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Saturday, April 07, 2018

How China can win

Although the US cannot lose a trade war with China due to the fact that it is already $600 billion in the annual red thanks to the trade deficit, that does not mean that China does not have an ace or two up its sleeve:
Chinese President Xi Jinping is now exchanging threats of tit-for-tat tariffs with President Trump, who announced Thursday he's considering raising the stakes another $100 billion. China vowed to defend itself "at any cost."

Compared to the scale of the U.S. economy, the numbers are still relatively trivial and mostly theoretical. But if things do spiral into all-out trade war, it's worth noting China has a nuclear option.

I'm referring to rare earth metals.

These are elements like dysprosium, neodymium, gadolinium, and ytterbium. They aren't actually rare, but they do play crucial roles in everything from smart phones to electric car motors, hard drives, wind turbines, military radar, smart bombs, laser guidance, and more. They're also quite difficult to mine and process.

It turns out the United States is almost entirely dependent on foreign suppliers for rare earth metals. More importantly, it's almost entirely dependent on China specifically for rare earth metals that have been processed into a final and usable form.

Basically, if China really wanted to mess with America, it could just clamp down on these exports. That would throw a massive wrench into America's supply chain for high-tech consumer products, not to mention much of our military's advanced weapons systems.

In fact, China isn't just America's major supplier of rare earth metals; it's the rest of the globe's major supplier as well. And in 2009, China began significantly clamping down on its rare metal exports. Once, China briefly cut Japan off entirely after an international incident involving a collision between two ships. This all eventually led to a 2014 World Trade Organization spat, with America, Japan, and other countries on one side, and China on the other.

That forced China to abandon its quotas. But it also shows China is willing to use its advantage in rare earth metals to play hardball if it's pushed far enough.
However, this is not an argument for free trade. In fact, it is precisely the opposite, it is a devastating disproof of Ricardian Comparative Advantage theory, which posits that manufacturing can move seamlessly between industries. In fact, if one were to argue that the USA must engage in trade due to its fear of its inability to process rare earth metals, one would have have to reject the theory of comparative advantage, and therefore, free trade.

This is the danger of engaging in the Ricardian Vice. It becomes all too easy to accidentally refute your own position when attempting to respond to protectionist arguments.

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73 Comments:

Blogger Freddy April 07, 2018 2:13 AM  

This Trump killing the Central Banker Market slowly. He's after the Fed reserve and Rothschild cartel

Blogger Joe Katzman April 07, 2018 2:28 AM  

Oh, please throw us in the briar patch, Mr. Xi.

Rare Earth metals are not rare. China only has a lead because of the environmental regulations in countries like the USA.

So... the only thing would happen if Xi pulled this stunt is that Trump would immediately sell off large chunks of federal land in the west in order to open "Rare Earth" mines, and use a national security emergency(TM) to rip up every bit of regulation or judicial obstruction that stood in the way.

Do it, Mr. Xi. Do. It.

Blogger Unknown April 07, 2018 2:31 AM  

I have to wonder if the current situation concerning rare earth metals is mainly due to how cheaply China can mine them, rather than an actual lack of there being any anywhere else.

IOW, if China does slash supply, does another source become available due to the increased cost? Could such a source come online quickly enough to mitigate supply chain shortages before they became critical?

Blogger Resident Moron™ April 07, 2018 2:37 AM  

I’m hearing whispers that behind the scenes China is begging to negotiate. Not clear how accurate this is yet, but if it is then it’s strong vindication of the GEs methods.

Blogger SciVo April 07, 2018 2:40 AM  

That would actually be an argument for slapping a green/OSHA tariff on Chinese rare earth metals right now, to spur domestic production by regulation-normalizing costs.

Blogger Unknown April 07, 2018 2:49 AM  

@5

Karl Denninger over at Market-Ticker calls that environmental policy arbitrage tariffs. Set tariffs on China sourced rare earth metals based on the estimated added cost that would come from China implementing proper environmental protection policies.

Blogger SciVo April 07, 2018 3:05 AM  

This comment has been removed by the author.

Blogger Rocklea Marina April 07, 2018 3:34 AM  

I'm ok with valve amps, they have soothing hum. And there's no storage space on top of flat screen tvs.

