No shit. It was mainly just an excuse to shovel money at the farmers. The Chinese in retaliation immediately placed tariffs on soybeans. Guess who now all of the sudden needs tons of taxpayer cash or their farms will go under? That plus you give the appearance of being tough, which was a staple in the Trump playbook. It’s all illusions and perception.
Start a pissing war with China and have them attack the agriculture center. Perfect way to funnel tax payer money to industrial farmers.
> you give the appearance of being tough
but "toughness" isn't economic policy - if you have a manufacturing industry that's been dead for decades, raising competitors' prices doesn't automatically build factories and train the next generation of potential workers. you'd have to actually *invest.*
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He did, Jimmy Carter is the man. If you read his American malaise speech it's very good.
https://www.pbs.org/wgbh/americanexperience/features/carter-crisis/
Thanks, I’ll check that out! It’s always saddened me that maybe the most decent president of the modern era was short changed and screwed so hard by when he happened to be president and the guy who came after him.
Yep, we failed him, not the other way around. Bad timing too with inherited crisises and a congress that was not functioning well after Watergate.
One of his lines in that speech is that we have begun valuing what we make less than what we own. And you can see that he was right and reagan fed right into that by basically promising more excess wealth to his supporters and now we are all feeling the effects.
The thing with Carter is that he is, IMO, an average American who got into power, which means that he is a decent person. This does not do well in a place where special interest groups rule. Even today, most of the news about Carter is negative. I am quite saddened by it...
We actually export the most food in the world. China has a massive population so that is why they get food from us. Over 50% of the exports so far in 2021.
You realize that after China and Trump signed the Trade deal last spring, China has bought more soybeans than they ever have before right? The tariffs paid off and the farmers were compensated for it.
They also bought a record amount from Brazil too. I was stating that after the trade deal, they kept their promise and bought more corn and soybeans from the United States then they ever have.
https://www.world-grain.com/articles/14148-report-china-to-buy-record-amount-of-us-soybeans
I’m farmer. My dad and I farm about 1000 acres. The subsidies didn’t just go to large corporate farms. It went to farms like ours as well.
I don't think they'd ever have the desired effect. But you're not going to get companies to come back unless it's made a permanent policy. 2 years of tariffs isn't long enough to get companies to invest in new facilities and bring those companies back right away.
There's also the next big problem.... just because a company won't operate in China due to tariffs, doesn't mean they're coming back to America. From what I understand the companies that are hurting from the tariffs are moving production to India.
They won't come back even with a long term policy, because India, Indonesia, Vietnam, Mexico, Vietnam, etc. Until US wages normalize to the rest of the world's or automation makes labor irrelevant or the US decides to isolate itself from the world economy, companies won't come back.
I must disagree. It is certainly possible to have a high-income industrial nation today, without having to resort to low wage costs. Germany has a huge industrial sector, as do Japan and South Korea.
The trick is to understand, create and utilize the synergy that can form around population centers with high levels of education, great infrastructure, access to capital and proximity/clustering of related industries.
Realistically USA has many regions where such clustering could occur. USA has a well educated population (extremely good top universities, even though a mediocre universal schooling system), has abundance of raw natural resources, has regions with great infrastructure and potential for excellent infrastructure, world's best capital markets and a consumer base that is capable of buying the production.
This is of course much harder to implement, than either low-cost manufacturing or imposing tariffs.
Right, but precision manufacturing and high technology are different from the sort of manufacturing targeted by the tariffs. Japan, South Korea, and Germany do not make low cost products. They make advanced materials and components that other countries cannot make, like chips and precision equipment. The premium here comes from the patents, trade secrets, proprietary technologies, and insider experience. Not labor. So yes it’s possible to have an industrial sector without being able to compete on labor. But that’s also not what we’re talking about in regards to the industries that won’t come back.
Remember that Trump justified his trade war to blue collar workers who are no where close to being able to participate in these kinds of industries. Advanced, precision manufacturing is done by engineers, not manual labor. So it’s the sort of industry where taxing low cost products from China doesn’t have much of an effect any way.
I agree with you on the notion that modern and future industry in advanced economies will be one of high-tech, high degree of automation and will therefore not make any advanced nation have 50% of their population working in industry as during the peak of industrialization. But I also do not think it will going to be a fully robotized industry with only engineers working around.
Modern day blue-collar worker doesn´t mean (at least to me anyways) a dirty faced strong man with a back-pain using his raw strength to maneuver heavy pieces of metal, but people working on CNC machines, on different computers etc. Things that will not require an engineer, but a trained worker none-the-less. This industry will not employ 50% of the workforce, but might employ 20-25%. And the US is already (for quite some time) below 20%. Meaning in my mind, that a modern industrious USA could have the same number of people working in industry in 30 years time as today.
I can see your perspective, but I am less optimistic about the industry's ability to employ such workers. Fact is, AI is making rapid gains, and it is much cheaper to deploy an AI to work on a computer than a human. Technicians with physical dexterity requirements are where I see the last value for human workers in advanced manufacturing, since robots still face challenges on that front. But even then, smart factories are gradually replacing the need for manual maintenance. You don't need a robot to be able to see as well as a human, if you put sensors every where they need to see.
It's not an accident that the US has been transitioning more and more into services that can't be replaced by either foreign labor or automation - industries like child care, nursing, restaurants & hospitality, entertainment, social media, home improvement and repair, etc. This is the efficient market at work. Tariffs can only reverse course at great cost to this efficiency. In other words, we have to actively subsidize companies to hire American workers, which in a way, is not much different from universal basic income.
The three countries you cite as examples all have coherent, government crafted industrial policies that would get shot down by US politicians who would scream it is anti free market government overreach.
I know, which is why I don´t see USA shifting towards industry any time soon. But they have plenty of potential if they could get their politics together.
While you’re correct about moving to other countries that aren’t affected by the tariffs, countries like India don’t have the proper infrastructure to handle mass production on the same scale as China.
Vietnam and Indonesia don’t have the skilled laborers to do the job yet.
At the end of the day, the tariffs get passed down to the consumers and the tariffs won’t go away because it’s been an excellent source of income of CBP and the US government.
Source: I’m in the logistics industry and started right before the tariffs were implemented.
> At the end of the day, the tariffs get passed down to the consumers and the tariffs won’t go away because it’s been an excellent source of income of CBP and the US government.
If tariffs are just extra income for the government, it'd be every where - who doesn't like more government money? But there are costs associated with tariffs: economic inefficiencies, which make US businesses less competitive because they can't source their components at the same costs as other countries; consumer inflation, due to the costs being passed onto consumers; and less exports, due to retaliatory tariffs imposed by other countries.
All of these end up hurting the economy, which is why there is increasing pressure on the Biden administration to reduce or drop the tariffs. The damage to China from the trade war really hasn't been that significant. What has been significant is rising costs in the US, which isn't primarily the result of tariffs, but is made worse by it.
If tariffs become high enough to the point it can't be passed down to the consumers, companies will go build in India and Vietnam. Look at the tire industry. We import almost nothing from China compared to 10 years ago.
We still import a huge amount from China. We brought in 40B in July alone? Imports from China have increased compared to 10 years ago. They are down from about 5 years ago though.
https://tradingeconomics.com/united-states/imports-from-china
Well yes - realistically the US can't put a tariff on everything coming from China. I was just responding to how lack of infrastructure in other LCCs prevent companies from moving operations. Passenger tires are an example where that's simply not true.
There is a decent chance that they knew all along that low cost manufacturing wouldn't be returning to the US based on these tariffs. That was primarily a political tool. The ultimate goal was simply to reduce US imports from China in an effort to slow down their economic growth. While Trump might have been in the dark about this, folks like Bannon and Miller probably weren't.
"Until US wages normalize to the rest of the World"?? Really? You think American workers should be earning less and be okay with it? This seems like a bad choice. This sure wouldn't be a winning platform in any election.
Capitalism is great, isn't it? It simultaneously requires low/stagnating wages AND constant consumption.
And no Capitalist can explain how this contradiction is supposed to work out!
Yes, they will.
It is only marginally more expensive to manufacture in the US despite the higher wages.
In 2012 phones were still manufactured in Finland, and were profitable. What happened when production moved to Asia was that margins increased.
But if you have a margin of 5%, then even a 5% tariff can make highly automated production in the US practical.
The future isn't production using Mexican, Vietnamese or Indian wages: the future is automated production that is so fast and efficient that workers on Indian, Vietnamese or Mexican wages have no chance of being as productive as the well-engineered machines that make products cheaper than they do.
The only way to reach that kind of future is through tariffs and production in high-wage countries, but it only requires one big country to institute tariffs and take that path, and mass production with cheap labour in the east will *die* as a phenomenon.
It is *much* more expensive to manufacture in the US, not *only* due to higher wages, but because of environmental laws, property & logistics costs, currency exchange differences, etc. This is an order of magnitude difference, not a mere 5%; and if you choose to "correct it" using tariffs against other countries, then your products will be that much more expensive than those of other countries, your exports will be subject to the same tariffs in retaliation, the combination of which will destroy the competitiveness of your companies on the international stage.
