A global petrochemical shift to China from Europe

Bad news! This seems to follow the typical playbook of the Communist Party of China like solar panels, rare earth metals processing and other products before! Produce large quantities, export excess, use price dumping, exploit free trade.

When will Western countries finally wake up! President Trump is right to oppose this managed foreign trade by China! This is not free trade, but an attempt to dominate certain industries to the benefit of China. China got away with this for too long!

"The global petrochemicals landscape is undergoing a massive shift. According to a ranking of the top 100 chemicals firms by ICIS, China’s majority state-owned Sinopec has supplanted BASF at the top of the list, with three other Chinese firms in the top 10. That will come as no surprise to anyone with half an eye on this sector, since China has been supporting domestic firms to aggressively build new integrated petrochemicals plants to turn the country from a net importer of petrochemicals to an exporter."

Sinopec overtakes BASF as world's largest chemical company amid China's petrochemicals expansion | Chemistry World (no public access) "China’s rapid capacity expansion fuels global oversupply, leading plant closures in Europe and elsewhere"

Trump Again Raises Tariffs On Chinese Goods & Services

Posted: 5/11/2019  revised: 5/12/2019

For lack of time, I cannot go into more details or topics of this trade dispute between the U.S. and China.

First of all, I am a staunch free trade supporter, but I am not blind to how free trade has been distorted in many ways over history …

My Two Cents On The Issue

Here are my two cents on this issue:

1. Free trade as it has been developed since World War II through e.g. institutions like GATT or its successor WTO, has been a far cry from real free trade. Managed or distorted trade would be a more accurate description
2. China still is a kind of Stalinist communist country (a totalitarian dictatorship)
3. Since joining the WTO, China has violated principles of free trade as has been reported many times. China does impose high tariffs on e.g. manufactured goods (e.g. cars); China has required/forced sharing of intellectual property with Chinese partner companies for access to its market and so on
4. State run and subsidized companies still dominate the Chinese economy. This is certainly not free market competition by any stretch of imagination
5. How leveraged is the Chinese economy? There are many reports about huge debt amounts in housing, banks, households etc.
6. Official Chinese statistics are very unreliable as is very typical for communist regimes
7. The Chinese regime has greatly promoted export over domestic consumption. No wonder that Chinese consumers either pay way too much for consumer goods and services or cannot find them. Just to give you one drastic example: Visit public restrooms in China. There are now a lot of them in major cities, however they are still mostly squat toilets (whole in the floor)  
8. The hope that China would transform to become a more Western type of democracy with more individual freedom and rights since it opened up at the end of 1970s has turned out to be wishful thinking
9. The current Chinese president, Xi Jinping, has installed himself as a dictator for life in 2018. Thus, destroying one of the most important safeguards of the Deng Xiaoping reforms, the term limited presidency

On The Impact Of High Tariffs

The Western media, economists, and so called libertarians are mostly preoccupied to wail about the higher costs to U.S. consumers, the detrimental effects on the the cross country supply chains, individual business that might be adversely impacted and so on.

On the other hand:

1. The ratcheting and drastic increases of tariffs is a very strong signal to China that President Trump means business and that he expects China to negotiate fast and without delaying tactics etc.
2. Higher import prices on Chinese goods & services incentivize new and existing U.S. businesses to replace those Chinese goods and services. Thereby, creating more business opportunities and jobs or robots in the U.S. etc. To my knowledge, this aspect of Trumps strategy has rarely been mentioned
3. Higher import prices on Chinese goods & services will also make other Asian and non-Asian countries more competitive relative to Chinese companies. This could e.g. very well realign international supply chains (I have to  thank U.S. Senator Lindsey Graham for this insight who in an Fox TV News interview pointed this out on 5/12/2019)

Hope For A Spectacular Free Trade Agreement Between U.S. And UK

Posted: 9/19/2019

Yes, President Trump and Prime Minister May have a lifetime opportunity to show the world what a true free trade agreement could look like that deserves its name. Let’s pray and hope that these two leaders will seize the opportunity and open a new era of advancing free trade around the world.

Since World War II the global elites duped the citizens of the world by claiming free trade when in fact they negotiated largely managed trade. Particularly shameful was the treatment of developing or emerging economies.

March 29, 2019 is Brexit day! A glorious and important day that will go down in history! By being free again of the restraints imposed by the statist and centralist EU, the UK has an enormous opportunity to become an powerhouse of economic freedom again like during Scottish Enlightenment and the Industrial Revolution.

Liberty minded think tanks have already started working on drafts or proposals for such a free trade agreement (Disclaimer: I have not yet read these free trade agreement proposals):

1. Britain and the US Can Show the World What a Free Trade Deal Should Like
2. The Ideal U.S.-U.K. Free Trade Agreement: A Free Trader’s Perspective

President Trump And Free Trade

Posted: 6/9/2018

The whole world is wondering aghast what President Trump is up to when he threatens to imposes new or even imposes higher tariffs on the imports from major trading partners or when he attacks or dismisses trade agreements as bad deal like NAFTA (North American Free Trade Agreement) or TPP (Trans-Pacific Partnership).

From a free trader’s perspective, like I consider myself to be one, these tariffs threaten to:

1. Harm consumers and businesses in the U.S. and abroad
2. Trigger a spiral of tariff and counter tariff impositions or, worse, even a trade war the like we have not seen in decades

For a long time President Trump has puzzled me with this approach. However, I begin to see some method in this, what appears to many as, madness:

1. A diversionary tactic to e.g. get the Europeans to focus more on economic prosperity and trade instead of radical environmentalism and identity politics
2. To initiate a more honest discussion about managed trade versus free trade, the former of which actually predominated the post World War II era. Perhaps, Trump is intentionally upsetting a much beloved world order of managed trade. But one should not be fooled, some countries took advantage in their own best interest of the likes of GATT (General Agreement of Tariffs and Trade) or its successor WTO (World Trade Organisation), e.g. China.
3. To get the U.S. Congress to finally limit the powers of the president to make unilateral changes to U.S. tariffs. Long overdue perhaps

I keep my fingers crossed that my above speculation is not entirely without warrant!