12 ms·

China Has Gotten the Trade War It Deserves

20 points by 2OEH8eoCRo0 2y ago

talldayo 2y ago
Yep. Much to the chagrin of the opportunist free-world, we've been heading down this path for years. It's hard to say China isn't the aggressor here though; their treatment of American intellectual property has justified tariffs for decades at this point. So where do we draw the line, why shouldn't we get political with it? The apologists seem to say that a free nation can't counter authoritarian action, but when a trade bill targeting China gets popular appeal they say it's an unfair double-standard. The only thing they support is keeping things the same, which is how China best reaps our rewards. Yes, you're going to feel this in your 401k and your iPhones and Xboxes will get more expensive. Chinese manufacturing is the albatross yoked around America's neck; the sooner we address the problem the sooner we can recover from our mistake.
legitster 2y ago
The dumb thing about this was we had a better solution: the TPP. The whole point was to band every single trading partner and rival of China into a trade alliance against it. It would have had way more juice behind it, come at a time before things like EV subsidies, and wouldn't have directly cost American consumers anything!
tuatoru 2y ago
I gues we can thank Putin for making Western governments finally realise that maintaining their own manufacturing capacity is vitally important. It only took thirty years, for something that was obvious in 1990.
retox 2y ago
Also from The Atlantic >Rather, tariffs fall on the American importers of Chinese goods, who often pass those cost increases onto American consumers. That means every time Trump raises tariffs, he risks raising costs on families and businesses. https://archive.is/vS1iF#selection-837.175-837.395 https://archive.is/vS1iF#selection-837.175-837.395
- badhackernews 2y ago
  [dead]
nanotuber 2y ago
I was looking into this the other day. China's subsidies for BYD amounted to approximately a $1k subsidy per electric vehicle (not counting battery subsidy, looking for numbers). America subsidizes electric vehicles up to $7.5k per electric vehicle in tax credits and 1.5k/vehicle in regulatory carbon credits (not counting battery subsidy, looking for numbers). I'm trying to believe the story that subsidization is creating unfair competition. But right now the Chinese Foreign Ministry explanation of comparative advantage looks more consistent with the numbers?
- legitster 2y ago
  Different subsidies. BYD received billions of dollars in funding grants from the Chinese government. The government also pays raw materials manufacturers to dump materials like steel and lithium on the domestic market at a loss. The government tax break on the sales price of the vehicle is not really what's relevant here.
  - nanotuber 2y ago
    The subsidies are a different structure, but they each allow the companies to sell a more expensive car for a lower price - which is the global competition we're discussing. The billions in funding (~2) for BYD is what I was discussing regarding about $1k/vehicle subsidy. I would be very interested in any data you have regarding the amount of money the Chinese government has paid toward raw materials that have been consumed by BYD. Do you have a source you can link?
    - legitster 2y ago
      Firstly, EV subsidies are irrespective of manufacturer. The government is not hand picking a corporation to receive them all. Secondly, I think you are vastly underrating the difference in "structure". If I was to pay you $100 an hour and give you a company credit card to go buy lunch, that's a much different proposition than asking you to go buy me lunch on the promise that I will reimburse you later. Corporations with a direct government investment are always going to have market advantage beyond just the price difference over companies that have to seek debt or investors. Here's an HBR writeup on Steel subsidies, specifically relating to the government paying the energy costs: https://hbr.org/2008/06/subsidies-and-the-china-price https://hbr.org/2008/06/subsidies-and-the-china-price Here's an article about the battery glut - there is 4x as much capacity planned as there is estimated forecast since the government guarantees their debt: https://www.ft.com/content/b6038e51-7b5b-4f97-a5da-9202e71562fc https://www.ft.com/content/b6038e51-7b5b-4f97-a5da-9202e7156... This does not even begin to cover how the party provides political protections for the executives of these companies, or how the government aids these companies in stealing intellectual properties from trading partners.

20 points by 2OEH8eoCRo0 2y ago

Yep. Much to the chagrin of the opportunist free-world, we've been heading down this path for years. It's hard to say China isn't the aggressor here though; their treatment of American intellectual property has justified tariffs for decades at this point. So where do we draw the line, why shouldn't we get political with it? The apologists seem to say that a free nation can't counter authoritarian action, but when a trade bill targeting China gets popular appeal they say it's an unfair double-standard. The only thing they support is keeping things the same, which is how China best reaps our rewards. Yes, you're going to feel this in your 401k and your iPhones and Xboxes will get more expensive. Chinese manufacturing is the albatross yoked around America's neck; the sooner we address the problem the sooner we can recover from our mistake.

legitster 2y ago

The dumb thing about this was we had a better solution: the TPP. The whole point was to band every single trading partner and rival of China into a trade alliance against it. It would have had way more juice behind it, come at a time before things like EV subsidies, and wouldn't have directly cost American consumers anything!

tuatoru 2y ago

I gues we can thank Putin for making Western governments finally realise that maintaining their own manufacturing capacity is vitally important. It only took thirty years, for something that was obvious in 1990.

retox 2y ago

Also from The Atlantic >Rather, tariffs fall on the American importers of Chinese goods, who often pass those cost increases onto American consumers. That means every time Trump raises tariffs, he risks raising costs on families and businesses. https://archive.is/vS1iF#selection-837.175-837.395 https://archive.is/vS1iF#selection-837.175-837.395

badhackernews 2y ago
[dead]

nanotuber 2y ago

I was looking into this the other day. China's subsidies for BYD amounted to approximately a $1k subsidy per electric vehicle (not counting battery subsidy, looking for numbers). America subsidizes electric vehicles up to $7.5k per electric vehicle in tax credits and 1.5k/vehicle in regulatory carbon credits (not counting battery subsidy, looking for numbers). I'm trying to believe the story that subsidization is creating unfair competition. But right now the Chinese Foreign Ministry explanation of comparative advantage looks more consistent with the numbers?

legitster 2y ago
Different subsidies. BYD received billions of dollars in funding grants from the Chinese government. The government also pays raw materials manufacturers to dump materials like steel and lithium on the domestic market at a loss. The government tax break on the sales price of the vehicle is not really what's relevant here.
- nanotuber 2y ago
  The subsidies are a different structure, but they each allow the companies to sell a more expensive car for a lower price - which is the global competition we're discussing. The billions in funding (~2) for BYD is what I was discussing regarding about $1k/vehicle subsidy. I would be very interested in any data you have regarding the amount of money the Chinese government has paid toward raw materials that have been consumed by BYD. Do you have a source you can link?
  - legitster 2y ago
    Firstly, EV subsidies are irrespective of manufacturer. The government is not hand picking a corporation to receive them all. Secondly, I think you are vastly underrating the difference in "structure". If I was to pay you $100 an hour and give you a company credit card to go buy lunch, that's a much different proposition than asking you to go buy me lunch on the promise that I will reimburse you later. Corporations with a direct government investment are always going to have market advantage beyond just the price difference over companies that have to seek debt or investors. Here's an HBR writeup on Steel subsidies, specifically relating to the government paying the energy costs: https://hbr.org/2008/06/subsidies-and-the-china-price https://hbr.org/2008/06/subsidies-and-the-china-price Here's an article about the battery glut - there is 4x as much capacity planned as there is estimated forecast since the government guarantees their debt: https://www.ft.com/content/b6038e51-7b5b-4f97-a5da-9202e71562fc https://www.ft.com/content/b6038e51-7b5b-4f97-a5da-9202e7156... This does not even begin to cover how the party provides political protections for the executives of these companies, or how the government aids these companies in stealing intellectual properties from trading partners.