How Gen. Franco Begat Spanish MotoGP Dominance

♠ Posted by Emmanuel in , at 5/19/2019 06:07:00 PM
A long-dead dictator set into motion the dominance of sporting figures like Marc Marquez and Jorge Lorenzo.
I've been paying more attention than usual to MotoGP, the top flight of motorcycle racing. Formerly, there were three classes--500cc, 250cc, and 125cc denoting different engine displacements. Eventually, these have been rebranded MotoGP, Moto2, and Moto3, respectively. Regardless, even a casual viewer like myself will notice that a lot of the top riders and teams in these competitions are Spanish. How did this happen? As it turns out, there is a potentially interesting history behind it all.

One of the most fascinating interpretations comes care of Motor Sports Magazine. it writes that Spanish obsession with these two-wheeled vehicles can be traced to the military dictatorship of Generalissimo Francisco Franco. Shunned by the rest of the world, local bike industries emerged, with sporting events being organized around these manufacturing concerns:
To understand why Spaniards race motorcycles better than anyone, you need to go back decades, all the way to the 1960s, because this is a tale of politics, protectionism, industry, media money and balmy Mediterranean weather.

During the 1960s Spain was still under the heel of dictator General Franco. Since the end of the Second World War, the country had been a pariah to the rest of Europe, which had fought off fascism at a terrifying cost, while Franco blithely remained neutral.

Spain was therefore isolated, so Franco prescribed an economy of self-sufficiency and protectionism. The nascent Spanish motorcycle industry was one of many protected from outside competition, most importantly from Japan. Companies like Bultaco, Derbi, Montesa and Ossa were able to flourish – to an extent – by manufacturing cheap little two-strokes that helped mobilise the nation. Inevitably, locals started using these bikes in street races, organised in towns and cities across the country.
Even if the dictator is long dead, Spanish national competitions now serve as feeders for those aspiring to international competition in the various Moto racing series. Even other Europeans come to compete in Spain for this very reason:
This is where the Spanish have been particularly effective. They succeed at world level because they laid strong foundations at home by creating highly competitive national championships and then taking their best riders through international series and into Grands Prix.

[Major Spanish organizer] Dorna took a while to get a real grip on motorcycle racing. But it got there in the end. As a result Spain has become the global centre of bike racing. The country’s multiple championships – from tiny minimotos through to the larger categories – offers a ladder to the big time. So much so that ambitious riders from around the world quit their national championships and head to Spain.

To underline how things have changed since the 1970s, Kenny Roberts took his eldest son Kenny Jnr away from the US racing scene to contest Spain’s Ducados Open series. He went on to win the 500cc world title in 2000.
Perhaps it wasn't the intention, but Franco may have set Spanish motorcycle racing domination into motion all those years ago. 

Trump on LDCs: Give Shitholes Food Aid

♠ Posted by Emmanuel in ,,, at 5/13/2019 04:37:00 PM
Feed Shithole Countries Program [FSCP]--a forthcoming American "gift" to the world?
Sometime ago, precisely zero people were surprised when US President Donald Trump characterized what were understood to be poor, migrant-sending countries as "shitholes." Rising to political prominence on a false, racist claim--the Obama "birther" conspiracy--displaying such verbal animus was to be expected. More recently, though, Trump has been toying with the idea that all the agricultural products which would have been sold to China can instead be purchased by the US government and distributed to these "shithole" countries as food aid. This action is to be done to help farmers who voted by and large for this obese racist (who probably doesn't need more food anywaygoing by his portly physique).

Leaving aside the intent here--Trump does not have a charitable or well-meaning bone in his body (remember that his "foundation" was a scam that's since been shut down)--there are several salient points which suggest it will help neither American farmers nor citizens of poor countries if Trump's latest harebrained idea was to be implemented. Bloomberg explains.

First, this idea has already been tried before during the Carter administration, and it didn't quite work as planned:
In the 1980s, crops expanded just as the export ban caused Soviet Union countries to start buying grain elsewhere. At the time, growers could deliver supplies to the Commodity Credit Corporation below certain loan rates...

