutes between a decision to launch nuclear weapons and the end of life on this planet earth as we know it. Here Sam Nunn, a U.S. senator who was part of the negotiations for arms control and who is the leading American in this field talks about the unimaginable danger. He says the strategy from the Cold War where Russia and the U.S. put their nuclear forces in a position to be launched within minutes, 4 to 5 minutes, is outdated and needs to be changed. Hillary Clinton described the issue in the television debate. Yet this was not discussed because of the nature of the 2016 presidential election with lack of serious discussion.  And both Nunn and Clinton emphasize that once the missiles are in the air they cannot be ordered to go back. Accidental error, judgemental error, informational error in which one side thinks the other has launched a missile, a firing by mistake, are possible. In this situation Nunn says Trump is temperamentally unfit, and Clinton is fit to take on the responsibility. Yet the question this raises is as Nunn signals- is anyone but God fit to make this decision to launch nuclear weapons. Nunn says it is outdated and wrong to have only a few minutes, as such a decision cannot be made in a few hours or days, much less in 5 minutes. Nunn brings up a discussion he had in Moscow when he brought this up with Russians and president Putin. Russian president Putin told Nunn that he was fully aware of this. Putin's response was- "Senator Nunn, at some point it becomes automatic."  Nunn does not clarify what this means, or what Putin means to say. For people on the planet it is not enough to have Reagan, Gorbachev, Clinton, as Nunn mentions being responsible people for a nuclear decision. The current state of affairs is simply shocking and the lack of attention to this is also shocking. Equally dangerous is that 20 countries have weapons usable nuclear material, and sophisticated hacking of command and control processes is another danger.       ...

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Cook and Olson look at how U.S. shale oil firms have handled the slump in oil prices. Their report in WSJ says the shale firms have weathered the oil slump well, with production declines in 2016 of only 535,000 barrels a day compared to 2015. The Saudi decision to not cut production and let oil prices drop has affected mostly higher cost less flexible production for mega projects such as deep water projects and oil sands in Canada. Oil shale firms are expected to snap back, according to experts, as demand increases. U.S. production is expected to increase by about 700,000 barrels a day by end of of 2017, say experts.

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About one third of people in America are living in areas where there is a critical shortage of ICU beds. Deaths in America are averaging 2200 a day on December 8, 2020.

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U.S. Commerce Secretary, Wilbur Ross, has balanced the rhetoric of president Trump on trade in the NAFTA debate by saying the U.S. is looking for win-win solutions in trade relations with Mexico. At the WSJ CFO network Ross says the trade regime from the post war years is now an anachronism and does not work well especially for the U.S. Many experts agree that the trade framework from that period is problematic. It does not take into account, for instance say experts, the situation where a command economy such as China could help manufacturing industries with state policies, including currency policies. The rapid growth in China was different from the rapid growth in an earlier period of Japan, in terms of its impact say experts. The U.S was the dominant economy during the sixties, and the growth in Japan was not at the accelerated pace and of the magnitude that happened in China. As a result the impact on  some communities in the U.S. was much more intense in the last two decades, as documented by prominent trade studies, leading to the sense that trade did not work for these communities. ...

