7 ms·

This is bad for the whole world and reduces the efficiency of the global machine. Now countries have to explore more expensive mines to make up for the demand w

This is bad for the whole world and reduces the efficiency of the global machine. Now countries have to explore more expensive mines to make up for the demand which could have easily been avoided. It feels like someone is dialing back the productivity of the entire world.

fastball 7y ago
Unfortunately the global machine only works well if the parts are working together for the greater good in the first place, which is not a given.
- simonh 7y ago
  One country benefiting more from trade than another isn't the same thing as the other country being worse off because of the trade. They're just not as much better off as they could have been. The goal of these disputes should be to reach a more equitable trading arrangement, not to stop or restrict trade that is 'harming' countries[1]. The Idea that the US is 'losing' due to the trade deficit and that reducing trade with China will benefit America is utter tosh and even the administration's own trade advisers and negotiators are saying so (a bit more politely). [1] There are some narrow cases where trade can be harmful, or where national interest could legitimately be served by restricting trade, but that excuse is being used vastly disproportionately in the current disputes.
  - NotPaidToPost 7y ago
    There is nothing inequitable in the current trade arrangements that were set by the West. The US and the West have benefited massively, and still are. That line is just spin repeated again and again until people accept it without questions. The actual issue for the US is the rise of China as a global power that does not answer to them.
    - simonh 7y ago
      By and large you're mostly right. There are some inequities in the way China treats foreign firms though. Completely blocking all the main US web technology firms for example. However I don't think the harm being done to the US economy by the trade war is worth the benefits to be gained, even though there may be some benefits.
      - NotPaidToPost 7y ago
        > Completely blocking all the main US web technology firms for example That's a question of being willing to comply with Chinese contents-control requirements rather than trade per se. And if they comply they face a huge public opinion backlash in the US... At the same time, it is understandable that a developing country try to develop its own companies rather than handed its market to US companies... Level playing field and all that ;)
        fastball 7y ago
        China literally steals tech from US businesses, mass produces it, and then undercuts the US companies that they stole the tech from in the US market. Get outta here with your "China can do nothing wrong".
        NotPaidToPost 7y ago
        Not literally "steals"... It's not possible to "literally steals" tech.
        fastball 7y ago
        What else would you call sending in people to illicitly copy data and designs under false pretenses?
  - pytester 7y ago
    >The Idea that the US is 'losing' due to the trade deficit and that reducing trade with China will benefit America is utter tosh and even the administration's own trade advisers and negotiators are saying so (a bit more politely). The problem isn't so much the deficit as it is the way the US has been seduced into relying upon the Chinese industrial machine. The US industrial base has been depleting for decades. This presents a serious systemic risk - the US relies more and more on Chinese industry which can (and probably will, at some point) be cut off. This will result in massive inflation. In (neoclassical) theory getting cut off isn't a problem because the market will simply bring all of that industry back to the United States. In practice, the flow of goods can be cut off overnight but an industrial base on a par with the pearl river delta would take at least two decades to build.
    - oblio 7y ago
      The "depleting" US industrial base is producing 2x what it was producing in 1990: https://fred.stlouisfed.org/series/INDPRO https://fred.stlouisfed.org/series/INDPRO :) Which is pretty good growth, all things considered. Mini-rant, feel free to ignore: The alternative perspective which assumes total US industrial domination up to the present day (MAGA/Trump) is quite irrational considering world history: the US had almost no real industrial competition post-WW2 when all the other industrialized countries were either: * shattered by wars in their homelands * or completely cut-off from the rest of the world for 50 years... So the industrial prowess of the US 1950 - 1970 (relative to the rest of the world) isn't coming back, now we're just headed for a normal equilibrium. One in which the US is still doing quite well from an industrial point of view.
      - simonh 7y ago
        Production is up, but jobs are down to about half as much as a proportion of the population, and by about a third in real terms. But then unemployment is quite low right now and there are plenty of un-filled jobs. Pay for low wage earners has seen some encouraging gains over the last few years. It's not clear the US actually needs a huge boost in manufacturing jobs. Historically, attempts to preserve or boost jobs artificially through trade manipulations have had limited success at massively disproportionate costs. Anyway in absolute terms manufacturing jobs aren't exactly low, it's at about the same level as in 1949.
