Jump to content
Chapala.com Webboard

Mexico and China - the future is knocking


solajijic
 Share

Recommended Posts

Oh by all means.  After all while Mexico is netting (all sources) somewhere north of 140 billion per year from the U.S. already they can hear that giant sucking sound as the trade deficit with China is 60 billion net per year.  Of course the Chinese buy a whopping 9 billion per year here but who's counting when it comes to America bashing these days?  :D

The Chinese are the worlds newest economic warriors and old-style mercantilists but no one seems to notice always the trade balances go in their favor.

 

  • Haha 1
  • Sad 1
Link to comment
Share on other sites

Blame American companies for not producing products in the US and American consumers are the one's buying Chinese products. Americans will keep buying and pay the higher prices. :-) Meanwhile: Chinese company producing Trump 2020 flags

Buick, Range Rover, Volvo, etc all build cars in China and export to the US. I suspect Americans must be buying them. :-)

Nearly everything trump family sells is made outside the US. lol

As to Mexico it buys 4 x as much steel from the US vs what is sells to the US, yet tariffs. I suspect the numbers for aluminum are also in the US favor. 

As to China building relationes with Mexico it is because Mexico wisely has about 50 trade agreements with other countries. Therefore, it buys and sells with other countries with little or no duties. BMW, Mercedes, Audi, etc all produce cars in Mexico much of which is for export.

The post  was about China and Mexico. Guess who made this topic "political" and included the US? Guess who will shut it down? :-) Give it a short time and "moderator" will close this too. 

 

 

 

  • Thanks 4
  • Haha 1
Link to comment
Share on other sites

2 hours ago, Sonia said:

Blame American companies for not producing products in the US and American consumers are the one's buying Chinese products. Americans will keep buying and pay the higher prices. 🙂 Meanwhile: Chinese company producing Trump 2020 flags

Buick, Range Rover, Volvo, etc all build cars in China and export to the US. I suspect Americans must be buying them. 🙂

Nearly everything trump family sells is made outside the US. lol

As to Mexico it buys 4 x as much steel from the US vs what is sells to the US, yet tariffs. I suspect the numbers for aluminum are also in the US favor. 

As to China building relationes with Mexico it is because Mexico wisely has about 50 trade agreements with other countries. Therefore, it buys and sells with other countries with little or no duties. BMW, Mercedes, Audi, etc all produce cars in Mexico much of which is for export.

The post  was about China and Mexico. Guess who made this topic "political" and included the US? Guess who will shut it down? 🙂 Give it a short time and "moderator" will close this too. 

 

 

 

The problem here is that Mexico allowed itself to be used as a conduit by the Chinese to send "Mexican" steel and aluminum to the U.S thereby abusing the rules of origin of NAFTA.  In point of fact Mexico has very little steel and aluminum industry of its own.

http://fortune.com/2016/09/09/chinese-aluminum-giant-is-tied-to-a-2-billion-mystery-mexican-stockpile/

Good read here.  Restraining and manipulating trade in your favor is a lot more than just tariffs.

https://business.financialpost.com/opinion/lawrence-solomon-china-has-declared-economic-war-against-us-and-were-helping-them-win

This should be as big a concern for Mexico as it is for the U.S.  Again, look at the fact this country is already bleeding to the tune of 60 billion per year in "trade" with the Chinese.  And then there's the theft of technology issue.

My point is that thinking Mexico is going to be "saved" by China is foolish in the extreme.  Actually I think the mistake here is both countries and Europe should realize what is going on and put the brakes on trade with China.  Bring those factories and jobs back to North America.  The increased prosperity and security is well worth the price.

 

 

  • Haha 1
  • Sad 2
Link to comment
Share on other sites

Its more about GDP than trade balances. The GDP of China, and the GDP of the European Union are both greater than the U.S.A. Both have benefitted from a central directed economies. Mexico, apparently, seeks alternative trade alliances not only with Asia, but the rest of the Latin American countries. Bring those jobs back to the U.S.A. will require large scale automation and investment. China is already becoming world class in industrial automation systems and electric vehicles. The leadership of the U.S.A. has now proven to be unstable, unreliable, not a good breeding ground for long term investment, involving billions of dollars. When a President is allowed to break all the rules, and impose tariffs on friendly allies on the basis of "national security", well, it will take many years to rebuild trust and stability.

https://www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-3306038

  • Like 2
  • Thanks 1
  • Haha 1
  • Sad 1
Link to comment
Share on other sites

Funny it is listed as the most competitive economy in the world and the U.S. economy is also the fastest growing now. 

The GDP of China or Europe is not greater than the U.S.  

