4 ms·

I think a lot of people feel the same way and it somewhat feeds into the Trump phenomenon. For years the thinking has been that China is liberalizing, and it w

I think a lot of people feel the same way and it somewhat feeds into the Trump phenomenon. For years the thinking has been that China is liberalizing, and it will eventually open up and that reciprocal sanctions or tariffs will spark unnecessary protectionism and encourage China to reverse direction. A lot of people now, after 20-30 years of similar behaviour, believe that China was just gaming the system all along and had no plans to liberalize politically or allow fair competition from foreign business. Trump certainly tapped into that (although I think there's some consensus that punitive tariffs still won't be useful).

logfromblammo 9y ago
Punitive import tariffs don't work as punishment. They convert a portion of the consumer benefit from trade into taxes, a portion into domestic producer benefit from trade, and throw the rest away as deadweight loss. The foreign producer-exporter is barely even scratched. It's just an excuse to grab money from domestic consumers using another country as the scapegoat.
- y4mi 9y ago
  every tax ever conceived is ultimately always paid by the consumer, yes. The point of such a tariff is however to increase the price of the foreign product, essentially giving local competitors a price advantage.
  - nyxtom 9y ago
    This doesn't work so well when your entire manufacturing industry explicitly relies on chinese production. Everything from debt to infrastructure has some dependency rooted in China. This is the whole point. Increase reliance on china for just about everything and it makes the idea of counter tariffs next to impossible.
  - logfromblammo 9y ago
    Inaccurate. Taxes are usually shared between consumers and their trade partners, and the relative burden on each is determined largely by price elasticities in the supply and demand curves. Generally speaking, the more sensitive consumers are to changes in price, the more the tax burden is shifted to suppliers. In the case of an import tariff, it is paid entirely by consumers, and domestic suppliers get a windfall from it, rather than sharing the burden. That's because there are two supply curves in play, domestic and international, and only one demand curve, because consumers generally don't care where the goods come from, and the internal trade of foreign markets is ignored.
dreamfactored 9y ago
I think it's a case of wage normalisation. The salary and cost of living differentials between the West and Asia are narrowing incredibly fast. That's going to cause a lot of dissent amongst Western populations, particularly as those downward wage pressures are creating the kind of insecurities and job competition that the wild east is long accustomed to. The real consequence of fluid global trade is a global normalisation of living standards - you could say the first world is finally sharing and taking a hit in return for smartphones and cheap clothing.

logfromblammo 9y ago

Punitive import tariffs don't work as punishment. They convert a portion of the consumer benefit from trade into taxes, a portion into domestic producer benefit from trade, and throw the rest away as deadweight loss. The foreign producer-exporter is barely even scratched. It's just an excuse to grab money from domestic consumers using another country as the scapegoat.

y4mi 9y ago
every tax ever conceived is ultimately always paid by the consumer, yes. The point of such a tariff is however to increase the price of the foreign product, essentially giving local competitors a price advantage.
- nyxtom 9y ago
  This doesn't work so well when your entire manufacturing industry explicitly relies on chinese production. Everything from debt to infrastructure has some dependency rooted in China. This is the whole point. Increase reliance on china for just about everything and it makes the idea of counter tariffs next to impossible.
- logfromblammo 9y ago
  Inaccurate. Taxes are usually shared between consumers and their trade partners, and the relative burden on each is determined largely by price elasticities in the supply and demand curves. Generally speaking, the more sensitive consumers are to changes in price, the more the tax burden is shifted to suppliers. In the case of an import tariff, it is paid entirely by consumers, and domestic suppliers get a windfall from it, rather than sharing the burden. That's because there are two supply curves in play, domestic and international, and only one demand curve, because consumers generally don't care where the goods come from, and the internal trade of foreign markets is ignored.

dreamfactored 9y ago

I think it's a case of wage normalisation. The salary and cost of living differentials between the West and Asia are narrowing incredibly fast. That's going to cause a lot of dissent amongst Western populations, particularly as those downward wage pressures are creating the kind of insecurities and job competition that the wild east is long accustomed to. The real consequence of fluid global trade is a global normalisation of living standards - you could say the first world is finally sharing and taking a hit in return for smartphones and cheap clothing.