Icon8888 Gossips About Stocks
(Icon) Trump & Trade (3) - The More I Google, The More I Don't Believe US Can Turn Protectionist
This is the third article I write about Donald Trump's threat to protect US workers by imposing tariffs on import.
As an investor in export stocks, I am very interested in this particular topic. After reviewing various articles and data, today I kind of achieved a Eureka moment which provided me with breakthrough understanding. This latest insight further reinforced my earlier belief that IT IS IMPOSSIBLE FOR DONALD TRUMP TO PROMOTE "BUY AMERICA" AT THE EXPENSE OF OTHER COUNTRIES.
To understand why, first of all, let's talk about why so many people take Donald Trump's threat so seriously. Since Donald Trump mooted the idea of imposing tariffs on imports, from Calvin Tan to paperplane, many people have run for cover and stayed away from export stocks. Why do people find Trump's threat so credible ?
THIS IS BECAUSE US IMPORTS SO MUCH MORE COMPARED TO EXPORTS. As we all know, in business, when you are a buyer, you wield considerable influence. Customer is king !!! Because of the huge US trade deficit, many people believe that if a trade war breaks out, the US will have significant upper hand. Take China as an example : it sells USD400 bil to US while only imports USD100 bil. In the event of a trade war, US' loss was 1/3 of China - US will trump China (pun intended).
Is that really the case ?
NO !!! A BIG NO !!!
This is because what is at stake is not merely import and export between the two countries. A trade war will also drag in ALL American MNCs doing business in China. For example : Starbucks. It is totally not involved in the export import trade between US and China, but it is doing a booming business in China. In the event of a trade war, China will not limit its retaliation to Amercian exporters, it will kick Starbucks out. The same can be extrapolated to cover many many other US companies such as AIG, Citibank, Hollywood movies, Hewitt Packard, Dell, JP Morgan, etc.
When you look at this whole thing in totality, it is not clear that America has upper hand against China at all.
The same is applicable to basically all other countries in the world. Take Europe as an example. Germany, UK, France and Italy exports USD125 bil, USD58 bil, USD48 bil and USD44 bil to US respectively. The total amount is USD275 bil. This is a huge amount ! Trump's "Buy American" will not only invite retaliation from China, but will also piss off a lot of Germans, Britons, French and Italians. Same as above, these countries are home countries to many American businesses. Despite ally status, I am sure none of them will sit idle and do nothing. You hurt my exporters, I will hurt not only your exporters but also your other MNCs.
Concluding Remarks
When viewed from trade point of view, US has extremely strong leverage against almost everybody else. However, if you take into consideration the interest of MNCs, those upper hand vanishes.
Imposing tariffs on strong countries such as China, Germany, UK and France will almost certainly invite retaliation. So it is quite clear that it is not doable.
How about small countries like Malaysia ? Can the US push us around ? It is true that our government might not be in a position to push back (we rely on US more than just trade. For example, they sit on Security Council and hence can make life difficult for us on certain issues). However, the displeasure can be expressed through grass root movement. If the U.S.' trade actions causes 50% of Penang's factories to close shops, with or without government prodding, many people will go to the street to express their anger. If you are an American MNC, you better have a Plan B, because Malaysians will not be buying your service or products anymore (unless no choice).
In a nutshell, by turning protectionist, US risks turning itself into public enemy No. 1 for almost every country in the world. It might be able to balance its trade, but it can forget about trying to make money in other countries' market. God bless America.
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Discussions
4 people like this. Showing 50 of 54 comments
Trump campaign is a campaign of lies.
With unemployment at 4-5%, America is practically at full employment at the moment.
2016-12-07 00:33
Calvin will be world best sifu if he ask for short sell...coz all his pick bjcorp, mulpha, mui, zelan, perisai, alam, kbunai, bpuri, DRB, Ajiya, GSB, etc all go holland to 52 weeks lowest
2016-12-07 00:34
calvin...
a few more stocks drop from $ 1.40 to $ 1.06, your whole portfolio is shattered already.
2016-12-07 00:34
99% of Calvin Tan pick go holland...the only 1 he earn is Kulim because of his luck
2016-12-07 00:37
Posted by stockmanmy > Dec 7, 2016 12:34 AM | Report Abuse
calvin...
a few more stocks drop from $ 1.40 to $ 1.06, your whole portfolio is shattered already.
Calvin replies:
I already made so much from more than 40 stocks. And I have taken back all my original capital. Now I only invested 3% of my capital which is all profits.
