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China will quickly run out of American exports that they can selectively (politically) tariff. In fact, they will eventually run out of ANY goods that they can

by cdash 8y ago

China will quickly run out of American exports that they can selectively (politically) tariff. In fact, they will eventually run out of ANY goods that they can tariff that are not already already tariffed much before the US does due the huge trade imbalance.

NTDF9 8y ago
But the US has a trade surplus over China in Services exports into China. Presumably those will get tariffed. Also, US made products that relied on chinese intermediate products will go up in price, passed on to consumers. Those same US products will not be export competitive in other countries (because input costs increased with tariffs) and thus China can now export to places that US used to export to. Trade is not that simple and usually needs negotiations to be win-win.
- WillPostForFood 8y ago
  In 2017 the US had a $40 billion trade surplus in services, and a $375 billion trade deficit in goods.
- cinquemb 8y ago
  "Goods exports totaled $129.9 billion; goods imports totaled $505.5 billion. The U.S. goods trade deficit with China was $375.6 billion in 2017." "Trade in services with China (exports and imports) totaled an estimated $75.0 billion in 2017. Services exports were $57.6 billion; services imports were $17.4 billion. The U.S. services trade surplus with China was $40.2 billion in 2017."[0] Seems to be an order of magnitude of difference, setting aside possible tariff rates. [0] https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...
  - NTDF9 8y ago
    And after the tariffs what do you expect will happen to goods and services going from the US to China?
    - cinquemb 8y ago
      I expect prices to go up (across the board on such goods) in China, and US companies who are more price sensitive will get hit harder on their upcoming 10k's than others, predictably.
village-idiot 8y ago
It’s unclear to me how solid the Chinese economic position actually is. It’s possible that their high debt load will mean that they have to fold very quickly. On the other hand, as an authoritarian regime they can handle much more political pain. You have to hurt China badly enough for them to fear revolution before politics alone will break them. In the other direction, all China has to do is make republicans deeply unpopular before the next election. This would reinforce democratic chances, and increase the likelihood of Congress putting a stop to this whole trade war.
cannabisceo 8y ago
China has threatened to start export controls on raw materials used by US manufacturers. Three trade war is complex.
Slartie 8y ago
And the US will quickly run out of goods that they can selectively tariff that will not immediately and harshly hurt the broad public in a clearly visible way. You already see that in this recent round - Apple gadgets being exempted from the tax is not a random coincidence. The problem is: the entire US consumer population is addicted to electronics, and the only place where modern consumer electronics can be manufactured at scale today is China. Not because of cheap labor (there are actually way cheaper places today), but because the complex production chains necessary to even get all the parts to a single place for final assembly are all door-by-door in places like Shenzhen. Even if there was a serious intent to move these production chains to the US to escape tariffs, it will take multiple decades to do so and will require extremely high up-front investments. And nobody will start such an endeavor during a phase of special tariffs put in place by a president basically for personal reasons, without serious support even from his own party - a president that will eventually stumble over its own foolishness and thus probably not even reach the end of his theoretical 8-year "lifespan" (which, again, would not suffice when we're talking about a process that spans decades). So, effectively, the US presidents' capability to impose tariffs end when he arrives at consumer electronics goods. Because his reality distortion field is not capable of making his followers just accept prices of iPhones, Apple Watches, TVs and countless other "Made in China" gadgets to rise by 25%. The good thing about a bunch of mindless zealots on Twitter and Facebook is, after all, that they hugely depend on smartphones, computers and cheap plastic routers, and the good thing about Fox News addicts is that they can't watch Fox News without a TV set.
- cinquemb 8y ago
  Idk, I see it hard for there to be riots in the street because electronics go up a bit, unless one subscribes to the Jamie Dimon's train of thought: “‘It’s not right to say we’re worse off,’ Dimon said [last September 17] at an event in Detroit in response to a question about declining median income. ‘If you go back 20 years ago, cars were worse, health was worse, you didn’t live as long, the air was worse. People didn’t have iPhones.’”[0] Though I do see it being a bloodbath on the stock market (that significant portion of adults have 0 exposure to compared to the wealthy) if iPhones become non exempt, possibly a ringing bell for market top (ignoring that unit sales have already been declining since 2015) of this 10 year bull market and experiment with ZLB interest rates. [0] https://www.counterpunch.org/2016/01/29/let-them-eat-iphones/ https://www.counterpunch.org/2016/01/29/let-them-eat-iphones...

by cdash 8y ago

NTDF9 8y ago

But the US has a trade surplus over China in Services exports into China. Presumably those will get tariffed. Also, US made products that relied on chinese intermediate products will go up in price, passed on to consumers. Those same US products will not be export competitive in other countries (because input costs increased with tariffs) and thus China can now export to places that US used to export to. Trade is not that simple and usually needs negotiations to be win-win.