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Canada, Australia, India, Brazil have some of the largest reserves of rare earth and critical minerals. Brazil has second largest reserves. This means the US can still change the current situation of a near monopoly on critical minerals by China in coming years by making the necessary investments early in these countries and in the US itself. Here is the situation in Brazil for rare earths. Brazil has said it will be open to investments that place a priority on rare earths processing within Brazil, not just rare earths commodity exports for processing in the EU or the US. China does most of the processing of rare earths in China, it imports heavily from Burma, Indonesia, Australia and Africa and does nearly 100% of the processing in China using research labs and production facilities funded by PRC government. Yet the search for and development of supplies of rare earths and critical minerals is still at an early stage so that with the necessary investments including in India, Indonesia, Australia, Brazil, in Africa, and in the US, the US and Germany, EU, India can change this situation by 2030. Brazil hold 21 million tons of reserves of rare earths, about a quarter of world rare earths reserves. Just in the last 3 years since 2023 3000 permits have been filed with Brazil's National Mining Agency compared to 500 in years before this. Australia and India are also catching up in rare earths minerals investment. Australian producers Viridis and Meteoric are doing advanced work in Pocos de Caldas mining area in Brazil. Canada is doing a project in Golas state. US company Rare Earth is putting $2.8 billion in Serra Verde. All this is being pushed forward by fast track investing supported by the DJT US government. Serra Verde historically sent rare earths in commodity form to China. Now DJT administration has setup private and public financing for a 15 year supply agreement to the US. Australia's Viridis can also get funding from IDFC operated by the US with discussions underway. Viridis's $360 million  Colossus project in Brazil sends rare earth in commodity form to a French-Belgian processing company in the EU. Brazil cannot afford to be too restrictive when it comes to processing- though that remains its goal -as Brazil wants to use its advantages in rare earths to increase investments and export earnings to support its slowing economy. Over time Brazil as part of this western hemisphere and as shown in "Brazil no Espelhos" or "Brazil in the Mirror" by Felipe Nunes, discussed in the adjoining piece on Brazil, is a part of the same social fabric of the Americas and its economic structure, its supply chains, its business, its democratic framework and processes. ...

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David Reilly says the Fed's response to the large volatility in the stock market after the credit downgrade of the U.S. to AA+ makes sense. The Fed's Open Market Committee voted 7-3 on August 9, 2011, to keep interest rates exceptionally low till mid-2013. With credit markets working and the financial system having sufficient liquidity the Fed did not need to take drastic action. Coming only a short period after the end of QE II, a QE III could be seen as an over-reaction. Another reason for the Fed's action- more pressure was needed for the U.S. government and Congress to shoulder responsibility for the economy. In an earlier statement the Fed had pointed out that the Fed by itself can only do so much and this is consistent with that thinking. There are important headwinds from housing, large consumer debt, deficits, and high unemployment that the Fed alluded to in that statement that will take time to reverse with policy action on several fronts over a longer period. In the speech made on June 6, 2011, U.S. Federal Reserve chairman, Ben Bernanke, said "monetary policy cannot be a panacea."...

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Federal data showing international and domestic migration by US state and the natural growth in US Population 2026. California, Hawaii, Vermont, New Mexico lost population because of domestic outmigration, lower international migration and natural birth/deaths led to net negative growth. Population growth was fastest in Idaho, Utah, Washington, Texas, North and South Carolina, Tennessee, Georgia, Florida, Arizona, in southern and western mountain states. Births were higher in these states in addition to the domestic in-migration from other states. Population is slowing to about 0.5% after the big surge in international migration under the Biden Administration from failed states such as Venezuela, Guatemala, and from Mexico at the southern Border- by 1.8 million to reach 341.8 million. One of the problems is integrating newcomers- the Movement for Literacy in the US is to ensure new US citizens have an essential grasp of the ideas that shaped the nation and civic information, knowledge of the English language. Another is burden on social services needed and healthcare services which were under strain under the Biden administration open border policy. Also significant is the concerns of residents for homelessness and safety in urban areas.  ...

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WSJ reports that Tech companies spent heavily in 2022 to block legislation in the US. Congress. This means the US Justice Department had to step in with the Executive Branch determined to dismantle the edifice of anti competitive behavior that Google, Apple and other companies have built. States are also stepping in with the US Justice Department. Attorney General Merrick Garland seeks nothing less than to breakup Google as is clear from his statement on January 25 announcing the US Justice Department lawsuit. 

