Decouple Decoupling from China

[Crafty_Dog]

https://www.theepochtimes.com/china/house-committee-establishes-working-group-to-counter-chinas-control-of-critical-mineral-supply-chains-5671281?utm_source=Goodevening&src_src=Goodevening&utm_campaign=gv-2024-06-19&src_cmp=gv-2024-06-19&utm_medium=email&est=AAAAAAAAAAAAAAAAYvAqcwcVzc7PzLYPrHFRB710wA0AIj31kx5JTWZu9FddhEg4S8RP

[Crafty_Dog]

https://r.news.clarionproject.org/mk/cl/f/sh/7nVU1aA2nfuTHPvVhUeJlOMlVpE30dQ/b_fpgZv-1LJb

[Crafty_Dog]

(1) GOP TO PUSH ECONOMIC BREAKAWAY FROM CHINA: Sen. James Risch (R-ID) said Congress has “failed to act in several areas” to counter the Chinese Communist Party (CCP), and Republicans will push to pass his STRATEGIC Act if they take the Senate in 2025.

The STRATEGIC Act would strengthen enforcement of the Foreign Agents Registration Act (FARA), establish the Global Infrastructure Investment Fund to counter China’s Belt and Road Initiative, and encourage U.S. companies to diversify supply chains away from China.

Why It Matters: U.S. officials and lawmakers anticipate a crisis or conflict with China by 2027, and currently U.S. supply chains are vulnerable to disruption. While this bill intends to secure critical supply chains against disruption due to a crisis or conflict, moving U.S. manufacturing and imports away from China could be interpreted by China as preparation for a conflict, ratcheting up tensions ahead of 2027. A recent bipartisan report on the National Defense Strategy found the U.S. is ill-prepared for a conflict with China. The window for deterring a conflict or crisis in the Indo-Pacific is closing due to Chinese military advantage in the region, and the Chinese cyber threat to U.S. critical infrastructure. – R.C.

[Crafty_Dog]

The Department of Commerce is planning to announce a new ban on Chinese and Russian-made hardware and software for testing and use in vehicles. The ban would cover driver assist and self-driving car systems, mapping and location software, and hardware for vehicle communications systems. (The ban is likely to impact supply chains for new vehicles that use these software and hardware imports, especially from China. While the Chinese-made vehicle software and hardware ban is predicated on stopping a potential cybersecurity threat, other consumer electronics with China-made software and hardware continue to be imported. – R.C.)

[Crafty_Dog]

(7) U.S.-CHINA COMMISSION KEY RECOMMENDATIONS TO CONGRESS: The U.S.-China Economic and Security Review Commission released its annual report and is making several sweeping recommendations:
Eliminate Section 321 of the Tariff Act of 1930, which waives tariffs and inspections on goods under $800.
Establish a Joint Interagency Task Force under the President to evaluate and enhance export controls on technologies posing a national security risk.
Provide government oversight to any Chinese involvement in U.S. biotechnology development, specifically for genomic research and ancestral documentation. This would include oversight at U.S. colleges and universities, and every level of government down to local agencies.
Ban Chinese imports of technology controlled by China such as humanoid robots and energy infrastructure remote services.
Repeal Permanent Normal Trade Relations status for China.

Order the Director of National Intelligence to report within 180 days on China’s preparation for imminent war. The report would be classified and cover China’s energy sector, goods production, mobilization systems, and strategic reserves.

Amend the Arms Export Control Act of 1976 to add Taiwan to “NATO Plus” recipients, pay foreign nations to continue diplomatic recognition of Taiwan.

Why It Matters: These recommendations are generally in line with President-elect Trump’s hard-on-China stance and would amount to a low form of economic warfare. Repealing Section 321 would see a near immediate price rise on cheap Chinese goods, significantly affecting inflation numbers. Of particular note is the recommendation to pay foreign nations to switch recognition. This is a common Chinese tactic that the U.S. is likely to highlight if China attempts to thwart its implementation. Relations with China are likely to be severely strained under these recommendations but none directly lead to war. – J.V.

[Crafty_Dog]

https://www.msn.com/en-us/money/companies/texas-governor-orders-state-agencies-to-sell-china-assets/ar-AA1uykiU?ocid=msedgntp&pc=HCTS&cvid=725ae2f915e14e91b0dd56d597fe5b3c&ei=30

[ccp]

Remember when the theory of globalization was that intertwining our businesses, investments, and products with CCP would prevent war, confrontation, and instability.

Instead CCP took advantage of this to destroy us.

Seems like decoupling is proven the best approach in hindsight.

[Crafty_Dog]

"Remember when the theory of globalization was that intertwining our businesses, investments, and products with CCP would prevent war, confrontation, and instability.  Instead CCP took advantage of this to destroy us."

ZANG!

[Crafty_Dog]

Thus showing why EVs and other battery related tech are dubious.
===============

(5) CHINA OFFICIALLY BANS CRITICAL MINERAL EXPORTS TO U.S.: China’s Ministry of Commerce announced an immediate ban on “the export of gallium, germanium, antimony, and superhard materials to the United States” under national security concerns.
Last year, China announced an application process for germanium buyers that effectively banned the material in the U.S. as there were no recorded imports from China this year.
China controls about half of the world’s antimony production and accounts for 63% of the U.S.’ total antimony imports, according to the U.S. Geological Survey (USGS).
Why It Matters: According to the USGS, the “most important use of antimony metal is as a hardener in lead for storage batteries,” such as the lead-acid batteries in conventional vehicles. Effectively, this ban is a “one-two punch” against U.S. automotive reshoring efforts as germanium and gallium are critical for electric vehicle battery production. – J.V.

