7 ms·

It's punishment for stealing hundreds of billions of dollars of IP, illegally subsidizing businesses to steal market share, and general national security by not

It's punishment for stealing hundreds of billions of dollars of IP, illegally subsidizing businesses to steal market share, and general national security by not outsourcing knowledge and infrastructure critical to national security to save a few bucks. It's easy to let someone push you back inch by inch instead of fighting back, but eventually you're on the edge of a cliff and have nowhere else to go. I'd take short term pain over one day waking up and realizing that China has total control over manufacturing for everything essential for modern life and in exchange we got cheap consumer goods for a few years.

EpicEng 8y ago
I don't know why you're being downvoted; China absolutely does all of those things. They are not playing fair in the global market and never have. One can debate whether or not the tariff is the right approach, but let's not pretend that China is a victim.
- tehbeard 8y ago
  GP never said China was a victim, just that a tariff screws over US companies, not China.
  - anon23423532 8y ago
    If manufacturing moves elsewhere and a few million already disgruntled Chinese are out of jobs, Chinese government has big problems. Their impotent threat towards the US ag industry is also laughable when we produce 40-50% of the worlds soybeans and corn. Increasing food prices for the millions of unemployed workers is surely a winning strategy Cheap labor is plentiful, there's only one US consumer market. China has no leverage here.
    - elago 8y ago
      I'm curious how are you coming up with these economic projections? Are you running simulations? Reading reports? Are you an economist? What if China just sells to other customers? What is China subsidizes it's manufacturers, so they get paid and keep their production capacity whether or not they're actually producing? Exactly like soybean and corn farmers in the US are btw. The whole thing seems incredibly complex, and most of the economic opinions I read about don't say "markets are better when the goverment skims 25% off of all transactions". So I'm curious how you immediately come to the conclusion "USA Wins, China has no leverage, game over".
      - anon23423532 8y ago
        They can try selling to other customers, but US is still around 25% of global GDP and probably a larger percentage of the market for the components that have been tariffed. Chinese government would have to print a lot of money to make up for that, which causes it's own issues, especially when considering the amount of debt China has already racked up. The point isn't for the government to skim 25%, it's to get China to trade fairly or if worse comes to worse bring manufacturing back to the US. In the event of a trade war US has leverage because we have the market and a essential product, food. US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food.
        mcphage 8y ago
        > if worse comes to worse bring manufacturing back to the US If these tariffs are on components and not manufactured goods, then it seems like it would push manufacturing into China, not bring it back to the US.
        tridentlead 8y ago
        Not if the goal is to bring back component manufacturing.
        mcphage 8y ago
        Who’s going to buy the US-made components if the manufacturers that use those products have already moved to China because of the tariffs?
        yellowapple 8y ago
        Probably those same manufacturers, depending on whether the added labor premium is less than the cost of shipping finished goods across the Pacific.
        8y ago
    - xbmcuser 8y ago
      Isn't this playing into China's hands they want to move up value chain from providing components to whole devices. Now chinese made devices will be at least 25% cheaper on components alone they already have the advantage of cheap labour. In the last few years assembly plants were supposedly coming back to the US now that would less likely.
    - chrisjc 8y ago
      I agree with you, although the thought of millions of nationalized, disgruntled, unemployed citizens within a highly industrialized country is rather terrifying in general, not just for the Chinese government.
    - Theodores 8y ago
      Those of us in the rest of the world view U.S. agricultural products as subsidised and dumped on the world market. Look at the history of the Chicken Tax to see the long history of this. The rest of the world would actually prefer jobs for our own farmers and we would also prefer to not be eating genetically modified junk from America. It is theoretically possible to live without a Harley Davidson motorbike and whatever else America actually makes these days, as for food, that is vital. Therefore in places like Japan rice is given special protection. I hope the Chinese respond by selling off the many trillions of US bonds/debt they have been buying over the years. I also hope that the petro-dollar is no more and that the world can move to an era of genuine fair trade.
    - ojbyrne 8y ago