See
A few of Calvin non performing stocks like O&G, Mp Corp, Bj Corp, Mulpha, kbunai and others are brought up over and over again while Calvin's great picks are slammed down
1) Super Enterprize made 200%
2) Pohuat made 200% (All furniture stocks bull run Calvin called to buy)
3) Silk made 200%
4) JAKS (Jaks jump, jump, JUMPED from 40 cts to Rm1.20 (UP A NICE 200%)
5) MyEG made 100%
6) AJIYA made 100%
7) Supermax made 100%
8) JERASIA made 100%
9) IPMUDA made more than 100% & LIMIT UP!
10) Pm CORP made 100% (3 Times in 3 years)
11) PRESTAR (Pre Star buy it before it turns into a Star) Made 70%
12) ASB (Up 50%)
13) KHEESAN Made 80%
14) PADINI made 90%
15) TAWIN (Big win) Up 80%
16) Kimlun - The Golden Dragon made 60%
17) THE STORE (Taken private: Up 50%)
18) NTPM - (King of Tissue) Up 40%
19) WANGZNG - King of Fortress (Up 40%)
20) MAHSING - The Singing Horse (Up 25%)
21) MAYBULK - The rebound of Baltic Dry Index (Up 90%)
22) CEPATWAWASAN - Cepat cepat beli (Up 40%)
23) NYLEX - Up 20%
24) Southern Steel (Up 30%)
25) KULIM (Taken private) Up 60%
26) TMakmur (Land of Prosperity. Taken private) Up 37%
27) KPSCB (Kaboom Power Surging) Up 45%
28) MASTEEL (Master of Long Steel) Made 60%
29) THPLANT (Up 15%)
30) BPLANT (Up 12%)
31) JTIASA (Giant Treasure) (Up 40%)
32) MHC PLANT (Up 15%)
33) CPO FUTURE (Up 15%)
34) INSAS (Up 11%)
35) WASEONG (Up 20%)
36) MFCB (My Father Comes Back) Made 40%
37) Cyclical 11MP Election stocks KKB (Kaboom Kaboom Booming) Up 35%
38) Cyclical 11MP Election stocks CMSB (Up15%)
39) Cyclical 11MP Election stocks NAIM (Up 25%)
40) RceCapital (The Best of Banking: Legalised Ah Long) Made 60%
2016-12-07 00:43
Posted by John Lu > Dec 7, 2016 12:34 AM | Report Abuse X
Calvin will be world best sifu if he ask for short sell...coz all his pick bjcorp, mulpha, mui, zelan, perisai, alam, kbunai, bpuri, DRB, Ajiya, GSB, etc all go holland to 52 weeks lowest
2016-12-07 00:44
icon
you think too much
Trump wins because America is a stupid country.
that being the case, you cannot analyse what a stupid country will do.
but outcome is clear...America is in permanent decline and China is waiting to fill the vacuum
2016-12-07 00:55
We vote Trump because he promised us with jobs if elected. If he does not keep promise can we revote and choose Hillary Clinton instead?
2016-12-07 04:11
Back in the days when ppl r angry they elected ho chi Minh, Mao Zedong, fidel Castro and Che Guevara to fxck some shit up. And boy did they fxck some shit up. Trump? Nah. He deeply vested in business interest and he won't break his own rice bowl. He ain't no Karl Marx that's for sure.
2016-12-07 06:27
Comment of the year
Posted by stockmanmy > Dec 7, 2016 12:55 AM | Report Abuse
icon
you think too much
Trump wins because America is a stupid country.
that being the case, you cannot analyse what a stupid country will do.
but outcome is clear...America is in permanent decline and China is waiting to fill the vacuum
Permanent decline? Last I checked the gdp n currencies of China are trending down for the past few years while the 'stupid' country is getting back on track after the 2008 housing crash which by the way trigger the world financial crisis n when Fed start hiking soon all EM currencies will go to the dogs - heck they are now approaching their low of 1998 even with current incredibly low rates. If I were u I start to worry about our beloved bolihland first - then see if the Chinese can avoid a hard lending n then hope the 'stupid' Americans still love the dollar trees n their walmarts so the Chinese can continue to fill the vacuum of cheap exported stuff n keep their gdp n currencies from sliding down even more into - yep u said it right - permanent decline - lol
2016-12-07 07:28
We are not interested whether US or China will win. We only want our wallets to win. So, no protectionism please
2016-12-07 09:58
Not necessary US will trump China even US is the big customer. Customer is king.
may not be always right. China supply clothing, foodstuff, Chinese medicine etc All are low margin commodities where American are not willing to do the job. Whereas US supply high added value like iphone, boeing etc.
So is case all this stop, who will win and who will suffer more?
2016-12-07 11:53
Icon
In this environment, exporters are our national heroes and saviors
We must support our national heroes then blessings will come.
That is called gratitude leads to happiness.
2016-12-07 11:59
Stock market not necessary reward smartness.
I like Forest Gump
Dump dump makes a lot of money because he focus on only one thing and he was right.....about the shrimp business.