The purchases aren’t a “very effective” way to deal with overhang, “and that’s what the government eventually realized," said Arlan Suderman, chief commodities economist at brokerage INTL FCStone Inc. “It does help support cash prices, but it limits rallies in the market because the market knows if it rallies too much, there are all those bushels still in the bin that will come out.”
Second, much of what China bought was not for human consumption but rather feed for livestock. What's more, LDCs are ill-positioned to receive a deluge of food anyway:
Aid programs are also too small. The U.S. government’s Food for Peace program usually buys and ships about $1.5 billion worth of goods a year to other countries. On top of that, the nations in need are usually seeking food-grade commodities, such as rice and wheat, said Joseph Glauber, former chief economist at the U.S. Department of Agriculture. The vast majority of U.S. corn and soy production is for use in animal feed or biofuel.

Many poor countries may also not have the facilities needed to process soybeans, which can also yield cooking oil. Some countries may also be opposed to large amounts of aid because it could hurt their farmers.
Third, dumping government-subsidized foodstuffs in the developing world would constitute a flagrant violation of WTO rules specifically meant to protect poor countries' farmers from such dumping:
Trump’s move could also generate disputes in the World Trade Organization as the measures can be seen as market distorting. The aid could send prices lower, hurting countries like Brazil and Argentina, which are also major corn and soybean exporters. “You can’t just dump grain at concessional prices,” Glauber said. “That would constitute an export subsidy. That is something the WTO members agreed not to do.”
Memo to Trump: the developing world doesn't need your racism or your country's food aid. 

US-China Trade Negos: The 'Rashomon' Effect

♠ Posted by Emmanuel in , at 5/09/2019 10:45:00 AM
This guy looks about as crazy as Trump, which is no mean feat. How Rashomon explains international economic diplomacy.
Blame in on Akira Kurosawa. The famed Japanese director's acclaimed film Rashomon featured the same event--a murder--as narrated by four different parties, to vastly different versions. Today, we have the same thing going on with trade negotiations that have been occurring between Chinese and American negotiators. The accounts are so vastly different that the rest of us aren't exactly sure whose version is accurate given that there is so little overlap. As the late film critic Roger Ebert keenly observed about Rashomon, there are four accounts offered, but no apparent solution. And so it is with the China-US trade negotiations. Let's begin with the more widely-publicized, American version of these events:
In a Reuters report published Wednesday and attributed principally to three U.S. government sources, the Chinese had been on the brink of an unconditional surrender before trying to wriggle out of it at the last minute. A nearly 150-page, seven-chapter draft had included binding legal language to change its legislation on intellectual property theft, forced technology transfers, competition policy, currency manipulation and access to financial services, Reuters reported, alongside an enforcement regime similar to those imposed on troublesome countries like North Korea and Iran. Beijing tried to reverse all that in a series of last-minute edits, according to the report.

That backs up an earlier report by Jenny Leonard, Saleha Mohsin and Jennifer Jacobs of Bloomberg News citing people familiar with the matter saying that the Chinese went back on promises to include changes to its laws in the text of the deal.
In short, "the Chinese reneged" is the Yankee take on events. How about for the Chinese?
An article in the Wall Street Journal, sourced to “people familiar with the thinking of the Chinese side,”  had a vastly different read. President Donald Trump’s tweets about his friendship with President Xi Jinping; praise of China’s economic stimulus; criticism of the U.S. Federal Reserve; and positive statements about planned Chinese purchases of U.S. soybeans – all were taken as evidence that Washington’s resolve was weakening along with its economy, according to the report. Beijing never had any intention of specifying which laws it was prepared to change to get a deal over the finish line, and didn’t take seriously hints from the U.S. that time was running out, it said.