      Nobody votes in China. There is an election coming up in this country.
  - EpicEng 8y ago
    Sure, I didn't mean it that way. I was referring to what I assume the down voters were thinking, but I wasn't very clear.
- debt 8y ago
  Not every single Chinese tech firm does these things. It's possible to develop a more nuanced view of China other than "China bad tariff good". Why not investigate which firms committed which crimes and punish those specific firms? It's a smarter approach that helps our justice system and China's. But "smarter" isn't part of this administrations playbook.
  - jandrese 8y ago
    While I agree that you could find firms that have not stolen IP to make their product, trying to nail down the sanctions to individual businesses would never work. The number of entities you would need to track and audit is enormous and it's way too easy for someone to launder the information around to supposedly "good" businesses. You're talking about the entire supply chain, so you would end up punishing firms that are otherwise innocent because unbeknownst to them they bought resisters or capacitors or silicon plates from a bad actor. A smart approach is just not feasible at this scale.
    - debt 8y ago
      "so you would end up punishing firms that are otherwise innocent" That's exactly what the current tariffs do. So I guess if it's too much work to vet individual firms, we just lazily start a trade war? Again, for this administration, sounds about right.
      - jandrese 8y ago
        Yes. You can either punish innocent firms, or punish innocent firms plus lots of extra paperwork.
  - sremani 8y ago
    When two elephants fight, many ants die. There is no precision guided ammo in trade wars. Its brute force!
  - EpicEng 8y ago
    Sure, but I don't think that's a practical solution. Also, tariffs like this aren't intended to harm individual businesses; the intent is to pressure the Chinese government, a government which directly supports and plays a role in IP theft and market manipulation. Why would the US spend an insane amount of resources to lessen the effect when the effect is exactly what they're after?
- pjc50 8y ago
  Whereas the US has always played fair in the global market and never used its dollar position, tarriffs, sanction, invasions etc for market advantage?
  - merpnderp 8y ago
    You're comparing apples and oranges. When has the US government stolen trade secrets from foreign companies and then bootstrapped new domestic companies to compete against them? China has surely done all the things you're accusing the US of, but they aren't being punished for that.
    - pjc50 8y ago
      http://money.cnn.com/2015/04/30/news/airbus-germany-nsa-spying/index.html http://money.cnn.com/2015/04/30/news/airbus-germany-nsa-spyi... (I'm not sure anything has been proven definitively in the open, but I'm not sure that applies to all these China allegations either)
      - merpnderp 8y ago
        So you would have had a problem with the EU retaliating if they’d felt they had enough proof for a case?
    - tomarr 8y ago
      The US actually did this extensively during its own industrialisation, stealing IP from Britain and shielding its own fledgling domestic industries (textiles was the tech sector of the day). Britain took steps as extensive as banning skilled people from travelling to the USA. All this is just historic and doesn't necessarily feed into what should be done in the present situation, but it is useful to note that this is a common path that developed countries have followed in the past: - ignore/steal IP - protect and subsidise domestic equivalents - upon domestic industry being competitive, reciprocally lower tariffs - once fully developed, lobby for free trade and strong IP protection
  - azinman2 8y ago
- s2g 8y ago
  I would have downvoted for the "general national security" bit. Everything else, sure. But national security, especially expressed like that, is just another "WON'T SOMEBODY PLEASE THINK OF THE CHILDREN".
- Spooky23 8y ago
  Be careful. The US doesn’t exactly “play fair” either.
luma 8y ago
I understand the rationale, which is pretty clearly laid out here: https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF https://ustr.gov/sites/default/files/Section%20301%20FINAL.P... What I don't understand is the response. The burden of this cost has entirely been placed upon US businesses purchasing products from (in many cases) the only place you can buy them and then assembling the completed product in the US with US labor. As someone doing small-scale production in the US, the simple way for me to avoid these tariffs is to have China assemble everything. Finished consumer goods have been explicitly avoided in this list. Can you explain to me how this is helping US manufacturing?
- frgtpsswrdlame 8y ago
  Yes but I see your comment as a rationale for an additional tariff that covers your circumstance. In what way would you punish China for their bad actions regarding US technology?
  - johnmaguire2013 8y ago
    Sometimes doing nothing is better than doing something. In this case, doing something (a) does not harm China, as intended, as they are still the only viable place to purchase these items, yet (b) actively harms business in the United States, as we are paying the additional cost ourselves.