  - fastball 7y ago
    China literally steals IP from US businesses and uses the fact that they had no R&D costs and cheaper production to then sell those "stolen" products back to the US, undercutting the US businesses that invented the IP. This is not a "neutral" behavior. And this is different from the past when "every country stole ideas" because in those other instances the "thief countries" weren't generally trading those products with their target. It's fine to steal ideas if you use it to make your own country better. It's not fine to steal things which you then use to undercut the people you stole from.
- tgsovlerkhgsel 7y ago
  > if the parts are working together for the greater good No, it also works surprisingly well if everyone is acting rationally but purely optimizing for self-interest.
  - stareatgoats 7y ago
    The question is if it works well in all relevant aspects and not only some. I believe a fair investigation would reveal a little of both well and bad to everyone except the most die-hard ideological laissez-faire purist. One such relevant negative aspect of all-out competition is that trade wars between superpowers backed by massive nuclear arsenals poses not only a risk to the world economy but also to our survival as a civilization if not species. Working together for the common good seems indeed preferable in this case.
onetimemanytime 7y ago
The idea is /was to renegotiate and than go back to "free trade." Put your seat-belts on
- pishpash 7y ago
  Nah, this is opiate laden, somewhat luddite Middle America lashing out at the world via proxy, conveniently skipping over the people who really screwed them over.
- fauigerzigerk 7y ago
  I understand the concept of breaking the rules in order to create momentum for changing them - and I agree with _some_ of the changes Trump demands. But if trust in the effectiveness and enforceability of rules is eroded by nationalist bluster and unreasonable demands (e.g balanced current accounts) then there will be nothing left to go back to. It will just be power politics forever, and that will degrade the world's economic strength and increase the risk of war.
mtgx 7y ago
Or maybe the rest of the world will have to innovate around the solution and no longer need the rare earths.
- killjoywashere 7y ago
  pretty sure the roads of technological innovation will, over time, lead to more rare earth usage, not less. Those electron orbitals are just too fancy to walk away from. The Critical Materials Institute may be officially interested in inventing methods that don't require lanthanides, but you can't invent new orbital configurations. I mean, you can try, good luck with that. Let me know how it works out.
cm2187 7y ago
My understanding of the reason why the mines are more expensive in the US is because some of the minerals extracted along rare earth materials are very slightly radioactive, but enough to trigger US nuclear regulations, which makes mining uneconomical. It could probably be solved with more sensible regulations.
- Animats 7y ago
  Where did that come from? The big problem with rare earth mines is huge tailings ponds.[1][2] Mountain Pass CA has a reasonably clean process. Even the Sierra Club approved. Molycorp built the current plant, but once they got going, China cut the price of rare earth metals. Then, once Molycorp went bankrupt, the price from China went up.[3] [1] http://www.bbc.com/future/story/20150402-the-worst-place-on-earth http://www.bbc.com/future/story/20150402-the-worst-place-on-... [2] https://www.google.com/maps/@40.6383411,109.6903271,3872m/data=!3m1!1e3?hl=en-US https://www.google.com/maps/@40.6383411,109.6903271,3872m/da... [3] https://seekingalpha.com/article/4184580-new-china-rare-earth-embargo-damage-several-u-s-companies-technology-competitiveness https://seekingalpha.com/article/4184580-new-china-rare-eart...
programmarchy 7y ago
The global supply chain is fragile, energy inefficient, and exploitative. Why place “productivity” above all else?
- varshithr 7y ago
  I thought efficiency, economies of scale and productivity were the points for establishing a global supply chain. Consider containerization, large ships for transport - the cost of transportation is next to nothing. Take iPhone for example, do you think it would cost less if it was manufactured entirely in the USA (down to the components)? I would love to hear a counter-argument or example. Thanks.
  - programmarchy 7y ago
    But why optimize for how many dollars something costs? The primary reason shipping goods like iPhones across the ocean appears cost efficient is due to exploiting cheap labor. We could lower the minimum wage, eliminate worker protections, or institute slavery to drive down costs, too. It’s not moral because it happens somewhere else. And cargo ships are large sources of pollution and have substantial tax privileges; the costs are externalized. Tangentially, if you read the “There’s Too Much Stuff” article that was recently on the front page, there’s plenty of cheap junk I’d love to see priced out of existence. Anyway, the deeper issues we have are not likely to be solved by global trade and cheaper goods. There are other factors which I’d argue are more important.