The Chinese, on the other hand, never explicitly said that they would revise their national laws to comply with the Americans' wishes in their version of events.
Having studied and taught some material on cross-cultural communication, could it all have been a case of mutual misunderstanding?
Still, the risks of such misinterpretation are a familiar hazard of diplomacy, especially in discussions between negotiators with different languages and cultural contexts, so it’s somewhat astonishing to see such a gap still yawning between the two sides after all the talking that’s been done over the past year.
Maybe there should be experts in cross-cultural communication participating in these sorts of high-stakes discussions? It's only the fate of the world economy that hangs in the balance, after all. 

Paris Plays for Brexit’s Refugees

♠ Posted by Emmanuel in at 5/02/2019 12:00:00 PM
Paris' main financial district is La Defense. Nowadays, they aren't defending themselves from English speakers, apparently.
 When it comes to bourgeois world leaders, they don't come much posher than French President Emmanuel Macron. A former investment banker, there were fears before he ran for the highest office in the land that he'd be an easy target for being out of touch with the common man. And so it has proven: for months and months, he's had to endure endless protests from the "yellow vest" movement.

Interestingly enough, though, Macron is still intent on luring more of those like him from London to Paris in the run-up to the UK's impending exit from the European Union. Those investment bankers need to go...somewhere else. But how about those who aren't masters of the (financial) universe, those unwashed masses filled with Gallic pride? Well, they could offer services for the plethora of ex-London investment bankers Macron envisions will decamp to Paris:
On floors 24 to 27 of the Europlaza tower in La Defense, on the outskirts of Paris, workers hammer away as they prepare the offices of the European Banking Authority, unperturbed by the twists and turns of the seemingly never-ending Brexit negotiations.

The regulator in charge of setting standards for European lenders and conducting bank stress tests will be fully operational from Paris with a 200-strong staff on June 3, ending its eight-year existence in London regardless of when exactly the U.K. leaves the European Union.

“We will continue operating as we did from London,” Executive Director Adam Farkas said in an interview. “Staff members enjoyed the offerings of London. I’m pretty sure they’ll find a way to enjoy Paris soon.”

Winning the bid to host the body was a coup for the French capital after it competed with Frankfurt, Dublin, Madrid and Amsterdam to be known as the EU’s financial epicenter. Now, the butchers, hairdressers and schools of Paris, like its government, are going all out to ensure Brexit-driven movers are made to feel at home, bringing imperceptible changes to life in a city that hasn’t always been seen as welcoming.
How serious are they? the culturally and linguistically more insular Parisian merchants are--good heavens--learning how to speak that accursed English:
Unlike the Germans and the Dutch, for example, the French have been reluctant speakers of English in spite of the country’s ranking among the world’s top tourist destinations. That’s changing.

Laurent Dumont and his wife Nathalie, who run their family butcher’s shop, Boucherie des ArĂȘnes, on rue Monge in the fancy 5th arrondissement of Paris, roll their tongues around unfamiliar-sounding English words these days to describe their offerings of Porc Noir de Bigorre or Boeuf de race Parthenaise.

“We have an increasing number of English-speaking clients,” said Nathalie. “They don’t even try to speak French; they launch straight away into English and we’ve had to adapt. There are two of us speaking English in the butcher shop, which is obviously a good thing.” She’s now working on boosting her employees’ English skills.

Florence Charlet, a 46-year-old hairdresser at Thomas C Coiffure in Paris’s fashionable 8th arrondissement, has a similar tale to tell. “We’re having to speak English more and more,” she said. “The last hairdresser I hired had to speak English—it’s a required skill.”
It reminds me of that time my mum visited a Lancel boutique with me in 1994. Back then, having English and Mandarin speakers was a novelty, but there were already a few of them even back then. Now, you see an encroachment into other aspects of French (or more accurately Parisian) commercial life not necessarily geared towards tourists but French-challenged residents.

Times have changed when the French finally relent on speaking English as a commercial necessity, but apparently you don't even need Macron to convince more than a few.

Make no mistake: the British are coming to Paris.

Why are US Firms Lame in 5G?