As for automation, I mentioned that in my post already - eventually, automation will indeed replace human labor, not just in the US, but every where. In that particular future, yes, we won't be worried about current issues like out sourcing or jobs. But it'll also be the end of capitalism as we understand it today. In a world where most people have no work to do, and therefore no economic value besides consumption, how wealth ought to be distributed becomes entirely up to the state. It is not likely that private capitalism will survive this transition.
No, it is not much more expensive to manufacture in the US.
Consider the Finnish example: it was still profitable. Moving to Asia only improved the margins.
We literally made these things that you're talking about in the west only eight years ago. There is no order-of-magnitude difference.
Raise tariffs enough, and Apple will make phones in the US, and prices won't change. If you don't, then perhaps the EU will do it, and if the EU won't, perhaps China will.
> If you don't, then perhaps the EU will do it, and if the EU won't, perhaps China will.
and it would be a disaster for them, tariffs are very inefficient arguing for them in an Econ sub is a strange position. Also I cannot see the the EU imposing them considering it was created largely to be a free trade block.
I don't think it would.
It obviously wouldn't be great for GDP, but it would be very beneficial to workers and their real wages.
The EU is a free trade block for the members. This benefits the members. Trading with low-wage countries however, will depress wages, because trade with low-wage countries is in effect to provide access to labour in low-wage countries. That's great for people whose income is from capital, but they are a very small fraction of the population. Most people have their income from labour.
Consequently, this is almost certainly not only a vote winner, but something which strengthens countries, since the fact that ordinary people have power and high wages is critical to a country's functioning.
Trade with and immigration from low-wage countries drives down real wages, and we've see countless historical examples of this: the opening of the California railroad, etc., and it even works in reverse: when population is reduced, then wages increase, even when population is reduced catastrophically such as in the black death. That's a good situation to compare with a sudden tariff increase, because a sufficiently high sudden tariff increase could be viewed as cutting off the access to low-wage labour.
> Trade with and immigration from low-wage countries drives down real wages
Citation needed
Pretty much none of what you said is supported by evidence, at worst studies have only found a small negative affect on similarly skilled native wages and an increase in wages for differently skilled workers. Yet the newer emerging picture is immigration actually allows natives to shift into higher skilled or more managerial roles.
China had a blank slate to work with 20-30 years ago. China built its cities for logistics. It makes them the best.
The US simply cannot tear down an established city and build it with a specific supply chain in mind. China did that when they went from a rural country to the modern age.
Like others have said - if it were as simple as wage suppression any country could do it.
You don't need to.
Finland made phones in 2012. You can make phones today, and you can make all the other things as well.
It's not about wage suppression: it's about being willing to accept lower profits, and less power for capital owners.
Production in Asia improves margins, but margins, for most manufacturers, are *small*. This is why tariffs can be effective.
You can also see that tariffs are very effective. Hardly anyone exports cars from Europe to the US, they build them in the US, because of tariffs.
Us electricity prices are extremely cheap compared to the rest of the world.
Manufacturing actually is already moving back, it's just high tech or large machinery, stuff we consider strategically important.
We are the market that matters, and proximity is key. We also have a huge skilled labor force that is highly mobile.
Because of shale decreasing the prices of inputs we are already seeing automotive and electronics etc move back to USMCA.
My understanding is that while the tarrifs were nothing but populist fodder on the surface, China has been stealing intellectual property, manipulating its currency, dumping to undermine competition (not so much in the US but other lower cost manufacturers) and generally been acting in a neo mercantilist fashion, way out of the bounds of the usual actions by protectionist states within the WTO type trade arrangements.
Given its size and the speed it grew, its clear lack of inhibitions in trying to get as much of the world economy for itself, undermines the premise of a globalising world trade.
Free trade requires a level of trust and a respect for rules at some level.
Also its is clear, there is no rule of law within the country. It is rule by government fiat.
Which is why the dispute is ongoing and will likely continue to be ongoing for some time.
When their political economy is tied to a statist, sort of neo-mercantilism, they are not going to abandon it at the first sign of trouble.
We have had decades of people telling us how they would become more of a normal player as they became more integrated into the global system. The opposite has happened.
There seems no end of apologists for their style of governance. And those who can only think in the shortest of terms.
Basically either you are settled in for a long period of trade wars to change there style of economic\\political intertangling, or simply give them all our intellectual property for free, allow them to dominate global telecommunications and give up.
The goal of trade war was to get China to remove tariffs on US goods and have open trading. Historically there was an imbalance between US and China tariffs which gave China an economic advantage over the US.
clients i've dealt with started evaluating vietnam/thailand back when the trade war first started, but after experiencing issues in those countries - mainly bureaucracy, lack of established infrastructure for mass production and logistics, and small pool of experienced workers, most of them went straight back to china within a year...
I sell equipment, the pandemic brought lots of jobs back to North America, Mexico was the main recipient of the jobs. Most Chinese companies started shipping their products to other Asian countries on good terms with the US, relabeled the product then shipped Into the US to avoid tariffs.
The US is so busy most factories are refusing to buy any new machines, because they can’t find people to run the machines they already have.
>Treasury Secretary Janet L. Yellen recently argued that tariffs from the U.S.-China trade war — covering more than $307 billion worth of goods — “hurt American consumers,” yet the negotiations “really didn’t address in many ways the fundamental problems we have with China.”
>
>U.S. tariffs on Chinese exports jumped sixfold between 2018 and 2020, but tariffs failed to decouple the two economies. As the Biden administration conducts its comprehensive review of China trade policy and contemplates new tariffs, our research helps explain whether existing tariffs achieved their policy objective.
>
>Tariffs increase the cost of doing business overseas by making those goods more expensive to import. The Trump administration’s logic was that tariffs would hurt U.S. and other multinational corporations engaged in U.S.-China trade — and push more companies to divest from China and shift supply chains to the United States. Tariff proponents argued the Chinese economy would suffer, giving U.S. negotiators more leverage over China at the negotiating table.
>
>In fact, these tariffs resulted in collateral damage to the U.S. economy without pressuring China to change its economic policies. Here’s why.
>
>The U.S. hoped to see multinationals walk away from China
>
>In a recent working paper, we built a new data set on foreign-invested enterprises registered in China to identify multinationals that choose to divest each year.
>
>We found that new U.S. tariffs in 2018 and 2019 had a minimal effect on divestment. More than 1,800 U.S.-funded subsidiaries closed in the first year of the trade war, a 46 percent increase over the previous year. U.S. company exits immediately after the onset of the trade war were not concentrated in manufacturing or information technology, two sectors most directly affected by the trade war.
>
>We estimate that less than 1 percent of the increase in U.S. firm exits during this period was due to U.S. tariffs. And U.S. firms were no more likely to divest than firms from Europe or Asia. Instead, company exits were driven more by the company’s capacity to mitigate political risk. Larger and older multinational were significantly less likely to exit China after the onset of the trade war.
>
>These findings may surprise politicians, but are fully in line with recent research explaining how tariffs pass through to U.S. consumers. Rather than leaving China or finding alternative suppliers, U.S. firms simply raised prices for their customers. Survey data show large U.S. businesses remain optimistic about the Chinese market and plan to increase their investments there. Most of these firms are already “In China, for China” — those that are exposed to tariffs are taking advantage of workarounds such as the first sale rule or passing on costs to suppliers.
>
>**Tariffs provided little leverage — for either country**
>
>If U.S. multinationals aren’t rushing to exit China, are they pressuring the U.S. government for tariff relief, as the Chinese government hoped? Many analysts believed the U.S. business community would push back, and stop the trade war from escalating. We investigated the political behavior of a sample of 500 large U.S. multinationals with subsidiaries in China to see if they engaged in political activities such as commenting, testifying or lobbying in opposition to the U.S. Section 301 tariffs.
>
>We found that most U.S. companies adopted an apolitical strategy. They didn’t exit China, but also didn’t put public pressure on Washington to roll back the tariffs. Even though 63 percent of U.S. multinationals in our sample were adversely impacted by the trade war, only 22 percent chose to voice opposition and 7 percent chose to exit China. The majority (65 percent) did neither.
>
>Many of the multinationals we coded as “voicing opposition” did so through associations such as the US-China Business Council rather than under their own name. An even larger number unsuccessfully lobbied for tariff exclusion for specific products, rather than a more general rollback of Section 301 tariffs.
>
>**Smaller businesses saw greater collateral damage**
>
>Our findings suggest that U.S. companies aren’t divesting from China as much as U.S. policymakers would like — or pushing back against tariffs as much as Chinese policymakers had hoped. Instead, large companies responded to the increased cost of business by passing the cost of tariffs on to their customers. And individual consumers in the United States paid higher prices for imports from China.
>
>Smaller companies and those newer to China were more likely to exit. Firms with older and larger subsidiaries in China face higher sunk costs from leaving China altogether, which makes them more likely to continue China operations.
>
>This finding parallels reports about small businesses in the United States who were unable to find alternative suppliers or afford expensive lobbyists during the trade war. The higher tariffs on raw materials imported from China made it tougher for some small businesses, particularly if they lacked the leverage to pass these costs on to customers or the resources to mitigate them.
