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Earlier quoted context omitted.
If iphones were charged with US labor costs then nobody would buy them
Or we would have automated assembly faster—the investment in which would’ve been counted in domestic investment offsetting the trade deficit, right? I’m trying to verify my mental model of what’s going on.
Why not try to improve it?
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It seems great until those imaginary numbers become worthless overnight. Then you might have a bit of an "oh shit" moment as you realize that the industrial ecosystem required to substitute those imports would take a decade and a half to build even if your money were worth something, which it now isnt. Lots of countries collapse due to overreliance on foreign imports. Argentina never recovered from its peak in the 19…
Why would they become worthless? The entire world is forever beholden to Microsoft Windows, Office, AWS, X, iOS, Google Play, whether people like it or not. People have made free or cheaper or local or better alternatives and they have never succeeded at dethroning these
One of these things is not like the others.
Using a national currency as the de facto global reserve guarantees a trade deficit for that country. No one else can manufacture USD's, so other countries have to acquire them by shaping their economies to supply goods and services demanded by the US. They can then use these earned dollars to transact with other countries, as the US itself insists they do. For the US, this is a simple trade off - gain massive politi…
Also, the often-mentioned US-EU trade deficit is not that big if you count in services. Which I think should be done in the 21st century. Large parts of the US economy are focused on digital high-value services, and they are "exported" worldwide.
Using a national currency as the de facto global reserve guarantees a trade deficit for that country. No one else can manufacture USD's, so other countries have to acquire them by shaping their economies to supply goods and services demanded by the US. They can then use these earned dollars to transact with other countries, as the US itself insists they do. For the US, this is a simple trade off - gain massive politi…
Adam Smith already pointed out that a trade deficit is not really interesting, so I do not understand the American obsession about it ;) Also, the often-mentioned US-EU trade deficit is not that big if you count in services. Which I think should be done in the 21st century. Large parts of the US economy are focused on digital high-value services, and they are "exported" worldwide.
Using a national currency as the de facto global reserve guarantees a trade deficit for that country. No one else can manufacture USD's, so other countries have to acquire them by shaping their economies to supply goods and services demanded by the US. They can then use these earned dollars to transact with other countries, as the US itself insists they do. For the US, this is a simple trade off - gain massive politi…
The US dollar was the global reserve currency in the 1960s but the US was running a trade surplus then.
Earlier quoted context omitted.
If iphones were charged with US labor costs then nobody would buy them
iPhones are already heavily overpiced considering how other companies regularly release phones with similar specs at lower prices.
Because most major countries devalue their currency vs the US Dollar, making imports more expensive. Like tariffs.
Getting real physical products in exchange for imaginary numbers and services is a good deal? We sell a lot of software?
The US runs a $1T surplus in services.
Earlier quoted context omitted.
iPhones are already heavily overpiced considering how other companies regularly release phones with similar specs at lower prices.
iPhones also used to be carrier subsidized. I remember getting a new one for $200 - $300 thanks to AT&T.
It's just that people now want the latest and greatest NOW and are willing to pay monthly rates to do so, instead of waiting a few months for whatever carrier deal there is.