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Oil prices and the US war with Iran -Straits of Hormuz how much of it remains open, European supplies, and drop in production in Gulf region, how these risks are managed will have an impact on inflation. Inflation could end up at 2.9% instead of 2% says Greg Ip. Gep Ip does not take into acocunt new flexible oil policy under which India gets a waiver to buy oil supplies from Russia, China sources more of its supplies from Russia to make up for the supplies lost from the Middle East. Russia steps in for a temporary period to keep oil prices lower. US ramps up Venezuelan and its own oil production to meet the needs of other countries such as Japan and S. Korea, Indonesia, Vietnam, and Europe. Conservation measures are enacted to reduce oil use for the same level of GDP as taken in Japan and Germany.

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Rex Tillerson, U.S. Secretary of State takes a strong stand on North Korean missile testing and nuclear program in a visit to Seoul and Beijing. He said the U.S. would be forced to take pre-emptive action "if they elevate their threat of their weapons program"  to an unacceptable level. Continuing a policy of the Obama administration following missile tests by North Korea, the Trump administration has rejected any talks with North Korea. Tillerson said that "the policy of strategic patience has ended." It was also meant to signal U.S. intentions before Tillerson goes to Beijing from Seoul. President Trump commented on Twitter; "North Korea is behaving very badly. They have been "playing" the United States for years. China has done little to help." Because China sees North Korea as a bargaining chip with the U.S., Japan and South Korea, the situation has ended repeatedly in a impasse with the North Korean nuclear and missile program continuing during the Bush and Obama administrations. This has also meant that North Korea was unlikely to collapse on its own, with China pursuing a policy of using North Korea as part of its defense policies in the region, as pointed out by Sanger in this report. As the North's missile program continues the U.S., and with the North seeing the missile program as the only way to ensure the survival of the regime, the U.S. needed to come up with a new way to tackle the situation.   ...

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The new India built refinery by RIL (Reliance India Limited) in the US at Brownsville, Texas, will reduce US trade balance by $15 billion a year and will produce oil using cleaner US shale oil and newer technologies that are less polluting for the environment.  India's RIL Refinery Project for $300 billion at Brownsville, Texas, is Explained here in the Indian Express. The Project is called America First Refining, and was announced by the US president recently.  $125 billion for 60 million barrels of US shale oil processed annually over 20 years and $175 billion for 2.5 billion gallons of refined product to be produced annually for 20 years. US  imports about 2.8 billion barrels a year and (exports 1 billion barrels a year) at a cost of $180 billion a year. This means the trade imbalance from crude imports will be cut by about 10% annually. The new refinery is the first in 50 years and is designed to process cleaner lighter shale oil from the US Permian Basin -whereas existing refineries are designed with older technology for heavier crude oil such as the US gets from Venezuela. Reliance India Limited has a fast turnaround time on projects- new project will come onstream in 2027. It currently has the world's largest single refining complex in Jamnagar, Gujarat, India.  ...

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U.S. president Trump has a meeting with the Pope at the Vatican in which both were seated at a wooden desk in the pope's private study, and both listened carefully. Trump told the pope, "Thank you, thank you, I won't forget what you said." The pope gave Trump an encyclical on the environment, in which he said that capitalism had contributed to degrading the environment and this hurt the poor. Trump said he would read the encyclical. The U.S. president was critical of the Paris climate change accord on the campaign trail in 2016. Now as he decides whether the U.S. should withdraw, aides at the White House in favor of it see this as an opportunity for Trump to get a better understanding of the issue before deciding. Mr. Trump gave the pope a first edition copy of Martin Luther King's writings, and Francis gave Trump a medal bearing an olive branch. Trump then met for 50 minutes with the Vatican Secretary of State Cardinal Parolin.

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This report by Martin in the NYT points out that Ohio no longer plays a critical role in U.S. presidential elections. It was critical for a Bush win over Gore, and president Obama carried it by 2 points against Romney in 2012. It is critical for Trump to win. For Hillary Clinton other states are gaining importance as they better reflect the demographic changes in the U.S. and the mix with minorities- states such as Georgia, N. Carolina, Colorado and Florida. Ohio has not seen an influx of Hispanics as other states, and is now more white, more evangelical voters, and reflects a mix that was prevalent earlier. 