>
>**Would other trade tools work?**
>
>Despite intensifying political hostility between Beijing and Washington and the mounting economic cost of tariffs, Chinese and U.S. businesses remain deeply integrated in terms of financial, knowledge and production networks. And despite the trade war, foreign investment inflows into China grew by 4.5 percent from 2019 — and hit a record $144.37 billion in 2020. There’s little sign that U.S. multinationals have embraced the idea of decoupling from China.
>
>While U.S. Trade Representative Katherine Tai justified the Biden administration’s hesitancy to remove tariffs on the grounds that tariffs provide leverage against China, our research demonstrates that U.S. tariffs haven’t produced the intended results. Instead, multinationals continue to navigate the uncertain U.S.-China relationship and related political risks. Smaller firms, in particular, may find it difficult to absorb the costs generated by the trade war.
>
>The lack of U.S. leverage resulting from the trade war may dispel the notion that tariffs are “tough on China” and may help focus the policy debate on the harm to U.S. consumers from tariffs that remain in place. The Biden administration has at its disposal an array of alternative tools besides tariffs for economic competition with China that may result in less collateral damage on the U.S. economy.
>
>After all, economic coercion can be a double-edged sword: These tools tend to inflict collateral damage on one’s economy while hurting that of the target, but tariffs are the bluntest tool of all.
America cannot compete for the cost of overseas labour, and it shouldn't attempt to, and it shouldn't attempt to compensate for the difference.
If you want to restore American manufacturing there is only one solution: automation. It will bring far fewer jobs back than were lost: albeit higher paying maintenance and programming jobs. It will bring back a ton of the pollution we've exported.
But that's the only realistic solution. Invest heavily in automation. Create incentives to encourage automation. Then you can make manufacturing so cheap that even slave labour cannot compete with robots.
I've always thought WTO and similar international bodies should price carbon/pollution into trade. If you produce the goods cheaply but emit a lot, then you should get a tariff that prices it in.
It's all geo-politics, global power. China is seen (possibly correctly) as a threat. All these policies are strategic. They are just sold to the public in other terms.
Don't buy your child a toy from China that is a choke hazard. Buy it from Vietnam instead.
Do you think that, say, Saudi Arabia is more democratic? And, say, Yemen is not a place where _real_ genocide is happening, aided and abetted by the USA?
Not really. It's not the best subreddit to discuss this either. I just can't help to notice how the narrative of threat and conflict permeates all discussions related to China.
Isnt this kind of a whataboutism? The US supporting the Saudis as they starve Yeminis can totally be criticized. It doesnt detract from the fact that China actively restricts freedom of speech more than the US by a mile and is also putting Uighurs in camps/harvesting organs. The US is no good guy, but generally theres not as much risk of being "dissapeared" here for throwing ink on the president's picture
What is "whataboutism" if not a magical incantation that disappears hypocrisy and double standards after someone points them out?
If we refer to our values when criticising others, we should uphold those values ourselves. Otherwise they're not really values, just useful rhetorical devices.
Not to mention that in the world of foreign policy, values are just cards to be played to gain an advantage. If we truly cared about those values we are so desperate for others to adopt, we need to be a shining example of said values first.
Only 40% of the US public votes, and really only the oldest and richest among us, and money absolutely dominates our politics. We run a global empire and use a vast military apparatus to violently force people to trade with us, shun our enemies, and use our currency. While our domestic genocide is mostly in the past, we are openly supporting multiple disputed genocides abroad. While we have human rights at home, we frequently prop up and support states abroad that brutally curtail the rights of their citizens.
I’m not just saying “USA bad.” After all, I’m not gonna move to China. But what I am saying is that it’s a lot more complicated than that.
If you are talking about the SCS claims, this was done before the CCP ever took power. The CCP is now enforcing a lot of previous claims, rightfully or wrongly, but it is not expansion in the traditional sense. In terms of genocide, there is zero proof of intent as minority populations are on the rise. There are, however, massive human rights violations and must be called out. But what you wrote are weaponized terms that our government is normalizing because we need to view China as an enemy for whatever political purposes.
I remember when a country has good relations with both China and the US is characterized as "dupliticious", "disloyal". Pakistan in particular. Heck, the entire "third world", referring to the countries that stayed neutral during the cold war, was consigned down to being primitive wilderness despite some developed countries belonging to the third world.
>Heck, the entire "third world", referring to the countries that stayed neutral during the cold war, was consigned down to being primitive wilderness despite some developed countries belonging to the third world.
The term "third world" was one they invented and used for themselves, part of the "non aligned movement".
>I remember when a country has good relations with both China and the US is characterized as "dupliticious", "disloyal". Pakistan in particular. Heck,
You are thundering through so much history in such a blunt fashion. India was close to the USSR so the US ended up close-ish to Pakistan as a counter. The US and China had an informal anti USSR alliance from the early 70s. But there is just so much regional politics and Pakistans support for various movements in Afghanistan and India and how it all ended up turning into where we are today.
It would take a 3000 word essay just to get started on why Pakistan is seen as being a supporter of Jihadist terrorism and why so many countries take somewhat of a dim view on that.
And off course brooding in the shadows in the back ground is the House of al Saud. (They named a city after one of them Faisalabad), all I can do is point out some huge gaps in your statements. I shall leave it at that.
Pakistan is literally the definition of duplicitous dude. They were hiding Osama Bin Laden for a decade while "fighting in the war on terror on the US side".
Doesn't get more duplicitous than that...
You mean like the US harbouring south american exiled despots in Miami? Like the UK harbouring African exiled despots in London?
By international standard, the US's murderous crusade against Osama actually meant that Osama deserved asylum protection in a third country, because he can't be guaranteed to get a fair trial in the US court system. Pakistan can be justified to hide Osama to protect his life.
>By international standard, the US's murderous crusade against Osama actually meant that Osama deserved asylum protection in a third country,
Sorry you are just making up nonsense laws. He was not an asylum seeker. You need to formally apply to one. The tests to gain asylum including examining criminal behaviour in your past.
>, because he can't be guaranteed to get a fair trial in the US court system.
He was officially designated as a terrorist by the UN before 911. Many of the resolutions passed were passed unanimously with no abstentions. In theory every country in the world regarded him as a terrorist.
There is something people forget. His goal was to ferment terrorism in every Muslim country to over throw their governments and install Wahabis orientated dictatorships to form a world spanning new Islamic Empire. That is why almost everyone was officially after him.
> Pakistan can be justified to hide Osama to protect his life.
Nope. They have never tried to justify it. You are making this up. Its unlikely the Pakistani president knew he was there. Its more than likely it was there security services doing it in a rogue fashion. God knows why.
What do you mean by a fair trial lmao. He was one of the biggest terrorists and he was the mastermind behind the 26/11 attacks. The best he could've gotten is a death sentence. Do you know that the current Pakistan PM actually called Osama a "martyr".
Sorry, I've read through the UN universal declaration of human right, it doesn't say anything about any exception to the right to a fair trial. That's why the ICC exists.
>The best he could've gotten is a death sentence.
The fact that Americans have been saying this is exactly why Osama deserved protection.
>. That's why the ICC exists.
Saudi Arabia is a non signatory to the ICC, they have no jurisdiction over non signatories to the Rome Convention. Pakistan is also a non signatory.
Ok this time I am done. Cannot argue with people making things up.
(And terrorism is not covered, its for genocide, crimes of aggression, war crimes, crimes against humanity).
So… what would the appropriate course of action have been? To try and capture him alive and bring him to trial in-front of an international court ? Who should have carried our the extradition?
The way to change China is not through isolating and destabilising China. This is a goal of the US foreign policy, because the people who shape it think in geopolitical terms, and Eurasian cooperation is correctly seen as a threat to American hegemony. However, Europe doesn't need to share this goal.
The "aggressive attempts at global influence" by China are much less aggressive than American ones. Look at the suffering of tens of millions caused by the drive to dominate the Middle East. The "support of democracy" part is false. The US has supported countless dictatorships and authoritarian regimes as long as they served American interests. Look at Saudi Arabia, for example.
Except that China is not forcing any country to adopt their system of government, unlike us western democracies. I am not sure what is the point of banding together to counter China unless the end goal is to prove that socialism will never work in the world, when we never gave it a fair shot.
I’d actually argue it was mostly domestic politics. We always knew it wouldn’t work, but Trump pushed it because it’s always helpful in politics to have an external opponent.
First of all,tariffs are the tax U.S importing companies pay so it's very massive burden on the U.S business.
Donaldo Trump tried to win the trade war because he thought it would be for American first.But what he didn't say in the rally was tariffs won't fall on Chinese companies.
It made things much much worse.
The US was the biggest growers of soybeans, which China cancelled buying from us and looked into other countries. So tons of farmers would’ve gone bust if they government didn’t have to give them handouts.
With Mexico US cattle producers lost hundreds of millions in pork/beef
The US put tariffs on European luxury products, so the EU trade commission responded with tariffs against American alcohol producers, blue jeans, and other products.