♠ Posted by Emmanuel in ,, at 4/22/2019 04:01:00 PM
By failing to conform to GSM--the global telecoms standard--the US fell well behind the leading edge..
Recent times have witnessed the United States trying to stop Chinese telecommunications equipment manufacturers--most notably Huawei--from gaining market share abroad. The ostensible purpose is that the United States is concerned about Huawei and the rest accommodating Communist Party wishes to spy on other countries. If government buyers of this gear were to install Huawei gear, the explanation goes, it would make them vulnerable to Chinese spying that would hinder US intelligence cooperation.

But what American gear does the United States offer instead for those wanting to buy next-generation telecommunications equipment? Therein lies the rub: the United States does not have any vendor of gear that is as advanced as Huawei's. In 5G, the United States is arguably a laggard not because the government interfered too much but rather because it left the industry to its own devices, as the South China Morning Post explains:
How exactly did the US go from being the leader of modern telephony to also-ran within a matter of decades, allowing a Chinese company to become the 5G leader today?[...]

Experts and former US telecoms employees point to the confluence of several factors that ultimately led to the downfall of the industry, including its deregulation in 1996 and the lack of national mobile standards. Europe had already mandated the use of the GSM mobile network standard in 1987. US regulators, however, allowed carriers to go with whatever mobile standard they preferred. US carriers Verizon and Sprint chose to offer services using the CDMA mobile standard, developed by US firm Qualcomm – which operates on different frequencies to GSM, which AT&T and T-Mobile adopted.

Consumers who subscribed to a Verizon carrier, for example, would likely have to switch handsets if they wanted to change providers, as a device configured for CDMA might not run on a network supporting GSM. “In the US there were wireless networks like TDMA, CDMA and GSM, and any carrier could choose any of those if they thought that it would be best for their own growth plan … the US was like the Wild West,” said Thomas J. Lauria, a former AT&T employee, telecoms analyst as well as the author of the book The Fall of Telecom. “Europe managed itself more contiguously than the US, they did not have a lot of disparate networks and picked the [GSM] standard that everyone had to agree to.” 
The government not insisting on standards was made worse by industry deregulation encouraging the adoption of multiple standards without penalty. They did not think highly of the European GSM effort [which established standards for 2G, 3G, 4G, 5G and so on]:
The existence of multiple mobile standards in one market was further encouraged by the deregulation of the US industry under the Telecommunications Act of 1996, in which the US opened up the market, removing the monopoly that AT&T had on phone services and allowing smaller carriers to sprout. The entry of multiple service providers, all of whom were free to adopt different standards, was at the beginning viewed as beneficial for consumers and the industry as a whole. AT&T spun off its equipment division into what became known as Lucent Technologies, which thereafter listed on the New York Stock Exchange and raised US$3 billion in its initial public offering – then the largest ever in American history.

Lucent’s revenues grew rapidly by providing new entrants with networking equipment, and initially offered a variety of products compatible with different mobile standards, including CDMA, TDMA, GSM and AMPS. But multiple standards also meant that it was difficult to achieve economies of scale, so Lucent eventually bet on CDMA and UMTS – neither of which took off in Europe and most of Asia, costing it expansion opportunities in international markets.

“The US vendors were not convinced that GSM would become a global standard,” said Bengt Nordstrom, chief executive of Stockholm-based consultancy Northstream. “Instead, they supported all the technical standards in the US for their customers there. In many aspects, the era from the early 1990s to mid 2000s was lost time for the US mobile industry.” “From a US perspective and mentality, it is hard to understand why a technology not coming from the US should be better,” he added.
I have an issue with the pro-government intervention argument in that the US federal government could have insisted on a standard which ultimately lost out in the global market. Still, the episode does point out the downsides to allowing a fast-moving industry too much leeway in deregulating and tolerating the proliferation of incompatible standards. The end result is what we have today: Americans telling people not to buy Chinese 5G gear to which US-based companies offer no real alternatives. 