fastball 7y ago

Unfortunately the global machine only works well if the parts are working together for the greater good in the first place, which is not a given.

simonh 7y ago
One country benefiting more from trade than another isn't the same thing as the other country being worse off because of the trade. They're just not as much better off as they could have been. The goal of these disputes should be to reach a more equitable trading arrangement, not to stop or restrict trade that is 'harming' countries[1]. The Idea that the US is 'losing' due to the trade deficit and that reducing trade with China will benefit America is utter tosh and even the administration's own trade advisers and negotiators are saying so (a bit more politely). [1] There are some narrow cases where trade can be harmful, or where national interest could legitimately be served by restricting trade, but that excuse is being used vastly disproportionately in the current disputes.
- NotPaidToPost 7y ago
  There is nothing inequitable in the current trade arrangements that were set by the West. The US and the West have benefited massively, and still are. That line is just spin repeated again and again until people accept it without questions. The actual issue for the US is the rise of China as a global power that does not answer to them.
  - simonh 7y ago
    By and large you're mostly right. There are some inequities in the way China treats foreign firms though. Completely blocking all the main US web technology firms for example. However I don't think the harm being done to the US economy by the trade war is worth the benefits to be gained, even though there may be some benefits.
    - NotPaidToPost 7y ago
      > Completely blocking all the main US web technology firms for example That's a question of being willing to comply with Chinese contents-control requirements rather than trade per se. And if they comply they face a huge public opinion backlash in the US... At the same time, it is understandable that a developing country try to develop its own companies rather than handed its market to US companies... Level playing field and all that ;)
      - fastball 7y ago
        China literally steals tech from US businesses, mass produces it, and then undercuts the US companies that they stole the tech from in the US market. Get outta here with your "China can do nothing wrong".
        NotPaidToPost 7y ago
        Not literally "steals"... It's not possible to "literally steals" tech.
        fastball 7y ago
        What else would you call sending in people to illicitly copy data and designs under false pretenses?
- pytester 7y ago
  >The Idea that the US is 'losing' due to the trade deficit and that reducing trade with China will benefit America is utter tosh and even the administration's own trade advisers and negotiators are saying so (a bit more politely). The problem isn't so much the deficit as it is the way the US has been seduced into relying upon the Chinese industrial machine. The US industrial base has been depleting for decades. This presents a serious systemic risk - the US relies more and more on Chinese industry which can (and probably will, at some point) be cut off. This will result in massive inflation. In (neoclassical) theory getting cut off isn't a problem because the market will simply bring all of that industry back to the United States. In practice, the flow of goods can be cut off overnight but an industrial base on a par with the pearl river delta would take at least two decades to build.
  - oblio 7y ago
    The "depleting" US industrial base is producing 2x what it was producing in 1990: https://fred.stlouisfed.org/series/INDPRO https://fred.stlouisfed.org/series/INDPRO :) Which is pretty good growth, all things considered. Mini-rant, feel free to ignore: The alternative perspective which assumes total US industrial domination up to the present day (MAGA/Trump) is quite irrational considering world history: the US had almost no real industrial competition post-WW2 when all the other industrialized countries were either: * shattered by wars in their homelands * or completely cut-off from the rest of the world for 50 years... So the industrial prowess of the US 1950 - 1970 (relative to the rest of the world) isn't coming back, now we're just headed for a normal equilibrium. One in which the US is still doing quite well from an industrial point of view.
    - simonh 7y ago
      Production is up, but jobs are down to about half as much as a proportion of the population, and by about a third in real terms. But then unemployment is quite low right now and there are plenty of un-filled jobs. Pay for low wage earners has seen some encouraging gains over the last few years. It's not clear the US actually needs a huge boost in manufacturing jobs. Historically, attempts to preserve or boost jobs artificially through trade manipulations have had limited success at massively disproportionate costs. Anyway in absolute terms manufacturing jobs aren't exactly low, it's at about the same level as in 1949.
- fastball 7y ago
  China literally steals IP from US businesses and uses the fact that they had no R&D costs and cheaper production to then sell those "stolen" products back to the US, undercutting the US businesses that invented the IP. This is not a "neutral" behavior. And this is different from the past when "every country stole ideas" because in those other instances the "thief countries" weren't generally trading those products with their target. It's fine to steal ideas if you use it to make your own country better. It's not fine to steal things which you then use to undercut the people you stole from.
tgsovlerkhgsel 7y ago
> if the parts are working together for the greater good No, it also works surprisingly well if everyone is acting rationally but purely optimizing for self-interest.
- stareatgoats 7y ago
  The question is if it works well in all relevant aspects and not only some. I believe a fair investigation would reveal a little of both well and bad to everyone except the most die-hard ideological laissez-faire purist. One such relevant negative aspect of all-out competition is that trade wars between superpowers backed by massive nuclear arsenals poses not only a risk to the world economy but also to our survival as a civilization if not species. Working together for the common good seems indeed preferable in this case.