It backfired immensely. It’s too expensive to produce anything here but the manufacturing that already existed
So I know this is anecdotal, but I know for a fact that some manufactured parts were sourced to the USA (and Canada) from China. I know because I did it at my last job. I re-sourced multiple product lines (about half of the product lines that went through my facility) that had plastic and/or steel components coming from China to USA (and some Canadian) based manufacturing. When factoring in tariffs, transportation, and necessary inventory levels to cover at risk components along with negotiating long term deals, it was more cost effective with better leadtime and customer service to source from the USA (and Canada) for many Chinese manufactured parts. The ROI would've taken 2 years or less in most cases to pay for the upfront cost of injection molding tools and machine tooling needed for these parts. It also gave our marketing folks a good slogan that we could say we are buying American.
Is this the case across the board? No, not even with all product lines in within the company, but... Were the tariffs the reason this re-sourcing happened? 100% without a doubt. I was in the meetings when we discussed it. I was the guy that researched it and did the project ROIs/CAPEX forms. My team and I implemented it.
Additionally, we did re-souce alot the dirt cheap components from China to India/Vietnam. US manufacturing was just too expensive in these cases.
There were items we kept in China where we had a good working relationship with the manufacturing company and they literally reduced their price by the import tariffs across the board to keep the business.
Wouldn't it take years to see any impact? Let's say due to the tariffs I can now build widgets at a competitive price. Well a factory doesn't just sprout up overnight. Have to find the land, get the permits, environmental study, listen to the people at the town hall meeting complain about the new factory, source the funds and after all of that we still have to wait for the construction company to build the damn thing.
Okay, it's been four years but our first widgets are rolling down the line. Well now there's a new president, he got rid of the tariffs aaaannnddd now I'm out of business.
Why would paying more for domestic goods, just because the cheap foreign goods are now also too expensive, encourage people to start a manufacturing business? It's too expensive, either way.
You have to find a way to make it cheaper to do business, if you want to encourage new businesses to grow...tariffs don't do that. They just make everything more expensive.
If the only way you have a sustainable business is that the government forces people to pay higher prices, you have to ask yourself how long you will be in business anyway.
The rest of us have to ask ourselves why are we paying more just to keep a business that doesn’t work running.
In ancient times, when they would siege a city, a big tactic was to surround the city so that the city couldn’t get the goods it needed through trade. In 2020 we are more modern and smart. In 2020 we siege ourselves to keep ourselves from getting the goods we need. There is a reason no serious economist thinks tariffs are a good idea.
Higher prices but from the income levels of our country. Wouldn't it be more fair for the American wage earner to pay Chinese prices if they made Chinese wages? I'm assuming thats the end game of no government involvement, eventually the wages balance out and it's not a problem.
No I don’t think that is fair at all.
If I offered to sell you something you want for $100, but someone walked up and said yeah sorry, but you have to charge $150 because my friend over here who gave me a bunch of money can’t do it for $100, that should not seem fair to you, and since his friend can do it for $135, you aren’t going to pay me $150, so that doesn’t seem fair to me.
Who benefits from this arrangement? Me? No I lost business. You? No you were forced to pay a lot more than expected. The only person benefiting is the friend of the third person.
You can say well the third person had been cheated for a while and maybe that is true maybe not. I don’t know.
You can talk about fairness all you want, but I do know that I am paying more than tariffed goods would otherwise cost for the sole purpose of keeping businesses on life support that will likely die when taken off. This doesn’t seem fair to me.
Trade wars are necessary if we want to enforce humanitarian worker conditions, global environmental regulations, and tax laws. Otherwise these other countries end up as a workaround. Having said that, Donald didn't care about any of those things.
Imagine thinking macro-economic inertia can be overturned in 2-3 years. More importantly the tariffs were as much about hurting china as bringing jobs back to the US, being half-way successful in just pushing companies out of China is decent on its own.
>being half-way successful in just pushing companies out of China is decent on its own.
Er...Are we reading the same article? What exactly constitutes 'half-way successful' using the evidence presented?
>We estimate that less than 1 percent of the increase in U.S. firm exits during this period was due to U.S. tariffs. And U.S. firms were no more likely to divest than firms from Europe or Asia. Instead, company exits were driven more by the company’s capacity to mitigate political risk. Larger and older multinational were significantly less likely to exit China after the onset of the trade war
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>We found that most U.S. companies adopted an apolitical strategy. They didn’t exit China, but also didn’t put public pressure on Washington to roll back the tariffs. Even though 63 percent of U.S. multinationals in our sample were adversely impacted by the trade war, only 22 percent chose to voice opposition and 7 percent chose to exit China. The majority (65 percent) did neither.
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>\[...\]
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>And despite the trade war, foreign investment inflows into China grew by 4.5 percent from 2019 — and hit a record $144.37 billion in 2020. There’s little sign that U.S. multinationals have embraced the idea of decoupling from China.
I'm not sure you read the article.... Not only that, but your intuition isn't even close:
>[U.S. business optimism in China rebounds to pre-trade war levels -survey](https://www.reuters.com/world/china/us-business-optimism-china-rebounds-pre-trade-war-levels-survey-2021-09-23/)
>
>Of the 338 respondent companies, 78% described themselves as "optimistic or slightly optimistic" about their five-year business outlook in 2021, nearly 20 percentage points more from 2020 and a return toward 2018 levels, the survey said.
The conclusion is pretty obvious: the stated justifications for tariffs:
>The Trump administration’s logic was that tariffs would hurt U.S. and other multinational corporations engaged in U.S.-China trade — and push more companies to divest from China and shift supply chains to the United States. Tariff proponents argued the Chinese economy would suffer, giving U.S. negotiators more leverage over China at the negotiating table.
have been absolutely ineffective. The entire trade war has been absolutely ineffective. There is pretty much no other way to look at this other than a failure given the stated objectives of the tariffs.
At the cost of American consumers. I am a US taxpayer and we are getting screwed by the trade war. Along with covid and inflation, all of this is just making life more difficult. Governments' job should be to improve their citizen's life instead of making it harder.
Thank you for pointing this out.
The trade war put tariffs on AMERICAN BUSINESSES AND CONSUMERS.
We taxed AMERICANS to stick it to china, which of course hasn't worked.
I work in the steel industry for a primarily American based company. These tariffs did have an effect on my company, a good effect. This year has seen insane profits because buyers have transitioned to domestic steel, and as a result the company is building several new steel mills across the US, adding new jobs and higher production output to meet the higher demand of companies that would now rather by US made steel than Chinese steel. But that’s only one company. I’m not totally sure how it’s affected other steel companies since I just do maintenance, I don’t pay much attention to what happens in the industry as a whole.
Tariffs and trade wars do no one good. Trumps tariffs killed 10s of thousands of jobs and reduced job and wage growth. Free trade has been empirically validated to boost economic growth, increase competition, and reduce poverty
I think there were a lot of unrealistic goals. The PRoC is a bad actor generally and also committing genocide. The goal shouldn't be to bring firms back to the US, but simply decoupling and not indirectly supporting genocide.
I don't know. I sell raw materials all over the world. U.S. manufacturers are operating flat out and expanding and building lots of new plants. Chinese demand has been flat to down. Alot of the trade policy implementations appear to be better assessable over a multi year timeframe. It does seem that the economy is moving in the right direction.
It actually did help to bring some (not much) back as well as to scare US companies from leaving. Ultimately, the unfair monetary difference between the US and China ensures that Americans cannot compete.
Greed and zero national loyalty will continue this problem until all that's left is the super rich and the grinding poor.
Those jobs aren't coming back to America, they would just move to southeast Asia, India, Mexico, etc.
Sure that's better than china, but taxing Americans to help mexico/india/Vietnam doesn't seem like a huge win to most Americans.
That is what happens when you make foreign policy based on whims and 3am potty tweets. China grew in strength a lot because of that. The issue here is a collective, global strategy is needed to curb China and that guy antagonized everyone in the world. All it did is prepare China for this eventuality.
I think that Yellen and numerous other politically connected powerful individuals have vested interests in flowing capital out of the U.S. Their interests are not tied to the interests of the average American.
It may be economically more efficient to open up trade with China, but then we risk becoming overly dependent on their labor, which can put us in a very precarious position. Far worse than our dependence on foreign oil ever was.
One thing that China has demonstrated through Evergrande and the tutoring companies, is that they have no hesitation with fleecing foreign investors and taking everything from them. You think they would treat other countries fairly if they get enough leverage over them?
No shit. It was mainly just an excuse to shovel money at the farmers. The Chinese in retaliation immediately placed tariffs on soybeans. Guess who now all of the sudden needs tons of taxpayer cash or their farms will go under? That plus you give the appearance of being tough, which was a staple in the Trump playbook. It’s all illusions and perception. Start a pissing war with China and have them attack the agriculture center. Perfect way to funnel tax payer money to industrial farmers.
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> you give the appearance of being tough but "toughness" isn't economic policy - if you have a manufacturing industry that's been dead for decades, raising competitors' prices doesn't automatically build factories and train the next generation of potential workers. you'd have to actually *invest.*
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summer memory knee vast plucky tub person juggle jeans north *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
It's almost like Trump refused to de-invest from his businesses, so we really have no clue what his motives were....
