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It's frustrating to see people say that we shouldn't fight Chinese economic imperialism, mercantilism, and protectionism because we should support free trade.

It's frustrating to see people say that we shouldn't fight Chinese economic imperialism, mercantilism, and protectionism because we should support free trade. Free trade is a two way street. If a trading partner is engaging in unfair practices then it's reasonable to support sanctions and tariffs and other means to get them to stop, even if you're a free trade supporter. In fact this is the whole premise of the WTO, which supports free trade. If you don't engage in free trade, you get slapped with tariffs.

seanmcdirmid 7y ago
If your trade partner isn’t practicing as much free trade as you are, but you are still making money on trade hand over fist, then it isn’t very much in your interest to fight what is still a golden goose to you. The only reason this fight has come at all is because of a bunch of displaced factory workers (and areas that did manufacturing) that have been hurt by this trade, and their government had failed to redistribute any of the eggs from the golden goose to them.
- yourapostasy 7y ago
  > The only reason this fight has come at all is because of a bunch of displaced factory workers (and areas that did manufacturing) that have been hurt by this trade... As a layperson watching from the sidelines in the software world, but fascinated by welding, electrical/electronics, mechanical engineering, CNC, machining, etc., it is incomprehensible to me why US business leaders would so willingly cede manufacturing to competitors (Chinese in this thread's context, but could be anyone really, even within the same nation). As a dilettante, I'm seeing parallels in manufacturing to what I experience in software, but maybe I'm just not seeing what those leaders see, so perhaps someone can help clear up my misunderstanding. To think you can divorce yourself cleanly from manufacturing and adopt a "throw it over the fence" mentality, and expect to maintain industry leadership, seems to me as misguided as thinking you can divorce yourself from coding and operational support as a software company, "throw it over the fence", and expect to stay a software leader. That might work for one or three iterations of product lifecycles over a few decades, but there are crucial insights into customer needs and market directions that come about from knowing about what those trenches deal with, that disappear in the fenced-off abstraction layer. You gradually disconnect from your market, your sales and marketing teams lose a critically-grounded, no-bullshit feedback loop from those areas, you lose understanding of the complexities to properly analyze the business problems, you lose metrics those areas gather to inform sales and marketing analytics. Maybe all those factors simply don't matter, or I'm simply wrong about them being factors at all in manufacturing business? In which case, I put on my value investor's hat and ask, what precisely is the defensible moat about giving up in-house manufacturing knowledge (and often accompanying core support functions) and only specializing in design, sales, and marketing for a manufacturer? I've never been able to figure that one out, either. Seems to me in-house manufacturing secrets are easier to come up with (see Japanese electrolytic caps) and protect than this year's trends and important customer segments, but again, I'm just a layperson, so I'm just left wondering what I'm missing.
  - zepto 7y ago
    You aren’t wrong at all. It’s just that it was in the short term advantage of a bunch of managers to adopt this mentality at the expense of the long term health of the economy.
  - seanmcdirmid 7y ago
