Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert • Hacker News Board

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#141

Post by witty_username » Sat, Sep 10, 2016, 3:53 PM UTC

tesseract wrote: post #81

cperciva wrote: post #53

Earlier quoted context omitted.

A similar, and perhaps more amusing, situation happened in Canada a few years ago. We have a 245.5% import tariff on cheese (why? Because dairy farmers are more important than poor people, apparently) but there was a much lower tax on "food preparations", including packaged pizza toppings. So companies would package up "pizza topping kits" in the USA, import them to Canada as "food preparations"... and then remove th…

This kind of waste seems common and from an outside perspective very frustrating. There is a famous example where Ford imported cargo vans from Europe to the US with disposable seats in them so they would be taxed (more cheaply) as passenger vans. I think the tax in question was referred to as the "chicken tax". The situation is a bit different but China's value-added tax scheme combined with the prevalence of factor…

I just can't wrap my head around protectionism. We lose, and they lose, and such crazy inefficiencies occur.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#142

Post by witty_username » Sat, Sep 10, 2016, 3:56 PM UTC

colechristensen wrote: post #110

slyall wrote: post #103

Earlier quoted context omitted.

Lovely argument, if only it were true. Your whole argument is all over the place, not least because a lot of food eaten in rich countries is has minimal subsidies already. Why don't you examine the world as it is today rather than how you think it is. > "You starve poor countries by selling off all of their food to rich countries and making what's left very expensive" The food produced in the poor country will sell f…

It's all over the place because there's a tree of possibilities that's difficult to cover succinctly. >The food produced in the poor country will sell for "the world price", pretty much the same everywhere. Not "cheap" in the rich countries and "expensive" in the poor ones. Spending power around the world varies by several orders of magnitude. If there's one "world price" for a crop, that price will be incredibly che…

> Spending power around the world varies by several orders of magnitude. If there's one "world price" for a crop, that price will be incredibly cheap for rich countries and incredibly expensive for poor ones. Agricultural poor countries will not be able to afford the food they grow.

This is just bad economics. If food is "incredibly cheap" for rich countries, and agricultural poor countries are unable to afford the food they grow, then the prices will rise. Humans can't survive without food.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#143

Post by makomk » Sat, Sep 10, 2016, 4:00 PM UTC

ktRolster wrote: post #16

oh_sigh wrote: post #13

Earlier quoted context omitted.

The simple version: If a foreign government is unfairly subsidizing an industry, America will slap a tariff on it. This is good policy - imagine, for example, if Airbus could afford to sell their planes for $1, because they are being entirely subsidized by the French government. Everyone buys airbus, no one buys Boeing any more. Boeing(along with tens of thousands of jobs) goes bye bye, and now Airbus starts selling…

Note that this trick is very hard to pull off in the long-term. China tried it with rare-earth metals, and production just started up elsewhere. In the short term it's annoying and causes disruptions.

I think the rare earth mines that tried starting up again were promptly driven under by China. For example, Molycorp (which started up production at the Mountain Pass mine in the US) was driven into bankruptcy a year ago soon after reaching full production. Not a bad deal for China at all - they got an almost decade-long monopoly on manufacturing using rare earth metals, which they can probably continue now, and those that tried to break their monopoly suffered massive losses.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#144

Post by tmoertel » Sat, Sep 10, 2016, 4:00 PM UTC

witty_username wrote: post #141

tesseract wrote: post #81

Earlier quoted context omitted.

This kind of waste seems common and from an outside perspective very frustrating. There is a famous example where Ford imported cargo vans from Europe to the US with disposable seats in them so they would be taxed (more cheaply) as passenger vans. I think the tax in question was referred to as the "chicken tax". The situation is a bit different but China's value-added tax scheme combined with the prevalence of factor…

I just can't wrap my head around protectionism. We lose, and they lose, and such crazy inefficiencies occur.

But somebody wins, and that's who's usually behind the protectionism in question.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#145

Post by CPLX » Sat, Sep 10, 2016, 4:17 PM UTC

cmarschner wrote: post #104

colechristensen wrote: post #96

Earlier quoted context omitted.

'real' free market capitalism can't exist because without proper regulation, power/wealth tends to concentrate to a level where the strong ruin the 'free' bit. 'real' communism can't exist (outside small rare communities) because the industrial revolution failed to bring about a post-scarcity economy which was marx's failure of prediction. A post-scarcity economy which eliminates the importance of capital is probably…

Communism failed because of human nature. It is incentives gone wrong. If there is no pressure to become more efficient, or even remain efficient, things will become less efficient and everybody suffers (to the point of starvation). Central planning failed due to complexity of the task. Free market / small government doesn't work because a) it is inherently unstable due to power laws (rich get richer), b) lots of ext…

Communism failed? Someone should call the Chinese Communist Party and tell them, they're still acting like they run the place.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#146

Post by fredgrott » Sat, Sep 10, 2016, 4:18 PM UTC

liztsai wrote: post #46

This is a simple duty arbitrage play. For anyone wondering what he actually did wrong, there are a few key points to note. Aluminum (and all materials, really) is exported and imported and duties are paid on the basis of the HS code and (if there is a trade agreement to be taken advantage of) certificates of origin (COO) along with the usual shipping docs. China is inclined to tax exports of primary aluminum because…

until the differences in costs of power to re-melt changes..of course that is why more than one country is used..

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#147

Post by flyinghamster » Sat, Sep 10, 2016, 4:25 PM UTC

tesseract wrote: post #81

cperciva wrote: post #53

Earlier quoted context omitted.

