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First, a reality check: 2015 imports from China were $582 Billion [0]. The Chinese GDP in 2015 was about $10 Trillion [1]. That makes the US responsible for con

First, a reality check: 2015 imports from China were $582 Billion [0]. The Chinese GDP in 2015 was about $10 Trillion [1]. That makes the US responsible for consuming nearly 6% of the Chinese economic output. I'm not an economist, but I think that means that stopping all exports to the US would put about 6% of China's workforce out of work. Given their reliance on employment as a deterrent to civil unrest, I'd say it's something they wouldn't even contemplate. As to the hypothetical effect on the US, I'd say that 100 years hence, historians would comment on how remarkably the US had snapped into action and replaced all the imported products and sources with domestic and non-Chinese sources. That would be coupled with a rationalization of what products American consumers didn't need and only bought or upgraded because they were cheap. There would be a lot of 'oh, I didn't need that anyway'. Another thing to keep in mind is that there are many other established and up-and-coming non-Chinese manufacturing hubs that could ramp up to absorb some of the displaced Chinese sources: Malaysia, Vietnam, India, and others. It's be a much less jarring event to the US than it would be to China, but actually enduring the process would be extremely unsettling and a lot of Americans would have to endure hardship during the transition. [0] http://www.census.gov/foreign-trade/balance/c5700.html http://www.census.gov/foreign-trade/balance/c5700.html [1] http://www.stats.gov.cn/english/PressRelease/201601/t20160119_1306072.html http://www.stats.gov.cn/english/PressRelease/201601/t2016011...

avmich 10y ago
And just as another probability we can also consider this. 6% of economic output isn't something dramatic - just think, many companies can have quarter-to-quarter results fluctuating more than that - so it's entirely possible that China won't notice that much, especially if the reduction is evenly spread. More, in autocratic economies people sometimes have higher tolerances to sudden economic turmoils, so it could be just another example of that. Those 6% could even be redistributed, possibly lowering prices elsewhere but in general decreasing, dampening and postponing the direct effect - so possibly not creating anything of a huge problem for China. Regarding USA springing back into self-reliance mode, one can - just as an example, possibly not particularly relevant - see how other countries behave, and how quickly they adjust. As recently demonstrated by Russia, some "remarkable snapping into action" suspiciously didn't happen, and so far economy slides downward two years in a row. That's after lots of rationalizations of Russians which products they don't really need - and reminding that, again, the tolerance to economic hardships there could be bigger than in US. Of course it's also unreasonable to imagine that not only China, but a whole set of countries could decide against US simultaneously. Never had examples of that in the past, right? Once again, this is just another perspective to the reality check proposed.
tzs 10y ago
If it were unilateral action by China, the impact on China might be big. But if they can could a couple other big economies to go along, and if they all stopped both exports to and imports from the US, then the impact would just be the size of their trade surpluses with the US, not the size of their exports to the US, and much of their exports that would have gone to the US could go to other countries to replace the US exports to those other counties.

avmich 10y ago

And just as another probability we can also consider this. 6% of economic output isn't something dramatic - just think, many companies can have quarter-to-quarter results fluctuating more than that - so it's entirely possible that China won't notice that much, especially if the reduction is evenly spread. More, in autocratic economies people sometimes have higher tolerances to sudden economic turmoils, so it could be just another example of that. Those 6% could even be redistributed, possibly lowering prices elsewhere but in general decreasing, dampening and postponing the direct effect - so possibly not creating anything of a huge problem for China. Regarding USA springing back into self-reliance mode, one can - just as an example, possibly not particularly relevant - see how other countries behave, and how quickly they adjust. As recently demonstrated by Russia, some "remarkable snapping into action" suspiciously didn't happen, and so far economy slides downward two years in a row. That's after lots of rationalizations of Russians which products they don't really need - and reminding that, again, the tolerance to economic hardships there could be bigger than in US. Of course it's also unreasonable to imagine that not only China, but a whole set of countries could decide against US simultaneously. Never had examples of that in the past, right? Once again, this is just another perspective to the reality check proposed.

tzs 10y ago

If it were unilateral action by China, the impact on China might be big. But if they can could a couple other big economies to go along, and if they all stopped both exports to and imports from the US, then the impact would just be the size of their trade surpluses with the US, not the size of their exports to the US, and much of their exports that would have gone to the US could go to other countries to replace the US exports to those other counties.