[Crafty_Dog]

(9) CORPORATE EXODUS FROM CHINA ACCELERATES: Foreign companies and investors are rapidly shifting production and investment away from China, as the government tightens regulations on foreign businesses and China’s economy continues to slow.

Top U.S. law firms have rapidly scaled back in China this year, with at least 11 major U.S. law firms closing offices in Shanghai, Beijing, and Hong Kong. Peter Zeughauser of the Zeughauser Group predicts more departures in 2025 but calls 2024 “a watershed year” for corporate exits from China.

Global management consulting firm Bain & Company released a survey of 166 CEOs and COOs and found that the share of companies moving operations out of China jumped to 69% in 2024 from 55% in 2022. Additionally, more foreign companies are reshoring operations in their home countries, with 81% of the CEOs and COOs surveyed planning to bring supply chains closer to market.

China’s foreign direct investment (FDI) inflows continue to dwindle, after hitting a 30-year low in 2023, with President-elect Trump’s proposed tariffs expected to disperse export-driven FDI from China to Mexico.

Why It Matters: China’s economic model hangs on exports and foreign direct investment, but government pressure on foreign businesses, along with geopolitical tensions between China, are accelerating the shift of capital away from China to other parts of the world. This has forced China to increasingly rely on promoting domestic consumption and flagship industries like batteries and electric vehicles (E.V.), but mounting debt and U.S. tariffs will likely continue to undermine China’s growth and diminish its leverage with Europe and the U.S. Such trends will likely spur Beijing to adopt an even more aggressive foreign policy in Southeast Asia and the Western Hemisphere. – M.N.

[Crafty_Dog]

(1) CHINA TRADE WAR RESPONSE LEADING TO NEGOTIATION: Think-tank Rhodium Group China markets chief Logan Wright said China’s response to the incoming Trump administration’s tariff threats, retaliatory tariffs and trade restrictions, are intended to force the U.S. to negotiate a trade war truce. Wright added that China has incentives to avoid a trade war escalation.

China’s aggressive trade responses will accelerate U.S.-China decoupling, creating a self-reinforcing cycle of U.S. firms leaving China, Foundation for Defense of Democracies Senior China Fellow Craig Singleton said.

Why It Matters: China announced new sanctions against U.S. defense contractors last Friday, which is a signal to the incoming Trump administration that China is not ready to negotiate a deal yet. The risk of supply chain disruptions of key imports remains while the U.S. and China implement tit-for-tat trade actions ahead of a possible negotiation. – R.C.

[Crafty_Dog]

(4) BIDEN ADMIN ADDS MORE CHINESE FIRMS TO BLACKLIST: The Biden administration added Tencent Holdings, Contemporary Amperex Technology Company (CATL), oil company CNOOC, and Cosco Shipping Holdings to the Federal Register of entities with ties to the People’s Liberation Army (PLA). The Trump administration could face a decoupling crisis in the next few years if China retaliates over trade restrictions.

[Crafty_Dog]

(3) TRUMP SAYS NEW CHINA TRADE DEAL POSSIBLE: President Donald Trump said it is possible the U.S. could reach a new trade deal with China.
Trump added that there is “a little bit of competitiveness,” but he has a “great relationship” with China’s President Xi Jinping.
Why It Matters: Trump’s statement is likely a signal to China to come to the negotiating table to avert a U.S.-China trade war. However, the U.S. would likely prevail in a trade war with China. Political economy expert Stephen G. Brooks and Treasury policy analyst Ben A. Vagle argued in a recent essay that the U.S. would experience minimal short-term and no long-term negative impacts from decoupling from China’s economy. However, they also argue a peacetime decoupling could backfire on the U.S. if allies do not get on board with decoupling their economies and supply chains from China, and the U.S. should save decoupling for a crisis. - R.C.

[Crafty_Dog]

HT CCP

https://finance.yahoo.com/news/apple-announces-500-billion-us-investment-in-bet-on-the-future-of-american-innovation-110106571.html

I also notice building in red Texas and not blue Kalifornia !   

[Body-by-Guinness]

This could live several places, but given that China appears to be what Trump in targeting, I'll drop it here:

unseen1 @unseen1_unseen

Once the tariffs go into effect on Apr 2nd, the USA trade policy will be changed for a very long time, if not forever.  It's an inflection point.  This is a very big deal, and I don't think most people understand the inflection point we are about to make.  Some of the big money understands, hence the trillions pouring into the country. 

We are switching from using trade policy to push foreign policy to using trade policy to push economic policy. 

China adopted our type of trade policy with its belt and road to drive countries into their sphere of influence. 

We were losing with that trade policy because we couldn't match slave labor, automation in manufacturing, and government controlling the private sector. 

Even though with open borders driving down wages and more and more government control of the private sector with regulations, we tried.

Trump is totally abandoning that policy and that losing war. 

He is starting a whole new battle using our middle class to fight it.  Increasing our middle class with protection tariffs, securing our border to increase our middle-class wages.   Using those wages and the increased purchasing power to make the USA the place to be to soak up supply.

The revenues from tariffs will allow taxes to be reduced, creating more demand.

China can not match that demand because their middle class doesn't have the means, and their government will never allow their middle class to amass the means.  It's totally opposed to marxism to have a rich, vibrant middle class.

As we know, governments, in general, once they latch onto a new revenue stream fighting to end, it is a multigenerational battle(see income tax)
April 2nd is going to be game-changing.

https://x.com/unseen1_unseen/status/1903891516621197677

[Crafty_Dog]