The Shifting Balance of Power and the ‘Trade War’

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Before diving into this article, note that there has been an ongoing major shift in yarn, fabric and apparel production in Asia from China to Vietnam. In October 2015, I was an apparel panel at TITUS in Taipei, Taiwan. Another of the speakers on my panel ran Vietnam’s apparel and textile organization. He shared these numbers:

Over the period 2013-2015, 16 companies (Hong Kong 6, China 4, Taiwan 3, Korea 3) invested $500 million in yarn spinning; $900 million in apparel manufacturing; and $3.8 billion in fabric production for a total of $5.2 BILLION. Vietnams plan was:

……………………………..2014……2025
Workers (millions)…………2.5…..…5.0
Spindles (millions)………..6.2…….17.9
Fabric (billion/m2)………..1.7….…12.0
Export in $US Billions…..24.2…….66.8

How This Trade War Will Remake the World
As China and the U.S. form competing coalitions, other nations and businesses will be forced to choose.
Bloomberg, May 23, 2019

President Donald Trump has long said the goal of his trade policy is simply to get better deals for Americans. But as the trade war intensifies, it seems increasingly likely that his policies will lead to something more: a lasting break with China and a new alignment of global power.

First, consider the evidence for the break. The current impasse in trade talks was sparked by a sudden change in terms on the part of the Chinese negotiators. This change likely caught the administration off guard, but Trump’s response is notable: He immediately ramped up tariffs, then announced a ban on business with Chinese telecommunications firm and national champion Huawei Technologies Co.

These actions have backed Chinese President Xi Jinping into a corner and turned the trade dispute into a matter of Chinese national pride. This limits the possibility not only of a quick resolution, but also of the chances that the Chinese people will accept any concessions to the U.S. Read More

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