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If manufacturing moves elsewhere and a few million already disgruntled Chinese are out of jobs, Chinese government has big problems. Their impotent threat towar

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.
        HeyLaughingBoy 8y ago
        As a first-order approximation, transoceanic shipping is essentially free. A quick google gives me $5,000 to ship a container from China to a US port. Considering the volume that a 40' container can hold, yeah, that's pretty much free. Compare that to even cheap US labor rates and it's a no-brainer.
      - systoll 8y ago
        The stated goal only matters insofar as it affects the policies that are created. In 2018, it's a whole lot easier to avoid doing any manufacturing in the US than it is to avoid using any components made in China; and both approaches avoid the tariff as written. If the goal is to bring back component manufacturing, they need to go back to the drawing board.
    - 8y ago
  - sangnoir 8y ago
    > US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food. All fair points, but can US politicians live with opposition from the agricultural lobby and/or rural vote? Political expediency beats long-term economic planning when politician's livelihoods are on the line.
  - simplify 8y ago
    > The point isn't for the government to skim 25%, it's to get China to trade fairly How is it currently unfair?
  - evgen 8y ago
    > US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food. But they aren't dependent on importing that food from the US. Brazil, Australia, Thailand, Indonesia, Malaysia, Canada and Argentina are all happy to step up and take over for US producers who are now going to see demand fall through the floor and these producers have been preparing for the inevitable shoe to drop in retaliation for US tariffs for months now. Luckily most of the damage is going to be felt in those central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers. But I am sure people are just going to be overjoyed when their Christmas electronics are significantly more expensive, and we will see how long they believe delusional statements like ones claiming that this action will "bring manufacturing back to the US" -- I am betting that line will get you a beat-down in the Midwest by next spring.
    - cat199 8y ago
      > central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers. say what you will about trump and 'central plains morons', but last time I checked, NYC isn't in kansas so 'their peers' is a bit of a stretch..
    - jduijdhdd 8y ago
      Soybeans dont grow overnight. The us provides a outsized portion of soybeans for China, there is no short term alternative supplier. Most likely a interim buyer like Singapore or Australia will purchase the soybeans and sell them to china for a markup that's cheaper the the tariff.
  - sfoblowsjose 8y ago
    "consumers can live without another 42in tv." So you think. Americans will rage if these taxes land on them. There will be hell to pay. Fuck with Americans TVs and iPads, we will go to war.
- sheepmullet 8y ago
  > and most of the economic opinions I read Have you read the economic opinion on income taxes? Hint: They also make markets less efficient. But nevertheless we think the trade off is worth it.
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.

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.
        HeyLaughingBoy 8y ago
        As a first-order approximation, transoceanic shipping is essentially free. A quick google gives me $5,000 to ship a container from China to a US port. Considering the volume that a 40' container can hold, yeah, that's pretty much free. Compare that to even cheap US labor rates and it's a no-brainer.
    - systoll 8y ago
      The stated goal only matters insofar as it affects the policies that are created. In 2018, it's a whole lot easier to avoid doing any manufacturing in the US than it is to avoid using any components made in China; and both approaches avoid the tariff as written. If the goal is to bring back component manufacturing, they need to go back to the drawing board.
  - 8y ago
- sangnoir 8y ago
  > US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food. All fair points, but can US politicians live with opposition from the agricultural lobby and/or rural vote? Political expediency beats long-term economic planning when politician's livelihoods are on the line.
- simplify 8y ago
  > The point isn't for the government to skim 25%, it's to get China to trade fairly How is it currently unfair?
- evgen 8y ago
  > US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food. But they aren't dependent on importing that food from the US. Brazil, Australia, Thailand, Indonesia, Malaysia, Canada and Argentina are all happy to step up and take over for US producers who are now going to see demand fall through the floor and these producers have been preparing for the inevitable shoe to drop in retaliation for US tariffs for months now. Luckily most of the damage is going to be felt in those central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers. But I am sure people are just going to be overjoyed when their Christmas electronics are significantly more expensive, and we will see how long they believe delusional statements like ones claiming that this action will "bring manufacturing back to the US" -- I am betting that line will get you a beat-down in the Midwest by next spring.
  - cat199 8y ago
    > central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers. say what you will about trump and 'central plains morons', but last time I checked, NYC isn't in kansas so 'their peers' is a bit of a stretch..
  - jduijdhdd 8y ago
    Soybeans dont grow overnight. The us provides a outsized portion of soybeans for China, there is no short term alternative supplier. Most likely a interim buyer like Singapore or Australia will purchase the soybeans and sell them to china for a markup that's cheaper the the tariff.
- sfoblowsjose 8y ago
  "consumers can live without another 42in tv." So you think. Americans will rage if these taxes land on them. There will be hell to pay. Fuck with Americans TVs and iPads, we will go to war.
sheepmullet 8y ago
> and most of the economic opinions I read Have you read the economic opinion on income taxes? Hint: They also make markets less efficient. But nevertheless we think the trade off is worth it.

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.