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The problem with a tariff on Chinese imports is: who do you think pays the tariff? The Chinese manufacturer? The importer? American distributers? No, it's the A

The problem with a tariff on Chinese imports is: who do you think pays the tariff? The Chinese manufacturer? The importer? American distributers? No, it's the American consumers who will have to pay for it. How does that help American manufacturers to compete? They still have much higher costs than their Chinese competitors, so they'll be outmatched on R&D, marketing, variety, etc. Besides, the American consumers probably can't afford the higher prices anyway, so rather than helping American manufacturers, tariffs will just collapse the market when consumers stop buying the products, or they go to underground sources. To level the playing field, we can't do it on the market-price side. We have to do it on the manufacturing-cost side. The US has all of these regulations that protect the environment and protect workers, but the costs have been borne by each manufacturer separately. I think that's led to a great deal of redundancy and inefficiency, which has raised the cost of these protections beyond what most manufacturers could bear. We need to move to a system where these costs are shared by all Americans, and by all who buy American products, in a more efficient manner. That should reduce labor costs, hopefully enough so that the benefits of local manufacturing outweight the still-higher labor cost to provide an American-level standard of living.

adventured 9y ago
> They still have much higher costs than their Chinese competitors, so they'll be outmatched on R&D, marketing, variety, etc. That's incorrect. It's essentially as expensive at this point to manufacture in China as it is in the US, for everything except the most basic of labor-intensive manufacturing (particularly in industries where China's lax environmental and labor protection rules are beneficial). Which is why China's manufacturing industry is barely growing. Companies that would have chosen China as an obvious, easy solution for decades, are now choosing Vietnam, Mexico, Pakistan, et al. It's enough that it has robbed China of nearly all manufacturing expansion. 2015: "U.S. Manufacturing costs are almost as low as China’s" http://fortune.com/2015/06/26/fracking-manufacturing-costs/ http://fortune.com/2015/06/26/fracking-manufacturing-costs/ 2016: "These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics." http://money.cnn.com/2016/03/17/news/economy/china-cheap-labor-productivity/index.html http://money.cnn.com/2016/03/17/news/economy/china-cheap-lab...
- pas 9y ago
  Okay, if US manufacturing is so cheap, are companies starting factories in the US? If yes, what's the problem? If not, maybe there are other costs associated too? Or the "supply chain" simply works best if placed in China? Or, as we've suspected already, it's just political posturing? And the good old lack of political will to spend on retraining coal miners and others?
- DougWebb 9y ago
  Substitue "China" for any other country where manufacturing is cheap and my argument stands. You've highlighted another problem with the tariff idea: if it targets one country, manufacturing will shift to another cheap country rather than coming back to the US, and the tariffs would have to apply to more and more of them until we've been completely isolated in a global trade war.
muninn_ 9y ago
Well if you impose tariffs on those imported goods, and you still need to buy said goods, you just pay more but that money spent goes to pay an American worker or in the worst case an a American factory owner paying taxes. We don’t pay the true cost of items now because of this off-shoring to China. But if you create a tariff such that it’s economically feasible to manufacture goods in the United States, wages will have to increase to continue growth and spending, and the environment will continue to improve. Ultimately it stands on the same principles that buy local does. The not local your purchases are - the more the wealth stays in the loca area - we just abstract that to the national level.
jacquesm 9y ago
> No, it's the American consumers who will have to pay for it. The theory (right or wrong is debatable) is that some percentage of consumers will use this price increase to let their decision to buy domestic be influenced.
- imcrs 9y ago
  That would assume that the number of people buying domestic wouldn't just shrink in proportion to the tariff, because they can't afford goods anymore. And also perhaps in addition, because their company cannot pay them anymore because of the cost of goods.
ianai 9y ago
A tariff on Chinese imports would be a direct hit to growth. It’s not going to force companies to manufacture here. It’s only going to hold the US back. It’s like saying we’d better off closing all of borders. The US produces lots, but it would hardly get by in isolation. Not to mention that waning from the national stage bequeathes power to the next in line.
taysic 9y ago
That sounds a lot like the federal sugar program - it was designed to restrict the imports of much cheaper sugar from other countries to help American sugar companies from going out of business. The artificially high domestic prices just end up moving candy companies out of the country - because it's hard for them to compete on price with candy companies that can buy cheaper sugar outside of the US. Meanwhile, the federal gov buys about $300 million in excess sugar every time prices drop below a certain level due to other regulations. It's a strange system. http://www.nytimes.com/2013/10/31/us/american-candy-makers-pinched-by-inflated-sugar-prices-look-abroad.html http://www.nytimes.com/2013/10/31/us/american-candy-makers-p...