Blogger SciVo April 07, 2018 3:35 AM  

@6 Unknown: Whatever you call it, it should just be common sense. And it should encompass all products, not just rare earths; and also labor regulations, not just environmental. The current scheme incentivizes poisoning China's ecology and endangering its workers while handicapping America's economy. I dare the Establishment to explicitly come out in favor of that combo (they actually are).

Blogger SciVo April 07, 2018 3:45 AM  

That is, in my opinion, the most likely purpose behind the mass indoctrination of tariffs = bad: to make stillborn every proposal of an across-the-board green/OSHA regulation-normalization tariff. Because TPTB are enjoying clean water, cheap goods, and high profits; so why would those self-centered egoists let anyone rock the boat?

But thanks to the God-Emperor, there is an opening here. It must be exploited.

Blogger Cetera April 07, 2018 3:51 AM  

As the rhetoric ramps up about China having all these miraculous, world-beating plays in their hand for use in a trade war, I'm getting suspicious of the motives behind them. They are starting to seem a little , a little like they are throwing everything out there to see if they can just scare us so bad Trump backs off.

I suspect this trade war may not be negotiation. I think it might be punishment. Trump was pretty harsh on China during the campaign. He backed off hard and fast after the election, tying them to NK, and saying he wanted to have them fix the problem. In return, he would give tuem favorable trade deals. He was firm, but respectful. He gave deadlines. They didn't meet them.

Something somewhere changed. Lil'Kim tapped out. A lot assumed China finally got through to him, got the job done. But what if they didn't? It may have been through some other opportunity that Kim decided he'd had enough. If so, Trump may end up wanting to break China completely. It was their mess, he's cleaning it up, and he's going to make sure they don't ever get to make any more messes.

Blogger Cetera April 07, 2018 4:44 AM  

Somehow missing a "desperate" in the blank spot in the above post. Thanks, sucky phone keyboard.

Blogger Wolfman at Large April 07, 2018 5:29 AM  

China's baffling lack of any sort of maintenance culture puts them in a constant race to build new buildings before the old ones fall down. Their whole economy is shockingly fragile.

Blogger Meng Greenleaf April 07, 2018 5:46 AM  

Apparently thermal vents are excellent sources of concentrated rare earths.

Blogger Meng Greenleaf April 07, 2018 5:56 AM  

I was standing next to an inch of water on the floor of an organic chemistry lab watching the the occasional spark from a nearby loose wire when the repairman (repairperson sorry) showed up..... to fix a stuck lock and then leave.

LOL

I assumed the buildings were built in the 1950s, actually they were less than 10 years old.....

I invited a friend from Nanjing to Japan. He complained that the China Town was too clean and likened it to going to Disney Land.
😆

OpenID Mike Jackson April 07, 2018 6:09 AM  

I'd like to see Trump end the exclusive deal between China Post and the USPS that enables you to buy a Chinese product off eBay for less than a dollar and get free shipping on top of it.

Someone I know buys specialty pens on eBay from China for 97¢, with free shipping. It would cost more than $2.50 to mail the same item to your next-door neighbor.

Blogger VFM #7634 April 07, 2018 6:29 AM  

@Joe Katzman

Right. The U.S. shale boom was an adaptation to OPEC+Russia attempting to corner petroleum, and which "couldn't be done". Are we seriously expected to believe we couldn't do the same with lanthanides?

Blogger Uncle John's Band April 07, 2018 6:36 AM  

The environment was one of the things that repelled me from leftism long before I took anything resembling a red pill. It's basically a subset of the scientody/scientistry distinction in Point 8, where something empirical morphs into dogma. Everybody wants a healthy ecology, but turning that into a pillow on the face of the American economy while maxing out production in the most environmentally irresponsible venues was obviously a deception. I love the environmental impact mitigation tariff idea - all the bogus green propaganda actually does apply to it. It's rhetorical gold.

@16 Mike Jackson

It's all connected. The cucks are howling because this looks a lot less like a trade conflict (superficial) than a systemic realignment. Look at the outcome of the last 50 years of economic/environmental/cultural policy. What happens if you actually reverse the policies?

It is essential for the globalists to destroy America on both the national and individual level. Empowering China does both. A strong national economy allows for strong, self-supporting families and lowers demand for social programs. This is a bedrock fight for the future of the entire system, and the liars are going haywire.

Keep pushing back hard. I haven't seen "expert" flak like this since the election.