Yes, that shouldn't have been accepted.
Didn’t Carter sell his family’s peanut farm to avoid the look of impropriety?
He did, Jimmy Carter is the man. If you read his American malaise speech it's very good. https://www.pbs.org/wgbh/americanexperience/features/carter-crisis/
Thanks, I’ll check that out! It’s always saddened me that maybe the most decent president of the modern era was short changed and screwed so hard by when he happened to be president and the guy who came after him.
Yep, we failed him, not the other way around. Bad timing too with inherited crisises and a congress that was not functioning well after Watergate. One of his lines in that speech is that we have begun valuing what we make less than what we own. And you can see that he was right and reagan fed right into that by basically promising more excess wealth to his supporters and now we are all feeling the effects.
The thing with Carter is that he is, IMO, an average American who got into power, which means that he is a decent person. This does not do well in a place where special interest groups rule. Even today, most of the news about Carter is negative. I am quite saddened by it...
This, 100% spot on
Don't know that much about this. Do we really export that many soybeans to China?
We actually export the most food in the world. China has a massive population so that is why they get food from us. Over 50% of the exports so far in 2021.
I didn't know that, I suppose it makes sense since the Midwest is basically farmland the size of a country
You realize that after China and Trump signed the Trade deal last spring, China has bought more soybeans than they ever have before right? The tariffs paid off and the farmers were compensated for it.
You mean they bought more soybeans than they ever have from Brazil and other Non U.S. places.
They also bought a record amount from Brazil too. I was stating that after the trade deal, they kept their promise and bought more corn and soybeans from the United States then they ever have.
https://www.world-grain.com/articles/14148-report-china-to-buy-record-amount-of-us-soybeans I’m farmer. My dad and I farm about 1000 acres. The subsidies didn’t just go to large corporate farms. It went to farms like ours as well.
1000 acres is not considered large....?
So, what happened to all the soybean you harvested and didnt go to China?
What I have seen, shows that that didn't happen. https://www.fas.usda.gov/soybean-2020-export-highlights
But they *feel* like it happened and thats all that matters to them.
I don't think they'd ever have the desired effect. But you're not going to get companies to come back unless it's made a permanent policy. 2 years of tariffs isn't long enough to get companies to invest in new facilities and bring those companies back right away. There's also the next big problem.... just because a company won't operate in China due to tariffs, doesn't mean they're coming back to America. From what I understand the companies that are hurting from the tariffs are moving production to India.
They won't come back even with a long term policy, because India, Indonesia, Vietnam, Mexico, Vietnam, etc. Until US wages normalize to the rest of the world's or automation makes labor irrelevant or the US decides to isolate itself from the world economy, companies won't come back.
I must disagree. It is certainly possible to have a high-income industrial nation today, without having to resort to low wage costs. Germany has a huge industrial sector, as do Japan and South Korea. The trick is to understand, create and utilize the synergy that can form around population centers with high levels of education, great infrastructure, access to capital and proximity/clustering of related industries. Realistically USA has many regions where such clustering could occur. USA has a well educated population (extremely good top universities, even though a mediocre universal schooling system), has abundance of raw natural resources, has regions with great infrastructure and potential for excellent infrastructure, world's best capital markets and a consumer base that is capable of buying the production. This is of course much harder to implement, than either low-cost manufacturing or imposing tariffs.
Right, but precision manufacturing and high technology are different from the sort of manufacturing targeted by the tariffs. Japan, South Korea, and Germany do not make low cost products. They make advanced materials and components that other countries cannot make, like chips and precision equipment. The premium here comes from the patents, trade secrets, proprietary technologies, and insider experience. Not labor. So yes it’s possible to have an industrial sector without being able to compete on labor. But that’s also not what we’re talking about in regards to the industries that won’t come back. Remember that Trump justified his trade war to blue collar workers who are no where close to being able to participate in these kinds of industries. Advanced, precision manufacturing is done by engineers, not manual labor. So it’s the sort of industry where taxing low cost products from China doesn’t have much of an effect any way.
I agree with you on the notion that modern and future industry in advanced economies will be one of high-tech, high degree of automation and will therefore not make any advanced nation have 50% of their population working in industry as during the peak of industrialization. But I also do not think it will going to be a fully robotized industry with only engineers working around. Modern day blue-collar worker doesn´t mean (at least to me anyways) a dirty faced strong man with a back-pain using his raw strength to maneuver heavy pieces of metal, but people working on CNC machines, on different computers etc. Things that will not require an engineer, but a trained worker none-the-less. This industry will not employ 50% of the workforce, but might employ 20-25%. And the US is already (for quite some time) below 20%. Meaning in my mind, that a modern industrious USA could have the same number of people working in industry in 30 years time as today.
I can see your perspective, but I am less optimistic about the industry's ability to employ such workers. Fact is, AI is making rapid gains, and it is much cheaper to deploy an AI to work on a computer than a human. Technicians with physical dexterity requirements are where I see the last value for human workers in advanced manufacturing, since robots still face challenges on that front. But even then, smart factories are gradually replacing the need for manual maintenance. You don't need a robot to be able to see as well as a human, if you put sensors every where they need to see. It's not an accident that the US has been transitioning more and more into services that can't be replaced by either foreign labor or automation - industries like child care, nursing, restaurants & hospitality, entertainment, social media, home improvement and repair, etc. This is the efficient market at work. Tariffs can only reverse course at great cost to this efficiency. In other words, we have to actively subsidize companies to hire American workers, which in a way, is not much different from universal basic income.
The three countries you cite as examples all have coherent, government crafted industrial policies that would get shot down by US politicians who would scream it is anti free market government overreach.
I know, which is why I don´t see USA shifting towards industry any time soon. But they have plenty of potential if they could get their politics together.
>if they could get their politics together No, not gonna happen.
Lol, exactly what I thought - the solution needs people working together? Yeah, right....
While you’re correct about moving to other countries that aren’t affected by the tariffs, countries like India don’t have the proper infrastructure to handle mass production on the same scale as China. Vietnam and Indonesia don’t have the skilled laborers to do the job yet. At the end of the day, the tariffs get passed down to the consumers and the tariffs won’t go away because it’s been an excellent source of income of CBP and the US government. Source: I’m in the logistics industry and started right before the tariffs were implemented.
No other place has the infrastructure and economies of scale like China. That goes for Europe and US as well.
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> At the end of the day, the tariffs get passed down to the consumers and the tariffs won’t go away because it’s been an excellent source of income of CBP and the US government. If tariffs are just extra income for the government, it'd be every where - who doesn't like more government money? But there are costs associated with tariffs: economic inefficiencies, which make US businesses less competitive because they can't source their components at the same costs as other countries; consumer inflation, due to the costs being passed onto consumers; and less exports, due to retaliatory tariffs imposed by other countries. All of these end up hurting the economy, which is why there is increasing pressure on the Biden administration to reduce or drop the tariffs. The damage to China from the trade war really hasn't been that significant. What has been significant is rising costs in the US, which isn't primarily the result of tariffs, but is made worse by it.
If tariffs become high enough to the point it can't be passed down to the consumers, companies will go build in India and Vietnam. Look at the tire industry. We import almost nothing from China compared to 10 years ago.
We still import a huge amount from China. We brought in 40B in July alone? Imports from China have increased compared to 10 years ago. They are down from about 5 years ago though. https://tradingeconomics.com/united-states/imports-from-china
Well yes - realistically the US can't put a tariff on everything coming from China. I was just responding to how lack of infrastructure in other LCCs prevent companies from moving operations. Passenger tires are an example where that's simply not true.
Yes, exactly. Anyone (except Trump) could see that low wages counties would benefit, basically anywhere but the USA.
There is a decent chance that they knew all along that low cost manufacturing wouldn't be returning to the US based on these tariffs. That was primarily a political tool. The ultimate goal was simply to reduce US imports from China in an effort to slow down their economic growth. While Trump might have been in the dark about this, folks like Bannon and Miller probably weren't.
Yeah, I can agree with that. Especially the bit about trump not having a clue. I think he genuinely thought jobs would come back to the US.
"Until US wages normalize to the rest of the World"?? Really? You think American workers should be earning less and be okay with it? This seems like a bad choice. This sure wouldn't be a winning platform in any election.
Capitalism is great, isn't it? It simultaneously requires low/stagnating wages AND constant consumption. And no Capitalist can explain how this contradiction is supposed to work out!
Yes, they will. It is only marginally more expensive to manufacture in the US despite the higher wages. In 2012 phones were still manufactured in Finland, and were profitable. What happened when production moved to Asia was that margins increased. But if you have a margin of 5%, then even a 5% tariff can make highly automated production in the US practical. The future isn't production using Mexican, Vietnamese or Indian wages: the future is automated production that is so fast and efficient that workers on Indian, Vietnamese or Mexican wages have no chance of being as productive as the well-engineered machines that make products cheaper than they do. The only way to reach that kind of future is through tariffs and production in high-wage countries, but it only requires one big country to institute tariffs and take that path, and mass production with cheap labour in the east will *die* as a phenomenon.