    - frgtpsswrdlame 8y ago
      (a) I mean this tariff does definitely harm China. The reason they're the only viable place to purchase these items is because they're so cheap. Making them more expensive gives space for non-Chinese competitors to enter into business. (b) It actively harms some businesses, but also gives room for new companies to form where they wouldn't have been able to previously. It's wrong to claim this hurts 'business' in a broad sense. >Sometimes doing nothing is better than doing something. Perhaps but in this case better for who? It doesn't seem to me that - for most Americans - allowing the Chinese to steal our technology and then underprice our businesses with cheap labor is beneficial.
zach43 8y ago
> punishment for stealing hundreds of billions of dollars of IP I feel like its more the other way round...the American IP system is overly expensive and outdated, and should be reformed instead. The repercussions of this are felt most heavily on domestic industries too.
- flyingcircus3 8y ago
  I concur. There seems to be a common thread in entrenched entities when their hegemony erodes before their very eyes and their well worn levers of power suddenly stop bearing fruits. It's like when someone loses their wallet, and their first instinct is to completely discount the possibility they just misplaced it, and jump straight to the conclusion that someone stole it. Start at your only acceptable conclusion, and work backwards to construct a plausible scenario that you can parade around as the obvious culprit.
- cakeface 8y ago
  Right! If we adopted a chinese approach instead of trying to force ours on them we might actually improve intellectual property laws.
s2g 8y ago
> general national security by not outsourcing knowledge and infrastructure critical to national security to save a few bucks. That's the best argument? ZTE was literally being used to spy en masse. maybe start there instead of "general national security". Care to explain Canada and the EU getting tariffs?
foobarbazetc 8y ago
Your comment is just a giant [citation needed]. None of this is true. “IP” produced by a nominally US corporation with hundreds of offices around the world is not attributable to the US government. This is just some super simplisitic nationalist BS masquerading as trade policy.
dboreham 8y ago
Look at the early history of the jet engine to see how countries other than China engage in similar tactics.
drb91 8y ago
It’s not clear these tariffs will change this. It’s still in China’s interest to gate entry to their markets.
mtw 8y ago
The are subsidies everywhere. The US government subsidized the oil industry for dozens of years, same for agricultural sector and major sectors of the economy (See Great Depression). Currently, electrical vehicles are also receive subsidies in most states. I'm not a big believer in IP (go Free software!). I find though if we have to strictly follow IP, then the US would have to pay for the use of paper and gunpowder, and many other inventions originating in China. What I hate so much about that it assumes it's all due to Chinese secretly stealing American IP. Nope - just go to China. People are working extremely hard and industrious. There is also 1.4 billion Chinese. And while there are good American products, there are also great German-made robots and tech, Korean chips, French nuclear reactors that Chinese would rather have than American products. Focus on building better products, work hard, and it will work out.
- defertoreptar 8y ago
  This goes beyond subsidies. We're talking about espionage, theft, forced technology transfers, and mandatory joint ventures if you want to set up shop in China.
  - fspeech 8y ago
    "if you want to set up shop in China" That is a funny line of logic that gets thrown around a lot, considering that the advocates' stated preference is for industries to move out of China. Isn't wide dissemination "about espionage, theft, forced technology transfers, and mandatory joint ventures" enough a deterrence for companies to stop going into China? Apparently not.
    - defertoreptar 8y ago
      > Isn't wide dissemination "about espionage, theft, forced technology transfers, and mandatory joint ventures" enough a deterrence for companies to stop going into China? Apparently not. You're right, and at the same time, that's not the point. The USA has been granting China favorable deals, which has resulted in trade deficits. The expectation is that the China will at least follow and enforce international trade law. The USA decided that the Chinese government is not doing this and is instead actively subverting it at the expense of US companies. This is a response to that.
pstuart 8y ago
It would be great to move a bunch of technology/manufacturing back onshore, but that's a different conversation. This appears to be done for political reasons: https://www.nbcnews.com/politics/white-house/trump-was-angry-unglued-when-he-started-trade-war-officials-n852641 https://www.nbcnews.com/politics/white-house/trump-was-angry...