adventured 9y ago

> They still have much higher costs than their Chinese competitors, so they'll be outmatched on R&D, marketing, variety, etc. That's incorrect. It's essentially as expensive at this point to manufacture in China as it is in the US, for everything except the most basic of labor-intensive manufacturing (particularly in industries where China's lax environmental and labor protection rules are beneficial). Which is why China's manufacturing industry is barely growing. Companies that would have chosen China as an obvious, easy solution for decades, are now choosing Vietnam, Mexico, Pakistan, et al. It's enough that it has robbed China of nearly all manufacturing expansion. 2015: "U.S. Manufacturing costs are almost as low as China’s" http://fortune.com/2015/06/26/fracking-manufacturing-costs/ http://fortune.com/2015/06/26/fracking-manufacturing-costs/ 2016: "These days, China's labor costs are only 4% cheaper than those in the U.S. when productivity is factored in, according to Oxford Economics." http://money.cnn.com/2016/03/17/news/economy/china-cheap-labor-productivity/index.html http://money.cnn.com/2016/03/17/news/economy/china-cheap-lab...

pas 9y ago
Okay, if US manufacturing is so cheap, are companies starting factories in the US? If yes, what's the problem? If not, maybe there are other costs associated too? Or the "supply chain" simply works best if placed in China? Or, as we've suspected already, it's just political posturing? And the good old lack of political will to spend on retraining coal miners and others?
DougWebb 9y ago
Substitue "China" for any other country where manufacturing is cheap and my argument stands. You've highlighted another problem with the tariff idea: if it targets one country, manufacturing will shift to another cheap country rather than coming back to the US, and the tariffs would have to apply to more and more of them until we've been completely isolated in a global trade war.

muninn_ 9y ago

Well if you impose tariffs on those imported goods, and you still need to buy said goods, you just pay more but that money spent goes to pay an American worker or in the worst case an a American factory owner paying taxes. We don’t pay the true cost of items now because of this off-shoring to China. But if you create a tariff such that it’s economically feasible to manufacture goods in the United States, wages will have to increase to continue growth and spending, and the environment will continue to improve. Ultimately it stands on the same principles that buy local does. The not local your purchases are - the more the wealth stays in the loca area - we just abstract that to the national level.

jacquesm 9y ago

> No, it's the American consumers who will have to pay for it. The theory (right or wrong is debatable) is that some percentage of consumers will use this price increase to let their decision to buy domestic be influenced.

imcrs 9y ago
That would assume that the number of people buying domestic wouldn't just shrink in proportion to the tariff, because they can't afford goods anymore. And also perhaps in addition, because their company cannot pay them anymore because of the cost of goods.

ianai 9y ago

A tariff on Chinese imports would be a direct hit to growth. It’s not going to force companies to manufacture here. It’s only going to hold the US back. It’s like saying we’d better off closing all of borders. The US produces lots, but it would hardly get by in isolation. Not to mention that waning from the national stage bequeathes power to the next in line.

taysic 9y ago

That sounds a lot like the federal sugar program - it was designed to restrict the imports of much cheaper sugar from other countries to help American sugar companies from going out of business. The artificially high domestic prices just end up moving candy companies out of the country - because it's hard for them to compete on price with candy companies that can buy cheaper sugar outside of the US. Meanwhile, the federal gov buys about $300 million in excess sugar every time prices drop below a certain level due to other regulations. It's a strange system. http://www.nytimes.com/2013/10/31/us/american-candy-makers-pinched-by-inflated-sugar-prices-look-abroad.html http://www.nytimes.com/2013/10/31/us/american-candy-makers-p...