US to WTO: China Isn't a Developing Country

♠ Posted by Emmanuel in , at 4/09/2019 10:44:00 AM
If Trump had his way, the WTO would have far fewer "developing countries." (China wouldn't be one, of course.)
There's an interesting fight going on at the WTO on the classification of developing countries as, well, developing countries. The Trump administration--never a fan of multilateral organizations like the WTO to begin with--wants fewer countries to be classified as such. At present, about two-third of WTO member countries have this status, and together with it, special and differential treatment (SD&T). SD&T allows preferences for developing countries that developed countries do not have such as a longer time frame for meeting WTO commitments or subsidizing their agricultural industries. From America's point of view [or is that Trump's?], this abuse has gone on for far too long.

On the other hand, China wants to keep this designation despite becoming the world's second-largest economy. From the South China Morning Post:
China will refuse to give up the “special and differential treatment” it enjoys as a developing nation at the World Trade Organisation, in a rebuke to a US proposal that would pare back the privileges China and other nations enjoy on trade. China is categorised as a developing country at the Geneva-based institution, which affords it “special and differential treatment”. This enables China to provide subsidies in agriculture and set higher barriers to market entry than more developed economies.

The dispute reflects a fundamental divide within the WTO that has threatened the future of the global multilateral trading system. The United States has long complained that too many WTO members – about two-thirds – define themselves as developing countries to take advantage of the terms the status permits them to trade under.
Allowing WTO members to classify themselves as developing countries to avail of SD&T is the latest American grievance against the WTO:
China, India, South Africa and Venezuela have opposed a US proposal to reform the “special and differential treatment”, published earlier this year. The four have already submitted a paper to the WTO saying that the self-classification of developing member status has been a long-standing practice and best serves the WTO’s objectives.

The joint letter also claims that many WTO rules have actually favoured the US and other developed countries, in the areas of agricultural support, textile quotas and intellectual property rights protection.
Unless other wealthy countries jion with the United States it's hard to see how the US gets traction on this issue in the medium term. 

NOPEC: Will Saudis Deny USD Oil Payment?

♠ Posted by Emmanuel in ,, at 4/05/2019 04:03:00 PM
Here's some news important to the study of IPE that has been flying under the radar. American lawmakers have, since the turn of the millennium, been contemplating passage of a "NOPEC" law removing the immunity of nations from American antitrust laws. As the name implies, the main target is collusion on setting global oil prices by OPEC member countries. In response to the Trump administration's increasing browbeating about high oil prices and OPEC's role in causing them, Saudi Arabia has come up with a potentially consequential strategy. That is, the Saudis will begin pricing their oil in a currency other than US dollars:
Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.

They said the option had been discussed internally by senior Saudi energy officials in recent months. Two of the sources said the plan had been discussed with OPEC members and one source briefed on Saudi oil policy said Riyadh had also communicated the threat to senior U.S. energy officials.The chances of the U.S. bill known as NOPEC coming into force are slim and Saudi Arabia would be unlikely to follow through, but the fact Riyadh is considering such a drastic step is a sign of the kingdom’s annoyance about potential U.S. legal challenges to OPEC.

In the unlikely event Riyadh were to ditch the dollar, it would undermine the its status as the world’s main reserve currency, reduce Washington’s clout in global trade and weaken its ability to enforce sanctions on nation states.

“The Saudis know they have the dollar as the nuclear option,” one of the sources familiar with the matter said.“The Saudis say: let the Americans pass NOPEC and it would be the U.S. economy that would fall apart,” another source said. 
Despite being a dollar bear, I am unsure if the Saudis denominating oil sales in another currency would be the proximate cause of the dollar becoming an even less dominant currency worldwide. At any rate, here's a NOPEC description:
NOPEC, or the No Oil Producing and Exporting Cartels Act, was first introduced in 2000 and aims to remove sovereign immunity from U.S. antitrust law, paving the way for OPEC states to be sued for curbing output in a bid to raise oil prices.

While the bill has never made it into law despite numerous attempts, the legislation has gained momentum since U.S. President Donald Trump came to office. Trump said he backed NOPEC in a book published in 2011 before he was elected, though he not has not voiced support for NOPEC as president.

