Superpower Showdown : How the Battle Between Trump and Xi Threatens a New Cold War

A business book, but so easy to follow and a page turner to boot. For the latest and best lowdown on china us trade problems the go to book. Learnt a lot while enjoying myself reading this book. Hats off and kudos to the authors.

Excellent angles to analyze the reason of the trade war between the two big ones. It helps think rationally.

Wall Street Journal reporters Bob Davis and Lingling Wei cover our relations with China from the first trade thaw in the 1980s through the current controversies said to be approaching “a new cold war.” I gleaned some insights:=====Trump was both a China hawk and a China dove. He truly wanted to get China to change objectionable policies, as the hawks did. But he feared upsetting global markets, as did the doves. Different aides played to different parts of his China schizophrenia, as U.S. policy to China lurched back and forth.Davis, Bob. Superpower Showdown (p. 30). Harper Business. Kindle Edition.======This explains why Trump’s trade negotiations with China seem tedious and chaotic. I also noticed contradictions:======Donald Trump started the biggest trade war since the 1930s with only a superficial understanding of how China worked,Davis, Bob. Superpower Showdown (p. 28). Harper Business. Kindle Edition.Corporate America, long compliant to the demands of Chinese authorities, was also pressing the White House to take action. U.S. firms were angry that Chinese officials helped domestic firms steal their technology. The Americans also feared Chinese plans to spend hundreds of billions of dollars to overtake the United States in artificial intelligence, advanced semiconductors, aviation, and other technologies of the future.Davis, Bob. Superpower Showdown (p. 31). Harper Business. Kindle Edition.======How could Trump “start a trade war” if China was stealing so much of our companies’ technologies that “corporate America was pressing Trump to take action?” There is also much opinion, some that rings true, and some that doesn’t:======Trump went out of his way to alienate allies the United States should have recruited to confront China. He pulled out of the Trans-Pacific Partnership, a twelve-nation pact of Pacific Rim countries that included heavyweights like Japan, Australia, and Vietnam, rather than try to renegotiate it to his liking.Davis, Bob. Superpower Showdown (p. 29). Harper Business. Kindle Edition.======Davis and Wei don’t explain why they think Trump could have renegotiated TPP “to his liking.” They don't explain the Japanese view (as expressed in a Japanese business journal, and not in the book):=====What the TPP means for JapanSecond, the [Japanese] auto industry will benefit from a phase-in in the reduction of tariffs on their exports. Also, they will be allowed to buy more parts for their products from Asia, including, significantly, from countries not in the TPP. The “rule of origin” requires only 45 percent of the vehicle to be made in the TPP zone; in the North America Free Trade Agreement (NAFTA), the equivalent figure is 62.5 percent.Being able to buy cheaper parts from countries such as China, and then sell vehicles with reduced tariffs to markets such as the U.S. is good for the Japanese auto industry.======That looks like a partnership between Japan and China to destroy what is left of the United States economy by dumping Japanese-branded products made in China into the United States duty free. “Good for the Japanese auto industry” and “countries such as China” and terrible for the USA.Another opinion by Davis and Wei:======The losers in all this are the [American] consumers who have to pay the tariffs and the workers in the industries that are being harmed by the trade fight. More broadly, the battle damaged a global trading system that helped to lift more than 1 billion people out of poverty over the past forty years and delivered material prosperity to billions more.Davis, Bob. Superpower Showdown (p. 34). Harper Business. Kindle Edition.======How true is that? Chinese imports are usually of lower quality than the American-made products they replaced. I am currently having problems with Chinese-made screws that disintegrate and Chinese-made lawn mower blades that won’t hold their edge. Consumers are coming to understand that buying low-quality products from China costs them more money replacing defective parts than they save. As for “workers harmed by the trade fight” the authors describe many who undeniably lost their jobs because of imports from China, but only speculate that there might be some who lost their jobs to tariffs. Isn’t it better to have jobs that let American workers buy USA-made products than to be unemployed by Chinese imports and not able to buy anything?And why assume American consumers bear the cost of tariffs? Why wouldn’t Chinese producers and American importers whittle down their inflated markups of Chinese imports? Chinese producers and American importers complain about that all the time, so they must be bearing some or maybe all the cost of tariffs, as indeed the Wall Street Journal reports they are:=====Apparel Companies Fear Tariffs Could Squash ProfitsBy Esther Fung and Inti PachecoUpdated Aug. 22, 2019 11:52 am ETAbout 40% of all clothing and 70% of shoes sold in U.S. are made in ChinaMacy’s says it will work with its Chinese partners to absorb the extra costs associated with the tariffs.Most apparel companies are expected to absorb the cost increase themselves or negotiate ways to cut expenses with their Chinese manufacturers to avoid antagonizing customers with higher prices.“We learned from that experience that the customer had very little appetite for those cost increases,” CEO Jeffrey Gennette said during the company’s earnings call last week. Instead, he said, Macy’s would work with its Chinese partners to absorb the extra costs.=====The tariffs are paying down our unsustainable budget deficits created in part because products imported from China do not pay taxes to the United States. Why should Chinese companies, many owned by China’s government, be permitted to extract profits from the United States without paying taxes here? Why should Chinese companies that don't pay taxes be advantaged over American companies that do? Are Americans really getting a deal when our taxes have to be raised because the Chinese aren’t paying them on the value created by factories and workers that were relocated out of the United States and to China?And how has the global economy been “lifted” when all we have had are Great Recessions and oceans of government-debt to prop up failing economies in every country that trades with China?The last chapter “Looking ahead: Cold War II” expresses the opinion (as I perceive it) that you hear from most of the business press: that Trump was right to verbally challenge China on predatory trade, but he should not do anything substantive about it, because the costs would be too much for our economy to bear.This is a worthwhile book for people who want to be educated in depth to our controversies with China, but you will need to keep your truth-detector finely tuned to separate the facts from the contradictions and opinion. Of course, contradictions and differences of opinion are to be expected when two people write a book and bring different perspectives to bear on a complex subject.

