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I am a free trader in principle. However you have a country (China) with an authoritarian government that makes favored industries subsidized. Of course the st

I am a free trader in principle. However you have a country (China) with an authoritarian government that makes favored industries subsidized. Of course the standard economic argument is that China using its GDP to make goods cheaper for our own citizens to purchase is better for us - they are subsidizing our economy. However it ignores the strategic disadvantage by our country losing its manufacturing capabilities. The graphs may show economic advantage. It’s hard to quantify the long term strategic and militaristic disadvantage to not being able to make anything yourself if a world war occurs.

curt15 2y ago
>However you have a country (China) with an authoritarian government that makes favored industries subsidized. If things keep going the way they are going, that could describe the US just as well in a few short years.
- dsr_ 2y ago
  https://en.wikipedia.org/wiki/United_Fruit_Company https://en.wikipedia.org/wiki/United_Fruit_Company "The company responded by intensively lobbying the U.S. government to intervene and mounting a misinformation campaign to portray the Guatemalan government as communist.[18] In 1954, the U.S. Central Intelligence Agency armed, funded, and trained a military force that deposed the democratically elected government of Guatemala and installed a pro-business military dictatorship.[19]" This is not a one-time aberration.
- jay-barronville 2y ago
  > If things keep going the way they are going, that could describe the US just as well in a few short years. Why do you think so?
ThinkBeat 2y ago
The US subsidizes a hell of a lot themselves already.
myrmidon 2y ago
> However you have a country (China) with an authoritarian government that makes favored industries subsidized. This is overlooking the forest for one tree. The thing is, mean chinese manufacturing wages are $25k/year (purchasing parity adjusted! $15k unadjusted) for a 49h week. That is the reason that so much manufacturing/industry has shifted there, not some nebulous "Chinese government subsidies" (not saying those are not a thing, just that they don't really matter all that much). > It’s hard to quantify the long term strategic and militaristic disadvantage to not being able to make anything yourself if a world war occurs. Certainly. But forcing low-skill industry to stay at a relevant size in a high-wage country is expensive business (compare agriculture, which is subsidized basically for exactly this reason) and not straightforward (see Jones act). Presenting tariffs as a viable alternative to taxation is just beyond ridicule, but that has not stopped people so far either...
- bryanlarsen 2y ago
  They could move to Bangladesh or Africa and pay $3k / year. They aren't. China has many advantages beyond cheap wages.
  - myrmidon 2y ago
    Absolutely. You do need a minimum baseline for infrastructure, government stability and workforce. Most of Africa is just starting to slowly get there, Bangladesh is already very relevant for textile production. I would expect the same basic trend to repeat that we saw with electronics manufacturing in 90s Japan: First cheap products move (very wage sensitive), then the local sector expands, wages rise with the whole local industry moving up the value chain, then at some point local wages become high enough for the whole process to repeat with the next low-wage country... I think trying to block this trend off with tariffs is a futile waste of taxpayer money which american consumers are gonna pay for. Spending tax money to keep some degree of self-sufficiency in critical industries (like with agriculture) can be a solid idea if done sparingly and cleverly, but that is not how the current US admin has approached this...
- gcnnbdff 2y ago
  [dead]
1oooqooq 2y ago
"I am a free trader in principle. However you have a country (China)" just think of china as another trader with more capital than you and pull yowrself up by your bootstraps.
coliveira 2y ago
Sour grapes. Most economists were just happy with this situation until recently. What I mean is, the current situation arises by the desire of Western businesses of getting hid of productive investments and concentrating only on capital investments. It has nothing to do with trading with an authoritarian government or not, which almost everyone believed was Ok until recently.
mulmen 2y ago
> The graphs may show economic advantage. It’s hard to quantify the long term strategic and militaristic disadvantage to not being able to make anything yourself if a world war occurs. Is the United States at risk of not being able to make anything ourselves? We have the second largest manufacturing output in the world. https://en.wikipedia.org/wiki/Manufacturing#List_of_countries_by_manufacturing_output https://en.wikipedia.org/wiki/Manufacturing#List_of_countrie...
3vidence 2y ago
What about Canada? We have even higher tarrifs than China and in the last 100 years are the USA's closest ally.
bbwbsb 2y ago
Pricing in externalities (such as national defense impact) is a basic function of economic policy. I searched 'economics 101 strategic industries' and found this[1] within 30s which includes an overview of 'national self-sufficiency'. It presents the standard argument, including the parts you claim the standard argument ignores. I personally favor decentralized planning over markets, but I find it unnecessary to slander economics. -- 1: https://www.adamsmith.org/economics-101 https://www.adamsmith.org/economics-101

curt15 2y ago

>However you have a country (China) with an authoritarian government that makes favored industries subsidized. If things keep going the way they are going, that could describe the US just as well in a few short years.