Blogger Rick April 07, 2018 6:57 AM  

Can we think of this in reverse? Let’s say we were currently NOT in a $600 billion trade deficit with China.
And they offered, hey, want some rare earth metals? It’ll only cost ya $600 billion PER YEAR.
Would we take that deal? Sounds like RENT to me. Nah, we’ll keep the $600 billion and figure out a way to solve this “gotta-have” ourselves.
Imagine the MAGA energy released from that alone, never mind all the other crap that’s robbing the GE of his precious attention, such as the wall, pedos, immvasion, etc..

Blogger Avalanche April 07, 2018 7:04 AM  

@11 "Something somewhere changed. Lil'Kim tapped out. A lot assumed China finally got through to him, got the job done. But what if they didn't? It may have been through some other opportunity that Kim decided he'd had enough."

Y'all remember:
In Sept 2017: A tunnel has collapsed for the second time at Punggye-ri in North Korea. ... The blast caused a 6.3-magnitude earthquake, according to the US Geological Survey, followed a few minutes later by another with a magnitude of ...
a North Korean official said the collapse happened during the construction of an underground tunnel.

There is a ... wandering thread ... out on the web suggesting the U.S. / Spec Forces did that. That the GE had moved a lot of very visible "assets" with his left hand, while his right hand took action? No way to tell, but it might seem persuasive?

Blogger CoolHand April 07, 2018 7:05 AM  

If EPA/BLM/MSHA would issue the permits, you could have a Stateside rare earths mine spun-up and producing salable concentrate inside a year. Less than that if money were no object (IE dire circumstances like a shooting war, or if China were to clamp down on exports and force a drastic rise in prices).

They'd need a waiver from the DOE vis a vis stockpiling the Thorium yield for later use as nuclear fuel instead of paying millions to bury it like fission waste (plutonium and a hundred other daughter isotopes, etc).

That's the big hangup with mining rare earths in the US. Our deposits generally contain much more thorium than elsewhere in the world, and DOE/EPA have classified thorium extracted from mining concentrate as hazardous nuclear waste, on par with the spent fuel from fission reactors.

It's not, no where even close to it, but the .gov has declared it to be so via regulatory fiat.

That could be undone via executive action, and would do more to help the US on both the energy front and the rare earths front than any other single action.

~90% of the world's problems boil down to energy production in one way or another.

We figure out how to generate power with less cost and pollution than just straight up burning coal, and we'll be a long way on towards solving a lot of issues that the Malthusians complain about incessantly.

IMO this is why everyone fights so hard to keep people from looking into any form of nuclear power besides uranium fueled boiling water reactors. Those are super expensive and scary enough to be a constant bogeyman for the leftists to wave about and protest against, and the huge cost of construction ensures the centralization of power production.

Small distributed thorium fueled molten salt reactors would totally implode the stranglehold that big power currently enjoys, and it would take a huge and highly visible bugbear away from the enviro-weenies by drastically reducing emissions of every type while being cheap to fuel and much safer to operate than the current tech.

It's a win/win for normal people and the country as a whole, which is why the leftists and the gov't are absolutely determined to see that it never happens.

Blogger Avalanche April 07, 2018 7:10 AM  

@21 "~90% of the world's problems boil down to energy production in one way or another."

and 100% of it boils down to too many people!!

OpenID would-be-tellin April 07, 2018 7:11 AM  

The issue in the US is refining the not so rare earths, you've got to boil the ore in acid about a thousand times, and with our environmental regulations absent tariffs or other restrictions or incentives we're dependent on China. But this can be changed, and fairly quickly, there's for example one refinery that tried to make a go of it within the last decade we could put back into operation.

Blogger Avalanche April 07, 2018 7:12 AM  

Coolhand, is anyone on the planet using thorium reactors?

Blogger Jew613 April 07, 2018 7:32 AM  

Roll back some of the green regulations and reopen the Mountain Pass Mine, problem solved.

Blogger tz April 07, 2018 7:40 AM  

We have mines here, and areas likey to contain them. The problem is OSHA, EPA, and USF&WS (endangered species). Only China will use cooley labor as miners.

It is interesting watching as I'm in the middle of the book "What's Wrong with China" by Paul Midler, and in this instead of his more contemporary anecdotes in "Poorly Made in China", it goes through their culture (and it is an ethno-culture) since history shows they haven't really changed.