A similar, and perhaps more amusing, situation happened in Canada a few years ago. We have a 245.5% import tariff on cheese (why? Because dairy farmers are more important than poor people, apparently) but there was a much lower tax on "food preparations", including packaged pizza toppings. So companies would package up "pizza topping kits" in the USA, import them to Canada as "food preparations"... and then remove th…

This kind of waste seems common and from an outside perspective very frustrating. There is a famous example where Ford imported cargo vans from Europe to the US with disposable seats in them so they would be taxed (more cheaply) as passenger vans. I think the tax in question was referred to as the "chicken tax". The situation is a bit different but China's value-added tax scheme combined with the prevalence of factor…

That was the Ford Transit Connect. One of the big ironies of that whole situation was that back in the 1960s, Ford was a beneficiary of the tax (which was mostly aimed at Volkswagen). After the tax was enacted, the Type 2 pickup and cargo van disappeared from VW's US product lineup.

The loophole has been closed, and Ford no longer sells the Transit Connect in the US.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#148

Post by colechristensen » Sat, Sep 10, 2016, 4:39 PM UTC

witty_username wrote: post #142

colechristensen wrote: post #110

Earlier quoted context omitted.

It's all over the place because there's a tree of possibilities that's difficult to cover succinctly. >The food produced in the poor country will sell for "the world price", pretty much the same everywhere. Not "cheap" in the rich countries and "expensive" in the poor ones. Spending power around the world varies by several orders of magnitude. If there's one "world price" for a crop, that price will be incredibly che…

> Spending power around the world varies by several orders of magnitude. If there's one "world price" for a crop, that price will be incredibly cheap for rich countries and incredibly expensive for poor ones. Agricultural poor countries will not be able to afford the food they grow. This is just bad economics. If food is "incredibly cheap" for rich countries, and agricultural poor countries are unable to afford the f…

>Humans can't survive without food.

When I'm saying "cheap" and "expensive" those are relative terms to the spending power of the population.

If I make $200 a day and some guy in Africa makes $2 a day and we both pay the same price for food. Either I get an incredible deal and pay basically nothing (compared to my income) for all of my food... or he starves to death because he can't afford it.

It has certainly happened. During the Irish Potato Famine, despite the potato disease going around, there was plenty of food to feed the population, they just sold it at a higher price elsewhere.

https://en.wikipedia.org/wiki/Great_Famine_(Ireland)#Irish_f...

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#149

Post by witty_username » Sat, Sep 10, 2016, 5:28 PM UTC

colechristensen wrote: post #148

witty_username wrote: post #142

Earlier quoted context omitted.

> Spending power around the world varies by several orders of magnitude. If there's one "world price" for a crop, that price will be incredibly cheap for rich countries and incredibly expensive for poor ones. Agricultural poor countries will not be able to afford the food they grow. This is just bad economics. If food is "incredibly cheap" for rich countries, and agricultural poor countries are unable to afford the f…

>Humans can't survive without food. When I'm saying "cheap" and "expensive" those are relative terms to the spending power of the population. If I make $200 a day and some guy in Africa makes $2 a day and we both pay the same price for food. Either I get an incredible deal and pay basically nothing (compared to my income) for all of my food... or he starves to death because he can't afford it. It has certainly happen…

That's true; but what I'm saying is that the guy in Africa will raise his/her price to not starve. He/she will double the price and the buyer in the rich country doesn't care. And the competition will do the same thing, as they're starving.

In the Great Famine, exporting leads to economic gain; it's just that people were poor. If you ban exports then exporters lose money and so they'll also become more poor.

Anyways, what you're saying is moot as we already have a world price for most food.

Re: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

#150

Post by colechristensen » Sat, Sep 10, 2016, 6:00 PM UTC

witty_username wrote: post #149

colechristensen wrote: post #148

Earlier quoted context omitted.

>Humans can't survive without food. When I'm saying "cheap" and "expensive" those are relative terms to the spending power of the population. If I make $200 a day and some guy in Africa makes $2 a day and we both pay the same price for food. Either I get an incredible deal and pay basically nothing (compared to my income) for all of my food... or he starves to death because he can't afford it. It has certainly happen…

That's true; but what I'm saying is that the guy in Africa will raise his/her price to not starve. He/she will double the price and the buyer in the rich country doesn't care. And the competition will do the same thing, as they're starving . In the Great Famine, exporting leads to economic gain; it's just that people were poor. If you ban exports then exporters lose money and so they'll also become more poor. Anyways…

>That's true; but what I'm saying is that the guy in Africa will raise his/her price to not starve. He/she will double the price and the buyer in the rich country doesn't care. And the competition will do the same thing, as they're starving.

The people actually selling the crops in foreign markets won't starve, but these people are often not the actual farmers but middle-men. What about the people who don't farm? Food prices double and they can't just double their own prices and expect to win.

There's a huge economic correction that takes a long time if you break down barriers and the result is a lot of people starving in poor countries and a lot of farms failing in rich ones.

>In the Great Famine, exporting leads to economic gain; it's just that people were poor. If you ban exports then exporters lose money and so they'll also become more poor.

Are you defending the people who found economic gain of the exporters during the famine? 1/8 of the population died. In a closed economy there was more than enough food, prices would have adjusted themselves so that everyone could have eaten. There would have been problems with buying power to import into Ireland, but a million people wouldn't have died and another million wouldn't have fled the country.