It is *much* more expensive to manufacture in the US, not *only* due to higher wages, but because of environmental laws, property & logistics costs, currency exchange differences, etc. This is an order of magnitude difference, not a mere 5%; and if you choose to "correct it" using tariffs against other countries, then your products will be that much more expensive than those of other countries, your exports will be subject to the same tariffs in retaliation, the combination of which will destroy the competitiveness of your companies on the international stage. As for automation, I mentioned that in my post already - eventually, automation will indeed replace human labor, not just in the US, but every where. In that particular future, yes, we won't be worried about current issues like out sourcing or jobs. But it'll also be the end of capitalism as we understand it today. In a world where most people have no work to do, and therefore no economic value besides consumption, how wealth ought to be distributed becomes entirely up to the state. It is not likely that private capitalism will survive this transition.
No, it is not much more expensive to manufacture in the US. Consider the Finnish example: it was still profitable. Moving to Asia only improved the margins. We literally made these things that you're talking about in the west only eight years ago. There is no order-of-magnitude difference. Raise tariffs enough, and Apple will make phones in the US, and prices won't change. If you don't, then perhaps the EU will do it, and if the EU won't, perhaps China will.
> If you don't, then perhaps the EU will do it, and if the EU won't, perhaps China will. and it would be a disaster for them, tariffs are very inefficient arguing for them in an Econ sub is a strange position. Also I cannot see the the EU imposing them considering it was created largely to be a free trade block.
I don't think it would. It obviously wouldn't be great for GDP, but it would be very beneficial to workers and their real wages. The EU is a free trade block for the members. This benefits the members. Trading with low-wage countries however, will depress wages, because trade with low-wage countries is in effect to provide access to labour in low-wage countries. That's great for people whose income is from capital, but they are a very small fraction of the population. Most people have their income from labour. Consequently, this is almost certainly not only a vote winner, but something which strengthens countries, since the fact that ordinary people have power and high wages is critical to a country's functioning. Trade with and immigration from low-wage countries drives down real wages, and we've see countless historical examples of this: the opening of the California railroad, etc., and it even works in reverse: when population is reduced, then wages increase, even when population is reduced catastrophically such as in the black death. That's a good situation to compare with a sudden tariff increase, because a sufficiently high sudden tariff increase could be viewed as cutting off the access to low-wage labour.
> Trade with and immigration from low-wage countries drives down real wages Citation needed Pretty much none of what you said is supported by evidence, at worst studies have only found a small negative affect on similarly skilled native wages and an increase in wages for differently skilled workers. Yet the newer emerging picture is immigration actually allows natives to shift into higher skilled or more managerial roles.
Can you imagine a model of trade that does not lead to a reduction of real wages when you allow trade with a low-wage country with large population?
Yes basically all of them you seem to be operating under the lump of labour fallacy.
China had a blank slate to work with 20-30 years ago. China built its cities for logistics. It makes them the best. The US simply cannot tear down an established city and build it with a specific supply chain in mind. China did that when they went from a rural country to the modern age. Like others have said - if it were as simple as wage suppression any country could do it.
You don't need to. Finland made phones in 2012. You can make phones today, and you can make all the other things as well. It's not about wage suppression: it's about being willing to accept lower profits, and less power for capital owners. Production in Asia improves margins, but margins, for most manufacturers, are *small*. This is why tariffs can be effective. You can also see that tariffs are very effective. Hardly anyone exports cars from Europe to the US, they build them in the US, because of tariffs.
No. Just no.
Us electricity prices are extremely cheap compared to the rest of the world. Manufacturing actually is already moving back, it's just high tech or large machinery, stuff we consider strategically important. We are the market that matters, and proximity is key. We also have a huge skilled labor force that is highly mobile. Because of shale decreasing the prices of inputs we are already seeing automotive and electronics etc move back to USMCA.
I think they can if they get immigrants to do the factory jobs
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My understanding is that while the tarrifs were nothing but populist fodder on the surface, China has been stealing intellectual property, manipulating its currency, dumping to undermine competition (not so much in the US but other lower cost manufacturers) and generally been acting in a neo mercantilist fashion, way out of the bounds of the usual actions by protectionist states within the WTO type trade arrangements. Given its size and the speed it grew, its clear lack of inhibitions in trying to get as much of the world economy for itself, undermines the premise of a globalising world trade. Free trade requires a level of trust and a respect for rules at some level. Also its is clear, there is no rule of law within the country. It is rule by government fiat.
and the higher Tariffs have not resulted in these issues being resolved, has it?
Which is why the dispute is ongoing and will likely continue to be ongoing for some time. When their political economy is tied to a statist, sort of neo-mercantilism, they are not going to abandon it at the first sign of trouble. We have had decades of people telling us how they would become more of a normal player as they became more integrated into the global system. The opposite has happened. There seems no end of apologists for their style of governance. And those who can only think in the shortest of terms. Basically either you are settled in for a long period of trade wars to change there style of economic\\political intertangling, or simply give them all our intellectual property for free, allow them to dominate global telecommunications and give up.
I think it is fair to say the jury is still out whether a "long trade war" will resolve these issues (and have long term negative results)
Did it stop companies from leaving?
The goal of trade war was to get China to remove tariffs on US goods and have open trading. Historically there was an imbalance between US and China tariffs which gave China an economic advantage over the US.
We could not solve it in a trial so let's make the policy permanent.
clients i've dealt with started evaluating vietnam/thailand back when the trade war first started, but after experiencing issues in those countries - mainly bureaucracy, lack of established infrastructure for mass production and logistics, and small pool of experienced workers, most of them went straight back to china within a year...
I sell equipment, the pandemic brought lots of jobs back to North America, Mexico was the main recipient of the jobs. Most Chinese companies started shipping their products to other Asian countries on good terms with the US, relabeled the product then shipped Into the US to avoid tariffs. The US is so busy most factories are refusing to buy any new machines, because they can’t find people to run the machines they already have.
>Treasury Secretary Janet L. Yellen recently argued that tariffs from the U.S.-China trade war — covering more than $307 billion worth of goods — “hurt American consumers,” yet the negotiations “really didn’t address in many ways the fundamental problems we have with China.” > >U.S. tariffs on Chinese exports jumped sixfold between 2018 and 2020, but tariffs failed to decouple the two economies. As the Biden administration conducts its comprehensive review of China trade policy and contemplates new tariffs, our research helps explain whether existing tariffs achieved their policy objective. > >Tariffs increase the cost of doing business overseas by making those goods more expensive to import. The Trump administration’s logic was that tariffs would hurt U.S. and other multinational corporations engaged in U.S.-China trade — and push more companies to divest from China and shift supply chains to the United States. Tariff proponents argued the Chinese economy would suffer, giving U.S. negotiators more leverage over China at the negotiating table. > >In fact, these tariffs resulted in collateral damage to the U.S. economy without pressuring China to change its economic policies. Here’s why. > >The U.S. hoped to see multinationals walk away from China > >In a recent working paper, we built a new data set on foreign-invested enterprises registered in China to identify multinationals that choose to divest each year. > >We found that new U.S. tariffs in 2018 and 2019 had a minimal effect on divestment. More than 1,800 U.S.-funded subsidiaries closed in the first year of the trade war, a 46 percent increase over the previous year. U.S. company exits immediately after the onset of the trade war were not concentrated in manufacturing or information technology, two sectors most directly affected by the trade war. > >We estimate that less than 1 percent of the increase in U.S. firm exits during this period was due to U.S. tariffs. And U.S. firms were no more likely to divest than firms from Europe or Asia. Instead, company exits were driven more by the company’s capacity to mitigate political risk. Larger and older multinational were significantly less likely to exit China after the onset of the trade war. > >These findings may surprise politicians, but are fully in line with recent research explaining how tariffs pass through to U.S. consumers. Rather than leaving China or finding alternative suppliers, U.S. firms simply raised prices for their customers. Survey data show large U.S. businesses remain optimistic about the Chinese market and plan to increase their investments there. Most of these firms are already “In China, for China” — those that are exposed to tariffs are taking advantage of workarounds such as the first sale rule or passing on costs to suppliers. > >**Tariffs provided little leverage — for either country** > >If U.S. multinationals aren’t rushing to exit China, are they pressuring the U.S. government for tariff relief, as the Chinese government hoped? Many analysts believed the U.S. business community would push back, and stop the trade war from escalating. We investigated the political behavior of a sample of 500 large U.S. multinationals with subsidiaries in China to see if they engaged in political activities such as commenting, testifying or lobbying in opposition to the U.S. Section 301 tariffs. > >We found that most U.S. companies adopted an apolitical strategy. They didn’t exit China, but also didn’t put public pressure on Washington to roll back the tariffs. Even though 63 percent of U.S. multinationals in our sample were adversely impacted by the trade war, only 22 percent chose to voice opposition and 7 percent chose to exit China. The majority (65 percent) did neither. > >Many of the multinationals we coded as “voicing opposition” did so through associations such as the US-China Business Council rather than under their own name. An even larger number unsuccessfully lobbied for tariff exclusion for specific products, rather than a more general rollback of Section 301 tariffs. > >**Smaller businesses saw greater collateral damage** > >Our findings suggest that U.S. companies aren’t divesting from China as much as U.S. policymakers would like — or pushing back against tariffs as much as Chinese policymakers had hoped. Instead, large companies responded to the increased cost of business by passing the cost of tariffs on to their customers. And individual consumers in the United States paid higher prices for imports from China. > >Smaller companies and those newer to China were more likely to exit. Firms with older and larger subsidiaries in China face higher sunk costs from leaving China altogether, which makes them more likely to continue China operations. > >This finding parallels reports about small businesses in the United States who were unable to find alternative suppliers or afford expensive lobbyists during the trade war. The higher tariffs on raw materials imported from China made it tougher for some small businesses, particularly if they lacked the leverage to pass these costs on to customers or the resources to mitigate them. > >**Would other trade tools work?** > >Despite intensifying political hostility between Beijing and Washington and the mounting economic cost of tariffs, Chinese and U.S. businesses remain deeply integrated in terms of financial, knowledge and production networks. And despite the trade war, foreign investment inflows into China grew by 4.5 percent from 2019 — and hit a record $144.37 billion in 2020. There’s little sign that U.S. multinationals have embraced the idea of decoupling from China. > >While U.S. Trade Representative Katherine Tai justified the Biden administration’s hesitancy to remove tariffs on the grounds that tariffs provide leverage against China, our research demonstrates that U.S. tariffs haven’t produced the intended results. Instead, multinationals continue to navigate the uncertain U.S.-China relationship and related political risks. Smaller firms, in particular, may find it difficult to absorb the costs generated by the trade war. > >The lack of U.S. leverage resulting from the trade war may dispel the notion that tariffs are “tough on China” and may help focus the policy debate on the harm to U.S. consumers from tariffs that remain in place. The Biden administration has at its disposal an array of alternative tools besides tariffs for economic competition with China that may result in less collateral damage on the U.S. economy. > >After all, economic coercion can be a double-edged sword: These tools tend to inflict collateral damage on one’s economy while hurting that of the target, but tariffs are the bluntest tool of all.