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Thucydides, Greek historian on the Peloponnesian War between Sparta and Athens 431 BC, cited by Xi Jinping of China during DJT visit to China, May 2026. “Can China and the United States transcend the so-called ‘Thucydides Trap’ and forge a new paradigm for major-power relations?” "Thucydides Trap," is about one established power being threatened by another rising power, as Sparta felt threatened by a rising Athens in the Greek world around 431 BC, leading to a long over 30 years war.  “The Taiwan question is the most important issue in China-US relations,” Xi said, of Taiwan, an island near China's coast where ChiangKaishek set up his government after the fall of his government in Beijing in 1949 to Communist People's Army of Mao Zedong. “If mishandled, the two nations could collide or even come into conflict, pushing the entire China-US relationship into a highly perilous situation."  What China sees is a future of strong economic growth based on China having built its industrial strength and world trade to exceed 1.2 trillion dollars of trade surplus in 2026. Yet this is only the beginning. US and European Union, and India+Japan are three economic regions compared to the situation in Greek history. The combined three economic regions potential for scientific and industrial advances in the future till 2045 in a synergistic fashion one building on top of the other's advances, far exceed the potential of the Chinese economy and industry by itself. This is why any such conflict may over time fizzle away as three economic regions of EU, US and India advance, particularly the 1.4 billion people of India, which will see growth rates of 20% annually for 10 years to 2035 in Eastern Indian region of the size of the EU. That region extends from Lucknow and Patna to Vizag and Chennai. Another aspect of this concerns China itself which sees slowing growth of 5% in 2026. Growth could slow further as US, European Union and India/Japan push back on Chinese exports during a period of reindustrialization in US, EU, Japan and rapid industrial development in India to 2040. China's development is only midway in terms of per capita GNP which lags most of Europe and the US, Japan. Thus the main concern in China is that China will not be able top go beyond middle income country as its demographics and aging population look more like Japan's over the period 2026-2040. China needs the US EU trade and markets for it to meet the needs and aspirations of its 1.4 billon people as the other engines of development such as housing construction, infrastructure building, have lost momentum. ...

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The full text of the letter is given here. In this letter the U.S. sets out some important facts about events that happened during the coronavirus crisis during the crucial 4 month period from December 2019 to March 2020. Every week lost in this time due to reasons of a lack of transparency, openness meant hundreds of thousands of people more infected and tens of thousands of deaths worldwide. There are questions of transparency, of openness and this raises questions about the manner in which the World Health Assembly operates with hundreds of small countries in Africa and Asia having votes equal to that of the U.S., India, Brazil, Mexico with votes taken of over 200 countries. The entire election process can now be seen as questionable, when over a billion people in one country alone such as India or hundreds of millions in Brazil and Mexico would have to bear the consequences of poor decisions made by small countries that can be swayed in one direction or another based on political bias and other considerations that have nothing to do with global health.  At the conclusion of the letter by the U.S. to the current WHO shaped by a controversial election in 2017 the following is stated about the standards set by Gro Harlem Brundtland and which helped the world prevent the SARS crisis which originated in China in 2003 from spreading to the large countries of the world India, Brazil, Mexico, and other such countries in Asia and Africa, Latin America, and the U.S. European Union. "In 2003, in response to the outbreak of the Severe Acute Respiratory Syndrome (SARS) in China, Director-General Harlem Brundtland boldly declared the World Health Organization’s first emergency travel advisory in 55 years, recommending against travel to and from the disease epicenter in southern China. She also did not hesitate to criticize China for endangering global health by attempting to cover up the outbreak through its usual playbook of arresting whistleblowers and censoring media. Many lives could have been saved had you followed Dr. Brundtland’s example." Even this does not come to grips with the flawed way in which the election of WHO head is done. It can no longer be relied on when there is the danger that lack of transparency can emerge in the WHO leadership itself because of a flawed process. It risks endangering the lives and livelihoods of hundreds of millions in countries such as India, Brazil, Mexico, as well as in the relatively small countries of Africa and Latin America where even basic water supplies are at risk but which could tilt elections at the World Health Assembly. Consider that a cyclone just hit the Indian state of West Bengal and Bangladesh on May 20 just as the coronavirus pandemic is spreading. That this region of 1.5 billion people had just 2 votes out of over 200 cast at the World Health Assembly in 2017 shocking. And even these votes cast based on old geopolitical considerations not how good the candidate is, and how good the country he is coming from is in terms of its record  on public health. The irony here is that private foundations in the advanced countries in the U.S. and Europe some of whom are major donors to WHO did not think that more experienced candidates in their own countries with a better record of public health such as in France or Germany are better qualified, in a flawed NGO support mentality left from the Clinton years. Basically the people in these large countries such as India, Brazil, Mexico were disenfranchised, when the austerity policies were consuming the European Union, and the U.S. had just elected a new administration itself groping for ways to reverse years of neglect of public services and infrastructure priorities. They would trust good leaders no matter where they come from, who have a record of transparency, leadership, and all the values we cherish together no matter where we come from. ...

