Push back on sanctions, Trade war, Global recession.

CHINA HAS BEEN CANCELLING PURCHASES FROM WEST

PREFERING TO TRADE WITH THOSE NOT ENGAGED IN SANCTIONS 

China has recently shocked several nations with cancellations of huge orders. There has been a concerted effort by the United States to encourage its allies to deny China certain materials and supplies that the United States feels would slow the Chinese economy. This has been Silicon chips from the United States and machine tools from Japan and Germany. This follows the total sanctions on all Russian products.

It seems that this policy is now having repercussions for the United States and much of the world. China has so far cancelled near 15 million metric tons of corn purchase from the United States, it seems they can buy these products for less in Brazil, a country that has refused to use sanctions against trade partners.

This past week saw China cancel $100 billion in auto orders from Germany, a country reeling from losing its entire auto business in Russia due to self imposed sanctions. It also has had their energy prices quadruple and is making much of their manufacturing business uncompetitive. Germany is officially in recession with no end in sight.

China has also canceled $150 billion in machine purchases from Japan. Japan's machine tool order are down near 40%. This followed Japan's slowing the delivery of certain strategic products. 

China has also responded to U.S. refusal to sell certain silicon chips. They have now produced the everyday chips at prices that will result in layoffs in Texas instruments and Intel. It can be expected that they can buy machine tools from Russia and Brazil and they will soon produce their own chips.

The sanctions that have eliminated the purchase of high tolerance machined parts from Russia have forced U.S. manufacturers to purchase from China, but all products shipped to the U.S. have a 40% tariff. Products shipped to subsidiaries in other countries have no tariffs.

The Trump administration engaged China in tariff reciprocity. The goal was to remove tariffs on U.S. products. It was done with respect and diplomacy. It also hoped to reduce taxes and regulation to make production in the U.S.. possible. This administration has portrayed China as an enemy, talked of war and is in engaged in encircling China with new military bases. This policy will indeed make China an enemy. 

This growing economic war of sanctions is having detrimental effects and no positive results. It is unlikely that it can be reversed in the near future. It can only lead to recession, lay-offs and economic decline by everyone, but particularly in the west, which is now dependent on products from China and Russian products and resources.

It is a delusional idea that these products will soon return to being produced in the United States. The foundries, steel plants and machine shops have all been dismantled. Regulation will not be conducive for these plants to be rebuilt. Then it will take generations of proper child rearing and a value placed on making things rather than paper shuffling. Things that make smoke, dirt and sweat. If a serious effort was begun now it would take 20-30 years to become reality. There is no serious effort and not likely in the near future.