I looked at the first few posts of mine on this topic. I commented on the political factors involved and the market’s ridiculous over reaction. YOU replied and deflected the thread into your ideas about “history” and “supply and demand” and your economic theories. I’ll stand by my statements about war with China. You choose not to agree or disagree. Fine, I have no problem with that. If you have an opinion you’d like to share, or ideas on how to counter the Chinese threats, I’m all ears. Otherwise, not.
1 I’ll agree that it isn’t just economics, although I believe it will be the ultimate factor. I don’t know if the Chinese are against Trump (homogeneously or not), but I think it’s moot because their government is a misbegotten dictatorship. I do understand that the Chinese people are becoming less and less content with their own government for economic reasons. 2 I don’t agree. Trump may be divisive (but not as much as you’re arguing), but the division was already there. Do you disagree that Obama was divisive?
Agriculture, the “primary sector”, is the most protected industry in the world. Even industrialized goods don’t come close.
Yet NZ switched from a highly protectionist policy in the 1980s, to one of open markets, and almost no subsides.
Today, Agriculture is 7% of their economy, more than double of what is for most developed countries, and their agricultural sector is among the most competitive in the world.
And why? Because when you can’t compete on price, you then compete on value. New Zealand sells into China, even at 25-40% tariffs. As the Chinese consumer trusts that New Zealander products have quality their domestic sources don’t.
Germany does the same thing; nearly anything produced on an assembly line in China is made with German-made tools. Instead of competing with China on cheap hangars or steel, the Germans competed by moving up the value chain. Produce the tools they need to produce with.
Their “Ordo Liberalism” has meant while they’ll throw financial supports behind companies, they will not protect them from competition.
Even with a highly appreciated currency, German exports have expanded, and has remained close to half their economy.
The counter example?
Any country who embraced ISI policies. It was a pursued policy objective by most of South America (and Russia) to replace imports, and spur on industrialization, by protecting their industries with high tariffs, quotas, and subsidies.
The result, is that they became more brittle versions of Italy. Growth stagnated. Their industries produced more basic goods but failed to move up the value chain.
To coalesce heavier or more complex industries, you need consumption by customers outside your own country. But you’ve insulated your companies from developing better logistics or process. Your goods beyond the basic level, don’t compete. You flood markets with cheap nick knacks, meaning quality is presumed to be elsewhere.
This is the very reputation deficit Chinese industries face with their own domestic consumers. As soon as your income grows high enough in China, you’re almost exclusively buying foreign-made goods. Or even Taiwan-ese goods.
Even “presumed” high value products like electronics and phones have to be built with foreign-made inputs. German or American made processors, Japanese-made components, German-made tooling. Purely Chinese-made ones are only things you’ll buy if you can’t afford anything else.
30 years ago,Trump’s economic enemy was the Japanese – along with the other Buy American economic protectionists. .
Seems to be the opposite of “good and easy to win.” If China listened to me and AS, you would probably consider that a win for the president and the country…AS, I think, and I would consider that a win – unless Trump refused to stand down our attack. Unfortunately, China’s just using the same playbook rather than surrendering.
That’s a good thing. i try to remember it. Pray for China too. The people of China need it more than the United States or President Trump. China’s more terrible on economics – and on civil rights.
Hahahahahaahahaha. What’s that agenda, RET? Wait, wait. Let me guess. Abortion rights, free healthcare, college for all, the Green New Deal and importation of Mexicans so we can elect Democrats? Just what non-economic agenda binds us? Wait, most of that is economic. Hmm…Black superiority then?! Improved sales of narcotics and prostitution? Or maybe we’d like to implement China’s social credit system? Just what do you think my agenda is?
Trump is diluting the meaning of a national security threat. He accused Canada of being a national security threat in his trade war with Canada which made no sense.
And now he is doing it with Huawei. Check out this video 40 minutes, 57 seconds in.
TRUMP: Huawei is something that’s very dangerous. You look at what they’ve done from a security standpoint, from a military standpoint, it’s very dangerous. So it’s possible that Huawei even would be included in some kind of a trade deal. If we made a deal, I could imagine Huawei being possibly included in some form, some part of a trade deal.
REPORTER: How would that look?
TRUMP: It would look very good for us.
REPORTER: But the Huawei part, how would you design that.
TRUMP: Oh it’s too early to say. We’re just very concerned about Huawei from a security standpoint.
I am going to ask this from a security standpoint. How can Trump say they are concerned about Huawei from a security standpoint, and then in the same damn paragraph say they would be open to including them in a trade deal?
Restrictions placed because of a security issue.
Restrictions against Huawei could be lifted as part of a trade deal.
The 2 points above are nonsensical when placed together unless… Huawei security issues is not real and it’s a giant bluff as part of the trade war. You can’t negotiate away a security threat based on a trade deal. I mean come on… this is stupid. I don’t give a flying rats patookie what Trump says China is gonna spy to get information, just like we are gonna spy on them to get information. If Huawei is a threat before the deal, it’s gonna be a threat after the trade deal.
