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As much as China can prepare, it's still in a pretty vulnerable position and the whole "the Chinese people are more conditioned for hardship" is as much Chinese
by ericmay 2y ago
As much as China can prepare, it's still in a pretty vulnerable position and the whole "the Chinese people are more conditioned for hardship" is as much Chinese exceptionalism as any claim to American exceptionalism. At the end of the day they lose millions of jobs, factories shut down, and people suffer there too regardless of the CCP marketing about being "tough" and "prepared". Appear strong where you are weak or something like that. Meanwhile the US can see prices go up, but aside from a few specific items we can buy or make the things that China has been. At an increased cost, sure, but Americans can handle it.
> The US has benefitted for a couple generations by being the reserve currency, meaning that we can make big mistakes and not suffer for them, while any other country would suffer. This coming trade war, if it actually happens, may finally break this exceptional status.
Very doubtful. The main danger is lack of fortitude with continuing and enforcing policies, and letting ideological battles get the best of the Trump administration for cutting good and fair deals with the EU and others. You're welcome to invest in Chinese, Russian, or whatever capital markets, though.
- skywhopper 2y agoWe can “buy or make the things China has been”? Buy from whom? Make in what factories, with what workers, with what supplies, equipment, and materials?
- ericmay 2y agoOk if we can't then you're proving the need for economic and policy measures to make it so we can. But yes, instead of buying a made in China t-shirt you can just spend a little more and buy one made in the USA, or even other non-authoritarian governments throughout the world (EU for example).
- epistasis 2y agoWe instituted many processes during the Biden era for bringing manufacturing to the US. They were all carrot based: provide stability for capital investments and even some tax benefits. This resulted in massive investments in factories in the US, the most in a generation. Tariffs do not provide capital security, they do not make it cheap to build the factories and in fact gigantically jack up the cost because we need to import a lot of the machinery to get the manufacturing going, and building the entire supply chain from scratch would add massive lead time to the other factories that use the machinery. Further, the need for onshoring cheap tshirt manufacturing is far from clear. We have massive amounts of our workforce in far more productive areas that produce absolutely massive amounts of GDP, and reallocating the workforce to tshirt manufacturing makes us far poorer. We are cutting drastically from scientific research, where each dollar spent by the government generates 2x-10x GDP, and telling those scientists to go work in factories. The very same types of factories that our trading partners would give up in an instant if they had the hi tech scientific research instead. What do we need? Certainly not tshirt factories. We need scientists, services, and more productive sectors of the economy. It is absolute idiocy to give up the higher tiers of the economy only possible in the US in the 21st century, to return to far lower 20th and 19th century productivity level.
- ericmay 2y agoI largely don't disagree with anything you wrote. I was broadly responding to the OP's broad comment. Like yea you don't need to buy cheap crap from Temu that you saw on TikTok. And if you have to pay $5 more for a t-shirt suck it up and stop supporting authoritarian regimes. If that results in Americans working in t-shirt factories which aren't morally better or worse than any other factory, being paid higher wages and having that money stay here in our local economies at the expense of cheap goods with economic outflows to China, I say good and maybe tariffs are a good way to make that happen. Remember, tariffs are just an economic and policy tool we can leverage. The EU uses them against China today even. I personally found the Biden administration's approach to trade to be better, but maybe we need a mix of policies to effect change? To that effect I don't really understand your last comment about giving up higher tiers of the economy that are "only possible in the US" - we can't make computers and iPhones here. Those are those high tiers. That is a problem. Tariffs can be a tool to effect change there. Maybe not, maybe so. The status quo isn't sustainable though.
