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Trump Hits China With Stiff Trade Measures
- enraged_camel 9y agoThe DOW is already down almost 3%. Tomorrow should be fun.
- baldajan 9y agoThat's one way of kick starting a recession I guess...
- freejulian 9y agoAh, there it is, the mindless "Arglebargle!1! Trump Bad!!!". He's better than Hillary.
- rubicon33 9y agoCall me crazy, but I'm kinda hoping for a recession. Housing prices seem very tightly correlated with the economy boom. I'd sure like to see a nice correction back down to sane levels, so that some of us who've been saving for a long time, can finally afford to buy something. Downvote of course if you're a current home owner.
- davidw 9y agoIt'd be nice if we could just build more housing, rather than hope for a painful recession to drop prices.
- lainga 9y agoWe did build more housing, far too much, in 2005-07.
- davidw 9y agoNot in the right places https://www.vox.com/2016/8/8/12390048/san-francisco-housing-costs-tokyo https://www.vox.com/2016/8/8/12390048/san-francisco-housing-... https://www.strongtowns.org/journal/2015/1/7/americas-suburban-experiment https://www.strongtowns.org/journal/2015/1/7/americas-suburb...
- lainga 9y agoOK, good point...
- hangonhn 9y agoIt doesn't hurt current home owners as long as they are not over leveraged. It doesn't necessarily help people without houses either. When there is a recession, credit could dry up. Most people in the US can't afford to buy without a mortgage. The solution to a housing crisis isn't a recession; it's more housing and better transportation. A recession hurts everyone and often hurts the poor harder than it hurts the wealthy.
- baldajan 9y agoA recession is part of an economic cycle to rebalance misused assets. More housing isn’t the solution. Many House bubbles had ample housing for people to live in, but not enough for speculation. Building more houses kicks the bucket down the road as it accumulates more than necessary housing. When a recession hits, and asset bubbles are deflated, speculation goes to zero, and you’re left with an over supply, an indebted society, and the country may lose generations of productivity (what actually happened in Japan in 1990).
- riffic 9y ago>I'm kinda hoping for a recession You don't have to hope -- recessions are a natural, unavoidable, and inevitable component of a typical business cycle.
- kregasaurusrex 9y agoMake America protectionist again?
- toomuchtodo 9y agoHollowed out middle America probably appreciates it versus everyone else getting the consumer excess from cheap goods from china. Keep the globalism. It pains me to say I agree with this action.
- scarmig 9y agoHow will this help "hollowed out" America? Is the promise that West Virginia will become the next Shenzhen?
- 52-6F-62 9y agoNot explicitly related, but funny enough— it comes on the same day this news came out. It seems like they're already done with the guy, anyway: U.S. miners' union to endorse two more Democrats in coal country https://www.reuters.com/article/us-usa-election-coal-endorsements-exclus/exclusive-u-s-miners-union-to-endorse-two-more-democrats-in-coal-country-idUSKBN1GY1YM https://www.reuters.com/article/us-usa-election-coal-endorse...
- deleted 9y ago[deleted]
- newfriend 9y agoHow is this funny? Don't unions typically endorse Democratic candidates? Union workers are not the same thing as union leadership. https://en.wikipedia.org/wiki/United_Mine_Workers#Recent_Elections https://en.wikipedia.org/wiki/United_Mine_Workers#Recent_Ele...
- product50 9y agoIt brings in jobs from manufacturing given the levees will make it more expensive to import from China. At least that is the rationale.
- HeyLaughingBoy 9y agoWonder if this will impact buying cheap Arduinos on Aliexpress.
- horsecaptin 9y agoYes that is the idea.
- adrianratnapala 9y agoIt's the idea that is the problem.
- pishpash 9y agoI get the sense that electronics have already doubled in price from a few years ago. There are almost no dirt cheap parts any more.
- HeyLaughingBoy 9y agoAs of two months ago, I could still purchase Arduinos & peripherals on Aliexpress for less than I could buy the raw parts and assemble them myself.
- sorenjan 9y agoWalmart is the biggest employer in the US. Won't this affect them and their customers, and by extension their employees, negatively?
- pishpash 9y agoNumber keeps changing. Was $50 billion on Bloomberg this morning.
- drak0n1c 9y agoNews usually reports on rumor and calculated leaks before any official announcement.
- cs702 9y ago...and from now on I will start calling it the "Echoes of Smoot-Hawley" Tariff. For those here who don't know, the Smooth-Hawley Tariff Act, signed into law around a year after the Stock Market Crash of 1929, is widely considered to have exacerbated the Great Depression of the 1930's.[a] If I may quote George Santayana: "Those who cannot remember the past are condemned to repeat it."[b] Hopefully this tariff and China's retaliation will remain an isolated incident, without significant repercussions for global trade. One can hope. Ignorance is a scarily powerful force in world affairs. :-( [a] https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac... [b] https://en.wikiquote.org/wiki/George_Santayana https://en.wikiquote.org/wiki/George_Santayana
- iooi 9y agoNot sure that's relevant right now, since we're not in a recession?
