4 ms·

There are argument for protectionism, just not for a highly developed country such as USA. But I'm not going over them for a single reason. This act will fail

There are argument for protectionism, just not for a highly developed country such as USA. But I'm not going over them for a single reason. This act will fail "bigly". China is the 3rd largest export market for USA. It imports a lot of grain and cars and can retaliate on politically sensitive goods. Midterms are coming and China may use it to restrict tourism to Florida, put tarifs on soybeans from midwest, cars from Michigan. Companies from those states will likely suffer more in short term than benefit from the protectionism - it takes a while to build up capacity and conquer markerts. Meanwhile people will put the blame on Republicans as companies start the lay offs.

anilshanbhag 9y ago
This argument goes both ways. If you look at the trade equation (https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...) - US imports 3 times it exports. So, for every $ of tariff that China imposes, US can impose roughly 3 times the pain. While it would increase prices in the US, it will just kill the Chinese economy which already has overcapacity and > 20% of its exports are to the US. There are many Chinese practices that are unfair. US companies cannot enter China alone, they need to do 50-50 joint ventures when they setup shop in China. They also need to transfer technology and there is little IP protection. Finally, China imposes tariffs on many manufactured goods while the US doesn't.
- cjalmeida 9y ago
  It doesn't goes both ways. China is not a democracy and Mr. Xi is increasingly more powerfull. Trump is way below 50% ratings and Republicans are behind in the generic polls. This trade war is not about who gets hurt more. It's about who can sustain being hurt for longer time. There's a major election in 7 months, so I'm betting on China.

anilshanbhag 9y ago

This argument goes both ways. If you look at the trade equation (https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...) - US imports 3 times it exports. So, for every $ of tariff that China imposes, US can impose roughly 3 times the pain. While it would increase prices in the US, it will just kill the Chinese economy which already has overcapacity and > 20% of its exports are to the US. There are many Chinese practices that are unfair. US companies cannot enter China alone, they need to do 50-50 joint ventures when they setup shop in China. They also need to transfer technology and there is little IP protection. Finally, China imposes tariffs on many manufactured goods while the US doesn't.

cjalmeida 9y ago
It doesn't goes both ways. China is not a democracy and Mr. Xi is increasingly more powerfull. Trump is way below 50% ratings and Republicans are behind in the generic polls. This trade war is not about who gets hurt more. It's about who can sustain being hurt for longer time. There's a major election in 7 months, so I'm betting on China.