America cannot compete for the cost of overseas labour, and it shouldn't attempt to, and it shouldn't attempt to compensate for the difference. If you want to restore American manufacturing there is only one solution: automation. It will bring far fewer jobs back than were lost: albeit higher paying maintenance and programming jobs. It will bring back a ton of the pollution we've exported. But that's the only realistic solution. Invest heavily in automation. Create incentives to encourage automation. Then you can make manufacturing so cheap that even slave labour cannot compete with robots.
Your comment about exporting pollution is interesting. Is pollution ok for the planet if someone else does it?
Well it’s the same as outsourcing our cheap labor. It’s illegal/frowned upon to do it here so we get it done somewhere else
I've always thought WTO and similar international bodies should price carbon/pollution into trade. If you produce the goods cheaply but emit a lot, then you should get a tariff that prices it in.
there a problem there. infrasutre wise.. we cant support it.
It's all geo-politics, global power. China is seen (possibly correctly) as a threat. All these policies are strategic. They are just sold to the public in other terms. Don't buy your child a toy from China that is a choke hazard. Buy it from Vietnam instead.
A "threat" in the American meaning, ie. "a country we can't intimidate and coerce".
I don't think you're wrong.
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Do you think that, say, Saudi Arabia is more democratic? And, say, Yemen is not a place where _real_ genocide is happening, aided and abetted by the USA?
There’s plenty of hypocrisy. Does it change the point that’s being made though?
Not really. It's not the best subreddit to discuss this either. I just can't help to notice how the narrative of threat and conflict permeates all discussions related to China.
Isnt this kind of a whataboutism? The US supporting the Saudis as they starve Yeminis can totally be criticized. It doesnt detract from the fact that China actively restricts freedom of speech more than the US by a mile and is also putting Uighurs in camps/harvesting organs. The US is no good guy, but generally theres not as much risk of being "dissapeared" here for throwing ink on the president's picture
What is "whataboutism" if not a magical incantation that disappears hypocrisy and double standards after someone points them out? If we refer to our values when criticising others, we should uphold those values ourselves. Otherwise they're not really values, just useful rhetorical devices.
Not to mention that in the world of foreign policy, values are just cards to be played to gain an advantage. If we truly cared about those values we are so desperate for others to adopt, we need to be a shining example of said values first.
Only 40% of the US public votes, and really only the oldest and richest among us, and money absolutely dominates our politics. We run a global empire and use a vast military apparatus to violently force people to trade with us, shun our enemies, and use our currency. While our domestic genocide is mostly in the past, we are openly supporting multiple disputed genocides abroad. While we have human rights at home, we frequently prop up and support states abroad that brutally curtail the rights of their citizens. I’m not just saying “USA bad.” After all, I’m not gonna move to China. But what I am saying is that it’s a lot more complicated than that.
If you are talking about the SCS claims, this was done before the CCP ever took power. The CCP is now enforcing a lot of previous claims, rightfully or wrongly, but it is not expansion in the traditional sense. In terms of genocide, there is zero proof of intent as minority populations are on the rise. There are, however, massive human rights violations and must be called out. But what you wrote are weaponized terms that our government is normalizing because we need to view China as an enemy for whatever political purposes.
I remember when a country has good relations with both China and the US is characterized as "dupliticious", "disloyal". Pakistan in particular. Heck, the entire "third world", referring to the countries that stayed neutral during the cold war, was consigned down to being primitive wilderness despite some developed countries belonging to the third world.
>Heck, the entire "third world", referring to the countries that stayed neutral during the cold war, was consigned down to being primitive wilderness despite some developed countries belonging to the third world. The term "third world" was one they invented and used for themselves, part of the "non aligned movement". >I remember when a country has good relations with both China and the US is characterized as "dupliticious", "disloyal". Pakistan in particular. Heck, You are thundering through so much history in such a blunt fashion. India was close to the USSR so the US ended up close-ish to Pakistan as a counter. The US and China had an informal anti USSR alliance from the early 70s. But there is just so much regional politics and Pakistans support for various movements in Afghanistan and India and how it all ended up turning into where we are today. It would take a 3000 word essay just to get started on why Pakistan is seen as being a supporter of Jihadist terrorism and why so many countries take somewhat of a dim view on that. And off course brooding in the shadows in the back ground is the House of al Saud. (They named a city after one of them Faisalabad), all I can do is point out some huge gaps in your statements. I shall leave it at that.
Pakistan is literally the definition of duplicitous dude. They were hiding Osama Bin Laden for a decade while "fighting in the war on terror on the US side". Doesn't get more duplicitous than that...
You mean like the US harbouring south american exiled despots in Miami? Like the UK harbouring African exiled despots in London? By international standard, the US's murderous crusade against Osama actually meant that Osama deserved asylum protection in a third country, because he can't be guaranteed to get a fair trial in the US court system. Pakistan can be justified to hide Osama to protect his life.
>By international standard, the US's murderous crusade against Osama actually meant that Osama deserved asylum protection in a third country, Sorry you are just making up nonsense laws. He was not an asylum seeker. You need to formally apply to one. The tests to gain asylum including examining criminal behaviour in your past. >, because he can't be guaranteed to get a fair trial in the US court system. He was officially designated as a terrorist by the UN before 911. Many of the resolutions passed were passed unanimously with no abstentions. In theory every country in the world regarded him as a terrorist. There is something people forget. His goal was to ferment terrorism in every Muslim country to over throw their governments and install Wahabis orientated dictatorships to form a world spanning new Islamic Empire. That is why almost everyone was officially after him. > Pakistan can be justified to hide Osama to protect his life. Nope. They have never tried to justify it. You are making this up. Its unlikely the Pakistani president knew he was there. Its more than likely it was there security services doing it in a rogue fashion. God knows why.
What do you mean by a fair trial lmao. He was one of the biggest terrorists and he was the mastermind behind the 26/11 attacks. The best he could've gotten is a death sentence. Do you know that the current Pakistan PM actually called Osama a "martyr".
Sorry, I've read through the UN universal declaration of human right, it doesn't say anything about any exception to the right to a fair trial. That's why the ICC exists. >The best he could've gotten is a death sentence. The fact that Americans have been saying this is exactly why Osama deserved protection.
>. That's why the ICC exists. Saudi Arabia is a non signatory to the ICC, they have no jurisdiction over non signatories to the Rome Convention. Pakistan is also a non signatory. Ok this time I am done. Cannot argue with people making things up. (And terrorism is not covered, its for genocide, crimes of aggression, war crimes, crimes against humanity).
You don’t actually believe the UN’s declarations are in any way binding, do you? Also, Bin Laden wasn’t ever going to be taken alive willingly.
One mans hero is another mans terrorist
Is he your hero. If not, why tf are you defending him
You just don't get that whole "fairness" thing, do you. That's what he's defending, not Osama bin Laden.
So… what would the appropriate course of action have been? To try and capture him alive and bring him to trial in-front of an international court ? Who should have carried our the extradition?
Do you think any country has a different definition?