    They didn’t abandon all manufacturing, just low level unskilled dirty manufacturing. American business people were happy to up the value chain to more technical stuff as well as more technical services. And actually, we have to move up this value chain anyways to justify our higher standard of living. America still has a lock on a lot of technical know how that will take the Chinese decades to replicate (eg semi conductor and jet turbine production).
    - remarkEon 7y ago
      >And actually, we have to move up this value chain anyways to justify our higher standard of living. This is the part that makes absolutely no sense to me. The farther you move up this value chain, the fewer and fewer people you can find that can actually do those jobs. They require advanced degrees and highly technical specialization and experience. Not everyone can do that. Unless you have a parallel plan to, perhaps magically, mint more and more PhDs every year what is everyone else supposed to do who was just a "low level unskilled dirty manufacturing" worker? >American business people were happy to... You're sure right about that! I think what people are questioning is if, as a state and society, that was a long-term good strategic choice. For the bottomline it absolutely was - for those businessmen and their company's earnings reports.
      - seanmcdirmid 7y ago
        > The farther you move up this value chain, the fewer and fewer people you can find that can actually do those jobs. Yep. But that is a problem better solved via some kind of wealth redistribution, rather than maintaining low value jobs that couldn’t pay enough to keep up anyways. China was just the first thing to suck away low value jobs, eventually automation will be much much worse.
baby 7y ago
Tariffs are totally parts of trading, it’s negotiation on a different layer.
bigYahnz 7y ago
It is a bit beyond frustrating. More like infuriating.
Merrill 7y ago
Free trade works so long as you are the economic hegemon. After the Napoleonic Wars, Britain was the strongest economic power and championed free trade until the 1870s. Then German and French manufacturing, US and Argentinian agriculture competed favorably with British manufacturers and landowners and free trade was not so popular in the run up to WW I. Similarly, after WW II, the US was dominant and free trade served us well. However, as other nations develop their competitive advantages, free trade is not so popular in the US.
- gurumeditations 7y ago
  If that were true, the US would treat Europe as even bigger an enemy than China.
  - Merrill 7y ago
    The U.S. goods and services trade deficit with the EU was $109 billion in 2018. The U.S. goods and services trade deficit with China was $378.6 billion in 2018.
  - Faark 7y ago
    The US certainly has little interest on a strong united EU. But there are a lot more factors at play. Like having military bases there. And generally a lot more soft power / cultural influence. Still, do you remember the US announcing tariffs on car imports?
  - boomboomsubban 7y ago
    The US has used groups like NATO and the G7 to ensure that no European power would challenge US hegemony.
    - sangnoir 7y ago
      The UK has long[1] been seen as the America's cat's paw/poodle in the EU[2] - which is why some in the EU are of the idea that Brexit's silver lining is the end of British obstructionism. 1. https://www.independent.co.uk/news/is-the-prime-minister-a-partner-or-a-poodle-1193543.html https://www.independent.co.uk/news/is-the-prime-minister-a-p... 2. https://www.economist.com/bagehots-notebook/2010/07/23/britain-americas-trojan-poodle-in-europe https://www.economist.com/bagehots-notebook/2010/07/23/brita...
deleted 7y ago
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seanmcdirmid 7y ago