- riffic 9y agoA recession started January 26, 2018. You weren't informed?
- EpicEng 9y agoThe word "recession" has many definitions (depends on who you ask), but in the US we tend to defer to the NBER. >The NBER defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."[1] GDP was up 2.6% last quarter[2], so no, we're not in a recession. A stock market dip does not a recession make. [1] https://en.wikipedia.org/wiki/Recession#Definition https://en.wikipedia.org/wiki/Recession#Definition [2] https://www.nytimes.com/2018/01/26/business/economy/gdp-economy.html https://www.nytimes.com/2018/01/26/business/economy/gdp-econ...
- dragonwriter 9y ago
- tristanj 9y agoEdit: HN Mods quickly fixed the article, which makes this comment out of date. I really appreciate how quickly mods fix things on this site. Article is wrong, Trump is not announcing $60B in tariffs, he's announcing tariffs on $60B of goods. Huge difference. I've seen multiple outlets make the same mistake. NYtimes got it right here https://www.nytimes.com/2018/03/22/us/politics/trump-will-hit-china-with-trade-measures-as-white-house-exempts-allies-from-tariffs.html https://www.nytimes.com/2018/03/22/us/politics/trump-will-hi...
- notheguyouthink 9y agoDoes this affect the doom and gloom comments made here? I know nothing of economics, hence the question.
- tristanj 9y agoThe size of the tariff changes. No concrete numbers have been announced, but the tariff may be in the range of ~10-40%. That would mean the actual tariff value is several times smaller than the reported $60B value.
- fspeech 9y agoWe will have to wait for the details. Will they really tax Nike shoes, HP/Dell computers or Apple phones? As for what Lighthizer allegedly cares about - "electric vehicles, high-tech shipping and aerospace technology", I am not aware that this country buys in any significant quantity from China so not sure how they can be targeted with tariffs. In NYT's exact words: ... Those industries include electric vehicles, high-tech shipping and aerospace technology. Mr. Lighthizer called them “the ones I care about” for tariff purposes.
- IAmEveryone 9y agoThe numbers involved wouldn’t make any significant difference either way. The fear is retribution, counter-retribution, and the breakdown of the free market consensus of the last 70 years.
- sctb 9y ago
- gesman 9y agoWe should of balance the incoming flood of this crap long time ago.
- freejulian 9y agoGood. The Chinese government subsidizes and protects many industries within their economy. Additionally, workers in the United State have been forced to race to the bottom with China. I, for one, am happy to see some protectionism.
- rrggrr 9y agoThere are reports and indications that the Chinese leadership is 'okay', possibly even inviting of this move and may respond only lightly to save face. - Xi knows the Chinese economy must rebalance for domestic reasons and that excess capacity must be shed. The US move provides Xi political cover and fallguy as the inevitable unfolds. - Chinese investors are eager to invest more in US assets and companies. Through the trade negotiations to come the US is likely to open its doors to greater Chinese investment as Chinese doors open to less or unrestricted investment from the US. This may take the form of sole US-owned investment, an end to technology transfers, or both. - Xi's power consolidation was widely reported as the product of ambition. The alternative explanation, and the one I favor, is the inevitable rebalancing of China's economy will necessarily cause some social and political instability - at all levels of the Chinese body politic. Whereas social and political pressure has forced policy retreats the past decade in China, Xi's new power suggests he'll enjoy the authority and longevity necessary to complete China's adjustment. Suggests only, a lot can go wrong. - China has much to do in supporting provincial governments, SOE, and other systemically important institutions. I don't think China has sufficient reserves in-place for a trade war, even if it were so inclined.
- noetic_techy 9y agoHate to say it, but if this is the case its also the best possible outcome for Trump and a boon for his re-election. "I took on China and negotiated a new deal. Sure, it was painful at first, but it brought them to the table, and now we're much better off. American factories are open again." I have a sneaking suspicion Trump doesn't care if he wins re-election or not and could give a crap if tariffs lead to recession. It plays into his narrative and image well, and that's all he really cares about. If he were smart, he would play a card that Dan Carlin over at hardcore history hypothesized: The 1-term president. Basically, it can be summed up as: "I'm going to shake this system so far to the core, I may only be a 1-term president, but I don't care! It must be done." I think he much prefers the billionaire lifestyle to a presidential one anyways. He hates living in the "shabby" white house.
- deleted 9y ago[deleted]
- jeffreyrogers 9y agoMany educated people are very critical of this, but as far as I know most countries that have developed successful industries had a period of protectionism during which they prevented foreign competitors from bringing in competing products in order to give their industries time to develop. This was coupled with strong export requirements to ensure that the products these industries produced were globally competitive and high quality. The most recent examples I can think of are the successful Asian countries (Japan, China, Taiwan, and South Korea). Many times these countries directly defied World Bank recommendations that encouraged a more laissez-faire, free-market approach. Obviously the people critical of these policies are fairly well educated and should know what they're talking about, but I wonder how much is born out of academic ideas that don't hold up in practice or a projection of their disagreement with Trump's personality and other political actions. Edit: I'm not saying this is the right approach, but I don't see many people arguing for these trade reforms, and I think it's unlikely that there are no decent arguments for them.
