The US has softened up on China, particularly on currency issues, following the advice of the Economist perhaps :) ...
Europe by contrast is ready to push much harder
Trump is missing a big opportunity. Good Bloomberg story
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Fun to get a chance to say in public what I really think, and have been telling everyone willing to listen in private ...
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bloomberg.com/news/newslette
The analytic case for disregarding the "Don't talk about the yuan" advice of Gopinath, Gourinchas and Rey and instead making currency the focal point of European and ideally G-7 macroeconomic diplomacy is laid out here
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The obvious issue Europe needs to confront is Russia, where it is failing miserably (just look at the mess around the 21st sanctions package). China is important but is also a distraction, since it's easier to pontificate about global imbalances than actually do stuff on Russia.
China supports Russia last i checked, and think German concerns about China's impact on its industry are real and this more than pontification
Irrespective of the debate about the undervaluation of the Yuan, do you seriously believe China could be persuaded to appreciate its currency? If we could not impose tariffs on China, what leverage would Europe have to be successful? Geopolitics is paramount here.
i think Europe can impose significant (but not silly across the board 145% ones) tariffs if China doesn't move. that is part of Europe's leverage. think there ways to deter China from using the rare earths card as well but will keep those private
The US is the one pushing Europe to push China harder. The US is trying to tighten the screws on China every which way. It's clear as day.
tariffs in trump 2 are now a uniform 10 to 12.5%, which isn't putting any pressure on China. see a lot more fog here
To a guy with hammer, everything is a nail. That’s you Brad. Everything to you is a capital/currency problem. Have you ever thought about even if China currency appreciates 20%, Europe still won’t have its manufacturing competitiveness back, then what?
The never prepared for anything Europeans missed their chance. No energy, no weapons, and expect to be followed and taken seriously. The life boats are filling quickly.
China'll just de-dollarise & put everyone back on gold. This solves everyone's problems with globalisation & force balances flows.
Of course the U.S. might go under if gold doesn't revalue strongly enough or it doesn't have enough stock but is what it is.
Translated from Chinese
It's because the US got pretty badly hammered by China's trade war policies
The EU doesn't need to get thrashed too
But it's not all bad news—after this kind of showdown, in two years they'll have a better mutual understanding
The toolbox gets more refined
But the EU getting
LOL Trump respects big crime bosses. He has just learned to respect Iran more in the future.