WillPostForFood 8y ago
In 2017 the US had a $40 billion trade surplus in services, and a $375 billion trade deficit in goods.
cinquemb 8y ago
"Goods exports totaled $129.9 billion; goods imports totaled $505.5 billion. The U.S. goods trade deficit with China was $375.6 billion in 2017." "Trade in services with China (exports and imports) totaled an estimated $75.0 billion in 2017. Services exports were $57.6 billion; services imports were $17.4 billion. The U.S. services trade surplus with China was $40.2 billion in 2017."[0] Seems to be an order of magnitude of difference, setting aside possible tariff rates. [0] https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republic-china https://ustr.gov/countries-regions/china-mongolia-taiwan/peo...
- NTDF9 8y ago
  And after the tariffs what do you expect will happen to goods and services going from the US to China?
  - cinquemb 8y ago
    I expect prices to go up (across the board on such goods) in China, and US companies who are more price sensitive will get hit harder on their upcoming 10k's than others, predictably.

village-idiot 8y ago

It’s unclear to me how solid the Chinese economic position actually is. It’s possible that their high debt load will mean that they have to fold very quickly. On the other hand, as an authoritarian regime they can handle much more political pain. You have to hurt China badly enough for them to fear revolution before politics alone will break them. In the other direction, all China has to do is make republicans deeply unpopular before the next election. This would reinforce democratic chances, and increase the likelihood of Congress putting a stop to this whole trade war.

cannabisceo 8y ago

China has threatened to start export controls on raw materials used by US manufacturers. Three trade war is complex.

Slartie 8y ago

And the US will quickly run out of goods that they can selectively tariff that will not immediately and harshly hurt the broad public in a clearly visible way. You already see that in this recent round - Apple gadgets being exempted from the tax is not a random coincidence. The problem is: the entire US consumer population is addicted to electronics, and the only place where modern consumer electronics can be manufactured at scale today is China. Not because of cheap labor (there are actually way cheaper places today), but because the complex production chains necessary to even get all the parts to a single place for final assembly are all door-by-door in places like Shenzhen. Even if there was a serious intent to move these production chains to the US to escape tariffs, it will take multiple decades to do so and will require extremely high up-front investments. And nobody will start such an endeavor during a phase of special tariffs put in place by a president basically for personal reasons, without serious support even from his own party - a president that will eventually stumble over its own foolishness and thus probably not even reach the end of his theoretical 8-year "lifespan" (which, again, would not suffice when we're talking about a process that spans decades). So, effectively, the US presidents' capability to impose tariffs end when he arrives at consumer electronics goods. Because his reality distortion field is not capable of making his followers just accept prices of iPhones, Apple Watches, TVs and countless other "Made in China" gadgets to rise by 25%. The good thing about a bunch of mindless zealots on Twitter and Facebook is, after all, that they hugely depend on smartphones, computers and cheap plastic routers, and the good thing about Fox News addicts is that they can't watch Fox News without a TV set.

cinquemb 8y ago
Idk, I see it hard for there to be riots in the street because electronics go up a bit, unless one subscribes to the Jamie Dimon's train of thought: “‘It’s not right to say we’re worse off,’ Dimon said [last September 17] at an event in Detroit in response to a question about declining median income. ‘If you go back 20 years ago, cars were worse, health was worse, you didn’t live as long, the air was worse. People didn’t have iPhones.’”[0] Though I do see it being a bloodbath on the stock market (that significant portion of adults have 0 exposure to compared to the wealthy) if iPhones become non exempt, possibly a ringing bell for market top (ignoring that unit sales have already been declining since 2015) of this 10 year bull market and experiment with ZLB interest rates. [0] https://www.counterpunch.org/2016/01/29/let-them-eat-iphones/ https://www.counterpunch.org/2016/01/29/let-them-eat-iphones...