Trump has instead stressed the importance of U.S-Saudi relations, including sales of U.S. military equipment, even after the killing of journalist Jamal Khashoggi last year. A move by Saudi Arabia to ditch the dollar would resonate well with big non-OPEC oil producers such as Russia as well as major consumers China and the European Union, which have been calling for moves to diversify global trade away from the dollar to dilute U.S. influence over the world economy.
It could be potentially exciting, eh? The real question for me is what would cause such a dramatic rupture in US-Saudi relations that the Arabs would stop pricing oil in USD. Still, I do not think the economic consequences for the dollar would be catastrophic. If many others follow suit, though, then we may be on the cusp of a whole new international political economy (though I doubt it).

WTO ‘National Security’ Ruling Meets Trump

♠ Posted by Emmanuel in , at 3/30/2019 07:36:00 PM
From Crimea to America: considering the plight of "national security" trade barriers.
Here's a heads-up for everyone; over the next few days, the World Trade Organization is expected to rule over Russia hitting the Ukraine with trade sanctions on "national security" grounds [DS512]. In the past, such claims were considered unquestionable by the WTO. However, the expectation now is that the WTO will rule against Russia and in favor of the Ukraine.

You should be asking by now, "What do Russia-Ukraine 'national security' dust-ups have to do with the United States?" Well, it sets a precedent for the WTO proceeding with cases having to do with national security and ruling in favor of the complainant. And, insofar as the United States has hit so many of its trade partners with such claims for limiting imports, the WTO's change of heart would render the US vulnerable to a world...of hurt:
The World Trade Organization is set to rule for the first time on a dispute involving a member’s national security, challenging a key justification for President Donald Trump’s tariffs and putting the arbiter of international trade conflicts on a collision course with the U.S. The WTO will issue a ruling on a case in which Russia imposed trade restrictions on Ukraine, saying they were necessary in the interest of national security, according to an official with knowledge of the report who asked not to be named because the process is private.

The decision could still be appealed or settled outside of the WTO. The ruling confirms the WTO’s authority to determine whether such measures are necessary to protect a country’s security.
The ruling could set up a showdown as US trade partners take it to the WTO dispute settlement mechanism over similar "national security" tariffs:
A WTO ruling on the Russia dispute could force the U.S. to justify why the European Union, Canada, Mexico and a half-dozen other nations that have filed disputes against Trump’s metal tariffs, pose a security threat. “The fact that the panel is actually going to engage in an inquiry of whether there is basis for these national security measures means things are looking really bleak for the U.S.” Nicolas Lamp, a former dispute settlement attorney at the WTO, said in an interview on Wednesday. “For the U.S., this finding could confirm all their worst fears about the WTO.”
To be sure, the isolationist-nationalist Trump would like nothing more than to pull the US out of the WTO, and being taken to court there over "national security" could be the last straw. Then again, Trump is still not the United States, and there may be a more united pushback from the business community and business-minded legislators if Trump threatens WTO withdrawal.

At any rate, the fate of the WTO is going to be shaped a lot over the next few days. Stay tuned.

Grindr, a US National Security Threat

♠ Posted by Emmanuel in ,, at 3/27/2019 04:07:00 PM
Fat, old guys like Trump and Xi need not apply on Grindr, but their geopolitics still shape the app's governance.
Never let it be said that American protectionism was always staid. As it turns out, the Committee On Foreign Investment in the United States (CFIUS) is now forcing the divestment of the gay dating app Grindr by its Chinese owners who bought the service in 2016. It may sound strange, but it's true: gay bureaucrats on Grindr appear to be a security concern since they may disclose too much about their employment to boys they meet [hunky PRC spy guys, mayhaps?] in this Chinese-owned digital playground:
Chinese gaming company Beijing Kunlun Tech Co Ltd is seeking to sell Grindr LLC, the popular gay dating app it has owned since 2016, after a U.S. government national security panel raised concerns about its ownership, according to people familiar with the matter.

The Committee on Foreign Investment in the United States (CFIUS) has informed Kunlun that its ownership of West Hollywood, California-based Grindr constitutes a national security risk, the two sources said.

CFIUS’ specific concerns and whether any attempt was made to mitigate them could not be learned. The United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves U.S. military or intelligence personnel.

