[flagged]
> Kinda weird to call it this You do realize how this began?
A growing trade deficit with China not respecting "intellectual property" and other such things?
Trump's Trade War Escalates as China Retaliates with 34% Tariffs
131–140 of 220 posts
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#132Earlier quoted context omitted.
If you assume the US tariffs are unchangeable then you would be right but the hope of retaliatory tariffs is that they will get the US to update it's tariffs in response to the economic harm caused. It will also harm China of course but I would imagine they hope the harm caused to the US will reduce the tariffs and leave China better off in the long run. This is not totally unreasonable, the US is ostensibly more sen…
If the US is consistent with the tariff policy that they've laid out, then I'd expect the opposite to happen. If China increases their tariffs and as a result increases their trade surplus, then that means that the US's tariffs go up as they are a function of the US's trade deficit.
> If the US is consistent with the tariff policy
This is doing a lot of heavy lifting here. The US can say it's tariff policy is whatever it wants but the administration is under constraints. If there was some extremely compelling data that the economic effects caused by the retaliatory tariffs would cause an overwhelming democratic victory at the midterms that would have a much bigger effect on policy than the formula for tariffs the administration wrote down. I am not predicting this definitely will happen but it is the kind of thing I am sure people are considering when they are imposing retaliatory tariffs.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#133Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated and will probably cause the prices of drugs and treatments in the USA to skyrocket.
Wait, they can go up more!? I remember thinking prices for really basic medication in the States was insanely expensive — something which costs $0.50 in Europe would cost $3+ in Target n co
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#134Earlier quoted context omitted.
I asked the google and it appears a big chunk of Chinese imports are agricultural products. Farmers not having a market to sell their products into isn't such a good thing for any administration so they seem to have a bunch of leverage on this point alone.
China can hit American farmers, but their overall trade surplus is $295 billion. The US has much more leverage.
Trade surplus is not sufficient to analyze the issue here. It is about commitment. What you want is something closer to the probability that the trade surplus will lead to a policy change. Even if it is true that the average Chinese citizen will be more negatively impacted than the average US citizen that negative impact doesn't equally translate to policy change. The US congress is fairly evenly split. It doesn't take that much to cause a policy shift.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#135Earlier quoted context omitted.
China can hit American farmers, but their overall trade surplus is $295 billion. The US has much more leverage.
There simply isn't a whole lot of alternatives to Chinese imports to the US. So while tariffs will stop some importation of Chinese goods due to costs others are just going to cost more for consumers until the proposed US manufacturing capacity is build up. Same with auto parts, even the US car makers rely on foreign made parts and have no real alternatives.
Until there are alternatives. When the price of a given product increases, it becomes more attractive for competitors to invest in making that product.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#136One thing that I'd like to inject into this discussion, is that the nominal trade imbalance is not the only relevant figure, and maybe not the most important one. For many goods, there is a very strong disconnect between the market value (the lowest price you can offer a group of suppliers competing against each other) and what one might call, for lack of a better word, true value (the price you'd be willing to pay if you had no alternatives). For luxury goods, these are often nearly the same, while basic goods might have a 5x difference and antibiotics could well have 1000x. When this is taken into account, the trade between the West on the one hand, and China and Russia on the other, is not unbalanced by a factor of 2, but more like 20. The West receives a huge amount of energy, manufactured products, chemical precursors, electronics, technological supplies, medical supplies and basic medicines. And in return they send champaigne, BMWs, branded clothing, intellectual property, and yes, some aircraft and photolithography machines. The effect of this has already been demonstrated once with the mostly unsuccessful sanctions against Russia, but would be felt ten-fold if there were a major disruption of trade between China and the West. China is at a point in their development, where they really could walk away from trading with the West if they really had to, but the Western economies would likely be sent into shock by such a step. Not that I think this is likely to happen, but I do get the feeling that the new tariffs are mostly giving China a leg-up towards full economic independence, while onshoring the US industry will be a very long and painful process.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#137I'm kinda happy about this. Our farmers in Utah lobby so hard for water, then use it to grow alfalfa which they sell to China because they can sell it there for more money than it can be sold locally. It boils my circuits that they ask for our precious water -- to which they have historically had an obvious right, growing our food -- and then basically ship it overseas. Keep the crops at least sold in the US, and hop…
Honestly, no one should be using water to grow alfalfa in Utah. The way Western water law currently works with prior appropriation encourages extremely wasteful uses of water, just because they don’t want to lose their valuable water allocations (use it or lose it). Alfalfa is a VERY water intensive crop, growing it in the desert wouldn’t make sense without these perverse incentives.
There’s a lot of effects, but one very visible one in Utah is the fact that the Great Salt Lake is drying out, because too much water is being diverted from its tributaries. Now there’s dust getting stirred up from the exposed lake bed that’s chock full of heavy metals, which is less than ideal next to a fairly big city.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#138No Hyper-economy, like China or the EU is going to stand about and take what seems like economic intimidation from the US. All the unaffiliated nations are going to be collateral damage in this clash of the economic titans. The best thing everyone can do is maintain low tariffs and try and strike free trade deals with each other. But the consequeces of Trumps Trade war are going to be disasterous for smaller developi…
Why does America get inflation and everyone else gets deflation in your view?
In this scenario, the US voluntarily goes quasi-autarky, but everyone else continues to trade.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#139Earlier quoted context omitted.
There simply isn't a whole lot of alternatives to Chinese imports to the US. So while tariffs will stop some importation of Chinese goods due to costs others are just going to cost more for consumers until the proposed US manufacturing capacity is build up. Same with auto parts, even the US car makers rely on foreign made parts and have no real alternatives.
Until there are alternatives. When the price of a given product increases, it becomes more attractive for competitors to invest in making that product.
Even if companies are convinced they need to manufacture stuff locally (ie they believe these tariffs are never going away, whereas in practice you'd expect that, at absolute most, they're gone within four years, likely two, and maybe within weeks), you're talking about years to build up production capacity. China is likely taking the (reasonable) view that US consumers won't put up with years of higher prices.
Re: Trump's Trade War Escalates as China Retaliates with 34% Tariffs
#140Earlier quoted context omitted.
There simply isn't a whole lot of alternatives to Chinese imports to the US. So while tariffs will stop some importation of Chinese goods due to costs others are just going to cost more for consumers until the proposed US manufacturing capacity is build up. Same with auto parts, even the US car makers rely on foreign made parts and have no real alternatives.
Until there are alternatives. When the price of a given product increases, it becomes more attractive for competitors to invest in making that product.
Sure, unless they flip-flop on tariffs and make your investment not as attractive as it initially seemed.
People assume there's going to be massive investments into what is essentially an uncertain market. A reversal of the capital outflows of the previous decades or something, dunno?
Why, exactly, would people from other countries chose to invest in the US when they could just keep their investments at home and/or engage with more reliable trading partners like the EU, South America or Asia?