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The USA captures most of the value from selling iPhones worldwide, but yet the entire value of an iPhone counts only as a Chinese export. Something is not right with how we calculate these things.
iPhone sales don't count as a US export when calculating the trade deficit? Does anyone have information on this? Seems like a major issue indeed.
Earlier quoted context omitted.
> When they talk about trade deficits do they take into account tourism and other services? If the USA wants tourists, they better ensure not to annoy tourists by their visa policy, or even by detaining tourists: > Germany Issues Travel Warning for US > https://www.newsweek.com/germany-issues-travel-warning-us-20...
It's made me reconsider visiting. ATM, if I do go, I'll most likely go via Ireland where most of the border checks are done before getting on the plane rather than when getting to the states. However, the article you linked to states its not an offical travel warning, more like an advisory. > But they also stressed that this change does not count as an official travel warning
Can someone explain to me how the US can reshore manufacturing without dramatically lower their standard of living? Maybe they can subsidize some essential industries but I can’t see a path to do it for everything.
Americans may no longer have an unnecessarily large or luxurious automobile, or a screen in every room, but I would argue excess becoming the standard is the problem and a major cause of the imbalance.
The solution doesn't feel very democratic or free though, values that have been critical to the identity of the USA.
A long time ago, Britain was the dominant economic power in the world. Britain had a massive trade deficit with India. It imported far more from India than it exported to India. But what Britain did was import massive amounts from India and made high value goods at home and provided high value services that couldn't be provided elsewhere. Should it have flipped the other way? In 1800, should Britain have suddenly shi…
>high value goods at home and provided high value services that couldn't be provided elsewhere. Eh, they were swiftly outcompeted in almost all fields, but protected that system of mercantilism, by disallowing their colonies to unload anything that was not flagged british. Monopolies work that way, they ruin things and are memorized in the empire center as "good times".. https://www.investopedia.com/ask/answers/04161…
A long time ago, Britain was the dominant economic power in the world. Britain had a massive trade deficit with India. It imported far more from India than it exported to India. But what Britain did was import massive amounts from India and made high value goods at home and provided high value services that couldn't be provided elsewhere. Should it have flipped the other way? In 1800, should Britain have suddenly shi…
What the US has traditionally done is make these countries then take Dollar loans from the IMF and World Bank to buy American defense and high tech products. When they naturally then default (right now there are more than 50 countries that cant pay back these dollar loans cause where the fuck are they going to get dollars from) their only option is to sell off their natural resources to Wall St/build a US mil base/hand over port etc.
This game has been going on so long (google super imperialism) the US with 5% of the worlds population has accumulated more than 50% of the worlds market cap value.
So the US starts overdosing on leisure/luxury and pace of innovation starts slowing cause they dont even need to be innovative. Try to build a ship in the US and its not possible anymore cause the experience is all gone. There is no great magic solution. When you talk about British history look at the 60s and 70s. There was major turmoil economically and socially post the Ww2 rebuild cause the entire system dependent on colonies had to restructure itself.
Trade deficit is a blunt and ineffective way to model international trade on this level, but it is easy to point at and say "look at this large bad number!" which is exactly what is going on. People are primed to interact with that through social media, etc.
The American trend currently is that any trade deficit is bad. It simply isnt. It is idiotic to state so.
The whole point of unequal import and export is that every single country should not strive for importing as much as it exports across all sectors. It is extremely inefficient for every country to specialize in everything equally. What then is the point of international trade? I produce steel, you produce tractors, your neighbor produces wheat. We have mutual dependence across our specializations in the market.
What is missing from the debate is that import/export equilibrium should be achieved on a global level, not on a national level. This is taking something that is a healthy driver for international trade and framing it as if trade partners are forcing others to sell out cheaply.
They aren't. They have found their niche. Find yours or step back.
The USA captures most of the value from selling iPhones worldwide, but yet the entire value of an iPhone counts only as a Chinese export. Something is not right with how we calculate these things.
Apple has internal transfer pricing which is dictated by accounting regulations and tax law.
Companies try and set transfer prices to minimize local taxes, but need to follow regulations.
A phone made in China is “purchased” by say Apple Canada for some fraction the price it sells for - regulation usually require the Value to reflect the cost of inputs.
So Apple Canada might purchase a phone from Apple China for $600 CAD then turn around and sell it for $1200 CAD in Canada.
It’s the $600 that counts as a Chinese export to Canada.
Earlier quoted context omitted.
iPhone sales don't count as a US export when calculating the trade deficit? Does anyone have information on this? Seems like a major issue indeed.
Of course they don't because they are made in China. Do you think that Ford cars manufactured in Mexico count as U.S export?
China gets a modest share of the profits, because Apple pockets the rest. Reinvesting a fraction in US and stashing most of the profits in banks across the world that use this money as leverage to buy US bonds, among other things.
The USA captures most of the value from selling iPhones worldwide, but yet the entire value of an iPhone counts only as a Chinese export. Something is not right with how we calculate these things.
iPhone sales don't count as a US export when calculating the trade deficit? Does anyone have information on this? Seems like a major issue indeed.
A long time ago, Britain was the dominant economic power in the world. Britain had a massive trade deficit with India. It imported far more from India than it exported to India. But what Britain did was import massive amounts from India and made high value goods at home and provided high value services that couldn't be provided elsewhere. Should it have flipped the other way? In 1800, should Britain have suddenly shi…
The t-shirt metaphor is completely unjust - there is no value there for national security nor strategic autonomy. Consider instead: - Semiconductor low-end fabrication (Taiwan, Korea) - Basic electronics: circuit boards, USB devices, .. (China) - Auto parts (Mexico, China, Germany) - Generic drugs (India, China) The reality is that the US is not the ultimate global hegemon anymore and therefore offshoring industries…
That’s why the logical thing to do is invest heavily in education.
Oh, wait.