Trump, Juncker and the China Tariffs

Early this year the US president Donald Trump has imposed tariffs on washers. In March tariffs on steel and aluminuim followed. As Donald Trump threatens with tariffs on cars and other products the situation escalates.

Today Donald Trump said he wanted trade with EU without tariffs at all. But why all this stories. Tariffs up, tariffs down and escalating trade negotiations?

China is an upcoming nation with a very succesfull history. It was the largest country with the biggest economy globally until the end of the 18th century. The invention of foundry technology and mass production, paper money and the calculator are devolopments of chinese people. After the two opium wars the chinese fall.

The last 30 years chinese economy finds traction, supported by western companies which finds cheap workers in China producing goods for the west. Western countries supports the situation which delivers cheap high quality and high tech products to their stores.

China becomes the production hub of the world. But with the production, also knowledge and development finds it‘s way into chinese companies. In old tradition of discipline and endurance chinese ingenieurs began to develope their own products. China of today is the second biggest economy with the most innovative industry globally. It‘s the leading country of solar technology and the leading chip producer globally. It‘s army has carriers and is the second strong behind the army of the USA. China is on the way to build its own space station and planing landings on the moon, plays a leading role in electro vehicles and 3D printing.

But all those developments are from a country that competes to the systems of the western states. China is still a communistic nation. Differences between the western nations and China are big. Cultural cooperation between China and the western nations are still difficult. The western countries can‘t integrate easily China into their cultural system. So USA has to defend itself to keep the world‘s leadership. The situation of China is better than the situation of USA. As USA starts to impose tariffs on chinese goods the chinese starts to buy companies or plants which produce the goods they wanted to import in EU and USA. For chinese this has a doubled effect. First they circumvent the taxes. The second effect is, that they can buy new technology and patents, so they can change production technology and demand fees for the licenses. So USA strengths the control of mergers with CIFIUS.

China has a lot of people with a big domestic demand. It has capacity enough to sell it’s goods to the own people. With the big population of India in the neighborhood the demand strengthens.

Also the financial situation looks better for the chinese.

The US debt is 105,42% of GDP, personal debt is up to 134% reaching 19 trio $ as GDP is more than 20 trio $.

 

The chinese government debt to GDP ratio for 2017 increases to 47,6% the last 20 years.

But it‘s corporate debt widens dramatically, so the banks had to regulate lending conditions. Chinese has to watch it’s bad loans related to corporate lending. Both the USA and China are widening the credit gap.

The chinese answer to taxes on goods for the USA was taxes on agriculture products from the USA. So the farmers of the USA were beaten. Today Donald Trump and Jean Claude Juncker made a deal that there are no tariffs on european cars and different other european products exported from Europe to the USA and that the EU widens the import of US soya products. „Soy beans is a very big deal.“: president Donald Trump remarks at the press conference after the meeting with Jean Claude Juncker. It looks like the USA wanted to start action against China with an old ally, the Europeans. Will Europe follow the course of USA?

Deutsche Post Streetscooter pickup feasible to become multi billion company

The increasing online-trading let the profit of the Deutsche Post grow, so Deutsche Post chairman Appel at the beginning of 2018. Some months later he disappointed the shareholders with the news that the profit growth is not estimated 10% but only 2%. There were also disappointing news from Deutsche Post customers that letters didn‘t find the customers and that parcels have to be picked up at a Post Office up to 15 miles away, as Deutsche Post closes offices, especially in the rural areas. At least Deutsche Post shocked it‘s shareholdes with a profit warning because Deutsche Post restructures the company away from letters to parcel service. This costs a lot of money, the management said.

As Deutsche Post was looking for an electric pickup which is able to deliver parcels with it it could‘t find one. None of the german car producers was able to deliver the company a suitable pickup because the german car producers didn‘t produce one electric car. So Deutsche Post developed an electric car on it‘s own, based on a Ford Chassis. The car was tested in Post‘s daily routine. This car is ready for serial production now. Today the Streetscouter is produced 1000 pieces per month. Customers of Deutsche Post which saw the car asked Deutsche Post where they can buy this car. When Deutsche Post recognized that there is very much demand for this pickup it opens a new factory in May 2018. Now a production of 20,000 vehicles pa is possible.

And this could be the beginning. Hamburg and Deutsche Post built a strategic partnership for better clima protection and better air in the city and signed an agreement. Deutsche Post wants to start with 70 Streetscooters Work XL in Hamburg. Similarily the City of Hamburg wants to increase the charging stations from 730 to 1,000. The major also guarantees that Deutsche Post get the capacity of electricity to charge their pickups. Hamburg will also build three new loading zones for electro pickups for Deutsche Post and other private companies.

This could be a modell with a domino effect. If cities built loading zones for electro-pickups and create more charging stations it is very likely that the demand for electro-pickups will increase. The result is increasing orders for Streetscooter Pickups. In a report of the renowned german economy magazine „Wirtschaftswoche“ the Deutsche Post chairman Mr. Frank Appel saw it feasible to create with Streetscooter a multi-billion-company. Streetscooter is the only German possibility to satisfy the demand of electro-pickups in Germany. And Deutsche Post shows the people that it‘s car function pretty good. Every time someone get a parcel a Streetscooter pickup arrives and signales: „I am aproved. You can buy me.“ That‘s the way you can convince customers. If you use your own product under industrial conditions so anyone can see.

But there is only one question. Why must Google, Deutsche Post, Hermes built their own electro cars, self driving cars or, like Hermes do, self driving robots? Is the very renowned german car industry not able to satisfy the demand of the customers? The Chinese are setting quotes for electro-cars on new cars and there are targets for gasoline free cities in the future. Audi and Porsche are discussing a Joint Venture to develop electro-cars for China. But there are many companies with electro-cars on the market making progress by watching the use of their products. This means they will be experienced if the German‘s will have their first prototype. And to buy high tech parts from companies abroad is the first step back to leave the top position.