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The Labor Department figures showed the U.S. added 157,000 jobs in January 2013. The unemployment rate edged slighly higher to 7.9%. Government jobs declined by 9000 in January, and the risk remains that drastic job cuts under a sequester of government spending cuts supported by some in Congress would hurt the job market.

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The Treasury and Fed's handling of the financial markets crisis on Tuesday, Wednesday, Thursday and Friday as it unfolded Sept 17, 18, 19 and 20, the worst since the 1930's. With the credit markets battered, the collapse of Lehman Brothers investment bank and the rescue of AIG right on the heels of the rescue of Fannie and Freddie the previous week, and all these moves barely improving the general loss of confidence and increasing fragility of the financial markets worldwide. Steps like the ban on short selling by the SEC to stem two 400 point declines in the last few days, and the Fed setting aside $50 billion to shore up money market funds by making them whole where needed, and providing about $200 billion through the European Central Bank and the central banks of Japan, Britain, Canada and Switzerland, were tactical moves so Paulson and Bernanke had to address the real problem of removing the highly illiquid assets of risky mortgages from the financial markets. This would require working with Congress to put together the necessary legislation which is what Congress, Treasury, the Fed, and others will work on this weekend of September 21, 22, so that the legislation could be drawn up the following week and passes into law creaing some Federal agency that will buy up the illliquid mortgage assets owned by banks, investment banks, and other financial institutions before there is another series of collapses in the financial markets necessitating rescues by the Fed. Meantime Treasury has raised another $200 billion last week through sale of Treasurys and provided this money to the Fed to use as needed. The result of the most recent chaos in the financial markets has resulted finally in agreement among all parties about the need for committing taxpayer money in hundreds of billions of dollars to be used to buy up the risky illiquid mortgage assets at steep discounts to be resold later to bargain seeking companies so that the banking sector can repair their balance sheets and recover, as being much safer and less costly route than the cost of rescuing financial firms with systemic risk on an individual basis after a run on these firms or their imminent collapse. Which is why people like Laurence Meyer of Macroeconomic Advisors himself a former senior Fed official believe that this is the first serious effort to tackle the crisis by getting to the root cause of the problem and removing the illiquid mortgage assets and the Government an taxpayers spending the hundreds of billions of dollars but at the same time finally seriously tackling the crisis in a manner that will restore confidence to the markets and to the industrial economy of the USA. His comment, "the markets voted and they liked the proposal", as the Dow Jones went up 610 points at one point and ended up the day Thursday September 19 at 410 points gain for the day....