Xi v.s. Trump sounds like a savvy negotiation between a westerner and a Chinese factory or shop that is doing its usual cheating and has been caught.

Blogger Stilicho April 07, 2018 7:45 AM  

@vox tactical victory for ChinaN strategic disaster.

There's an eighth China, the clumsy giant with a poorly hidden inferiority complex that has dominated the region at times through brute force while pretending that they "lead" through superior culture. Their neighbors despise them for a variety of valid reasons. #LetThemEatRareEarth

Blogger Johnny April 07, 2018 7:46 AM  

Some of our environmental rules are nutty extreme. I take it as pandering to people's fears. Most people are not quantitative about risk. One in a million risk is no different than one in ten. And then there is globalism. Extreme regs push production abroad and thus favor the international companies.

To mix metaphors, Trump shoots from the hip when it comes to his lips, but he tends to plod when it comes to decisions. Seems to work for him. For now I think he is just stirring the pot on this foreign trade stuff.

Blogger Johnny April 07, 2018 7:53 AM  

To drift slightly off topic, Lil'Kim has led a life of considerable isolation. It could be there are possibilities that he didn't know existed. So I say for now we pretend to believe he is going to come around and become something more reasonable. Could happen.

Blogger pdwalker April 07, 2018 7:55 AM  

@24 The US has test reactors that ran for years (late 60's? early 70's) that were successful but were shut down.

The Chinese are developing their own Thorium reactors currently. I don't know the current state of their project.

Blogger mark auld April 07, 2018 7:57 AM  

The Netflix show "Occupied" is based on Norway trying to start using Thorium in its reactors.

Blogger Uncle John's Band April 07, 2018 7:59 AM  

@ 21. CoolHand

This is the sort of big structural shift that's in play. A transformation like you describe is not easily undone.

Blogger Uncle John's Band April 07, 2018 8:00 AM  

Ditto new nuclear technology. It's this level of change that has the whole global elite in paroxysms.

Blogger Rantor April 07, 2018 8:05 AM  

US’s last rare earth mine was Mountain Pass in California. Went bankrupt and closed in 2015. Mine was sold to a Chinese firm in 2017. The Chinese are working to resume operations. So now even US rare earths belong to China...

Blogger Duke Norfolk April 07, 2018 8:27 AM  

"However, this is not an argument for free trade. In fact, it is precisely the opposite..."

Exactly. This is their logic:

"Look, we're vulnerable to China in the rare earth market, so let's make ourselves increasingly vulnerable to them in other important strategic markets too; in addition to more mundane consumer markets. What could go wrong?"

Blogger Lovekraft April 07, 2018 8:38 AM  

My general summary of Canada involves baby boomers whining that they shouldn't have to work manual labor because they're special, so mass importation of third worlders ensues to the present point that most major cities resemble Marrakesh. In conjunction with this is another poison fruit of unsustainable social programs (Health Canada has somewhere in the vicinity of 35 000 employees IIRC) that cause deficits, which cause govts to sell off profitable assets (Hydro One, for example) and inhibit self-reliance.

As for our natural resources, we're basically completely powerless to retain some measure of sovereignty. Which makes Trudeau's clown shows even more pathetic. Chinese and Dot Indians and Muslims have cut large swaths of areas for their own.

Blogger Rick April 07, 2018 9:08 AM  

VD, a few questions, if you please. What is your opinion on these:

1) would Trump settle for a $300 billion trade deficit with China?
2) is a $0 billion trade deficit with China possible?

Blogger English Tom April 07, 2018 9:18 AM  

Yes. Have watched the first two seasons and can confirm it is excellent (although there's not much about thorium and more so about political machinations). Recommended.

Blogger Emmanuel Mateo-Morales April 07, 2018 9:26 AM  

@22

Someone must get off on the Georgia Guidestones' globalist message... Malthusian cuck.

Blogger Nobody of Consequence April 07, 2018 9:39 AM  

The US has been unable to mine its "rare earths" in the Rockies due to environmental restrictions pushed by the globalists and passed illegitimately by the federal government.

Blogger VFM #7634 April 07, 2018 9:41 AM  

"It is interesting watching as I'm in the middle of the book "What's Wrong with China" by Paul Midler, and in this instead of his more contemporary anecdotes in "Poorly Made in China", it goes through their culture (and it is an ethno-culture) since history shows they haven't really changed.

