Cheap labor is plentiful, there's only one US consumer market. China has no leverage here.
What if China just sells to other customers? What is China subsidizes it's manufacturers, so they get paid and keep their production capacity whether or not they're actually producing? Exactly like soybean and corn farmers in the US are btw.
The whole thing seems incredibly complex, and most of the economic opinions I read about don't say "markets are better when the goverment skims 25% off of all transactions".
So I'm curious how you immediately come to the conclusion "USA Wins, China has no leverage, game over".
The point isn't for the government to skim 25%, it's to get China to trade fairly or if worse comes to worse bring manufacturing back to the US.
In the event of a trade war US has leverage because we have the market and a essential product, food. US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food.
But they aren't dependent on importing that food from the US. Brazil, Australia, Thailand, Indonesia, Malaysia, Canada and Argentina are all happy to step up and take over for US producers who are now going to see demand fall through the floor and these producers have been preparing for the inevitable shoe to drop in retaliation for US tariffs for months now. Luckily most of the damage is going to be felt in those central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers.
But I am sure people are just going to be overjoyed when their Christmas electronics are significantly more expensive, and we will see how long they believe delusional statements like ones claiming that this action will "bring manufacturing back to the US" -- I am betting that line will get you a beat-down in the Midwest by next spring.
say what you will about trump and 'central plains morons', but last time I checked, NYC isn't in kansas so 'their peers' is a bit of a stretch..
If these tariffs are on components and not manufactured goods, then it seems like it would push manufacturing into China, not bring it back to the US.
Compare that to even cheap US labor rates and it's a no-brainer.
In 2018, it's a whole lot easier to avoid doing any manufacturing in the US than it is to avoid using any components made in China; and both approaches avoid the tariff as written.
If the goal is to bring back component manufacturing, they need to go back to the drawing board.
These whole shenanigans are quite transparent, really, aren't they?
All fair points, but can US politicians live with opposition from the agricultural lobby and/or rural vote? Political expediency beats long-term economic planning when politician's livelihoods are on the line.
How is it currently unfair?
Have you read the economic opinion on income taxes?
Hint: They also make markets less efficient. But nevertheless we think the trade off is worth it.
The rest of the world would actually prefer jobs for our own farmers and we would also prefer to not be eating genetically modified junk from America. It is theoretically possible to live without a Harley Davidson motorbike and whatever else America actually makes these days, as for food, that is vital. Therefore in places like Japan rice is given special protection.
I hope the Chinese respond by selling off the many trillions of US bonds/debt they have been buying over the years.
I also hope that the petro-dollar is no more and that the world can move to an era of genuine fair trade.
Sanctions in the US have been about avoiding wars, rather than trade. There are also other global reserve currencies... value of dollar was earned.
Invasions have been shady for raw materials, for sure. Chinese are getting that in smarter ways now, but building their new “Silk Road,” which is a way to ensure they get raw materials mined by Chinese labor by Chinese companies in foreign land by propping up existing corrupt officials. Basically they took a US playbook and made it “better.”
China has surely done all the things you're accusing the US of, but they aren't being punished for that.
Britain took steps as extensive as banning skilled people from travelling to the USA.
All this is just historic and doesn't necessarily feed into what should be done in the present situation, but it is useful to note that this is a common path that developed countries have followed in the past:
- ignore/steal IP
- protect and subsidise domestic equivalents
- upon domestic industry being competitive, reciprocally lower tariffs
- once fully developed, lobby for free trade and strong IP protection
(I'm not sure anything has been proven definitively in the open, but I'm not sure that applies to all these China allegations either)
Why not investigate which firms committed which crimes and punish those specific firms? It's a smarter approach that helps our justice system and China's.
But "smarter" isn't part of this administrations playbook.
You're talking about the entire supply chain, so you would end up punishing firms that are otherwise innocent because unbeknownst to them they bought resisters or capacitors or silicon plates from a bad actor.
A smart approach is just not feasible at this scale.
That's exactly what the current tariffs do. So I guess if it's too much work to vet individual firms, we just lazily start a trade war? Again, for this administration, sounds about right.
Everything else, sure. But national security, especially expressed like that, is just another "WON'T SOMEBODY PLEASE THINK OF THE CHILDREN".