The Reality of World Trade

Assumptions based on limited information create a false conclusion. Those aware of reality or do their own research know the facts.

Each country has a skewered view of itself without reference to how it is viewed by other nations. Citizens speak as if their view is the only one, act as if their beliefs are facts and proceed in a fantasy. They do not grasp they live in one place in the world. What they know or think or believe is only one version of reality, a reality which is limited to their time, place, attitude.

When one is limited to this extent, errors in judgment occur.

There was a period in which Great Britain virtually ruled the world. The British Empire stretched from Northern Europe, across the Atlantic to Canada, down through the Islands of the Caribbean, to Central and South America, across to various islands in the Pacific, to Australia, New Zealand, to India, and into Africa, Britannia ruled the world.

Where it didn't have specified colonies it has 'spheres of influence' in which it controlled the government or a segment thereof.

By the 1930s many of the British colonies wanted Independence.

World War II intervened. Nations which would separate from the Empire, nevertheless joined in the fight to defend it. Independence movements were shelved until after the war.

At the completion of World War II a few nations did take Independence, but some delayed.

As the War was devastating to Great Britain it had to import residents of its colonies to make up the work force. By the 1960s, when Great Britain was stable, many of the colonies gained their Independence but joined the Commonwealth.

Although it must have been difficult, Great Britain accepted its role as a once Empire.

It was only after World War II that the United States became a World Power. This is because it did not suffer the devastation of Europe. The United States had operational factories, a large work force, and natural resources.

The only challenger was the Soviet Union with which it began a 'cold war'. The United States focused on this Cold War until 1991, when it basically ended.

So focused was the United States on the Soviet Union it did not notice that in 1978 China moved to a kind of international capitalism in which it produces and sell items to 3rd World nations.

About 80% of the world is classified as '3rd World'; from Africa to Asia to the Caribbean, to nations in South America and in the Pacific. It is these markets the United States never considered particularly important which China entered.

By the mid 1980s, China had 'invaded' many of these 3rd World countries with trade deals and various forms of assistance.

As China focused on 3rd World markets, not much attention was paid by America. to this incursion. Only those who lived in 3rd World nations would notice how American products slowly but steadily disappeared from their shelves to be replaced by Chinese goods.

Beginning quietly in 1978 it was less than ten years before the 3rd World noticed how few American products were available.

I recall standing on a road side in Jamaica watching the traffic, noticing how rare British and American automobiles were. Most cars were Toyotas or Nissans and Motorcycles were Yamahas or Hondas.

Today, most cars are still Japanese or Korean, but most motorcycles now come from China.

I recall searching for an American made pair of jeans, and only one shop in all of Kingston sold Made in America jeans. All the rest sold stuff made in China.

Admitting my surprise at this online, people from all across the 3rd World, from Kenya to Pakistan to the Philippines, replied that it was and is Chinese products which fill their shelves.

Whether it is a pair of jeans, a microwave oven, a television or a broom, the item sold from Kinshasa to Kingston, comes from China.

Further, various infra structural improvements, be they roads, bridges, factories, power plants were built and are being built, by the Chinese

There is little trade in 3rd World nations, (which make up most of the world) which is not with China. There is very little trade with the United States.

Any 'Trade War' between America and China has already been won by China.

Only those ignorant of reality, stuck in some Fabulous 50s world, could miss the facts.

China 'invaded' the 3rd World in 1978 and has been increasing its involvement ever since. Virtually nothing is Made in America.

Further, China is enlarging and diversifying its production.

One of the most glaring 'flags' that only the most distracted could have missed is that when the United States closed its automobile factory in Mexico, it was not 24 hours before China to entered and took it over.

China takes its trade and involvement in 3rd World nations very seriously. In most cases, China makes a loan to a country to build a bridge or a dam or a power station. Chinese work men arrive with their families.

While the workers build a structure, the wives open shops and import every possible commodity from China.

Focused on profit, Chinese owned businesses are virtually opened 24 hours a day every day. Whatever the price is at a local place, they are cheaper at the Chinese owned venue. They may be selling shoddy goods, but they are cheap. They are often cheaper than locally produced items. And few 'Made in America' products are imported into 3rd World Nations because they are expensive.

The Chinese 'loan' is repaid by tolls on roads or bridges, and special permissions to operate businesses.

The bridge may have been completed in 2000 but the Chinese family that came with the workman are still in the country, still running businesses; expanding from a shop to a supermarket.

When we heard Trump talk about Trade War, it proved beyond a doubt that he knew absolutely nothing about world trade.

He had no idea that 80% of the world buys most of its goods from China, NOT the United States. Nor, does he comprehend what the United States actually imports or sells to China.

Almost all of us are using computers that are made, (or the parts are made) in China. Most cell phones are made in China. Tariffs on these products would of course, hurt Americans, who would see the price of these goods go up by 25%

When America slapped its sanctions on Chinese products, it did not seem to be aware that soybeans grown in America are exported to China.

The price of a ton of soybeans at the time was $420. China’s threat of a retaliatory tariff of 25 per cent on US produce would translate into roughly a $100 increase in the price.

Official United States trade figures showed soybean sales to China dropping. China canceled a net 62,690 metric tons of purchases of US soybeans.

Brazil and Canada, have quickly jumped in and are selling their soybeans to China.

Soybeans are America’s most valuable export crop, most are exported, 60% to China. The trade was about $12 Billion in 2017.

Funnily enough, soybeans are grown in the Mid West of America, is a political stronghold for Trump. It is his supporters who are stuck with tons of a product they have no market for.

As an aside, Jamaicans bought soybeans from the U.S. for pennies and fed them to chickens. The price of chicken dropped by half in Jamaica.

China ceased to buy Lobster from the U.S. They bought every one we have to sell.

Simply put, China doesn't need to buy from America. Or sell to America.

America has to back off from its Trade War. It is America which is stuck with virtually unsellable products.

America imports far more from China than it exports. This means China doesn't really need the United States.

It has markets in the 3rd World where it can divert items that were built for America. Electronic components can be sold to India which is creating its own tech sector, as is Nigeria.

Clothing and shoes can be sent to the 3rd World where the markets already exist. A few more shops selling these goods can be opened in these countries.

There would be no dislocation for China.

The Trade War would be devastating for the United States.