Xi v.s. Trump sounds like a savvy negotiation between a westerner and a Chinese factory or shop that is doing its usual cheating and has been caught."

@26 tz
China has been playing the game of "sell stuff to foreigners and buy nothing from them" for hundreds of years.

China being a specie sink is arguably what helped explain their disinterest in colonizing the world, leaving it for the Europeans.

It's also basically what started the Opium Wars; the Brits figured out that opium was the only thing the Chinese would buy from the gwailos (and even that was illegal).

Blogger pyrrhus April 07, 2018 9:56 AM  

@21 Yes, oh what a tangled web the Government weaves in its regulatory efforts to suppress innovation that would annoy the powerful interests...Thorium is relatively harmless, and a potentially extremely valuable resource, and its suppression has left the US entirely dependent on China and a few other sources....When you attempt to explain this to neocons, their heads explode....

Blogger Crush Limbraw April 07, 2018 10:52 AM  

"Trump shoots from the hip when it comes to his lips, but he tends to plod when it comes to decisions." - danged good observation, Johnny!

Blogger James Dixon April 07, 2018 11:09 AM  

As with oil, that's a matter of choice, not necessity: https://www.energy.gov/articles/high-concentrations-rare-earth-elements-found-american-coal-basins and http://www.mining.com/scientists-produce-high-grade-rare-earths-coal/

> Small distributed thorium fueled molten salt reactors would totally implode the stranglehold that big power currently enjoys, and it would take a huge and highly visible bugbear away from the enviro-weenies by drastically reducing emissions of every type while being cheap to fuel and much safer to operate than the current tech.

I'm sure it's not actually that simple (it almost never is), but there is absolutely no reason not to give thorium reactors a try.

> Coolhand, is anyone on the planet using thorium reactors?

https://www.geek.com/science/first-new-thorium-salt-reactor-in-40-years-comes-online-1713296/

>
> 1) would Trump settle for a $300 billion trade deficit with China?
2) is a $0 billion trade deficit with China possible?

You'd have to ask someone in the Trump administration what there actual goals are. No one here is going to know. And I doubt they're going to tell anyone till the deals are done.

If it were my call, I'd want it down to something well under $100B.

Is a $0 deficit possible? Sure, but it may not be desirable.

Blogger seeingsights April 07, 2018 11:12 AM  

Another way to get rare metals is from asteroid mining.

Blogger Rick April 07, 2018 11:15 AM  

James, that’s why I said “opinion”. Of course, no one would know or say.
I’m essentially asking VD if he thinks it fits Trump’s character traits.
$100 billion could easily be pitched as a win. But my opinion of Trump’s trait is that $100b makes as much sense as $600b — because they’re both a total waste.

Blogger seeingsights April 07, 2018 11:22 AM  

VD's post made me think that it's good for a country to have a diversified economy. That might seem like common sense, but Ricardian theory holds that's its fine for one country to specialize in X while another country specializes in Y.
Back in the 1970s, the Arab Oil Embargo contributed to the deep US recession at that time. At the time, the US was dependent on foreign oil.
Now, the US has fracking and domestic oil production has increased so much that the US in a major oil producer--and perhaps will be the number one oil producer.
That means that a group of countries cannot play economic blackmail against the US. Also with the increased domestic supply of energy, costs go down which enchances US economic growth. And the economic growth is not only good for US consumers but also good for US producers and for jobs for Americans.

Blogger NO GOOGLES April 07, 2018 11:25 AM  

There was a rare earth mine in the US years ago (in Utah? IIRC - might be wrong) and it was shut down because China was flooding the market back in the late 2000s to destroy their competition. People actually warned that it would be a bad idea to do nothing and let China monopolize rare earth production but the same idiot freetraders supported the idea.

Luckily for us, in the intervening decade or so since that happened a lot of critical components that we use in a huge variety of goods no longer use rare earths because the price has been all over the place. A lot of compact and powerful electric motors ended up replacing the rare earth magnets with different magnets that do not use rare earths, etc.

It's something that would be a short term disruption because there are other sources of rare earths. It would just take time to bring them back online (Mongolian, Afghanistan, and the US all have significant rare earth facilities that were shut down in the last 10-15 years).