2016-12-07 12:02
I agree with Icon view. No country especially US can be act in isolation(be a protectionist).We are living in a globalized world.Just like US cannot act as a sheriff for the world. Those days are gone it cannot do what it likes without consequences.
2016-12-07 12:40
I think a lot of people get this wrong, manufacturing job back to US do not mean the same model will back to US. Due to high cost, company back to US will resort to technology for help. There will be a new industrial revolution that create a lot of tech engineering jobs to US. Under automation, they do not need many blue collar US workers either. This is what china going to do if china wages getting too high until unprofitable to do business, china gov will resort to technology for help instead of offshoring to other country.
So what trump want to achieve, is to do it before china, have this revolution happen in US instead of china. Clear?
2016-12-07 14:10
Dont think highly of trump.He is just an erratic bussiness man without
any principle to guide him thru his presidency.My guess is he will flip flop thru all his way.The result will be very messy
2016-12-07 14:32
Softbank and Taiwan Foxconn investing $57bn in US specially dedicate to Trump. Whats ur view?
2016-12-07 14:37
If trump do not want to do something big, he would not even going for the presidential seat. All he view is consistent, from stopping TPP to shooting china on trade, all he want is trade rebalance! Simple? Consequence is severe to china, there is a big bubble in china. Any changes to the balance, china will kena as china internal bubble is bigger than US internal economic problem.
2016-12-07 14:47
From the author "THIS IS BECAUSE US IMPORTS SO MUCH MORE COMPARED TO EXPORTS. As we all know, in business, when you are a buyer, you wield considerable influence. Customer is king !!! "
So this lousy seller like china gain more influence along the process? See, so many years trade deficit, spent like king US, end up nurture china to increase their influence. Global trade rule all along set up by US, they can throw it or change it again. China is just playing inside the rule maker game. One of the purpose for One road one belt is to create china own game. Play game, have fun
2016-12-07 14:53
Those who look down on Trump, i dont know why i do not share the same view like those preaching in the news. Maybe im borned not to be brainwashed by media, maybe trump got a lot of unreasonable talks, but his ultimate aim is rather clear: trade rebalance, better if US able to achieve trade surplus. If deficit is the king, let china be the king....actually i dun quite believe deficit or surplus can be king, only rule maker, order leader can be the king.
2016-12-07 15:00
What is the root cause of huge deficit for US ? It is because of their life style , overspend ...spend beyond their mean...To blame others because your own fault is exactly what Trump stand for............
2016-12-07 15:21
beng, beng
If you are American, you will surely be Trump supporter...the talk cok king.
But he will not lead America to greatness, only to the dumps.
2016-12-07 15:33
China got big internal problems but China also got big leaders.
In Trump America got tantrums in chief.
Ahbeng Beng > Dec 7, 2016 02:47 PM | Report Abuse
If trump do not want to do something big
2016-12-07 15:36
Hillary vs Trump is in reality
competence vs tantrum in chief
kind woman vs woman abuser
facts and science vs truth, facts deniers
one who lives in this Universe vs boy child living in another Universe.
2016-12-07 15:39
Corporation in US offshore to china, money they earn did not remit back to US as those money will be taxed 35% once they want to bring it back to US. At the same time those corp bringing jobs overseas and sell the product back to US. Do you think Trump will want to do something about it? Lifestyle, overspend... change rule, US will start working, and china will start spending. China spending power, you know de, also not that bad.
Automation will be the answer for manufacutring job slowly coming back to US, Trump will justake it happen quicker. My prediction la, only happen liao, looking back, history will tell whether im correct or not.
2016-12-07 15:43
SoftBank can invest USD 1 trillion in US if they want. All I am saying is that Trump cannot simply impose tariff on other countries
If Trump wants to create jobs in US, he should create an environment that is conducive (namely, cost efficient), but not by making other people's goods more expensive through protectionism. That will face pushback.
2016-12-07 15:46
US can not eat the whole cake by themself.Sharing is alway the best
solution over pretectionism.Dont forget US is only have population of 318.9m vs 7.4 b world population (4.31%).
going isolation will not make america great again.It only show how
shallow america is.......
2016-12-07 15:55
If US wants to create jobs, it should learn from Germany. Germany has high wages, yet they register huge trade surplus with most countries
US should learn how to take jobs from Germany, not Malaysia. And do it by not imposing tariffs.
Anyway, my interest in this topic is limited to apparel, furnitures and cling wraps because I have Poh huat, latitude, Prolexus, thong guan, etc. Wake me up when SoftBank starts making those products in US. Zzzzz
2016-12-07 16:10
I agree and i believe Trump wont be raising the tariff of imports seeing the consequences.