Quote
The World's Top 10 Economies
  • The Top 10 Economies in the World. Note: This list is based on estimates for 2017 by IMF's World Economic Outlook Database, April 2017. ...
  • United States. The U.S. economy remains the largest in the world in terms of nominal GDP. ...
  • China. ...
  • Japan. ...
  • Germany. ...
  • United Kingdom. ...
  • India. ...

image.png.5a3efa9c5622a0c85f107239e70fa6bf.png

 

The "rules" being broken are unequal trade restrictions including tariffs.  They need to be broken IMO.  Everyone including Canada has been taking advantage of the U.S. in trade and defense for a long time and that is going to change like it or not.   Canada calls it "supply management" but the effect is the same--keep out U.S. imports.  Because it didn't fit the agenda of the MSM, for example, few people know Canada fired the first shots here with new "supply management" rules that basically shut out the U.S. dairy industry and caused a number of U.S. suppliers to shut down.

And I guarantee you anyone looking to China for economic salvation is delusional.  The Chinese will and do manipulate their currency, erect all sorts of non tariff barriers, sell below cost until your home industries close down, steal your technology and whatever else it takes to dominate you economically.  They cheat as that example of using Mexico to get around NAFTA rules of origin on Aluminum.  Aluminum is a strategic metal and of the 23 suppliers of it in the U.S. now only 5 remain.  

The Chinese quite correctly view economics as the new form of war and they are waging it very successfully.  Already Mexico is losing.  Sixty billion per year represents a lot of jobs.  The U.S. is far worse off in the trade deficit problem.

There are no shortage of credible sources that support this.  Just google up "how China cheats on trade" and read until you drop.  For example, from a source that is no friend of the current U.S. administration:

https://washingtonpost.com/opinions/global-opinions/trump-is-right-chinas-a-trade-cheat/2018/04/05/6cd69054-390f-11e8-8fd2-49fe3c675a89_story.html?noredirect=on&utm_term=.ca186b2b5b19

Quote

But amid the noise and tumult, including the alarming tweets about Amazon and Mexico, let’s be honest — on one big, fundamental point, President Trump is right: China is a trade cheat.

Many of the Trump administration’s economic documents have been laughably sketchy and amateurish. But the Office of the U.S. Trade Representative’s report to Congress on China’s compliance with global trading rules is an exception worth reading. In measured prose and great detail, it lays out the many ways that China has failed to enact promised economic reforms and backtracked on others, and uses formal and informal means to block foreign firms from competing in China’s market. It points out correctly that in recent years, the Chinese government has increased its intervention in the economy, particularly taking aim at foreign companies. All of this directly contradicts Beijing’s commitments when it joined the World Trade Organization in 2001.

Whether one accepts the trade representative’s conclusion that “the United States erred in supporting China’s entry into the WTO,” it is clear that the expectation that China would continue to liberalize its markets after its entry has proved to be mistaken.

I'm all for free trade.  In all directions.  However if it means less access to cheap and often poorly made Chinese goods to me to address this long standing disparity it is worth the price.  I'm old enough to remember when we all lived quite well with a lot less consumerism. 

And when I think we need to bring those jobs back to North America I specifically include Mexico in that.  Although the Chinese war against the western economies needs to be addressed I do not agree with how that has been done thus far.  We should be focused much more on working with Mexico and Canada against the common threat.  We should be working together as a hemisphere on this.

I would have hoped there would have been a better way to persuade Mexico to not allow China to use it to circumvent NAFTA rules of origin but maybe that was tried first.

And no Sonia, I haven't made it any more political than the citation of the OP by a long shot.  World trade is political to all involved.  Mexico has every bit as much to lose as the U.S. here when it comes to China taking over their economy.  As regards that citation IMO the guy who wrote it really doesn't have a clue about this.  And that is what I have addressed here.  If you want to complain about political I suggest you start with the last several line of the post above this one.  :)

 

 

  • Like 1
  • Haha 1
Link to comment
Share on other sites


The United States enjoys a large dairy trade surplus with Canada amounting to $400 million dairy surplus with Canada.

The Americans and other countries choose to subsidize to the tune of hundreds of millions, if not billions of dollars, their agricultural industries including their dairy.

The US has an over supply of dairy. in recent years there been an increasing demand for high-fat products, such as butter, so more milk is needed to produce it. But that leaves farmers with excess protein, which is where ultra-filtered milk comes in.

Ultrafiltered milk, the product at the center of the dispute, wasn’t part of NAFTA and has been exported to Canada tariff-free since the trade agreement was finalized in the early 1990s. Effective April 1, 2016, Ontario changed the pricing  for milk proteins, including ultrafiltered milk making it competitive with unfiltered mild from the US meaning US importa dropped. 

