4 ms·

The worst for China is that we block them from our markets. Which Trump is trying to do

MarkMc 7y ago
Even worse for China is if they are blocked from both US and EU markets. Like the US, Europe has found its IP and technology appropriated by China, so with the right strategy Trump might convince EU leaders to also take a hard line against China. Unfortunately Trump's world view doesn't allow for such a strategy.
- makomk 7y ago
  The big obstacle to this strategy isn't Trump's world view, it's the structure of the EU itself. They just haven't been able to agree on a hard line against any kind of Chinese trade abuses. This has been a problem since well before Trump was elected.
krak12 7y ago
Let’s do it
User23 7y ago
China’s economy is very dependent on foreign markets, both for exports of its manufactured goods and for acquiring the commodities needed for that. Their currency peg further limits their options. If they go too low commodities become unaffordable and if they go too high exports lose competitiveness.
- phkahler 7y ago
  And some manufacturing jobs come back to the U.S.
  - mdorazio 7y ago
    Not likely. When manufacturing comes back to the US it's because the company calculated the cost of a US-based automated factory was less than the shipping + tariffs on the foreign-produced goods. If manual labor jobs leave China, they will go to other low-cost countries like Malaysia, Vietnam, etc. or be lost forever. Even producing things in Mexico can cut your labor cost in half in comparison to producing here.
    - WillPostForFood 7y ago
      An automated factory in the US is more US jobs than a factory in China. It is a net positive even though you don't get all the jobs back.
      - User23 7y ago
        More importantly it's a strategic positive. Productive capacity is defense capacity. Buying gewgaws, knickknacks, and flipflops from a strategic competitor is one thing, buying defense technology is another, and it's not the path to security.
      - nearbuy 7y ago
        It could mean more US jobs, but it could also mean fewer if you look more broadly. Say US companies are having PCBs manufactured in China because that's currently the cheapest option. You cut off that option and US companies are forced use more expensive domestic options. The effects of that can ripple through US companies that directly or indirectly depend on PCBs, and the jobs lost throughout the economy could be greater than the jobs gained from the new automated factories.
      - mr_toad 7y ago
        The gains by US producers will be outweighed by losses to US consumers. https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss In addition, much of the gain will accrue to a smaller number of business owners, while the losses will be spread across the wider public. Inevitably, those in control will manipulate the situation to their own advantage.
    - ianai 7y ago
      Exactly. They wouldn’t go from China to the US. They’d go from China to somewhere closer to the economic factors of China - India, Brazil, etc
      - User23 7y ago
        That's the point. It's strategically and economically superior for the US to depend on {South Korea, Japan, Vietnam, Thailand, India, the Philippines, Brazil,...} for 600 billion in imports than to depend entirely on {China} for them. Edit: Lol I shouldn't have posted this during Chinese lunch hour :X

Even worse for China is if they are blocked from both US and EU markets. Like the US, Europe has found its IP and technology appropriated by China, so with the right strategy Trump might convince EU leaders to also take a hard line against China. Unfortunately Trump's world view doesn't allow for such a strategy.

makomk 7y ago
The big obstacle to this strategy isn't Trump's world view, it's the structure of the EU itself. They just haven't been able to agree on a hard line against any kind of Chinese trade abuses. This has been a problem since well before Trump was elected.

krak12 7y ago

Let’s do it

User23 7y ago

China’s economy is very dependent on foreign markets, both for exports of its manufactured goods and for acquiring the commodities needed for that. Their currency peg further limits their options. If they go too low commodities become unaffordable and if they go too high exports lose competitiveness.

phkahler 7y ago
And some manufacturing jobs come back to the U.S.
- mdorazio 7y ago
  Not likely. When manufacturing comes back to the US it's because the company calculated the cost of a US-based automated factory was less than the shipping + tariffs on the foreign-produced goods. If manual labor jobs leave China, they will go to other low-cost countries like Malaysia, Vietnam, etc. or be lost forever. Even producing things in Mexico can cut your labor cost in half in comparison to producing here.
  - WillPostForFood 7y ago
    An automated factory in the US is more US jobs than a factory in China. It is a net positive even though you don't get all the jobs back.
    - User23 7y ago
      More importantly it's a strategic positive. Productive capacity is defense capacity. Buying gewgaws, knickknacks, and flipflops from a strategic competitor is one thing, buying defense technology is another, and it's not the path to security.
    - nearbuy 7y ago
      It could mean more US jobs, but it could also mean fewer if you look more broadly. Say US companies are having PCBs manufactured in China because that's currently the cheapest option. You cut off that option and US companies are forced use more expensive domestic options. The effects of that can ripple through US companies that directly or indirectly depend on PCBs, and the jobs lost throughout the economy could be greater than the jobs gained from the new automated factories.
    - mr_toad 7y ago
      The gains by US producers will be outweighed by losses to US consumers. https://en.wikipedia.org/wiki/Deadweight_loss https://en.wikipedia.org/wiki/Deadweight_loss In addition, much of the gain will accrue to a smaller number of business owners, while the losses will be spread across the wider public. Inevitably, those in control will manipulate the situation to their own advantage.
  - ianai 7y ago
    Exactly. They wouldn’t go from China to the US. They’d go from China to somewhere closer to the economic factors of China - India, Brazil, etc
    - User23 7y ago
      That's the point. It's strategically and economically superior for the US to depend on {South Korea, Japan, Vietnam, Thailand, India, the Philippines, Brazil,...} for 600 billion in imports than to depend entirely on {China} for them. Edit: Lol I shouldn't have posted this during Chinese lunch hour :X