America's Trade War versus China Inevitable 2012

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United States Trade versus China 2012, a unique economic report that examines the challenges that face America. iHuman Evolution, the premier business website and ecommerce social media developer, writes a compelling case that details key industries such as solar panel manufacturing, energy, clean water, agriculture, mobile technologies, and healthcare. Read the full report under the News Events section visit www.iHumanEvolution.com

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America's Trade War versus China Inevitable 2012

  1. 1. U.S. Trade War versus China Inevitable 2012Today, President Obama announced support of tariffs on imports Chinese solar panel technologies to America. This newswas received with cheers at the Oregon based SolarWorld Ag plant that employs over 1,000 workers. The Obamaadministration’s latest shift to a more protectionist U.S. trade policy seems to be accelerating as the economy remainsstagnate. Data shows the U.S. trade deficit has increased significantly over the past several years. The latest officialmeasurement shows that for the month of January 2012; the U.S. trade deficit grew to $52.6 billion (goods and service).China has taken aggressive steps to provide the Yuan as an alternative currency to the USD. Although, technology will beable to solve many of the issues brought on by the global population explosion, it cannot dissipate the human drive forcontrol and power. This will require a collaborative understanding among nations to maintain the delicate balance of peace.Read the Full Report Online Click Here: www.ihumanevolution.com/US_Economy_2012.htmlMost recently, the China Development Bank took the lead in signing key agreements with BRIC nations (India, Brazil, SouthAfrica, Russia and Singapore) to provide renminbi loans and extend loans in BRIC’s respective currency. By 2015, Chinaplans to offer the Yuan as a freely convertible currency. In 2011, China led the world by exporting over $1.89 trillion worthof commodities. It should come as no surprise then as China begins its massive shift out of USD into other investments. Thequestion remains who will pick up the abundance of dollars that have flooded the market. Japan is unable to buy the excessdollars due to their severe economic debt problems and aging population issues says James Rickman 3rd, Director iHumanEvolution.China is using its manufacturing base to establish true value in the marketplace. For several years, China has stock piledenough reserves of raw materials such as valuable rare earth metals that are critical components to manufacture electriccars and mobile devices battery storage and oil energy contracts including (Sudan, Iraq, Canada, Kazakhstan, Russia, SouthAmerica, Afghanistan). Following its plan, China has paid for these strategic natural resources in their own currencytogether with enough reserves of gold, silver and precious metals (Australia, U.S., Canada, China, Africa) to enable them todump the US Dollar and take the loss in value of their US treasuries ($1.2 trillion) as less than the gain in value of China’sprecious metals reserves. By 2015, the global oil supply will see a shortfall of 10 million barrels per day. Read Oil OutputReportLooking back at the oil crisis of 1973 and 1979 in America, the cost of oil skyrocketed while the value of the U.S. dollardropped causing massive inflation. Today, we find the same conditions brewing even worse however now if you combinethis with U.S. $15 trillion debt, high unemployment and Middle East unrest. The U.S. economy seems to be staggering alongat weak 2 – 3 percent GDP growth rates that are not sufficient to lead us out of this recession. As a result the likelihood
  2. 2. remains that significant inflationary conditions may occur due to the inevitable need by the Federal Reserve to raiseinterest rates in order to begin addressing the U.S. debt. The FED cannot prop up the U.S. economy forever.Dont expect precious metals prices to spike and then tumble again. China needs precious metals prices to rise and staythere so they can have a viable reserve currency coming together at the same time. The wealth of the Chinese people isincreasing significantly due to their high rate of savings per capita much of it in precious metals and commodities. Today,we are seeing China has already put the key elements in place for its global rise to power and leadership position equal tothat of the United States. Based on an 8% annual growth rate by 2025, it is calculated that China’s gross domestic productwill reach over $14 trillion equal to that of the United States.Below are the most recent figures in U.S. trade with key regions.  