Blogger kurt9 April 07, 2018 11:32 AM  

The U.S. has rare earth metal mines as well. They are currently inactive because the Chinese mines have been undercutting the price and 60% of the world's semiconductor fabs are now in China. If the Chinese cut off rare earth metal exports to the U.S., our mines would open up and start producing to fill the market.

Blogger Ominous Cowherd April 07, 2018 11:43 AM  

Rare earths are available in the US. See here for a mine just waiting a favorable environment, like a rare earths embargo from China.

Blogger Mr. Naron April 07, 2018 11:45 AM  

Could this be why they're going after Scott Pruitt so hard? Peter Schwietzer, the guy who wrote Clinton Cash, just came out with another book exposing how the bi-factional ruling party is getting filthy rich off China. Mitch McConell features prominently because of his wife. Point being, the gravy train is being derailed, and the EPA secretary can't be helping them. So, he's got to go.

Blogger MrGb1965 April 07, 2018 11:55 AM  

Many accounts comprise the Balance of Trade.

Blogger Dad29 April 07, 2018 12:07 PM  

Surprise!! The Clintons gave away US rare-earth processing capabilities to the ChiComs in 1991.

https://www.marketplace.org/2017/06/26/business/big-book/why-us-buys-all-its-rare-earth-metals-china

Gee. The Clintons. Still not in custody after all these years.

Blogger Kevin Blackwell April 07, 2018 12:55 PM  

So china owns a company that owns a mine? That's fucking simple strip the company of its charter to do business in the US. It doesn't exist and now china's claim to the land is gone too. All corporations are chartered persons that exist for the benefit of man. No charter, no existence.

Blogger Ominous Cowherd April 07, 2018 1:26 PM  

Kevin Blackwell wrote:So china owns a company that owns a mine? That's fucking simple strip the company of its charter to do business in the US.

Mine stripping first, strip mining later.

Better yet, let the Chinese own and operate the mine. They can sell all the rare earths they can extract, but only to US buyers. Let them develop it with their own capital. After they have been in operation for a bit, they find out we won't let them repatriate the profits.

Blogger Allen L. April 07, 2018 1:37 PM  

Why it almost seems that all of the things our ruling class have been saying are nonsense.

Government debt, no problem. Did we tell you it might be one if we're not nice to the Chinese?

Globalization, it's good for America. Well maybe not if things get a little dicey.

At what point do people realize that the fools selling this crap have always been wrong, and will continue to be wrong and should never be trusted?

Blogger Ahärôwn April 07, 2018 2:11 PM  

Lovekraft wrote:My general summary of Canada involves baby boomers whining that they shouldn't have to work manual labor because they're special, so mass importation of third worlders ensues to the present point that most major cities resemble Marrakesh. In conjunction with this is another poison fruit of unsustainable social programs (Health Canada has somewhere in the vicinity of 35 000 employees IIRC) that cause deficits, which cause govts to sell off profitable assets (Hydro One, for example) and inhibit self-reliance.

As for our natural resources, we're basically completely powerless to retain some measure of sovereignty. Which makes Trudeau's clown shows even more pathetic. Chinese and Dot Indians and Muslims have cut large swaths of areas for their own.


This is true in the major cities, although less true elsewhere - most of Alberta's gas and oil industry, for instance, is comprised of locals or people from other parts of the country, such as the Maritimes. Also, farming, logging etc is still big in Canada.

Government is much too big, and needs to be trimmed. It's true about attempting to sell off viable government business - I'm reminded of a recent attempt to sell the LCBO, which makes over $1 billion/year. Thankfully that didn't go through.

Canada is considered to be a "small open country", sixth most open [read foreign held] in the world according to some lists, which is why I say Canada is, and always has been, a colony, albeit one with a first-world standard of living due to the first world people who settled the country.

Blogger Seth Schueler April 07, 2018 5:58 PM  

As a geology grad student I visited and interviewed at the rare earth mine in Mountain Pass California. They have plenty of REE there, but were bankrupted by predatory pricing policies of China. The US is totally capably of producing It's own REE supply.

Blogger 罗臻 April 07, 2018 6:44 PM  

Another way China can retaliate: blow up any North Korea deal.

Chinese Start Quoting Sun Tzu, Prepare for Asymmetric Warfare

Blogger MrGb1965 April 07, 2018 6:49 PM  

Balance of Payments, sorry.