Which at the end of the day, means one of 2 things.
Trump is willing to make deals with countries who are threats to the US
He is willing to lie about a country being a threat in order to extract concessions from that country.
I’m not personally sure which is worse. If I was another country though, I’m not certain I would think it wise to start talking to the USA regarding trade though with the 2 above in mind. Sounds like an abusive relationship to me.
A trade deal opens an opportunity to get concessions on national security concerns, “trade with the U.S. would be very good for your nation but if you continue x, y and z that deal will not be possible”.
I really am confused as to how Trump derangement syndrome can make even the most simple and reasonable strategies incomprehensible.
Here is a shortcut that might help, Presidents have a limited amount of tools at their disposal to coerce the leaders in the world who are a threat or who become cozy with others who are a threat; they can engage them with the military, bribe them for loyalty or find economic incentives that motivate them to consider our concerns.
Trump is using the strategy that makes the most sense and stands the best chance of succeeding without bloodshed; because Trump is smart and not hindered by divided loyalties.
Or you see the “national security argument” as a thin veil to trot in protectionism.
Let’s be honest here; the most likely result is that Trump “fixes” trade with more Cronyist arrangements for certain industries and forgets the rest.
Because that’s what happens every time we get trade war. We don’t get a freer market, we get a more carefully arranged market, with more purview given to the politicians to pick winners and losers. Like with sugar quotas, or forcing catalytic converters on Japanese cars, or the mandatory sale of U.S. crops through USAID.
The health of the republic, or individual rights, this does not help. It only helps to grow the instrumentality of the state, and its ability to favor the economic interest of certain parties over others.
To which I ask; why aren’t we done with this ****? Why have we not filed this under “bad ideas” just like we did with the Ex-Im bank?
Then you don’t need tariffs. And you especially don’t need them on countries who are our allies.
Technology blocks, like we did with blocking China’s import of microchips, are enough to put a stranglehold on another country, without involving favoritism.
Pfffft, come on RET. You as well I know know China is going to keep spying and backdooring it’s tech that goes on sale in the USA. I don’t care who’s in office on this point. It’s gonna happen. Don’t believe you can trust the Chinese?
The RCMP, acting at the request of U.S. justice officials, arrested Meng Wanzhou who is the CFO of Huawei on charges that she lied to American banks about her company’s ties to a telecommunications firm that did business in Iran. That would have been a breach of sanctions on Iran. Canada, being the security threat we are… complied with the US request and arrested her so that she could be extradited to the US. China has retaliated by going into a trade war with Canada, and started to arrest Canadian citizens in retaliation. They are doing that, while Huawei and the Chinese government keep maintaining they are separate entities and don’t have control over one another. But if that was true, then why is the Chinese govt flipping out about one of their citizens being arrested due to breaking another countries laws to the point they are willing to engage in a trade war and arrest innocents? Probably because the company is connected to the Chinese Govt…
And now knowing that, you REALLY think you’re going to get honest concessions from the Chinese? Please…
Yet as we pointed out last December, Trump’s tariff claims have a bigger flaw. In 2018, the U.S. government committed to paying American farmers $9.6 billion to offset their losses from Chinese tariff retaliation. This is about $1 billion more than it took in all year from Trump’s China tariffs. Tariffs, therefore, ending up not just harming American companies and consumers, but costing the government money. More money left “U.S. coffers” to offset farm losses than came into them from U.S. importers.
We also predicted that, with farmers a critical part of Trump’s electoral base, these losses would grow as the trade war dragged on. And we were right.
Since last year, as the graphic above shows, Trump’s “tariff deficit” has only ballooned further. The Department of Agriculture just unveiled a new $16 billion bailout for farmers hit by the trade war. After just ten months of a trade war with China, subsidies to farmers are set to drain over $25 billion from “U.S. coffers” for damage done to date. China tariffs, meanwhile, have so far brought in just over $19 billion in tax payments from U.S. importers—$6 billion less than authorized farmer payments.
Going forward, Trump’s tariff deficit shows no sign of shrinking—quite the reverse.
Another good reason why I would like to see just a boycott on account of human rights issues. If (speaking hypothetically; not holding my breath) that gets sorted out, then it’ll have an influence on some of the trustworthiness issues.
The Protectionists lose again, Trump used the threat of tarrifs to get a trade partner to stop enabling the invasion of our Nation by criminals; and those who advocate for Protectionism of other nations so the Democrat party can continue creating a larger dependent class in the United States who will vote for them lose yet another round
I was momentarily confused by your usage of the term “protectionists”. That is the perfect term for the bipartisan beltway crap weasles who want to protect the rights and privileges of absolutely everyone except We The People.
note: I stole the pejorative from Michelle Malkin, love her style.