- JumpCrisscross 9y agoI'm fine with this. It will certainly cost us jobs and money. But that seems like a reasonable cost to pay to counter a geopolitical competitor.
- kbutler 9y agoWait - I thought the goal of "countering a global competitor" was to save jobs and thus money for US? Otherwise, what's the point?
- davidw 9y ago"Cutting off your nose to spite your face", I guess.
- JumpCrisscross 9y ago> Otherwise, what's the point? Encourage behaviour change. Same as with Iran. Everyone lost, economically (in the short term), as a result of the Iran sanctions. Those short-run losses were deemed sufficient compensation for the possibility Iran would agree to limit its nuclear program. Similarly, if China agreed to loosen access to its own market and stop forcing American companies to give up their IP to Beijing, that could be better for all in the long run.
- deleted 9y ago[deleted]
- Grovara123 9y agoNothing I see here is a negative - China does not play fair - this is a shot over the bow... should have been done years ago.
- megablast 9y agoReally? So then China put tariff on our stuff. Then we do it again, then they do it again. You see that as a good outcome?
- Grovara123 9y agoI think that China is cheating the system and if you have a better idea on how to fix the situation I'm all ears.
- jorblumesea 9y agoAlso known as a tax on the poor. Tariff taxes just get pushed onto the consumer as the US doesn't have any domestic competing products anywhere close to the price point of Chinese goods. We will continue to buy China, just at 10% more than in the past. People will just pay yet another tax as everything will become more expensive. The disconnect between "China is taking our jobs" and "I want a tv for cheap" is astounding. Different sides of the same coin.
- kregasaurusrex 9y agoFoxconn's investment in Wisconsin is a perfect example of this- there's simply no US competitor in a lot of consumer product areas for the same price point. What we're faced with is like having the choice between an American 720p TV and a Chinese 1080p TV for the same price at a retailer: there's no incentive to buy the American version when the foreign one's BOM\shipping\import costs beats that of the US-made one.
- makomk 9y agoInterestingly, a lot of the low-end TVs in Europe are made in Turkey of all places (including panel manufacturing, I believe).
- detaro 9y agoI wonder if that has to do with TVs being fairly large compared to other consumer electronics, and shipping costs start to play a role.
- jorblumesea 9y agoAlso implying that American made electronics are even appealing to the American consumer anymore. That to me is the big question. Everyone talks about buy American, but look at the mass produced American goods and it doesn't scream quality, even if it is at the right price point. Everyone buys Korean washing machines, Japanese cars, and Chinese electronics. Not simply because of the cost but also because of quality. My Toyota is a far better deal than Ford/Chevy/etc.
- lewis500 9y agoSince interest rates are positive now, The number of jobs is currently controlled by the fed. The stronger labor demand is, the more they raise interest rates, thereby reducing job creation. So all of these make work programs, like the huge military spending boost, are currently just leading to higher interest rates and prices and shifting workers from one industry to another. Specifically it will shift workers out of export production and construction, because higher interest rates hurt our exports and construction. No job creation, more expensive products and homes. Thanks. Fortunately these tariffs are pretty insignificant: 50 billion worth of stuff is not that much for us, although it might be for certain cities in China and the precedent is bad.
- wilburTheDog 9y agoCould just be coincidence, but this was signed at roughly the same time that China started selling oil futures in yuan. Some see that as a big threat to the primacy of the dollar in international oil trading. http://nationalinterest.org/feature/the-end-the-petrodollar-25002 http://nationalinterest.org/feature/the-end-the-petrodollar-...
- noetic_techy 9y agoKeep in mind, the US is by far the LEAST protectionist country according to the WTO, with China being the most, and Europe somewhere in the middle. Europe also has anti-dumping and high tariffs on China, with some steel import tariffs as high as 71.9% in some cases to prevent dumping. Cars being shipped from the U.S. into Europe faced a 10% import duty while European cars into the U.S. face only a 2.5% percent duty. China makes its immensely difficult for US based companies to enter Chinese markets, and IP enforcement is abysmal. Fixing this access imbalance was the only thing good the TPP had going for it, but the concessions were too much and ultimately it was scrapped. I sincerely hope this does bring everyone back to the negotiating table eventually for a better deal.
- fwgwgwgch 9y agoAnd I suppose once TOP was in place scrapping it would b have been more difficult (like NAFTa) and getting China to play by the rules too
- mrwebmaster 9y agoThe WTO uses bound tariffs, not the actual applied tariffs, as far as I know. The applied tariffs adjusted by real trade shows that US is not the least protectionist country, Japan and Singapore are less protectionist. Anyway, the adjusted tariff is lower than the China tariff. https://ftalphaville.ft.com/2018/03/08/1520526203000/America-is-not-the-least-protectionist-country-in-the-world/ https://ftalphaville.ft.com/2018/03/08/1520526203000/America...
- Animats 9y agoApple may have to move iPhone production to the US.