Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

China Once Looked Tough on Trade. Now Its Options Are Dwindling

nytimes.com

Post reply on HN
Print view View original

111–120 of 385 posts

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#111

Post by doctorpangloss »

nkoren wrote: post #109
adventured wrote: post #21

Earlier quoted context omitted.

It would no doubt be disruptive, temporarily. And it would also prompt a multi hundred billion dollar redirection of investment into moving those supply lines to other countries. Vietnam would love to get some more of China's tech manufacturing action, as would a dozen other developing countries. Others would welcome gains to be had in apparel or autos by moves like that by China. One of the biggest problems China ha…

The manufacturing ecosystem in Shenzhen (for example) is unique. Any individual element of it is probably replaceable (at a considerable cost), but the presence of all those elements in the same place is not. The agglomeration benefits of this are HUGE, and losing them would introduce a thousand small frictions into the manufacturing process. Issues that can be sorted out in hours or days in Shenzhen (finding alterna…

This is a commonly espoused narrative.

I’m sure there were synergies in steel and auto production in US cities connected by rail between Pennsylvania and Michigan.

I’d say the key misunderstanding is that you’re conflating China with “markets” in “it took China roughly two decades to build this kind of ecosystem.” If you read it as, “Markets took two decades to build this kind of ecosystem,” it should be clear that the relationship between prices, time, volume, supply and demand aren’t determined by political prerogatives, but by market ones.

In other words, if your thesis is correct (that there’s something special about Shenzhen), the thing that’s special about it can be reproduced elsewhere. It will probably happen faster than two decades, because it’s proven to be a lucrative setup.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#112

Post by bsder »

tambourine_man wrote: post #35
adventured wrote: post #21

Earlier quoted context omitted.

It would no doubt be disruptive, temporarily. And it would also prompt a multi hundred billion dollar redirection of investment into moving those supply lines to other countries. Vietnam would love to get some more of China's tech manufacturing action, as would a dozen other developing countries. Others would welcome gains to be had in apparel or autos by moves like that by China. One of the biggest problems China ha…

I’m not sure. Tim Cook seemed to suggest the iPhone couldn’t be manufactured anywhere else.

The big problem is that Apple would have to move or rebuy a huge wallop of high-precision CNC machines that they have installed in China.

http://www.iphonehacks.com/2016/10/next-iphone-probably-wont...

Koenig writes. “Apple is such a huge buyer of a particular kind of mill (BT30 spindle drill-tap centers) that Fanuc, Brother and DMG Mori each have factories dedicated to building machines exclusively for Apple.”

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#114

Post by wahern »

gscott wrote: post #100
ElBarto wrote: post #97

Time is on China's side. The US can throw a tantrum all they want. They should play a long game. There is no benefit for them in retaliating to hurt the US as long as it does not cause issues in domestic politics. They should focus on not getting hurt too much and let time do the rest.

The US would need to implement tarrifs of several hundred percent to make a difference. A 20% tariff China can just make a small change to the price of their currency and ride it out. An article today has a quote from Jack Ma that he thinks this trade war will last 20 years. https://markets.businessinsider.com/news/stocks/alibaba-stoc...

It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether.

U.S. conservatives love bilateral trade deals, but that's only because most trade occurs through the WTO system, making bilateral negotiations tractable. If either the U.S. or China lost the benefit of the WTO system, they would be indisputably worse off. So would everybody else. But in any event the end game will be resolved, for better or worse, long before 20 years is up. If there's still a dispute raging in 20 years then the next 20 years will be filled with economic and political strife much like those of the 20th century.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#115

Post by bhouston »

wahern wrote: post #114
gscott wrote: post #100

Earlier quoted context omitted.

The US would need to implement tarrifs of several hundred percent to make a difference. A 20% tariff China can just make a small change to the price of their currency and ride it out. An article today has a quote from Jack Ma that he thinks this trade war will last 20 years. https://markets.businessinsider.com/news/stocks/alibaba-stoc...

It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether. U.S. conservatives love bilateral trade deals, but that's only because most trade occurs through the WTO system, making bilateral negotiations tractable. If either the U.S. or China lost the benefit of…

Trump could easily destory the wto or declare it irrelevant to the us. Similar to his reaction to the icj.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#116

Post by pergadad »

debacle wrote: post #65
SubiculumCode wrote: post #46

Earlier quoted context omitted.