- TheOtherHobbes 2y agoCheap crap on Temu and phones that mainline social media into everyone's pockets are part of the circus machinery that keeps the population distracted and docile. Nuking them is unlikely to end well politically. As others have said, if you want to use tariffs to wage a trade war, you prepare first, so you're not cutting off the branch you're sitting on. You don't create tariffs and then build your factories. Because you can't. It's just not possible. But this regime has a shoot-from-the-microphone policy style which is completely irrational and unworkable, and minor considerations like practicality don't figure. In any case, it's clear the regime is in a race between enforcing its grip on power with martial law (whatever it's going to be called) and political collapse brought about by economic collapse. It's too early to tell, but if martial law wins, economic collapse on an unprecedented scale will follow. You can be toxically positive and say that a lot of dead wood needed to be cleared. But in practice that just means whole swathes of the country will turn into Detroit of the 00s, but worse - rotting ghost towns, haunted by the ghosts of those who starved to death.
- chipsrafferty 2y ago
- adra 2y agoThe unemployment rate is what, 3%? Where are you going to find the millions of people needed to make the iPhone domestically? Immigration? Hah, that would be an interesting stance. Automation? It would work to fill some gaps, but even apple doesn't want to pay Chinese workers for tasks that machines can do today. Someone in their company decides on when they automate, and when they use elbow grease. They may be able to afford a lot of the capital outlay to greatly improve the productivity of their workers if effectively required to onshore, or they may just stop selling iPhones in the US for a few years if all cell phones become prohibitively expensive to own. If Apple can't make the economics work, I can't see who can.
- ericmay 2y ago> The unemployment rate is what, 3%? Where are you going to find the millions of people needed to make the iPhone domestically? I don't know off the top of my head, but that sounds like a great problem to have and I'd be happy to do whatever it takes to make sure we have that problem.
- agolsme 2y agowhat EU countries have a good t-shirt supply chain? do you know? I am pretty sure limited to poland, and maybe a few other eastern european countries. as for MUSA, i buy a lot of t-shirts and none of them are made in usa, who are you thinking of?
- ericmay 2y agoYou can Google something like "made in America t-shirts" and should find plenty of results as I did (not trying to be a jerk and say "Google it", really just trying to be helpful if you are indeed looking). I'm not sure about the European Union. There are quite a few but just an example: https://www.american-giant.com/pages/about-us https://www.american-giant.com/pages/about-us (no affiliation or any further research other than identifying from a lengthy list of made-in-USA clothing).
- skywhopper 2y agoFor some things, I agree it’s important to have domestic capability. For most things, global trade works well for everyone involved, so long as we do it in a cooperative way. The current tariff bullying approach is the worst way of building domestic capability or improving trade relations. More likely the US will sink into a decade or more of stagflation or worse as world markets move on without us, far more easily than we can become self-sustaining. For your t-shirt example, sure we can buy US made shirts. But the US factories have a limit to what they can produce. Then what? What business person would invest in any new factories in the current environment? Where do they buy the materials to build the factory? (From our trading partners.) Where do they buy the tools and equipment used in the factory? (From our trading partners.) who do they hire to work in the factory? Former government bureaucrats? Immigrants? Oh wait!
- dgfitz 2y agoAll I did was a quick google search, but I searched what the US imports from China, to fill in the word "stuff" from your post: "The U.S. imports a wide variety of products from China, with the top categories including electronics, machinery, and furniture. Specifically, significant imports include computers, smartphones, electrical equipment, toys, and furniture." I just don't think there will be riots in the street over this stuff. Maybe there will be, maybe there should be, I can't say for sure. I do know kids will survive just fine without toys, and I don't see riots over furniture. I don't know about the rest of it. The other side of the coin is interesting: What if China decided they were never going to sell anything to the US? Would people riot in the street? Even more interesting, if China really wanted to play that game, why don't they? Why are they so mad? If this wasn't a threat to them it would be a giant nothingburger on their end.
- TylerE 2y agoVastly underestimating the impact. Think of all the Made in USA stuff that makes use of Chinese components. Many of the machines used in factories are made in China. A lot of tool making is outsourced there (an injection molding die that might cost $50,000 to make in the US might be $10k in China, and the Chinese typically make them with a quicker turnaround time, even with shipping.
