He’s not the only one. When there’s a trade imbalance between two nations and they get into a tarriff war that reduces or eliminates trade between the two, the government whose nation was selling the most is going to be hurt the worst. They aren’t the only ones who can look for other sources for what they buy. The only real fly in the ointment that I can see is if the U.S. turns to other exporters, and they in turn spend their increased wealth on Chinese goods.
To be clear, there will be pain on both sides, but I think it’s arrogance that leads people to believe that China relies more on the the US. Having said that, let’s say your right. Do you think we can lead a trade war on multiple fronts? I mean, the EU isn’t in a trade war with China. Canada isn’t in a trade war with China, but the US has placed tariffs on all three. Do you think there may be an incentive for all these nations to work together in ways that will have long term consequences for US businesses?
There is also the question of being able to carry out your political will. Subsidies are one way that a nation can avoid feeling the pain. We both know that subsidizing an industry or industries retards real economic factors by altering incentives in a way that makes economies less efficient.
Let’s say Xi subsidizes Chinese industry? Who has the better chance of seeing something like this through? Trump or Xi?
Republicans are already balking at Trump’s plan…After all, don’t most Republicans believe that the “free market” should run its course? Aren’t subsidies anti-free-market?
Then you have Xi who is is a life time appointment in an authoritarian nation and Trump who solidly has the backing of 25% of the US electorate.
Even if your right and China needs the US more than the US needs China economically, I think the US needs China more than China needs the US politically. Virtually every single electronic component in the world contains parts made in China. If a significant tariff increases prices and TV’s, iPhones, Cars, microwaves, washers etc increase significantly in price here in the US (and decline in China as supply relative to demand will increase there) politically, I think that will have devastating consequences on whoever is in charge of that policy.
I think China knows that they can wait this out till the next election and that by that time people in the US will revolt against the result of a trade-war against China in ways that the Chinese people cannot against it’s own government.
It’s not a question of who needs who more, but who can see this out, and I think the US is at a distinct disadvantage on this front.
“Let’s say???” Xi has subsidized Chinese industry for as long as he’s been in power–as have several of his predecessors.
I meant in addition to what is being done today. Seems to further bolster my point that China can sustain subsidies and the “pain” the administration wants to cause their industries as a way to force concessions is likely to fail.
Having said that…The Chinese government providing subsidies to their corporations is earned as savings by US consumers, is it not? How is this a bad thing?
yeah, I’m just seeing a bunch of Barbara Streisand.
So President Trump institutes tariffs, which damn near every other country that we trade with puts on our goods anyway.
He’s just giving them back what they do to us. It’s a tool. If they want more trade, which we buy more than anyone else because we are the largest consumers of high tech, then they need to lower or drop their tariffs.
How’s it working? Pretty damn good. The economy is kicking along just fine.
Where is the measure that shows it’s not working? You don’t like tariffs on a fundamental basis is not a measurement for how well a policy is accomplishing it’s task.
We figure cost-benefit analysis differently. I weigh American jobs preserved or created versus a small uptick in the CPI.
I am happy if the military says steel doesn’t need protection. However, I will stand by my original statement:
As long as you believe that intellectual property is not a commodity of value and can be stolen without moral or legal consequences, we live in separate realities.
Then you’ve made the perfect the enemy of the good.
Unilateral free trade works better even when the other side isn’t playing along.
That’s a fact DN.
Punishing our own consumers and producers for someone else’s protectionism just hurts us in the end.
And the country engaging in protectionism is simply hurting itself.
Less jobs, less production, slower to innovate. There’s nothing redeeming about it.
The policy is costing us, on net, 140,000 jobs. So you admit it isn’t worth it. Protectionism doesn’t create net jobs, it costs them.
And why ? Because value creation and job growth go hand in hand. Interrupt one, you interrupt the other.
Except the statement is just speculation on your part.
You don’t test your premise, and looking to historical examples shows that there’s an error built in.
Protectionism doesn’t account for quality. Quality and best practices comes about through interaction with our competition. Otherwise you waste money and fall behind. In the military sphere, that’s deadly.
That’s how you feel about it, I’m talking about the real, implicit world we live in.
Digital piracy is ubiquitous. It’s not stopping; it’s only growing, and it’s growing not among career criminals but ordinary people.
As the digital realm grows, anything non-rivalrous will be taken. People will download a car, and most of us will not blink an eye. The legal system will concede in 99% of cases because it will be too commonplace to prevent.
At some point, it’ll simply be forced to give.
No, you will never get free trade without changing the practices of your trading partner.
This is what you don’t understand.