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The rise of Japan was a major challenge for president Reagan in the 1980's in the way president Trump is confronting the rise of China. The Reagan administration obtained the concessions it needed from Japan. The negotiator for the U.S. side during the Reagan years - Robert Lighthizer. Lighthizer is using his experience in winning concessions from Japan in his role as top trade negotiator with China.  As the WSJ points out Japan ceased to be a threat to the U.S. faster than anyone thought possible. 

But there is one problem even if this happens the warning is that the imbalances with Japan simply transferred over time to China. The warning is for America's tendency to spend money it does not have, and for how long.

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The broken world economy has hurt the American people, in small communities and towns across the US whose societal fabric was destroyed by a system of world trade with abuses done by China. Japan, European Union, Canada and Mexico since 2000. Shortsighted American leaders and economists allowed this to happen. Robert Lighthizer on the New World Order a new system of world trade that replaces the old in 2026. The old trading system was one in which lip service was made to free trade while all the time the system was used by Japan, Germany, China, Canada, Mexico and other nations to build non tariff barriers and other policies to support their industry  at the expense of the United States leading to disillusionment in the US. The facts are mind boggling- the loss of 5 million jobs, many small communities across the US decimated with loss of jobs. About 20 trillion in wealth transfers to China and other countries over 2000-2020, with foreigners owning $27 trillion more of US assets than the US owns of theirs. US Trade Deficits that went up by 40% in 4 years of the Biden administration from $800 billion to $1.2 trillion. Economists and weak leaders got it all wrong allowing this to happen from Geoge W. Bush to Clinton Bush and Obama. Lighthizer says "shortsighted leaders aided and abetted this process," from 1990 to early 2010. Consider that US had 17.3 million  people in manufacturing, in factories all over the US in 1970, in 1999 we had the same number of jobs, even though there were changes in technology and productivity- the US held its own with the rest of the world. The Bush, Obama years were the worst for the US industry - by 2026 we have 12.6 million - loss of 4.7 million jobs since 1999. And real median household income took a big hit growing from $72,000 to $84,000 about 17% in the last 25 years, compared to twice that in the period 1975-2000 prior quarter century. The result is the fracturing of American society- and dire consequences for healthcare as communities suffered from loss of jobs leading to drug overdoses, alcohol abuse and suicides, which are common in post industrial American communities. Think of this fact: two thirds of America's workforce that does not have a college degree, that is working class people, lives 8 fewer years than college graduates, a gap that was only 2.5  years in 1992. The wars carried on by Bush and continued by Obama in the Middle East also wracked these same communities till Biden and DJT pulled out. One has only to drive across America to see this with one's own eyes. Trade may be an abstract topic for economists and politicians- there is nothing abstract about this. And the economic growth of the US has suffered with the unfair trading system with China, European Union, Japan, Canada and Mexico. From 1945 to 2000 American growth was 3.2% a year. Since 2000 only 2 years of growth over 3%. US has not seen historically normal growth for the last 19 years and at this rate (if we continued along this path) the Congressional Budget Office says 1.8% growth for 2027-2035. There are other factors yet the the major driver of this is our trade deficit of $1.2 trillion dollars a year. It is a story of remarkable persistence in the Nation's interest through 2 adminstrations- this Lighthizer story. Lighthizer fought Japanese commercial interests as Deputy Trade Representative under Ronald Reagan, and as US Trade Representative under DJT in the first DJT administration in 2016-2020. His Deputy at the time is Jamieson Greer who is now the US Trade Representative in the second DJT adminstration in 2025. For 30 years this brave American patriot has fought to reverse the bad actions of presidents and economists that have led to devastating losses in the American countryside. He says any new trading system must be perceived as fair to working people. It will survive only if working people think it is good for them. It cannot and must entrench a small, permanent elite. The benefits going to labour must be at least as great as those going to capital. It should create fulfilling high paying jobs for the vast majority of the American people. This is America's new promise to its people, its new compact with its people. ...