dsr_ 2y ago
https://en.wikipedia.org/wiki/United_Fruit_Company https://en.wikipedia.org/wiki/United_Fruit_Company "The company responded by intensively lobbying the U.S. government to intervene and mounting a misinformation campaign to portray the Guatemalan government as communist.[18] In 1954, the U.S. Central Intelligence Agency armed, funded, and trained a military force that deposed the democratically elected government of Guatemala and installed a pro-business military dictatorship.[19]" This is not a one-time aberration.
jay-barronville 2y ago
> If things keep going the way they are going, that could describe the US just as well in a few short years. Why do you think so?

ThinkBeat 2y ago

The US subsidizes a hell of a lot themselves already.

myrmidon 2y ago

> However you have a country (China) with an authoritarian government that makes favored industries subsidized. This is overlooking the forest for one tree. The thing is, mean chinese manufacturing wages are $25k/year (purchasing parity adjusted! $15k unadjusted) for a 49h week. That is the reason that so much manufacturing/industry has shifted there, not some nebulous "Chinese government subsidies" (not saying those are not a thing, just that they don't really matter all that much). > It’s hard to quantify the long term strategic and militaristic disadvantage to not being able to make anything yourself if a world war occurs. Certainly. But forcing low-skill industry to stay at a relevant size in a high-wage country is expensive business (compare agriculture, which is subsidized basically for exactly this reason) and not straightforward (see Jones act). Presenting tariffs as a viable alternative to taxation is just beyond ridicule, but that has not stopped people so far either...

bryanlarsen 2y ago
They could move to Bangladesh or Africa and pay $3k / year. They aren't. China has many advantages beyond cheap wages.
- myrmidon 2y ago
  Absolutely. You do need a minimum baseline for infrastructure, government stability and workforce. Most of Africa is just starting to slowly get there, Bangladesh is already very relevant for textile production. I would expect the same basic trend to repeat that we saw with electronics manufacturing in 90s Japan: First cheap products move (very wage sensitive), then the local sector expands, wages rise with the whole local industry moving up the value chain, then at some point local wages become high enough for the whole process to repeat with the next low-wage country... I think trying to block this trend off with tariffs is a futile waste of taxpayer money which american consumers are gonna pay for. Spending tax money to keep some degree of self-sufficiency in critical industries (like with agriculture) can be a solid idea if done sparingly and cleverly, but that is not how the current US admin has approached this...
gcnnbdff 2y ago
[dead]

1oooqooq 2y ago

"I am a free trader in principle. However you have a country (China)" just think of china as another trader with more capital than you and pull yowrself up by your bootstraps.

coliveira 2y ago

Sour grapes. Most economists were just happy with this situation until recently. What I mean is, the current situation arises by the desire of Western businesses of getting hid of productive investments and concentrating only on capital investments. It has nothing to do with trading with an authoritarian government or not, which almost everyone believed was Ok until recently.

mulmen 2y ago

> The graphs may show economic advantage. It’s hard to quantify the long term strategic and militaristic disadvantage to not being able to make anything yourself if a world war occurs. Is the United States at risk of not being able to make anything ourselves? We have the second largest manufacturing output in the world. https://en.wikipedia.org/wiki/Manufacturing#List_of_countries_by_manufacturing_output https://en.wikipedia.org/wiki/Manufacturing#List_of_countrie...

3vidence 2y ago

What about Canada? We have even higher tarrifs than China and in the last 100 years are the USA's closest ally.

bbwbsb 2y ago

Pricing in externalities (such as national defense impact) is a basic function of economic policy. I searched 'economics 101 strategic industries' and found this[1] within 30s which includes an overview of 'national self-sufficiency'. It presents the standard argument, including the parts you claim the standard argument ignores. I personally favor decentralized planning over markets, but I find it unnecessary to slander economics. -- 1: https://www.adamsmith.org/economics-101 https://www.adamsmith.org/economics-101