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The economic picture of what will happen is instead of being an American engineer designing widgets made in China, some fraction of you are now decimated to be

by ty6853 2y ago

The economic picture of what will happen is instead of being an American engineer designing widgets made in China, some fraction of you are now decimated to be an American widget maker of items engineered in China. Tarriff is essentially just a handicap to comparitive advantage in trade, trading out jobs where you had the advantage. It is one of the most baffling thing I have seen our government do in our lifetime.

walterbell 2y ago
Currency rates are also a factor. https://financialpost.com/news/stephen-miran-economist-trump-economic-advisory-team https://financialpost.com/news/stephen-miran-economist-trump... > Miran.. points to Trump’s application of tariffs on China in 2018-2019, which he argues “passed with little discernible macroeconomic consequence.” He adds that during that time the U.S. dollar rose to offset the macroeconomic impact of the tariffs and resulted in significant revenue for the U.S. Treasury.. “The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019,” the report said. “As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7 per cent, so that the after-tariff USD import price rose by 4.1 per cent.” https://archive.is/uvL5w https://archive.is/uvL5w > The deepening trade war is raising speculation in financial markets that China may resort to aggressively devaluing the yuan against the dollar in a break of their policy of pursuing a stable currency.. A weaker yuan would make Chinese goods cheaper abroad, offsetting some of Trump’s tariff impact, and make it costlier for local consumers to buy US goods.. One big consideration for Beijing is the risk of foreign investors pulling their money out of China if the currency sinks.
absolutelastone 2y ago
I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away.
- no_wizard 2y ago
  >I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away. So why the broad spectrum tariffs? Why are we blowing up our trade relationships with Canada, the EU, UK, Mexico, Taiwan, Japan, Australia, New Zealand, South Korea and many many other countries who have been good, honest trade partners? This isn't about China's sins in economic dealings. If it was, the tariffs would only target China and there is an explicit case to be made that indeed, we should be putting tariffs on Chinese made goods, the same pattern may hold true for India as well FWIW. But our other trading partners have been very good to the American economy, and we blew that up overnight. We left a vacuum for another economic force to fill now. All the nations we put tariffs on, not only will the tariff US made goods, they're now overnight going to be looking for a place to transact hundreds of billions worth of units, and China can now offer sweetheart deals to absorb that trade, and that weakens the US (and as consequence, western) alliances.
- tharne 2y ago
  > I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away. If if comes to pass that the 21st century is a Chinese one, it will be this long con that launched the whole thing: "We'll manufacture anything you want real cheap, just show us how to do it." The U.S. outsourcing it's manufacturing to China is likely to go down as one of the biggest economic and political self-owns of the modern era.
  - watwut 2y ago
    No, the biggest self own is going on now. Even if you plan to bring manufacturing back, it was possible without shooting yourself into own foot.
    - Vilian 2y ago
      And without making the rest of the world pissed
palmotea 2y ago
> The economic picture of what will happen is instead of being an American engineer designing widgets made in China, some fraction of you are now decimated to be an American widget maker of items engineered in China. Tarriff is essentially just a handicap to comparitive advantage in trade, trading out jobs where you had the advantage. That's just a myopic regurgitation of free trade dogma that misses much. For instance: 1) the previous sock of American widget makers didn't become engineers, they got laid off with poor prospects; 2) it assumes a friendly free trade regime, which is unrealistic oversimplification; and perhaps 3) that "comparative advantage" is something real and not just lower living standards and laxer environmental and labor regulations. > It is one of the most baffling thing I have seen our government do in our lifetime. The part you're baffled about is only baffling if you're ignorant of everything except free trade dogma. The real baffling thing is why little to no distinction was made between allies and adversaries, low wage countries and high wage countries.

by ty6853 2y ago

walterbell 2y ago

Currency rates are also a factor. https://financialpost.com/news/stephen-miran-economist-trump-economic-advisory-team https://financialpost.com/news/stephen-miran-economist-trump... > Miran.. points to Trump’s application of tariffs on China in 2018-2019, which he argues “passed with little discernible macroeconomic consequence.” He adds that during that time the U.S. dollar rose to offset the macroeconomic impact of the tariffs and resulted in significant revenue for the U.S. Treasury.. “The effective tariff rate on Chinese imports increased by 17.9 percentage points from the start of the trade war in 2018 to the maximum tariff rate in 2019,” the report said. “As the financial markets digested the news, the Chinese renminbi depreciated against the dollar over this period by 13.7 per cent, so that the after-tariff USD import price rose by 4.1 per cent.” https://archive.is/uvL5w https://archive.is/uvL5w > The deepening trade war is raising speculation in financial markets that China may resort to aggressively devaluing the yuan against the dollar in a break of their policy of pursuing a stable currency.. A weaker yuan would make Chinese goods cheaper abroad, offsetting some of Trump’s tariff impact, and make it costlier for local consumers to buy US goods.. One big consideration for Beijing is the risk of foreign investors pulling their money out of China if the currency sinks.

absolutelastone 2y ago

I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away.

no_wizard 2y ago
>I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away. So why the broad spectrum tariffs? Why are we blowing up our trade relationships with Canada, the EU, UK, Mexico, Taiwan, Japan, Australia, New Zealand, South Korea and many many other countries who have been good, honest trade partners? This isn't about China's sins in economic dealings. If it was, the tariffs would only target China and there is an explicit case to be made that indeed, we should be putting tariffs on Chinese made goods, the same pattern may hold true for India as well FWIW. But our other trading partners have been very good to the American economy, and we blew that up overnight. We left a vacuum for another economic force to fill now. All the nations we put tariffs on, not only will the tariff US made goods, they're now overnight going to be looking for a place to transact hundreds of billions worth of units, and China can now offer sweetheart deals to absorb that trade, and that weakens the US (and as consequence, western) alliances.
tharne 2y ago
> I don't know that the prior situation was sustainable and would have lasted much longer anyway. Using China for manufacturing is like using Amazon for sales. You are required to give them everything they need to take your business away. If if comes to pass that the 21st century is a Chinese one, it will be this long con that launched the whole thing: "We'll manufacture anything you want real cheap, just show us how to do it." The U.S. outsourcing it's manufacturing to China is likely to go down as one of the biggest economic and political self-owns of the modern era.
- watwut 2y ago
  No, the biggest self own is going on now. Even if you plan to bring manufacturing back, it was possible without shooting yourself into own foot.
  - Vilian 2y ago
    And without making the rest of the world pissed

palmotea 2y ago

> The economic picture of what will happen is instead of being an American engineer designing widgets made in China, some fraction of you are now decimated to be an American widget maker of items engineered in China. Tarriff is essentially just a handicap to comparitive advantage in trade, trading out jobs where you had the advantage. That's just a myopic regurgitation of free trade dogma that misses much. For instance: 1) the previous sock of American widget makers didn't become engineers, they got laid off with poor prospects; 2) it assumes a friendly free trade regime, which is unrealistic oversimplification; and perhaps 3) that "comparative advantage" is something real and not just lower living standards and laxer environmental and labor regulations. > It is one of the most baffling thing I have seen our government do in our lifetime. The part you're baffled about is only baffling if you're ignorant of everything except free trade dogma. The real baffling thing is why little to no distinction was made between allies and adversaries, low wage countries and high wage countries.