The goods deficit with Canada increased from $3.9 billion in December to $4.8 billion in January 2012. Exports decreased $0.7 billion (primarily computer and automobiles, parts, and accessories) to $22.0 billion, while imports increased $0.2 billion (primarily crude oil and automotive parts and accessories) to $26.8 billion.  The goods deficit with China increased from $23.1 billion in December to $26.0 billion in January 2012. Exports decreased $1.3 billion (primarily civilian aircraft, engines, equipment, and parts and passenger cars) to $8.4 billion, while imports increased $1.6 billion (primarily footwear and apparel) to $34.4 billion.  The goods deficit with European Union decreased from $9.6 billion in December to $8.5 billion in January 2012. Exports decreased $1.7 billion (primarily civilian aircraft, engines, equipment, and parts and fuel oil) to $21.1 billion, while imports decreased $2.8 billion (primarily passenger cars and civilian aircraft) to $29.6 billion.How important is our balance in trade policy and what impact does it have on a local economy?Let’s take for example, a state like Oregon that declares for every $1 billion in new exports it creates 5,400 jobs. Mostrecently, Portland Oregon business leaders have launched an aggressive plan to promote their products and servicesoverseas. Oregon governor, John Kitzhaber has been instrument in leading this business development charge to increaseexports to Asia. Recent data shows Oregon companies sales abroad increased 18.5% for 2010 and 4.5% in the first 10months of 2011. China remains Oregons leading foreign customer, with total purchases of $4.1 billion in 2010, a 1,300percent increase since 2000.Oregon offers export opportunities from major shipping down the Columbia and Willamette rivers and their access to thePacific Ocean. Oregon high tech companies like Intel, SolarWorld, Microsoft and ClearEdge Power employee tens ofthousands of Oregonians. Major apparel companies like Columbia Sportswear and NIKE are headquartered in Oregon. Thestate has abundant forestry lumber, cattle and agriculture resources that make it an attractive trading partner to overseasmarkets. In fact, Oregon holds the largest North American reserve of clean water under its Cascade mountain range. Whileplaces like Asia and even California have serious shortfall of clean water resources.If a U.S. trade war with China heats up it will impact states like Oregon which have close ties to Asia, particularly inrenewable energy. It is unclear what effect such a trade war would have but the mere psychological impact on financialmarkets worldwide could shake investor confidence with a severe retreat in the stock market.
  3. 3. For example, many argue tariffs would threaten the steady decline in the cost of solar power, driven in part by competitiveprices, that has sparked the growth in jobs and investment in the American solar energy industry. With the price of solarmodules falling from approximately $2 per watt in 2010 to $1 per watt, currently, the U.S. solar industry added about 7,000jobs last year, for over 100,000 positions added total. This year, the industry expects to hire an additional 24,000 workers,making it one of the fastest-growing in the American economy.However, this progress could wane quickly if tariffs go into effect, raising prices and risking a Chinese trade war. The BrattleGroup, an economic watch dog has reported high tariffs on solar panels would result in the loss of as many as 32,712 jobsrelated to the solar industry in 2012, 40,593 by 2013 and 49,589 by 2014.Locally, a protectionist policy could impact Oregons solar industry, the eighth largest in the United States, with anestimated 3,346 jobs at 545 locations. Moreover, Chinas inevitable trade retaliation could hurt Oregons other exportoriented industries, from semiconductor equipment to agricultural and timber products.The question is no longer “if”, the U.S. versus China trade war will happen rather it’s a matter of “when” and “how” it isoccurring. Politically, China must satisfy its exploding population that will add over 450 million middle class consumers by2022. Worldwide the population will hit eight (8) billion people by 2025 driving the demand for oil, high protein foods,electricity, medicine and clean water to a level never seen before on Earth.As the world becomes much more crowded, the competition intensifies for critical resources and power struggles ensue.It becomes then a question of whether or not the U.S. can rebuild its competitive position in a highly educatedworkforce, superior infrastructure, energy independence and tax structure that draws innovative business opportunities,says James Rickman 3rd, Director iHuman Evolution. It remains to be seen whether the leadership in Washington D.C.and American voters can get it right; all while the clock is ticking and the country is staggering to find its way through thishistoric transformational period.

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