This book is an informative and also an intriguing read. China has always been on my mind since I was young...(in my 70's now).... my Dad told me they were the country the US should be worried about in the future. So, every time an event occurred in recent years, I thought about a Cold War that might be on our horizon..For me, this was both an informative and intriguing read. The two authors discuss the trade battle between the two countries and also the length of time it has been happening...And, it did not start with our current President.Lots in this book and It is well written, research has been done expertly... including interviews with both government and business people. As a reader trying to learn about a showdown that may occur between two super powers, this is a perfect starting point.Tensions are rising...let us see what happens in the future. Both of these Wall Street Journal reporters did admirable jobs in their presentation of the facts.Most highly recommended.

I cannot recommend this book enough. Davis and Wei, two longstanding WSJ reporters, give an insightful account of the US China trade war, one that displays a deep understanding of the economic factors at play, and one that is peppered with delightfully detailed and humorous stories of the important personnel involved. As a graduate student in economics, it was satisfying to see how they have read and understood research from our discipline. I was impressed by their ability to capture the perspective of both the US and China, which is difficult because of the vast differences between each country's historical, cultural, and political contexts, and because authors on both sides have a human tendency to display prejudice and animosity towards those who disagree with them. Lastly, the trade war affected the two authors in some touching personal ways, and that adds an extra spark of memorability.

At the onset, I expected a dull collection of economic facts and, although interested, believed I probably wouldn't finish the thick 450 pages. NOT SO! This reads more like a novel of political intrigue as the authors relate the history of the who, what, and why of trade issues between the US and China focused mainly on the Trump years. A day-to-day account, sometimes hourly, of failed and successful attempts to reach equitable trade positions between the two superpowers. Politics rule the day, each country playing their own game. Miscalculation and naivete is rampant. Confusion is the daily password. "Schoolyard fights" between adults and PhD's questions the quality of governments. I came away with insight into the character of major players who were previously only talking heads to me on TV news programs. Above all, well written and easy to read even with the plethora of revolving characters. Finally, it's not over. Hopefully, lessons have been learned and the two superpowers will come to a peaceful agreement and thrive.