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Nathaniel Taplin of the WSJ says the tariffs put on $50 billion high tech products by the U.S. and retaliatory tariffs on $50 billion products are not about a trade war but a way both countries will negotiate setting out their two positions.  A look at the role of foreign firms in China shows China has access to new technology using these firms as a conduit and these firms are also generating more jobs, being highly productive. These firms Taplin says will set back their investments if no agreement is reached or if it is harder to bring Chinese made products into the U.S. At this time China badly needs this investment and technology access because of their dynamism compared to inefficient state run firms as it struggles under a massive debt load with very high debt to GDP ratio.  A major issue is job growth as companies getting foreign investment are much more effective in jobs generation, delivering 10% of all urban job growth from 2007 to 2016, using just 5.5% of total investment. Return on assets at 9% compares to 4% at state run firms. If this dynamism is reduced or affected in some way China could have to provide more unproductive debt buildup stimulus.  For these reasons China has good reason to make concessions, says Taplin. Trump administration will ask for greater semiconductor purchases, much looser joint venture or foreign ownership requirements, higher Chinese payment for U.S. intellectual property. For all these reasons this is not about a trade war but about serious negotiations taking place so that there is a level playing field in the next phase of competition in high tech between the U.S., China and the E.U. changing the dynamics of the trade relationship in ways that reverse the trends of the past. ...

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China's tariffs on US products could be called self-respect tariffs as US exports to China are small compared to China's $1 trillion surplus a year. $143 billion mainly oilseeds and grains! US business not willing to rely on US labor created the outshoring that built Chinese industrial growth, shipping out technology in the process, that created this situation. Consultants to Apple at the time such as myself bringing Total Quality of Management from Japan to the US, could see the failure of production quality at the Colorado Springs plant just before Steve Jobs returned to the company in 1998. About 20-25% of PC product was defective on the production lines seen with my own eyes. Looking back I believe it was not just the workers but the managers and engineering that needed to guide and motivate the workers with new ways to build in quality control. These were the days when Apple's Steve Jobs hired Tim Cook to revamp production and ship it to China. American workers got blamed. Yet as Jim Carlton shows in "Apple the Inside Story of Intrigue, Egomania, and Business Blunders," by 1996 a new German CEO Michael Spindler 1993-1996 had driven the company to the ground. The struggle with Microsoft gave Jobs an idea- by shifting production to a low cost location he could make the high margins to outinvest all competitors with new products-ipods, iphones, ipads. There is nothing wrong with American workers and their craftsmanship. Timeline- Steve Jobs returns to Apple 1997-1998 Tim Cook is hired from Compaq to revamp manufacturing in 1998 1999-2000 - the strategy is made to shift all of the production to China. Jobs could generate the margins and quality to challenge Microsoft, and profits to invest in new products 2020 -   the weakness of the strategy is apparent with supply side shock for chips and computers with the pandemic stopping shipping 2024 - after taking small steps to shift production to India does little to shift back to America 2025- Apple facing serious tariffs and the country's mood shifting to Make in the USA tells the new US president DJT it will invest $500 billion to shift production back to America. ...

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This exceptional report by Ian Talley in the WSJ cites trade and currency expert William Cline about the prospect of a worsening trade deficit under the Trump administration. With an improving economy, says Cline, the dollar had already surged about 8% beyond its fair market value during the last 2 years under president Obama as the economy improved. After Trump's election it surged another 3%. This makes it likely that the trade deficit could approach 4% of GDP with the stronger dollar. More protectionist policy to support U.S. industry, worsening trade deficits, more trade friction could be expected in these conditions. He does point out that markets may be overestimating what will be spent on infrastructure, and how much interest rates will go up which support a stronger dollar. Yet the fact remains that under an administration that is keen on promoting U.S. exports a dynamic is underway that makes U.S. exports actually less competitive in international markets.