#16
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China can dump their current holdings, but that doesn't really accomplish anything for them. The value of the USD will decline, making US products more competitive, the value of the YUAN will rise making their products less competitive. You probably see an explosion in commodity prices since these are priced in dollars. Where would China recycle the yuan? EUROS? then the same happens in reverse for EUROPE. EURO Strengthens, european products get less competitive. The problem with all this is markets and financial products have linkages. SO we are all prisoners of the current system. I think the rubber will hit the road in 12-18 mo time when Steel Industry executives award themselves windfall compensation packages from price gains caused by tariffs, and the rank/file union workers realized they only have the 2.5% wage gain. This kind of corporate behavior has been going on for 50+ years and there is no reason for it to stop now. Last edited by verticaldoug; 09-18-2018 at 07:58 AM. |
#17
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Tariffs don't work.
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#18
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If half of the deficit Trump is trying to "fix" is electronics, we're screwed. Americans don't realize the degree to which owning a new iPhone every year relies on externalizing the huge environmental costs to China. We don't want an iPhone plant in Michigan (although who knows, given our unbelievable tolerance toward the water crisis there).
Actually, this point aside, we're screwed. The whole project is ahistorical kook economics. |
#19
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those rare earth metals don't make themselves easy to find |
#20
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There are plenty in Afghanistan ..... Hmmmmmmmm
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#21
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#22
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Predictably, China has responded with tariffs on American imports. Trump has already bailed out the heartland with $12 billion in subsidies, don't forget.
Trump vows 'great and fast' economic retaliation on China if it goes after American farmers https://www.cnbc.com/2018/09/18/trum...twitter%7Cmain Late Monday the U.S. officially announced tariffs on another $200 billion of Chinese imports in an escalating trade dispute with China. China said Tuesday it would slap duties on another $60 billion of American imports in response. In a pair of tweets Tuesday, President Donald Trump said China was trying to influence the U.S. election by attacking farmers, ranchers and industrial workers and that his retaliation will be "great and fast." |
#23
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"Bailed out the heartland" simply means doubling-down on corporate subsidies for the Big Ag companies who are destroying the environment and whatever is left of small farmers.
This is beyond stupid, all of it. Pointless political theater aimed at stirring up the red-hat crowd just in time for the mid-terms. Why do anything that would actually bring positive change? Sent from my Pixel 2 XL using Tapatalk
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Io non posso vivere senza la mia strada e la mia bici -- DP |
#24
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Trump approves tariffs on Chinese goods including $1 billion in bike products
The idea of “fair trade” is a bit of a fallacy. The trade environment is much more complicated than tariffs when you consider subsidies, which supports inefficient production (e.g. US sourced ethanol, sugar, cotton), and tax credits (e.g. farm equipment, plant/office location).
All countries engage in this behavior, mostly to favor groups with considerable lobbying/voting power. Since the US doesn’t produce many goods, most of the tariffs are against agriculture products and planes. A trade war with China really hurts the Ag sector, as it can take years to develop the relationship and there are plenty of other sources like Brazil and Europe. In the end of a trade war, since there isn’t a like for like tariffs (ie US made televisions against China-made televisions), a lot of sectors get hurt and GDP falls for all countries involved. China has one key advantage over other countries is scale in manufacturing. For high volume products, it can build a factory, hire 5,000 workers and be fully operational in a month. That kind of scale can’t be replicated elsewhere in the world. Of course, that model has long term susceptibility to automation from robotics and additive manufacturing. China recognizes that and is pushing to be a leader in technology. Some recent reports are that China has about 300 million engineers; that’s equivalent to the entire US looking for new ideas/processes. A prime criticism of the current trade war is that it works against the tax cut policy that was supposed to spur GDP. The US needs to offset the lost tax revenues (from lower rates) with high growth. Since the 50s, tax cuts have never paid for themselves. This contributes to the fiscal deficit, which will increase by $1 trillion or more each year and add to the federal debt, which is about 100% of GDP ($21 trillion) if you include the IOUs stuffed into the social security and Medicare funds. With Medicare (hospital insurance) trust funds running out in 2026 and social security (OASDI) in 2033 (without accounting for a potential recession), the budget and debt will get even worse. Voters will not take a 20% or more reduction in both social security and Medicare benefits. And a recession is looming (‘Winter is coming”) with the corporate debt bubble that’s expanding (mostly funded from non-banks and therefore outside of regulation). We’ve got 2 out of 3 conditions for a recession: Fed tightening, credit conditions weakening and waiting for the economy to slow down. Implementing a tax cut at this part of the cycle is removing the govt’s ability to stimulate the economy when the recession hits. And with interest rates relatively low, the Fed doesn’t have much room for monetary stimulus (cutting rates). We’re forecasting a nasty recession that could be deep and long. The last corporate-led recession was in 1989-90 which then triggered a commercial real estate crisis. This last recession was concentrated in banking/financial services and housing); nevertheless, corporate defaults reached 14% and could be twice as high next recession. A trade war could accelerate the timing of the next recession. Sent from my iPad using Tapatalk
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My Bikes Last edited by veloduffer; 09-18-2018 at 10:29 AM. |
#25
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I don't think this policy will work out well. The consumer ends up paying the increased costs from tariffs. I guess it could make the Chinese cave on some stuff we want but I think that they have a higher tolerance for pain than we do.
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please don't take anything I say personally, I am an idiot. |
#26
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I find it fascinating the government is "playing all its cards now" so to speak. why make some of the moves during an economy showing strong job growth, and good GDP numbers. why claim is the best economy ever, then make these additional moves normal reserved for corrections? I am also fearful of an economy so heavily reliant on cheap debt, with interest rates rising, and inflation soon to follow. why play these games when the focus could be on policy that helps Americans get things they need? things like real wage growth surpassing inflation, health care, education, you know, things we actually consume that could make daily life better for all. |
#27
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Too much common sense in this thread.
Someone say something crazy. |
#28
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Oh, Tariffs DO work.... but they almost never, if ever, accomplish what they intend/claim to and often do the opposite.
But don't kid yourself into thinking they don't influence the economics of said sector.
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cimacoppi.cc |
#29
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OK; if we're going to trade with communists, it should be the Cubans, not the Chinese. Let's just embargo them, we have more levers of controls in the Americas than they can ever hope to, especially Brazil. That just leaves Africa to worry about, because Afghanistan, India, and Pakistan are not any kind of tipping points.
The Japanese thought we couldn't build a war machine after they cornered the natural rubber market, and we know how that worked out for them. This. Is. America! Crazy enough? Last edited by 93KgBike; 09-18-2018 at 11:01 AM. |
#30
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I know how to get rid of all these tariffs.
Call it socialism! (which it is) |
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