Oooops ...

Cramer: I think Trump is winning the China trade war, and the US stock market backs me up

Trump is winning the trade war because China has more to lose

Some unsolicited advice to all our pundits.

Paul Krugman has on occasion really annoyed professional economists in North America.  He is indeed an unapologetic liberal.  Many professional economists do not share his politics.

All that said, you really have to know your stuff before you start dumping on Krugman.  Even those professionals who disagree with him have a lot of respect for Paul Krugman.  

Partisan bashing of Krugman may earn brownie points with some ordinary voters but it gets you nowhere with Krugman's colleagues. 

 Did read it. Your interpretation of Krugman's alleged thoughts not really supported. Krugman specifically characterized the temporary import surcharge of 1971 as "hardball", and said "I don't propose this turn to hardball policy lightly" after pointing out how few options we had in dealing with Chinese currency value manipulation. He seems to clearly characterize this as one of the few untried options we had at the time in our limited arsenal of economic levers to exert pressure on China. So I think you've engaged in a fair amount of hyperbole in holding this op ed up as an example demonstrating that Krugman "never met a tariff he didn't like".

How about the substance of the Op-ed? Krugman is pointing to the correlation between the imposition of the temporary surcharges and Germany, Japan, and other nations raising the dollar value of their currency a few months later. It's true that correlation does not necessarily imply causation; can you point to evidence of what prompted these countries to raise the dollar value of their currency if not in response to the temporary surcharges?

Not sure I'm seeing where in the cited op eds Krugman says what you claim in so many words. 

I assume you are being tongue in cheek here.

If he has substantive issues with the recent Krugman post he could probably email him directly to rebut, or send an email to the Times. 

Didn't really see much substance in the initial post, just ad hominem and partisan bickering.

I must correct myself.  Germany has consistently run a trade deficit with China

wtf? 

I'm not really disagreeing with much of what you say...in fact the first point is relevant because so much of what the US consumes is mass-produced goods - consumption is 2/3 of the GDP...back to my point why labor is so important.  But taking this back to my original point, Chinese tariffs and xrate manipulations are not the primary reason we have a trade imbalance with China, which seems to be the focus of the administration, and a point ignored in much of the recent discussion over trade.

Your second point is also valid.  As China begrudgingly grows its middle class, it must manage its slower growth as manufacturing inevitably shifts to lower cost markets.  And perhaps tech/automation could be a further stake in China's manufacturing.  With labor costs minimized, there's more incentive to move production back to domestic markets. 

As to the third point...maybe that's the real goal of the administration?  Trash the $ by creating an adversarial and unstable environment, thereby forcing the global community to move to a different standard currency, or basket currency which Russia and China seem to endorse.  But what would that do to our financial markets and economy?  

Come on, even if you are not an economist (rather obvious I would say), you can do better than that.  

Well, fair enough, USD 18 billion is not huge compared to the others but it is still a sizeable deficit.

Canada?    Are you sure?  Are you really sure?

Or is this Team Trump Nordic speaking?  

......

The US runs big trade deficits with high-cost countries (Japan, Germany, Canada). ......

Firstly what you are claiming is only true for mass-produced goods with a high labor content.. clothes, shoes, etc. Moreover, as China develops, labor intensive manufacturing is anyway moving elsewhere (and a good thing too, encouraging development in the poorer nations). The US is not a banana republic, therefore low-cost-labor production is not the sector where a country like the US with such high per capita GDP should be competing on the world stage, but in goods and services with high added value.

Secondly, offshoring to low-cost countries is an issue that applies to every developed economy yet not all of them are running trade deficits with emerging economies like between the US and China. You need to look elsewhere for the reasons behind the US trade deficit. 

My point is that the artificially high USD exchange rate due to the investment influx (safe haven) means that most US products are overpriced in global competition. Take Germany as a comparison. Despite importing similar volumes of consumer goods (per capita) from China as the US, Germany has consistently run a trade surplus due to exports of cars and machine tools. The US competition in this field is overpriced for the quality they offer so you end up with a trade deficit.