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The US would need to implement tarrifs of several hundred percent to make a difference. A 20% tariff China can just make a small change to the price of their c

by gscott 8y ago

The US would need to implement tarrifs of several hundred percent to make a difference. A 20% tariff China can just make a small change to the price of their currency and ride it out. An article today has a quote from Jack Ma that he thinks this trade war will last 20 years. https://markets.businessinsider.com/news/stocks/alibaba-stock-price-jack-ma-trade-war-could-last-20-years-2018-9-1027543478 https://markets.businessinsider.com/news/stocks/alibaba-stoc...

wahern 8y ago
It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether. U.S. conservatives love bilateral trade deals, but that's only because most trade occurs through the WTO system, making bilateral negotiations tractable. If either the U.S. or China lost the benefit of the WTO system, they would be indisputably worse off. So would everybody else. But in any event the end game will be resolved, for better or worse, long before 20 years is up. If there's still a dispute raging in 20 years then the next 20 years will be filled with economic and political strife much like those of the 20th century.
- bhouston 8y ago
  Trump could easily destory the wto or declare it irrelevant to the us. Similar to his reaction to the icj.
  - wahern 8y ago
    Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. And in any event, the U.S. doesn't dispute the usefulness of the ICJ or its jurisdiction over other countries, it just disputes the usefulness of the U.S. being subject to ICJ jurisdiction. By contrast, the WTO deeply matters to the wealth and security of the U.S. economy. But much like NATO, Congress is willing to call Trump's bluff. [EDIT: I confused ICJ with ICC. My bad.]
    - 394549 8y ago
      > Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. Are you seriously claiming there would be a military coup in the US over something like that? The US has very strong taboos against military intervention in politics, much stronger than exist in many other countries. That you would make such a claim calls into question much that you've said about the US.
      - true_religion 8y ago
        From the US point of view, accepting the ICJ is giving up soverigty to its old colonial masters, and wartime enemies. It is not a palatable position.
      - deleted 8y ago
        [deleted]
      - wahern 8y ago
        I made a hyperbolic statement to emphasis that it's not politically viable. No, I don't think there'd be a coup. But I also think acceptance of ICC jurisdiction in the near future is about as likely as there being a coup. The military institutionally--the people that embody the military at the Pentagon, in Congress, in the White House, and elsewhere--would never allow it even if a majority of Americans were okay with it. ICJ (which I confused with the ICC earlier) is a little different because technically the U.S. has a veto as a member of the security council. Nonetheless, we only submit to ICJ jurisdiction on a case-by-case basis; which is to say, when we know we'll win or when we don't care one way or the other.
        gonvaled 8y ago
        Agree. I hope we also agree that this is extremely unfair, internationally speaking.
        wahern 8y ago
- nl 8y ago
  Trump wants an excuse to pull out of the WTO.
  - wahern 8y ago
    What Trump wants is "a win", which is an extremely subjective assessment on his part and doesn't even necessarily require any material change in position. Everything else is a means to that end, including the endless posturing and 1980s Wall Street-style hardball tactics.
    - nl 8y ago
      This is true. But additionally his inclination is against any kind of treaty or multinational body which doesn't involve immediate tribute paid to the US.
- 394549 8y ago
  > It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether. It probably can last that long. It will take years for a WTO tribunal to do its work, and even after the tribunal makes its ruling, there can be years more of foot-dragging. I can see all of that taking at least a decade.
JPKab 8y ago
China has deliberately manipulated the yuan for decades now. I first studied and modeled the manipulation while an undergrad in economics 15 years ago. It has helped them remain an export-driven economy, for good and bad. It's not a good move at this point in time. China needs desperately to increase domestic consumption. Manipulating the Yuan further will only lead to more wealth flight out of the country as citizens try to protect their wealth from devaluation.

by gscott 8y ago

wahern 8y ago

It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether. U.S. conservatives love bilateral trade deals, but that's only because most trade occurs through the WTO system, making bilateral negotiations tractable. If either the U.S. or China lost the benefit of the WTO system, they would be indisputably worse off. So would everybody else. But in any event the end game will be resolved, for better or worse, long before 20 years is up. If there's still a dispute raging in 20 years then the next 20 years will be filled with economic and political strife much like those of the 20th century.

bhouston 8y ago
Trump could easily destory the wto or declare it irrelevant to the us. Similar to his reaction to the icj.
- wahern 8y ago
  Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. And in any event, the U.S. doesn't dispute the usefulness of the ICJ or its jurisdiction over other countries, it just disputes the usefulness of the U.S. being subject to ICJ jurisdiction. By contrast, the WTO deeply matters to the wealth and security of the U.S. economy. But much like NATO, Congress is willing to call Trump's bluff. [EDIT: I confused ICJ with ICC. My bad.]
  - 394549 8y ago
    > Every president has declared the ICJ irrelevant. The Pentagon would send tanks to the White House if a President so much as hinted at accepting ICJ jurisdiction. Are you seriously claiming there would be a military coup in the US over something like that? The US has very strong taboos against military intervention in politics, much stronger than exist in many other countries. That you would make such a claim calls into question much that you've said about the US.
    - true_religion 8y ago
      From the US point of view, accepting the ICJ is giving up soverigty to its old colonial masters, and wartime enemies. It is not a palatable position.
    - deleted 8y ago
      [deleted]
    - wahern 8y ago
      I made a hyperbolic statement to emphasis that it's not politically viable. No, I don't think there'd be a coup. But I also think acceptance of ICC jurisdiction in the near future is about as likely as there being a coup. The military institutionally--the people that embody the military at the Pentagon, in Congress, in the White House, and elsewhere--would never allow it even if a majority of Americans were okay with it. ICJ (which I confused with the ICC earlier) is a little different because technically the U.S. has a veto as a member of the security council. Nonetheless, we only submit to ICJ jurisdiction on a case-by-case basis; which is to say, when we know we'll win or when we don't care one way or the other.
      - gonvaled 8y ago
        Agree. I hope we also agree that this is extremely unfair, internationally speaking.
        wahern 8y ago
nl 8y ago
Trump wants an excuse to pull out of the WTO.
- wahern 8y ago
  What Trump wants is "a win", which is an extremely subjective assessment on his part and doesn't even necessarily require any material change in position. Everything else is a means to that end, including the endless posturing and 1980s Wall Street-style hardball tactics.
  - nl 8y ago
    This is true. But additionally his inclination is against any kind of treaty or multinational body which doesn't involve immediate tribute paid to the US.
394549 8y ago
> It can't last that long. Eventually the disputes will reach a WTO tribunal, at which point both sides will either need to acquiesce, or risk going it alone outside the WTO system, or perhaps destroy the WTO altogether. It probably can last that long. It will take years for a WTO tribunal to do its work, and even after the tribunal makes its ruling, there can be years more of foot-dragging. I can see all of that taking at least a decade.

JPKab 8y ago

China has deliberately manipulated the yuan for decades now. I first studied and modeled the manipulation while an undergrad in economics 15 years ago. It has helped them remain an export-driven economy, for good and bad. It's not a good move at this point in time. China needs desperately to increase domestic consumption. Manipulating the Yuan further will only lead to more wealth flight out of the country as citizens try to protect their wealth from devaluation.