They engage in protectionism by pirating and cloning, and placing high tariffs on our goods.
Go check out the cost of trying to take your American car to Japan. Not the shipping cost mind you, the fees that the gov’t of Japan will charge.
Try the same for China. Even Hong Kong. The fees will be more than your car is worth.
Not necessarily so. There’s a limit to how much a government can subsidize before the economy collapses. And although I’m not a fan of Trump talking about temporarily subsidizing farmers until (unless?) this trade war is over, I daresay we’re a lot farther from that limit than they are.
If I’m being honest, I really don’t know economically speaking if that’s true or not, but what I will say is that politically, I think that China can carry this a lot farther than the Trump administration.
I say this because this isn’t just an issue of economics. China is a nearly homogeneous culture who feels like it’s being unfairly targeted by the Trump administration and I think that arms Xi with a lot of political capital that he can spend doing things that will result in a lot of discomfort for his citizens in the name of opposing the US.
Trump on the other hand is the great divider who has made no attempt to unite Americans. Any hardship he places on the US economy will be thoroughly and ceaselessly attacked politically by his opposition, which, last time I checked, is more than 1/2 of US voters.
The same is true on the world stage. Trump does not have broad support in Europe where he’s going to need it in order to pull off his trade war…I think Trumps moves here have the potential to weaken the US for generations. I admit that is a pessimistic view tainted by my unavoidable bias and I could be wrong, there are still a lot of people in our government who don’t like the way things are and may be working for a different outcome. Time will tell.
So again, I respectfully disagree, I think you’re looking at this in purely economic terms and I think that’s a mistake.
And now the president threatens tariffs on parts used to produce American-made cars manufactured by foreign companies, like BMW and Toyota, which have their largest plants located in the United States, which is what the president said he wants – when he said make iPads here. I suppose the next goal is to ensure we’re stuck with GM and Ford.
Using national security as an excuse? Seriously?
“Automotive technological superiority is essential for the national defense,” the White House proclamation said. “In light of all of these factors, domestic conditions of competition must be improved by reducing imports.”
Automotive technological superiority? Hahahahahahaha
What is it he wants? What is it you guys want?
This isn’t primarily about trade. It is, however, about war. Modern warfare is fought on three fronts: economic, information and kinetic. The Chinese have been pursuing (and winning) the first two for a long, long time. They dare not take it to the kinetic phase as they will get their posteriors kicked but they keep pushing the envelop in the South China Sea. Bush, Clinton, Bush and Obama did nothing except bend over. Trump has been talking about this war for 30 years and is now doing something about it, alone; without Democrats or Republicans or the MSM or Wall Street. It’s not going to be over next week, count on it. A “deal” will be akin to a cease fire and the President is not inclined to do so without some real concessions. For what it is worth, which in my case is not too much, the President has my prayers.
Unilateral free trade is something one country does, regardless of what other countries it trades with do in response.
Bilateral OTOH is mutual free trade . Or trilateral, or larger.
Unilateral on its own works. Countries that do it, wind up better than countries that practice protectionism.
Again, this is a fact DN. We can make comparisons of nations based on how free their trade is.
Nations with freer trade do better across the scale. So do the industries in question.
There are reasons for this if you want to hear them.
Protectionism pretends goods are identical and interchangeable, but markets know better.
Because there is no argument for this on the basis of trade.
Again, we can make comparisons, and run the clock of what the long term outcome is for nations who practice unilateral free trade vs protectionism.
Unilateral free trade wins out. Nations who practice it, for game theoretical reasons, regardless of whether it’s mutual, come out on top.
China isn’t winning by being protectionist. It’s harming itself and stagnating it’s industries.
Russia is doing the same thing; it’s part to why their modernization efforts have run into serial obstructions.
Yep, they will not understand because they have an agenda unrelated to economics that blinds them to the obvious.
China has had virtually unrestricted access to the number 1 and number 2 consumption economies on the planet for decades, United States businesses must compete with this but without access to most of number 2 nations markets.
If a supermarket managed to restrict their competitors to only selling to a 3 block radius of customers while the supermarket can sell to the whole town I doubt these “Free Trade” advocates would be saying this was cool because it only hurts the supermarket.
Unless it was Trump who pointed out the obvious corruption in the rules, then they would be champions of the policy.
Since you won’t be honest about trade, why would I hear your other arguments? You’re providing a false premise.
You can’t hide this from me Old dog. I don’t get why you pretend you can.
You dropped this part in your reply when you quoted me.
If you disagree then we have nothing to discuss since you will cling steadfastly to your opinion.
If you agree, let’s hear how you would wage the war.