Kunlun had said last August it was preparing for an initial public offering (IPO) of Grindr. As a result of CFIUS’ intervention, Kunlun has now shifted its focus to an auction process to sell Grindr outright, given that the IPO would have kept Grindr under Kunlun’s control for a longer period of time, the sources said.
 The grounds for the CFIUS forcing divestment are unknown, but we can pretty much guess the general rationales based on other FDI transactions involving the Chinese and personal data that have been proscribed:
CFIUS’ intervention in the Grindr deal underscores its focus on the safety of personal data, after it blocked the acquisitions of U.S. money transfer company MoneyGram International Inc and mobile marketing firm AppLovin by Chinese bidders in the last two years.

CFIUS does not always reveal the reasons it chooses to block a deal to the companies involved, as doing so could potentially reveal classified conclusions by U.S. agencies, said Jason Waite, a partner at law firm Alston & Bird LLP focusing on the regulatory aspects of international trade and investment. 
My belief is that it's the most pathetic American excuse for protectionism yet, but your mileage may vary.

Will Boeing's 737 Ground US-China Trade Talks?

♠ Posted by Emmanuel in , at 3/20/2019 05:19:00 PM
The only thing being "maxed" around here are US-China trade tensions.
It's a major embarrassment for the mainstay product of the United States' largest exporter of manufactures to be grounded worldwide. Remember, though, that Chinese aviation authorities were among the first to do so. Boeing's workhorse model, the 737, has had teething problems with the rollout of its latest edition, the Max 8 and 9. Worse still, the two recent crashes of the plane appear to have been caused by similar factors, shifting the likelihood of blame away from pilot error to the software of the plane.

Now, we learn that not only is the Boeing 737 Max a global aviation concern, but also one that could ground US-China trade talks. You see, one of the quicker ways to "bridge" the enormous US-China trade imbalance is for the PRC to buy big-ticket items, and few come more expensive than state-of-the-art jetliners. Unfortunately, though, the Chinese understandably balking at purchasing more 737s--these are meant more for the domestic market--may cause wider damage to trade negotiations:
China’s move to ground Boeing Co’s 737 MAX jetliners following the deadly Ethiopian Airlines crash has cast a shadow over the American planemaker’s immediate hopes for a major jet order linked to a U.S.-China trade deal, industry sources said...

Evidence of a major potential order for more than 100 jets worth well over $10 billion at list prices had risen in recent weeks as Washington and Beijing reported some progress in trade talks to resolve a months-long trade war.

Those expectations were fanned by signs of pent-up demand stemming not only from a drop in China’s public purchases as the two sides descended into a tariff war, but also because China placed no private orders for Boeing aircraft in 2018, according to trade and industry sources familiar with the matter. Now, those sources say it is uncertain how quickly China will be willing to give the 737 MAX the expected new endorsement after ordering its own airlines to stop flying the jet
Also keep in mind that the Chinese are busy rolling out their own Boeing 737 / Airbus A320 competitor, the COMAC C919. To burnish its reputation for safety, especially among PRC nationals, it may be worth denigrating the Boeing 737 as unsafe such as by canceling orders originally meant to appease the trade-crazed Donald Trump:
China may now see an opening to establish itself as more of a leader in the aerospace industry, having already embarrassed the Federal Aviation Administration by leading a global charge to ground the Max that left the U.S. regulator isolated in its defense of the plane’s airworthiness and nearly the last of its brethren to temporarily ban the jet from commercial flight. China may be wont to relinquish its newfound role as a champion of safety, particularly as Comac prepares to drive a wedge in the Boeing-Airbus duopoly with the roll-out of its C919 in 2021. China says the plane — which can fit up to 168 passengers, similar to the Max 8 plane implicated in the crashes — has more than 800 orders worldwide.
In any event, this latest brouhaha over the 737 Max surely does not look like it's helping to bring current trade talks to a successful conclusion. After all, what else big-ticket goods are still made in the USA that the Chinese would buy lots and lots of?