But Softbank and Foxconn started the investment and more to come? US bringing back their companies, manufacturing themselves and export instead? Then Trump no need to raise the tariff lor since they are not doing imports
2016-12-07 16:17
As long as they don't impose tariff, I am fine. By the time they finish building their factories, stockmanmy and I would have cashed out from our export plays already. That is all we care LOL
2016-12-07 16:45
icon
furniture and commodity shares got no risk of tantrums from boy child
but suppliers and contractors to MNC do face a bit of such risk....
2016-12-07 16:51
the rhetoric is that those who lost jobs to free trade are Trump voters.
The reality is that those think Obama is a muslim are the true Trump voters....
it is reality in Hillary vs the dark corners of the far right Universe on the internet and social media which is so powerful now.
2016-12-07 16:59
Trump urges cancellation of order for new Boeing Air Force One
http://www.thestar.com.my/news/world/2016/12/07/trump-urges-cancellation-of-order-for-new-boeing-air-force-one/
2016-12-07 17:19
What else Trump will do when take over as President? Don't import from oversea?
http://www.thestar.com.my/news/world/2016/12/07/trump-urges-cancellation-of-order-for-new-boeing-air-force-one/
2016-12-07 17:20
no good has ever come to anyone who believed in Donald Trump
That is the real history of Donald Trump.
2016-12-07 17:27
Stockmanmy: haha, you are bashing on trump in every aspect. Nah, it doesnt hurt me, i hope he did nothing in the end, save my worries. Im just execercising my caution as an investor in any likely scenario. Up until now it is all talk, he didnt even becoming the president you already so sibeh sure he talk c0ck....not even a hint appear to you that he will do anything unexpected. Well, i hope such sibeh sure mentality should not be a trait that appear in an investor instinct.
You are using his personal life to determine his ability to do thing. So... trump insults women so he cant do anything...only release tantrum, is that what you mean?
This remind me of world war 2, bad mouthed, like swearing, heavy smoker and drinker vs gentleman, good speech inspirator, good discipline and even an artist that can draw nicely...who you want to choose as your leader? The earlier behave like trump and later behave like obama???
Well, the earlier is winston churchil while the later is hitler. You mentality will make you choose hitler, let us salute to the fuhrer.
2016-12-08 02:25
"That is the real history of Donald Trump."
You know a lot of history about Trump? Anything about his president history that haven't happened yet? Or just his history of fighting WWF, shaving other ppl hair, appear in simpson, appear in reality show/movies etc? Or just purely depiction from the media?
Dont get me wrong, i think he is idiot too. He has bad geography, he thought Philippines is in middle east, as a muslim country. He even thought paris is in german. He wrongly saying china as a currency manipulator when just recently PBoC spent billions of reserve to defend rmb from falling too sharply. But this is exactly what im worrying about, too smart will think too much, at least everyone will be safe. Too dumb like trump, he will behave like a child, hopefully this child will only just release his tantrum, give him a gun, everyone will kena.
2016-12-08 02:42
1. Donald Trump is simple. He is willing to do whatever he needs to win, attack weak point of the opponent, making fake news, pretending to be strong, promising what voters want to hear, etc. Don't take it seriously what he said he will do.
2. He will do whatever he thinks its good for USA. Moving all those subcontracting back to USA (iPhone etc) maybe, but not 45% import tax.
2016-12-08 05:12
After length argument and different point of views, wallet still shrinking. Inteliigent but no action is same as dumb? Or just dumb dumb buy export stock? Or buy what? Any recommending?
2016-12-08 15:45
Just dumb dumb buy exports
National heroes
Buy national heroes, dumb dumb you get blessing.
2016-12-08 21:52
Icon, i invite you and your 9 million readers to buy Hibiscus!!
John Lu
481 posts
Posted by John Lu > Dec 12, 2016 10:50 PM | Report Abuse X
10 reason buy Hibiscus
1) Opec and non Opec agreed to cut oil production (6 mths)
2) After 6 month, I believe they will cut more
3) Hisbiscus 3000 bpd now
4) Target 10000 bpd
5) Hibiscus cost at below 19
6) Management target to reduce the cost to below 15 pb
7) Oil price now 54 pb
8) Company continue 2Q profit
9) Free debt company
10) Last tranches pp at 29c
BUY!
2016-12-12 23:29
Icon, very good article.. in fact on import tariff, he will implement 10% across all products... counter that with lower business tax for companies operating in the US... supermax will gain from lower business tax in US (since it operates a US subsidiary) and if they build a contact lens plant there, they will get more profit margin (they still have land in US)... and instant market access. i think we will see more innovation from his policy. He is a smart guy.
2017-01-04 11:44
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stockmanmy
wrong Calvin...
the exporters will outlast Trump the boy child.
Further our exporters have no jobs for them.......hahahaha.
2016-12-07 00:29