Blogger CoolHand April 07, 2018 7:33 PM  

Avalanche wrote:Coolhand, is anyone on the planet using thorium reactors?

Nothing outside of small scale research reactors that I'm aware of.

You can't get a permit to build an actual usable one in the US because DOE doesn't consider it a "proven" design, ergo you can't build one to establish that it works.

Neat trick, huh?

Blogger Peter April 07, 2018 8:40 PM  

Guys.. A US military understands this issue and have plans in place... dont worry.

Blogger Nate April 07, 2018 8:52 PM  

If you don't make steel you don't have a country.

if you don't refine rare earth minerals you don't have a country.

Just one more nail in the coffin of free trade.


So satisfying to see you people finally coming around to my side of things.

Blogger Ominous Cowherd April 08, 2018 12:05 AM  

罗臻 wrote:Another way China can retaliate: blow up any North Korea deal.

Blow up. Good one.

Blogger Azure Amaranthine April 08, 2018 2:44 AM  

"You can't get a permit to build an actual usable one in the US because DOE doesn't consider it a "proven" design, ergo you can't build one to establish that it works."

Sounds like legislation has ensured the stagnation of US nuclear power technology.

Unsurprising. Innovations can't shake up the established power structures if they can't be made in the first place.

Blogger Crew April 08, 2018 11:22 AM  

A minor point but it seems we are closer to a trade deficit of $700 Billion:

https://blog.bea.gov/2018/04/05/february-2018-trade-gap-is-57-6-billion/

On an annual basis that looks like $700B.

Blogger Crew April 08, 2018 11:58 AM  

In 2017, 66% of our trade deficit was with China:

The primary U.S. trading partners are China ($636 billion total trade), Canada ($582 billion), Mexico ($557 billion). The trade deficit with China is $375 billion. It's responsible for 66 percent of the total U.S. deficit in goods. The other U.S. trading partners don't create much of a deficit.

https://www.thebalance.com/u-s-trade-deficit-causes-effects-trade-partners-3306276

They are the ones to attack and President Trump is doing just that.

Blogger Crew April 08, 2018 12:18 PM  

The data from February suggests that Trump's talk on tariffs has had an effect, but it is too soon to know:

The trade deficit worsened with Mexico ($-6.1 billion from $-4.2 billion) but improved with China ($-29.3 billion from $-35.9 billion); the EU ($-12 billion from $-13.6 billion); Japan ($-5.5 billion from $-5.6 billion); OPEC ($-1.4 billion from $-2.8 billion) and Canada ($-0.4 billion from $-3.7 billion).

We will see by Summer, I guess, if the trade deficit with China goes down more.

Blogger Heterodox April 08, 2018 3:20 PM  

The only reason China is the world's producer of rare earths is that it's really expensive to mine them without poisoning the land to high heaven. China's government, being Communist, just doesn't care. When we ceded our production of rare earths to China it was roundly criticized, but money talks as always.

Most of our current issues are interesting in that they started as small, easily solvable issues that grew into monsters due to our unwillingness to bite the bullet and deal with them even when we knew what inaction would bring. This one is no exception. And, like all the other issues we're dealing with -- including our various demographic challenges -- it's now going to be a real fight to resolve them and move forward.

Blogger Heterodox April 08, 2018 3:28 PM  

There is a huge aspect of China's manufacturing rise that almost nobody talks about - it allows corporations to skirt environmental regulations. Now, I understand that like all regulation people can get carried away and make stifling and/or unnecessary regulations, but they're still immensely important because it stops companies and governments from doing irreparable damage to the environment. The fact is that China is an immense polluter in a myriad of ways and an indicator of what is really wrong with us in this day and age. That computer you had "recycled?" Nobody recycled it, it was taken to China, run through a shredder and dumped where it can leach poisonous substances into the groundwater.

Like so many of our problems, we didn't really solve it. We just pushed it out of sight and out of mind.

Blogger Thucydides April 08, 2018 11:00 PM  

Another source of REE is deep ocean mining, another technology developed by the United States as far back as the 1960's, but then put on the shelf.

Blogger bosscauser April 11, 2018 10:02 AM  

We just nationalize them. .We hold all the aces!

Blogger bosscauser April 11, 2018 10:03 AM  

You're whispers were right!

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