EpicEng 8y ago

I don't know why you're being downvoted; China absolutely does all of those things. They are not playing fair in the global market and never have. One can debate whether or not the tariff is the right approach, but let's not pretend that China is a victim.

tehbeard 8y ago
GP never said China was a victim, just that a tariff screws over US companies, not China.
- anon23423532 8y ago
  If manufacturing moves elsewhere and a few million already disgruntled Chinese are out of jobs, Chinese government has big problems. Their impotent threat towards the US ag industry is also laughable when we produce 40-50% of the worlds soybeans and corn. Increasing food prices for the millions of unemployed workers is surely a winning strategy Cheap labor is plentiful, there's only one US consumer market. China has no leverage here.
  - elago 8y ago
    I'm curious how are you coming up with these economic projections? Are you running simulations? Reading reports? Are you an economist? What if China just sells to other customers? What is China subsidizes it's manufacturers, so they get paid and keep their production capacity whether or not they're actually producing? Exactly like soybean and corn farmers in the US are btw. The whole thing seems incredibly complex, and most of the economic opinions I read about don't say "markets are better when the goverment skims 25% off of all transactions". So I'm curious how you immediately come to the conclusion "USA Wins, China has no leverage, game over".
    - anon23423532 8y ago
      They can try selling to other customers, but US is still around 25% of global GDP and probably a larger percentage of the market for the components that have been tariffed. Chinese government would have to print a lot of money to make up for that, which causes it's own issues, especially when considering the amount of debt China has already racked up. The point isn't for the government to skim 25%, it's to get China to trade fairly or if worse comes to worse bring manufacturing back to the US. In the event of a trade war US has leverage because we have the market and a essential product, food. US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food.
      - mcphage 8y ago
        > if worse comes to worse bring manufacturing back to the US If these tariffs are on components and not manufactured goods, then it seems like it would push manufacturing into China, not bring it back to the US.
        tridentlead 8y ago
        Not if the goal is to bring back component manufacturing.
        mcphage 8y ago
        Who’s going to buy the US-made components if the manufacturers that use those products have already moved to China because of the tariffs?
        yellowapple 8y ago
        Probably those same manufacturers, depending on whether the added labor premium is less than the cost of shipping finished goods across the Pacific.
        8y ago
  - xbmcuser 8y ago
    Isn't this playing into China's hands they want to move up value chain from providing components to whole devices. Now chinese made devices will be at least 25% cheaper on components alone they already have the advantage of cheap labour. In the last few years assembly plants were supposedly coming back to the US now that would less likely.
  - chrisjc 8y ago
    I agree with you, although the thought of millions of nationalized, disgruntled, unemployed citizens within a highly industrialized country is rather terrifying in general, not just for the Chinese government.
  - Theodores 8y ago
    Those of us in the rest of the world view U.S. agricultural products as subsidised and dumped on the world market. Look at the history of the Chicken Tax to see the long history of this. The rest of the world would actually prefer jobs for our own farmers and we would also prefer to not be eating genetically modified junk from America. It is theoretically possible to live without a Harley Davidson motorbike and whatever else America actually makes these days, as for food, that is vital. Therefore in places like Japan rice is given special protection. I hope the Chinese respond by selling off the many trillions of US bonds/debt they have been buying over the years. I also hope that the petro-dollar is no more and that the world can move to an era of genuine fair trade.