onetimemanytime 7y ago

The idea is /was to renegotiate and than go back to "free trade." Put your seat-belts on

pishpash 7y ago
Nah, this is opiate laden, somewhat luddite Middle America lashing out at the world via proxy, conveniently skipping over the people who really screwed them over.
fauigerzigerk 7y ago
I understand the concept of breaking the rules in order to create momentum for changing them - and I agree with _some_ of the changes Trump demands. But if trust in the effectiveness and enforceability of rules is eroded by nationalist bluster and unreasonable demands (e.g balanced current accounts) then there will be nothing left to go back to. It will just be power politics forever, and that will degrade the world's economic strength and increase the risk of war.

mtgx 7y ago

Or maybe the rest of the world will have to innovate around the solution and no longer need the rare earths.

killjoywashere 7y ago
pretty sure the roads of technological innovation will, over time, lead to more rare earth usage, not less. Those electron orbitals are just too fancy to walk away from. The Critical Materials Institute may be officially interested in inventing methods that don't require lanthanides, but you can't invent new orbital configurations. I mean, you can try, good luck with that. Let me know how it works out.

cm2187 7y ago

My understanding of the reason why the mines are more expensive in the US is because some of the minerals extracted along rare earth materials are very slightly radioactive, but enough to trigger US nuclear regulations, which makes mining uneconomical. It could probably be solved with more sensible regulations.

Animats 7y ago
Where did that come from? The big problem with rare earth mines is huge tailings ponds.[1][2] Mountain Pass CA has a reasonably clean process. Even the Sierra Club approved. Molycorp built the current plant, but once they got going, China cut the price of rare earth metals. Then, once Molycorp went bankrupt, the price from China went up.[3] [1] http://www.bbc.com/future/story/20150402-the-worst-place-on-earth http://www.bbc.com/future/story/20150402-the-worst-place-on-... [2] https://www.google.com/maps/@40.6383411,109.6903271,3872m/data=!3m1!1e3?hl=en-US https://www.google.com/maps/@40.6383411,109.6903271,3872m/da... [3] https://seekingalpha.com/article/4184580-new-china-rare-earth-embargo-damage-several-u-s-companies-technology-competitiveness https://seekingalpha.com/article/4184580-new-china-rare-eart...

programmarchy 7y ago

The global supply chain is fragile, energy inefficient, and exploitative. Why place “productivity” above all else?

varshithr 7y ago
I thought efficiency, economies of scale and productivity were the points for establishing a global supply chain. Consider containerization, large ships for transport - the cost of transportation is next to nothing. Take iPhone for example, do you think it would cost less if it was manufactured entirely in the USA (down to the components)? I would love to hear a counter-argument or example. Thanks.
- programmarchy 7y ago
  But why optimize for how many dollars something costs? The primary reason shipping goods like iPhones across the ocean appears cost efficient is due to exploiting cheap labor. We could lower the minimum wage, eliminate worker protections, or institute slavery to drive down costs, too. It’s not moral because it happens somewhere else. And cargo ships are large sources of pollution and have substantial tax privileges; the costs are externalized. Tangentially, if you read the “There’s Too Much Stuff” article that was recently on the front page, there’s plenty of cheap junk I’d love to see priced out of existence. Anyway, the deeper issues we have are not likely to be solved by global trade and cheaper goods. There are other factors which I’d argue are more important.