The U.S. dairy industry is off base because ultra-filtered milk is not part of Canada's supply management regime, and was created after NAFTA, which has allowed it to flow into Canada from the U.S. duty free.

The U.S. claim of Canada dumping subsidized milk into its' market is unfounded.

 

There are a lot of ways to compare and contrast the differences in milk and industries between the US and Canada. 

The most popular difference between the two countries is the use of recombinant bovine somatotropin, or rBST. What is that? Health Canada states that rBST is a synthetic version of a naturally occurring growth hormone. It is approved for use in the USA to increase the production of milk in dairy cattle, but is illegal in Canada. Why is this illegal for use in Canada? Health Canada determined that it did not pose a health risk to humans, but they also determined that it had negative effects on the health and welfare of cows.

As well, Canada's maximum Somatic Cell Count (SCC) is also lower than the American standard. What is a SCC? It’s the total number of cells per milliliter in milk. Primarily, SCC is composed of leukocytes, or white blood cells, that are produced by the cow’s immune system to fight an inflammation. It’s a Canada measures milk quality. For example, a reduced count of SCC is associated with better quality milk. Often if the count is high, it means the cow might be sick. Canada maximum allowable is 400,000. Canada's provincial average is well below this maximum at 205,000. In Canada, each load of milk is tested to ensure it’s below that standard. In the USA, the national standard is 750,000, but the export standard is 400,000.

  • Like 1
Link to comment
Share on other sites

Much more complicated than that, Sonia:

https://factcheck.org/2017/04/u-s-canada-dairy-dispute/

Definitely true about U.S. dairy subsidies.  The Canadian version is supply management.  The U.S has a significant overall trade deficit with Canada, the fact it has a surplus in one category does not negate this. 

Again note that I believe the common enemy is China and it is a mistake for the three nations of North America to not hang together when it comes to trade.  I believe the current difficulties between the three are temporary.

 

 

 

  • Like 1
  • Sad 1
Link to comment
Share on other sites

Wow, Mc, that is one of the most xenophobic posts I have been forced to read in quite some time. AMLO seems to want an amiable separation from the USA. The Chinese are willing to invest in a new gateway from Southern Mexico to Latin America. A solid investment.

As far as Canada and milk qutos/,supply management,this goes back over thirty years. The problem was that an unrestrained marketplace, milk would cost (let's say $2 a gallon) in Southern urban areas, and $5 a gallon in the North, poor kiddies. All milk goes into a common pool, and farmers are limited to how much milk they produce. Not so in the U.S.A. - dump their surpluses in Canada, and the rest of the world. Unfortunately , cheese and milk are no longer perceived as the life giving elexirs they once were. Enzymes and antibiotics killed that golden egg.

  • Thanks 1
  • Sad 1
Link to comment
Share on other sites

You chose to read it, no one forced you.  LOL

Now you might want to chose to read the many credible sources including the several I cited that understand what China is up to a great deal more than you seem to.  I'm afraid your viewpoint on this is increasingly in the minority these days.

Certainly the port/rail shortcut is a solid investment for them.  For Mexico?  I wonder.  Is it good for Mexico to bleed 60 billions per year and growing in trade deficit to China?  Is it good for Mexico to put itself in a position of helping China circumvent NAFTA at the expense of its very profitable trade relationship with the U.S.?  I don't think so.

As I noted, the milk situation is very complicated.  However that statement about dumping is about as true as your statement about the China and Europe GNP.  It seems to me that given the size of the trade surplus Canada enjoys with the U.S. that there would be some willingness to deal on this particular item but apparently not. 

I certainly agree the taxpayers of the U.S. should not be subsidizing oversupply.  Nor should the taxpayers of Canada be paying high prices for dairy products because of government restraint of trade.  Both need to give on this.

I expect the U.S. and Mexico to reach an accommodation sooner rather than later.  Canada seems more invested in its price raising system of supply management which is the main sticking point.

Unfortunately Chillin I have a hard time having a fact-based and rational discussion with you given your antipathy and xenophobia towards the U.S. 

  • Thanks 1
  • Sad 1
Link to comment
Share on other sites

Someone keeps deviating from the original post bringing in politics related to other countries.

Statistics from the Office of the United States Trade Representative refute Trump’s claim of a trade deficit. The U.S. government agency said U.S. had a $12.5 billion trade surplus for goods and services in 2016, exporting $320.1 billion and importing $307.6 billion.

And that is with a lot of exports from Canada of Kock brother's oil. 