- myvoiceismypass 2y agoUnfortunately our homes, offices, and lots of infrastructure kinda require things like electrical equipment (amongst other trivial things like wood, metal, insulation materials, etc)
- standardUser 2y agoYou are making a lot of bold claims without much to back it up. As someone who reads a lot about the topic, I would characterize your assessment as far removed from mainstream opinion and rosier than the rosiest professional assessments that don't come from an acolyte of Donald Trump. In other words, a fairy tale.
- ericmay 2y agoIf you have a specific comment or point to make I'd love to talk about it. Most mainstream opinions aren't very valuable, though certainly there are some that are better than others.
- standardUser 2y agoWhen so much is thrown at the wall at once it makes it onerous and boring to respond to every slapdash point. If they had stumbled on a truly valuable and novel perspective that convincingly goes against all prevailing knowledge, I can only imagine they would have presented it with significantly more evidence than they did in that screed. Otherwise, mildly-educated people like me discard it immediately as empty rhetoric or maybe just propaganda. Aka trolling.
- ericmay 2y agoI think that's rather unfair, and if you don't want to participate in a conversation you can just ignore the comment instead of accusing others of trolling. I'm not trolling, I like to discuss and debate these topics on the Internet, and if there are facts or concepts that you think should require a source in civil conversation you can ask for those. This is also a new paradigm shift in America and so most of the mainstream opinion articles you read don't have much more information than anyone else, and funny that you mention propaganda because that's exactly what you're going to find hidden away in those mainstream opinions.
- standardUser 2y agoIf you go against established facts you have a greater burden to prove your views aren't bullshit. Yet people coming from perspectives that just happen to line up with the teachings of Donald Trump always seem to provide less information. Do you not notice this trend? If you want to convince people try being convincing.
- surgical_fire 2y ago> cutting good and fair deals with the EU Trump administration only succeeded in making the EU see the US as a foreign hostile nation. At this point I think it's more likely the EU cut deals with China.
- ericmay 2y agoNah, the problem is EU will face the same problems the US is facing (they don't want products dumped on their markets at subsidized costs putting their workers out of business), and a lot of the posturing (Canada I think is different) is for the public and because Trump is an asshole but the EU sees the same problem the US does. Nevermind China very overtly aiding Russia in its war in Europe which has the EU not very happy. Guess we forgot about that? The EU is actually quite protectionist, despite public claims to the contrary. Most countries are in various fashion protective of many or certain industries. Trump no doubt damaged ties, and again I think the Biden administration's approach was superior in many ways, but there's a limit to what agreements the EU will make with China. The manufacturing capacity that the Chinese have built isn't sustainable without a substantial increase in Chinese domestic consumption.
- surgical_fire 2y ago> Nah, the problem is EU will face the same problems the US is facing The US problems are problems of their own making. EU has only trade rivalries with China, not ideological issues like the US has. Those can be ironed out. And honestly the US administration also has an ideological hatred for Europe, as illustrated by the vice presidents own words. Not really conducive to any sort of deals. As for China dumping cheap things here, as you said, EU is very protectionist (China is as well), and EU consumers have a lot less appetite for consumption than the US. I really think that is less a problem than you believe. > Trump no doubt damaged ties, and again I think the Biden administration's approach was superior in many ways, but there's a limit to what agreements the EU will make with China. I think you really downplay the kind of generational damage the US is doing to the relationship with former allies. > The manufacturing capacity that the Chinese have built isn't sustainable without a substantial increase in Chinese domestic consumption. You forget that China is only in a trade war against the US. The US is in a trade war with everyone else.
- epistasis 2y agoIt's not exceptionalism as much as authoritarianism. The lockdowns that happened in China for COVID were real and extreme. Meanwhile there were no lockdowns in the US and a significant chunk of the electorate acts as though there was extreme government overreach and in response gained control of large chunks of government with those arguments. Sure, the Chinese government finally capitulated to citizen demand eventually, but the degree of control compared to the US is hard to overstate.