  - ojbyrne 8y ago
    Nobody votes in China. There is an election coming up in this country.
- EpicEng 8y ago
  Sure, I didn't mean it that way. I was referring to what I assume the down voters were thinking, but I wasn't very clear.
debt 8y ago
Not every single Chinese tech firm does these things. It's possible to develop a more nuanced view of China other than "China bad tariff good". Why not investigate which firms committed which crimes and punish those specific firms? It's a smarter approach that helps our justice system and China's. But "smarter" isn't part of this administrations playbook.
- jandrese 8y ago
  While I agree that you could find firms that have not stolen IP to make their product, trying to nail down the sanctions to individual businesses would never work. The number of entities you would need to track and audit is enormous and it's way too easy for someone to launder the information around to supposedly "good" businesses. You're talking about the entire supply chain, so you would end up punishing firms that are otherwise innocent because unbeknownst to them they bought resisters or capacitors or silicon plates from a bad actor. A smart approach is just not feasible at this scale.
  - debt 8y ago
    "so you would end up punishing firms that are otherwise innocent" That's exactly what the current tariffs do. So I guess if it's too much work to vet individual firms, we just lazily start a trade war? Again, for this administration, sounds about right.
    - jandrese 8y ago
      Yes. You can either punish innocent firms, or punish innocent firms plus lots of extra paperwork.
- sremani 8y ago
  When two elephants fight, many ants die. There is no precision guided ammo in trade wars. Its brute force!
- EpicEng 8y ago
  Sure, but I don't think that's a practical solution. Also, tariffs like this aren't intended to harm individual businesses; the intent is to pressure the Chinese government, a government which directly supports and plays a role in IP theft and market manipulation. Why would the US spend an insane amount of resources to lessen the effect when the effect is exactly what they're after?
pjc50 8y ago
Whereas the US has always played fair in the global market and never used its dollar position, tarriffs, sanction, invasions etc for market advantage?
- merpnderp 8y ago
  You're comparing apples and oranges. When has the US government stolen trade secrets from foreign companies and then bootstrapped new domestic companies to compete against them? China has surely done all the things you're accusing the US of, but they aren't being punished for that.
  - pjc50 8y ago
    http://money.cnn.com/2015/04/30/news/airbus-germany-nsa-spying/index.html http://money.cnn.com/2015/04/30/news/airbus-germany-nsa-spyi... (I'm not sure anything has been proven definitively in the open, but I'm not sure that applies to all these China allegations either)
    - merpnderp 8y ago
      So you would have had a problem with the EU retaliating if they’d felt they had enough proof for a case?
  - tomarr 8y ago
    The US actually did this extensively during its own industrialisation, stealing IP from Britain and shielding its own fledgling domestic industries (textiles was the tech sector of the day). Britain took steps as extensive as banning skilled people from travelling to the USA. All this is just historic and doesn't necessarily feed into what should be done in the present situation, but it is useful to note that this is a common path that developed countries have followed in the past: - ignore/steal IP - protect and subsidise domestic equivalents - upon domestic industry being competitive, reciprocally lower tariffs - once fully developed, lobby for free trade and strong IP protection
- azinman2 8y ago
s2g 8y ago
I would have downvoted for the "general national security" bit. Everything else, sure. But national security, especially expressed like that, is just another "WON'T SOMEBODY PLEASE THINK OF THE CHILDREN".
Spooky23 8y ago
Be careful. The US doesn’t exactly “play fair” either.