His trade war with China (and only China) is one of the few administration's positions I whole wholeheartedly support (as a economics dilettante, no expert).

Our "trade war" with Canada is a proxy trade war with China. Our "trade war" with Europe is, to a much more limited degree, a proxy trade war with China. A big part of the rationale with all of these little trade wars is to make China stand alone on the global stage, so that they are more easily negotiated with. A secondary effect is to eliminate "Made in $country" goods that are 90% manufactured in China and finishe…

That doesn't make much sense at all. Ruining goodwill and relationships (and of course trade) with YOUR MOST IMPORTANT ALLIES is certainly not just proxy economic warfare. The EU economy as a whole is bigger than either China or the US.

Don't try to find a logic when there clearly is none. Trade war with EU and Canada might be the most unhelpful thing Trump has done.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#117

Post by chongli »

MarkMc wrote: post #22
enitihas wrote: post #12

I initially used to think China might have more leverage against any potential trade war agains the US, as: 1. The Chinese had option of imposing high tariffs on politically significant US agricultural products, like soyabean, which are not very large in $ value, but affect a lot of areas. 2. Since some swing states are highly influential in US elections, the Chinese always had the option of imposing tariffs which im…

Trump has countered the soybean attack by handing out subsidies to soybean farmers.

What a strange phenomenon. So essentially Trump is subsidizing the Chinese government.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#118

Post by propman »

xyzzyz wrote: post #9
euroclydon wrote: post #2

Are tariffs just straight up revenue for the US government, like income taxes?

Yes, but it is relatively small amount of revenue. Even with the new 10% tariffs on extra $200B, China tariffs in total will be less than 3% of federal government revenue.

They will apparently collect $7.5B from steel tarrifs from everyone by the end of the year. That 10% is going up to 25% in January and China has no real counter to that since they’ve already tarriffed all our exports including some which really harm them. And trump has threatened another 267B.

3% is a substantial amount but I doubt it’ll be close to that much. Supply chains will move to avoid tarrifs, parts will be shipped to Brazil or Mexico and then into the US. Or from China to Vietnam etc. I highly doubt it’ll get to 3% but if it does and the economic impacts of that thus far are fairly minimal, that would be significant. Makes up for the entire tax cut deficit and more when accounted for dynamic scoring but again it’s still monumentally dumb to count on tariffs for revenue which Trump has been stupidly bragging about. I do completely support Trump’s trade war thus far however with the end goal of fair and reciprocal trade and limiting China militarily through the economy.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#119

Post by bsder »

gonvaled wrote: post #74

Extremely one sided comments, with a US centric view. The world is not the US, and HN readers are not only US citizens, so let me express a different point of view. Assumption: Trump wants fair trade. HN readers want fair trade. What is needed: fair trading rules, fair IP rules, fair capital structures, and a fair currency. Tackling some of the unfair trade practices does not address all those issues. In particular i…

> Assumption: Trump wants fair trade.

Invalid Assumption: Trump has any understanding of cause-effect.

This is China's problem, right now. Trump doesn't have a specific purpose, so there is no pain point you can drive back at. China should have just tariffed some meaningless stuff, rolled out the propaganda machine, and just let it go.

Never wrestle with a pig. You get dirty, and besides, the pig likes it.

Re: China Once Looked Tough on Trade. Now Its Options Are Dwindling

#120

Post by wahern »

bhouston wrote: post #115
wahern wrote: post #114

Earlier quoted context omitted.

It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether. U.S. conservatives love bilateral trade deals, but that's only because most trade occurs through the WTO system, making bilateral negotiations tractable. If either the U.S. or China lost the benefit of…

Trump could easily destory the wto or declare it irrelevant to the us. Similar to his reaction to the icj.

Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. And in any event, the U.S. doesn't dispute the usefulness of the ICJ or its jurisdiction over other countries, it just disputes the usefulness of the U.S. being subject to ICJ jurisdiction.

By contrast, the WTO deeply matters to the wealth and security of the U.S. economy. But much like NATO, Congress is willing to call Trump's bluff.

[EDIT: I confused ICJ with ICC. My bad.]

Post reply on HN