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01-27-2017 08:38 AM
I'd assume that sympathies will be pretty universal in favor of Mexico vs. los yanquis feo.
China should be jumping up and down with glee over he possiblity of expanded exports and better access to all those natural resources.
01-27-2017 09:03 AM
An historic debacle in the works.
There usually is a stick involved as part of negotiations among sovereign nations but that message is best delivered in private rather than as a public ultimatum.
Given that choice, foreign leaders are forced to take a lose-lose path rather than surrender- otherrwise their domestic support will collapse.
Kaiser von Trumpsky* has experience from the WWF where it works fine that way. Not here.
*with apologies to the Hohenzollern family.
01-27-2017 10:03 AM
China's MO is well established- they're willing to do business anywhere without any meddling in domestic matters (in that regard failry transactiobnal, like Trump.
Defeat of TPP strengthens their hand in the Eastern Pacific and Latin America but this could turn out to be a bonanza of enormous size.
Not only does Latin America have oodles of resources-and like Africa, and they're always on the prowl- but in general its a better market for their manufactured goods where the US currently is strong.
Probably be quite willing to reconfigure some meat and poultry investment in that direction too.
01-27-2017 11:35 AM
Hate to break up your string of talking to yourself by posting, Nox, but exactly what manufactured goods made in the USA are being successfully sold in Latin America that will be replaced by Chinese manufacturing? Exactly in what ares is the USA currently strong?
01-27-2017 12:18 PM
Technology, machine tools, autos, consumer goods. We ran a $30B trade surplus with the region in 2016.
Point being that Mexico does not have to continue agricultural trade with the US on the same terms if it means surrendering their sovereignty and honor.
In fact that was always the most contentious part of NAFTA and the effects of imported corn and HFCS were a considerable cause of immigration to the US.
01-27-2017 01:36 PM
So are we talking about Mexico, and the wall, or South America where no wall is being proposed? Latin America is not just Mexico, which runs a trade surplus with the USA, a pretty big one. I really doubt that Mexico is going to get that 30 to 50 billion a year replaced by trading with China, but maybe I am wrong.
In fact, your statistic is basically the net from trading with Brazil, with Columbia and Chile two lessor regions that the USA has net surpluses with. Here is a discussion on what makes up the trade with Brazil.
A Key Trading Partnership
• Two-way trade between the United States and Brazil has doubled in the past decade to more than $80 billion in 2010, and investment and capital flows in both directions. In the past five years, goods and services exports more than doubled, from $18.7 billion in 2004 to $38.8 billion in 2009.
• With 193 million of the world’s consumers, and per-capita income expected to grow at 6 percent a year, Brazil’s demand for goods imports has more than tripled, from $47.2 billion in 2002 to $181.6 billion in 2010.
• Since 2002, U.S. goods exports to Brazil nearly tripled, growing from $12.4 billion in 2002 to $35.4 billion in 2010. In 2010, U.S. goods exports to Brazil were up 35 percent from 2009. Brazil receives more exports from the U.S. than from any other nation, nearly 15 percent of all goods exported to Brazil.
• These exports were made up of goods from high-tech, value-producing industries. In 2010, the largest U.S. goods export category to Brazil was machinery, valued at $7.2 billion. Other top export categories in 2010 included aircraft and parts ($4.4 billion), electric machinery ($4.3 billion), and organic chemicals ($2.0 billion).
• Exports to Brazil benefit businesses and entrepreneurs across the nation. In every year for the past 10 years, exporters in all 50 states and the District of Columbia have reported exports to Brazil. In 2010, two-thirds of U.S. States (34 total) reported goods export shipments in excess of $100 million.
• U.S. services exports to Brazil have also increased. From 2002 to 2009, U.S. services exports to Brazil more than doubled, increasing from $5.1 billion in 2002 to nearly $12.7 billion in 2009. These services included telecommunications services worth $1.5 billion, and communication and information services totaling $350 million.
Machinary, Airplanes, etc. I would Imagine that Brazil would have no reason to stop importing those items if and when the trade tariffs on Mexico go into place.
01-27-2017 01:44 PM
The point being that Mexico would a have reason to sek bilateral agreements elsewhere within the hemisphere and China is always on the prowl.
China is back pitching the railway to Brazil's west coast.
01-27-2017 03:50 PM
I have a few things to add on this issue.
1. Yes, most Latin American countries will side w/ Mexico, but they will not do another another thing than expressing condemnation for the all. The Brazilian government did that this week, but highlighted that Brazil is a friend of both countries.
2. Opinion: Chinese projects in Brazil won't go too far. They don't have a clue on the local bureaucracy and the strict laws protecting the environment
3. Most of the data that rsbs used is old. All of that data is prior to the recession in Brazil. Brazil does not see economic growth since the second half of 2013. 2014 was a flat year. The years of 2015 and 2016 were the worst in a century in terms of economic performance - nearly 8% of a decline of GDP considering the two years combined. Therefore, the numbers about the trade are quite different as of today.
01-29-2017 01:21 PM
I was noticing that agriculture is not the top export in Brazil nor is it the top export from brazil to china....
Iron Ore is significantly higher.... just interesting and something we don't see often...
Please report back to us on the Rain activity this next week..