So the words from the US President are akin to these recent words:

I am done and I am sure this thread is too.. :-)

 

fullsizeoutput_49ff.jpeg

  • Thanks 2
  • Haha 1
  • Sad 1
Link to comment
Share on other sites

Since the original citation is advocating Mexico to shift away from one country and to another and using a specific project as an example, it should be obvious Sonia that discussing the ramifications of that shift for Mexico and the world is legitimate. 

And now for the rest of the story from Sonia's citation.  Please note the bolded part:

Quote

However, the international shipment of non-U.S. goods through the United States can make standard measures of bilateral trade balances potentially misleading. For example, it is common for goods to be shipped through regional trade hubs without further processing before final shipment to their ultimate destination. This can be seen in data reported by the United States’ two largest trading partners, Canada and Mexico.

The U.S. data report a $17.5 billion goods deficit with Canada in 2017, and a $71.1 billion goods deficit with Mexico. Both countries, however, reported substantially larger U.S. goods surpluses in the same relationship. In 2017, Canada reported a $97.7 billion surplus, and Mexico a $132.4 billion surplus.

This reflects the large role of re-exported goods originating in other countries (or originating in one NAFTA partner, arriving in the United States, and then returned or re-exported to the other partner without substantial transformation). U.S. statistics count goods coming into the U.S. customs territory from third countries and being exported to our trading partners, without substantial transformation, as exports from the United States. Canada and Mexico, however, count these re-exported goods as imports from the actual country of origin. In the same way, Canadian and Mexican export data may include re-exported products originating in other countries as part of their exports to the United States, whereas U.S. data count these products as imports from the country of origin. These counting methods make each country’s bilateral balance data consistent with its overall balance, but yield large discrepancies in national measures of bilateral balance. It is likely that a measure of the U.S. trade deficit with Canada and Mexico excluding re-exports in all accounts would be somewhere in between the values calculated by the United States and by our country trading partners.

Sorry you chose to make the discussion political Sonia with that obviously intended to insult attachment.  I'm also sorry you don't understand this situation is much bigger and more serious than the individual politicians of the moment and in fact is a major megatrend that has profound implications for the entire free world including Mexico.

  • Like 1
  • Sad 2
Link to comment
Share on other sites

The megatrend is a decline of U.S. status around the world. The people the least angry seem to be American voters. I double dog dare you to keep this link up, which also covers the milk situation quite clearly. It is abou halfway through, but I doubt if you will get that far.

https://www.truthdig.com/articles/america-the-failed-state/

  • Like 1
  • Thanks 1
  • Sad 1
Link to comment
Share on other sites

15 hours ago, Tiny said:

I will read this thread later when I have a hard time getting to sleep. 

Wow, that was the best sleep I have had in years. Half way through the thread I was out. My wife said I snored so loudly. 

Thanks to everyone.

Link to comment
Share on other sites

Quote

It is abou halfway through, but I doubt if you will get that far.

I'll bet I get far enough to know the U.S. GNP is a whole lot larger than China's.  :D

That's an interesting site.  I bookmarked it.  The particular citation you mentioned is an over the top hate corporation rant but there is a lot of interesting stuff there, albeit with a distinct leftward tilt.

"Away with Objectivity" in particular was a lot of fun to read. :)

Trading with people on an unequal basis has certainly not enhanced the strength of the U.S.  Nor has paying for everyone's defense and engaging in way too many overseas military actions has also not enhanced that strength.  If I were a Canadian or a Mexican I'd be very concerned about the decline of the U.S.  I sure wouldn't be as happy about it as you seem to be.

But then I'm also not living in some fantasy about how benign China is and how letting them sink their hooks into Mexico is a great idea.

There were a lot of people running around in the thirties who didn't take Germany seriously even though the signals were clearly there just as they are with China now.

Mexico loses up to 10 percent of its GNP to corruption.  Plenty of money there to pay for this project without selling out to a country with a very clear agenda of world economic and military domination.

  • Sad 1
Link to comment
Share on other sites

Here's a link for you - real GDP versus nominal GDP. Nominal is misleading because it also includes monies sent offshore by U.S. companies.

That's OK Tiny - I had to wade through five years of this crap to get my degree in economics, majoring in international politics and law, honours in bad spelling😆

https://www.thebalance.com/world-s-largest-economy-3306044

  • Sad 1
Link to comment
Share on other sites

6 minutes ago, CHILLIN said:

Here's a link for you - real GDP versus nominal GDP. Nominal is misleading because it also includes monies sent offshore by U.S. companies.

That's OK Tiny - I had to wade through five years of this crap to get my degree in economics, majoring in international politics and law, honours in bad spelling😆

https://www.thebalance.com/world-s-largest-economy-3306044

So Russian fake news is spreading thru the schools?  HAHAHAHA

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...