- ryandrake 2y agoAmericans nearly rioted over unenforced (effectively voluntary) Stay-At-Home and business closures that were openly ignored by business owners. If we can't even survive a few months of not buying khakis and eating at Olive Garden, how are we going to survive a hardcore and sustained trade war?
- ericmay 2y agoAmericans are just like anyone else for the most part, albeit with some cultural differences. We can put up with hardship just like anyone else, though our suburban ecosystems and factory farming make that more difficult than need be, it's just that we haven't had a real need to face true national hardship since World War II perhaps. I don't disagree with the COVID-19 lockdowns or anything like that, but I'm not sure that's the best example here because as a nation we weren't really aligned on that being a hardship necessary to endure sacrifice.
- simiones 2y agoAnd you think trade war with China is something that the entire nation believes is necessary hardship, when even Trump allies like Musk are speaking out against it, as is the entire business world?
- ericmay 2y agoWell I don't think it'll be that much of a hardship, but yea I don't think everyone is exactly aligned with how the Trump administration is going about it. Generally speaking "we have a problem with China - they took our jobs!" has broad consensus, at least in my experience. Also politically the Biden administration and others have undertaken steps to defend US economic interests against China.
- goatlover 2y agoThe same Americans who voted in Trump and gave Republicans in Congress a majority because of inflation? How long do you suppose it will take to build all the industries in the US to replace Chinese goods, and who is going to be performing the cheap labor making those goods after deportations kick into high gear? America has survived stagflation before in the 70s, but there was a large political fallout.
- ben_w 2y ago> At the end of the day they lose millions of jobs, factories shut down, and people suffer there too regardless of the CCP marketing about being "tough" and "prepared". I have the feeling, not only from this comment but also those about Foxconn suicide nets, that people have a hard time judging quite how big things in China are. Losing a million jobs would change China's unemployment rate by… 0.14% of the workforce.
- ericmay 2y agoGreat then it is very simple and it won't bother them too much and we can gain 100k* jobs or so and pay more to make things here and everyone is happy. China can stomach the loss of a few million jobs and they shouldn't complain since it's no big deal. * Job loss/gains wouldn't be 1-1 as new US factories would likely use fewer workers.
- simiones 2y ago> * Job loss/gains wouldn't be 1-1 as new US factories would likely use fewer workers. Why in the world would you think this is the case? China leads the world in manufacturing efficiency, maybe behind only Japan and South Korea.
- ericmay 2y agoOh so we would gain more jobs then? So we'll take a highly automated factory in China, shut it down since it won't be selling products to the US, build that factory here even though it might be a little less automated, and then we'll have the same number of jobs and maybe more than the Chinese factory had? Sign me up! That sounds awesome.
- epistasis 2y agoIf there is a goal for more factories in the US, and it's certainly not clear at all that this is a policy goal of the current US executive branch, there's not a clear route to achieving that goal. If the factory gets staffed at all, it will be competing in a labor pool in the US that only has 4.2% unemployment. The high employment rates, and inability to find workers during Biden's presidency, led employers to revolt against Biden. The question is whether those automated factory jobs will be better than other jobs for the workers, whether they will be created in places with the appropriate worker pool (education, unemployment high enough etc.). There's also the question of whether there's anybody willing to build some new high-cost automated factory when the same capital could be deployed to another purpose that likely has a far higher capital return rate. There's almost zero protection that the impetus for having the expensive highly-automated factory--namely the tariffs--will exist past for most of the life of the factory. Or in fact if they will even be in place by the time that the factory is constructed and ready to go, which will take a minimum of 3-4 years. All the stars have to align perfectly for some sort of new jobs to appear and then it's not clear that they will be better than existing jobs. And if it does happen, we all suffer from several years of being poorer in the mean time.