If your trade partner isn’t practicing as much free trade as you are, but you are still making money on trade hand over fist, then it isn’t very much in your interest to fight what is still a golden goose to you. The only reason this fight has come at all is because of a bunch of displaced factory workers (and areas that did manufacturing) that have been hurt by this trade, and their government had failed to redistribute any of the eggs from the golden goose to them.

yourapostasy 7y ago
> The only reason this fight has come at all is because of a bunch of displaced factory workers (and areas that did manufacturing) that have been hurt by this trade... As a layperson watching from the sidelines in the software world, but fascinated by welding, electrical/electronics, mechanical engineering, CNC, machining, etc., it is incomprehensible to me why US business leaders would so willingly cede manufacturing to competitors (Chinese in this thread's context, but could be anyone really, even within the same nation). As a dilettante, I'm seeing parallels in manufacturing to what I experience in software, but maybe I'm just not seeing what those leaders see, so perhaps someone can help clear up my misunderstanding. To think you can divorce yourself cleanly from manufacturing and adopt a "throw it over the fence" mentality, and expect to maintain industry leadership, seems to me as misguided as thinking you can divorce yourself from coding and operational support as a software company, "throw it over the fence", and expect to stay a software leader. That might work for one or three iterations of product lifecycles over a few decades, but there are crucial insights into customer needs and market directions that come about from knowing about what those trenches deal with, that disappear in the fenced-off abstraction layer. You gradually disconnect from your market, your sales and marketing teams lose a critically-grounded, no-bullshit feedback loop from those areas, you lose understanding of the complexities to properly analyze the business problems, you lose metrics those areas gather to inform sales and marketing analytics. Maybe all those factors simply don't matter, or I'm simply wrong about them being factors at all in manufacturing business? In which case, I put on my value investor's hat and ask, what precisely is the defensible moat about giving up in-house manufacturing knowledge (and often accompanying core support functions) and only specializing in design, sales, and marketing for a manufacturer? I've never been able to figure that one out, either. Seems to me in-house manufacturing secrets are easier to come up with (see Japanese electrolytic caps) and protect than this year's trends and important customer segments, but again, I'm just a layperson, so I'm just left wondering what I'm missing.
- zepto 7y ago
  You aren’t wrong at all. It’s just that it was in the short term advantage of a bunch of managers to adopt this mentality at the expense of the long term health of the economy.
- seanmcdirmid 7y ago
  They didn’t abandon all manufacturing, just low level unskilled dirty manufacturing. American business people were happy to up the value chain to more technical stuff as well as more technical services. And actually, we have to move up this value chain anyways to justify our higher standard of living. America still has a lock on a lot of technical know how that will take the Chinese decades to replicate (eg semi conductor and jet turbine production).
  - remarkEon 7y ago
    >And actually, we have to move up this value chain anyways to justify our higher standard of living. This is the part that makes absolutely no sense to me. The farther you move up this value chain, the fewer and fewer people you can find that can actually do those jobs. They require advanced degrees and highly technical specialization and experience. Not everyone can do that. Unless you have a parallel plan to, perhaps magically, mint more and more PhDs every year what is everyone else supposed to do who was just a "low level unskilled dirty manufacturing" worker? >American business people were happy to... You're sure right about that! I think what people are questioning is if, as a state and society, that was a long-term good strategic choice. For the bottomline it absolutely was - for those businessmen and their company's earnings reports.
    - seanmcdirmid 7y ago
      > The farther you move up this value chain, the fewer and fewer people you can find that can actually do those jobs. Yep. But that is a problem better solved via some kind of wealth redistribution, rather than maintaining low value jobs that couldn’t pay enough to keep up anyways. China was just the first thing to suck away low value jobs, eventually automation will be much much worse.

baby 7y ago

Tariffs are totally parts of trading, it’s negotiation on a different layer.

bigYahnz 7y ago

It is a bit beyond frustrating. More like infuriating.

Merrill 7y ago

Free trade works so long as you are the economic hegemon. After the Napoleonic Wars, Britain was the strongest economic power and championed free trade until the 1870s. Then German and French manufacturing, US and Argentinian agriculture competed favorably with British manufacturers and landowners and free trade was not so popular in the run up to WW I. Similarly, after WW II, the US was dominant and free trade served us well. However, as other nations develop their competitive advantages, free trade is not so popular in the US.

gurumeditations 7y ago
If that were true, the US would treat Europe as even bigger an enemy than China.
- Merrill 7y ago
  The U.S. goods and services trade deficit with the EU was $109 billion in 2018. The U.S. goods and services trade deficit with China was $378.6 billion in 2018.
- Faark 7y ago
  The US certainly has little interest on a strong united EU. But there are a lot more factors at play. Like having military bases there. And generally a lot more soft power / cultural influence. Still, do you remember the US announcing tariffs on car imports?
- boomboomsubban 7y ago
  The US has used groups like NATO and the G7 to ensure that no European power would challenge US hegemony.
  - sangnoir 7y ago
    The UK has long[1] been seen as the America's cat's paw/poodle in the EU[2] - which is why some in the EU are of the idea that Brexit's silver lining is the end of British obstructionism. 1. https://www.independent.co.uk/news/is-the-prime-minister-a-partner-or-a-poodle-1193543.html https://www.independent.co.uk/news/is-the-prime-minister-a-p... 2. https://www.economist.com/bagehots-notebook/2010/07/23/britain-americas-trojan-poodle-in-europe https://www.economist.com/bagehots-notebook/2010/07/23/brita...

deleted 7y ago

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