luma 8y ago

I understand the rationale, which is pretty clearly laid out here: https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF https://ustr.gov/sites/default/files/Section%20301%20FINAL.P... What I don't understand is the response. The burden of this cost has entirely been placed upon US businesses purchasing products from (in many cases) the only place you can buy them and then assembling the completed product in the US with US labor. As someone doing small-scale production in the US, the simple way for me to avoid these tariffs is to have China assemble everything. Finished consumer goods have been explicitly avoided in this list. Can you explain to me how this is helping US manufacturing?

frgtpsswrdlame 8y ago
Yes but I see your comment as a rationale for an additional tariff that covers your circumstance. In what way would you punish China for their bad actions regarding US technology?
- johnmaguire2013 8y ago
  Sometimes doing nothing is better than doing something. In this case, doing something (a) does not harm China, as intended, as they are still the only viable place to purchase these items, yet (b) actively harms business in the United States, as we are paying the additional cost ourselves.
  - frgtpsswrdlame 8y ago
    (a) I mean this tariff does definitely harm China. The reason they're the only viable place to purchase these items is because they're so cheap. Making them more expensive gives space for non-Chinese competitors to enter into business. (b) It actively harms some businesses, but also gives room for new companies to form where they wouldn't have been able to previously. It's wrong to claim this hurts 'business' in a broad sense. >Sometimes doing nothing is better than doing something. Perhaps but in this case better for who? It doesn't seem to me that - for most Americans - allowing the Chinese to steal our technology and then underprice our businesses with cheap labor is beneficial.

zach43 8y ago

> punishment for stealing hundreds of billions of dollars of IP I feel like its more the other way round...the American IP system is overly expensive and outdated, and should be reformed instead. The repercussions of this are felt most heavily on domestic industries too.

flyingcircus3 8y ago
I concur. There seems to be a common thread in entrenched entities when their hegemony erodes before their very eyes and their well worn levers of power suddenly stop bearing fruits. It's like when someone loses their wallet, and their first instinct is to completely discount the possibility they just misplaced it, and jump straight to the conclusion that someone stole it. Start at your only acceptable conclusion, and work backwards to construct a plausible scenario that you can parade around as the obvious culprit.
cakeface 8y ago
Right! If we adopted a chinese approach instead of trying to force ours on them we might actually improve intellectual property laws.

s2g 8y ago

> general national security by not outsourcing knowledge and infrastructure critical to national security to save a few bucks. That's the best argument? ZTE was literally being used to spy en masse. maybe start there instead of "general national security". Care to explain Canada and the EU getting tariffs?

foobarbazetc 8y ago

Your comment is just a giant [citation needed]. None of this is true. “IP” produced by a nominally US corporation with hundreds of offices around the world is not attributable to the US government. This is just some super simplisitic nationalist BS masquerading as trade policy.

dboreham 8y ago

Look at the early history of the jet engine to see how countries other than China engage in similar tactics.

drb91 8y ago

It’s not clear these tariffs will change this. It’s still in China’s interest to gate entry to their markets.

mtw 8y ago

The are subsidies everywhere. The US government subsidized the oil industry for dozens of years, same for agricultural sector and major sectors of the economy (See Great Depression). Currently, electrical vehicles are also receive subsidies in most states. I'm not a big believer in IP (go Free software!). I find though if we have to strictly follow IP, then the US would have to pay for the use of paper and gunpowder, and many other inventions originating in China. What I hate so much about that it assumes it's all due to Chinese secretly stealing American IP. Nope - just go to China. People are working extremely hard and industrious. There is also 1.4 billion Chinese. And while there are good American products, there are also great German-made robots and tech, Korean chips, French nuclear reactors that Chinese would rather have than American products. Focus on building better products, work hard, and it will work out.

defertoreptar 8y ago
This goes beyond subsidies. We're talking about espionage, theft, forced technology transfers, and mandatory joint ventures if you want to set up shop in China.
- fspeech 8y ago
  "if you want to set up shop in China" That is a funny line of logic that gets thrown around a lot, considering that the advocates' stated preference is for industries to move out of China. Isn't wide dissemination "about espionage, theft, forced technology transfers, and mandatory joint ventures" enough a deterrence for companies to stop going into China? Apparently not.
  - defertoreptar 8y ago
    > Isn't wide dissemination "about espionage, theft, forced technology transfers, and mandatory joint ventures" enough a deterrence for companies to stop going into China? Apparently not. You're right, and at the same time, that's not the point. The USA has been granting China favorable deals, which has resulted in trade deficits. The expectation is that the China will at least follow and enforce international trade law. The USA decided that the Chinese government is not doing this and is instead actively subverting it at the expense of US companies. This is a response to that.

pstuart 8y ago

It would be great to move a bunch of technology/manufacturing back onshore, but that's a different conversation. This appears to be done for political reasons: https://www.nbcnews.com/politics/white-house/trump-was-angry-unglued-when-he-started-trade-war-officials-n852641 https://www.nbcnews.com/politics/white-house/trump-was-angry...