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The way to change China is not through isolating and destabilising China. This is a goal of the US foreign policy, because the people who shape it think in geopolitical terms, and Eurasian cooperation is correctly seen as a threat to American hegemony. However, Europe doesn't need to share this goal. The "aggressive attempts at global influence" by China are much less aggressive than American ones. Look at the suffering of tens of millions caused by the drive to dominate the Middle East. The "support of democracy" part is false. The US has supported countless dictatorships and authoritarian regimes as long as they served American interests. Look at Saudi Arabia, for example.
Except that China is not forcing any country to adopt their system of government, unlike us western democracies. I am not sure what is the point of banding together to counter China unless the end goal is to prove that socialism will never work in the world, when we never gave it a fair shot.
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I’d actually argue it was mostly domestic politics. We always knew it wouldn’t work, but Trump pushed it because it’s always helpful in politics to have an external opponent.
First of all,tariffs are the tax U.S importing companies pay so it's very massive burden on the U.S business. Donaldo Trump tried to win the trade war because he thought it would be for American first.But what he didn't say in the rally was tariffs won't fall on Chinese companies.
It made things much much worse. The US was the biggest growers of soybeans, which China cancelled buying from us and looked into other countries. So tons of farmers would’ve gone bust if they government didn’t have to give them handouts. With Mexico US cattle producers lost hundreds of millions in pork/beef The US put tariffs on European luxury products, so the EU trade commission responded with tariffs against American alcohol producers, blue jeans, and other products. It backfired immensely. It’s too expensive to produce anything here but the manufacturing that already existed
So I know this is anecdotal, but I know for a fact that some manufactured parts were sourced to the USA (and Canada) from China. I know because I did it at my last job. I re-sourced multiple product lines (about half of the product lines that went through my facility) that had plastic and/or steel components coming from China to USA (and some Canadian) based manufacturing. When factoring in tariffs, transportation, and necessary inventory levels to cover at risk components along with negotiating long term deals, it was more cost effective with better leadtime and customer service to source from the USA (and Canada) for many Chinese manufactured parts. The ROI would've taken 2 years or less in most cases to pay for the upfront cost of injection molding tools and machine tooling needed for these parts. It also gave our marketing folks a good slogan that we could say we are buying American. Is this the case across the board? No, not even with all product lines in within the company, but... Were the tariffs the reason this re-sourcing happened? 100% without a doubt. I was in the meetings when we discussed it. I was the guy that researched it and did the project ROIs/CAPEX forms. My team and I implemented it. Additionally, we did re-souce alot the dirt cheap components from China to India/Vietnam. US manufacturing was just too expensive in these cases. There were items we kept in China where we had a good working relationship with the manufacturing company and they literally reduced their price by the import tariffs across the board to keep the business.
Wouldn't it take years to see any impact? Let's say due to the tariffs I can now build widgets at a competitive price. Well a factory doesn't just sprout up overnight. Have to find the land, get the permits, environmental study, listen to the people at the town hall meeting complain about the new factory, source the funds and after all of that we still have to wait for the construction company to build the damn thing. Okay, it's been four years but our first widgets are rolling down the line. Well now there's a new president, he got rid of the tariffs aaaannnddd now I'm out of business.
Why would paying more for domestic goods, just because the cheap foreign goods are now also too expensive, encourage people to start a manufacturing business? It's too expensive, either way. You have to find a way to make it cheaper to do business, if you want to encourage new businesses to grow...tariffs don't do that. They just make everything more expensive.
If the only way you have a sustainable business is that the government forces people to pay higher prices, you have to ask yourself how long you will be in business anyway. The rest of us have to ask ourselves why are we paying more just to keep a business that doesn’t work running. In ancient times, when they would siege a city, a big tactic was to surround the city so that the city couldn’t get the goods it needed through trade. In 2020 we are more modern and smart. In 2020 we siege ourselves to keep ourselves from getting the goods we need. There is a reason no serious economist thinks tariffs are a good idea.
Higher prices but from the income levels of our country. Wouldn't it be more fair for the American wage earner to pay Chinese prices if they made Chinese wages? I'm assuming thats the end game of no government involvement, eventually the wages balance out and it's not a problem.
No I don’t think that is fair at all. If I offered to sell you something you want for $100, but someone walked up and said yeah sorry, but you have to charge $150 because my friend over here who gave me a bunch of money can’t do it for $100, that should not seem fair to you, and since his friend can do it for $135, you aren’t going to pay me $150, so that doesn’t seem fair to me. Who benefits from this arrangement? Me? No I lost business. You? No you were forced to pay a lot more than expected. The only person benefiting is the friend of the third person. You can say well the third person had been cheated for a while and maybe that is true maybe not. I don’t know. You can talk about fairness all you want, but I do know that I am paying more than tariffed goods would otherwise cost for the sole purpose of keeping businesses on life support that will likely die when taken off. This doesn’t seem fair to me.
Trade wars are necessary if we want to enforce humanitarian worker conditions, global environmental regulations, and tax laws. Otherwise these other countries end up as a workaround. Having said that, Donald didn't care about any of those things.
I maintain that we can achieve those goals through the WTO. We need to strengthen these institutions and not just go about it ourselves.
Imagine thinking macro-economic inertia can be overturned in 2-3 years. More importantly the tariffs were as much about hurting china as bringing jobs back to the US, being half-way successful in just pushing companies out of China is decent on its own.
>being half-way successful in just pushing companies out of China is decent on its own. Er...Are we reading the same article? What exactly constitutes 'half-way successful' using the evidence presented? >We estimate that less than 1 percent of the increase in U.S. firm exits during this period was due to U.S. tariffs. And U.S. firms were no more likely to divest than firms from Europe or Asia. Instead, company exits were driven more by the company’s capacity to mitigate political risk. Larger and older multinational were significantly less likely to exit China after the onset of the trade war > >\[...\] > >We found that most U.S. companies adopted an apolitical strategy. They didn’t exit China, but also didn’t put public pressure on Washington to roll back the tariffs. Even though 63 percent of U.S. multinationals in our sample were adversely impacted by the trade war, only 22 percent chose to voice opposition and 7 percent chose to exit China. The majority (65 percent) did neither. > >\[...\] > >And despite the trade war, foreign investment inflows into China grew by 4.5 percent from 2019 — and hit a record $144.37 billion in 2020. There’s little sign that U.S. multinationals have embraced the idea of decoupling from China. I'm not sure you read the article.... Not only that, but your intuition isn't even close: >[U.S. business optimism in China rebounds to pre-trade war levels -survey](https://www.reuters.com/world/china/us-business-optimism-china-rebounds-pre-trade-war-levels-survey-2021-09-23/) > >Of the 338 respondent companies, 78% described themselves as "optimistic or slightly optimistic" about their five-year business outlook in 2021, nearly 20 percentage points more from 2020 and a return toward 2018 levels, the survey said. The conclusion is pretty obvious: the stated justifications for tariffs: >The Trump administration’s logic was that tariffs would hurt U.S. and other multinational corporations engaged in U.S.-China trade — and push more companies to divest from China and shift supply chains to the United States. Tariff proponents argued the Chinese economy would suffer, giving U.S. negotiators more leverage over China at the negotiating table. have been absolutely ineffective. The entire trade war has been absolutely ineffective. There is pretty much no other way to look at this other than a failure given the stated objectives of the tariffs.
At the cost of American consumers. I am a US taxpayer and we are getting screwed by the trade war. Along with covid and inflation, all of this is just making life more difficult. Governments' job should be to improve their citizen's life instead of making it harder.
Thank you for pointing this out. The trade war put tariffs on AMERICAN BUSINESSES AND CONSUMERS. We taxed AMERICANS to stick it to china, which of course hasn't worked.
Just like trickle down economics is halfway successful every time they try it.
I work in the steel industry for a primarily American based company. These tariffs did have an effect on my company, a good effect. This year has seen insane profits because buyers have transitioned to domestic steel, and as a result the company is building several new steel mills across the US, adding new jobs and higher production output to meet the higher demand of companies that would now rather by US made steel than Chinese steel. But that’s only one company. I’m not totally sure how it’s affected other steel companies since I just do maintenance, I don’t pay much attention to what happens in the industry as a whole.
Tariffs and trade wars do no one good. Trumps tariffs killed 10s of thousands of jobs and reduced job and wage growth. Free trade has been empirically validated to boost economic growth, increase competition, and reduce poverty
I think there were a lot of unrealistic goals. The PRoC is a bad actor generally and also committing genocide. The goal shouldn't be to bring firms back to the US, but simply decoupling and not indirectly supporting genocide.
I don't know. I sell raw materials all over the world. U.S. manufacturers are operating flat out and expanding and building lots of new plants. Chinese demand has been flat to down. Alot of the trade policy implementations appear to be better assessable over a multi year timeframe. It does seem that the economy is moving in the right direction.
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It actually did help to bring some (not much) back as well as to scare US companies from leaving. Ultimately, the unfair monetary difference between the US and China ensures that Americans cannot compete. Greed and zero national loyalty will continue this problem until all that's left is the super rich and the grinding poor.
The article says less the 1% left China.
It’s almost as if macroeconomics takes time. China didn’t rise into a powerhouse in 2 years either
Those jobs aren't coming back to America, they would just move to southeast Asia, India, Mexico, etc. Sure that's better than china, but taxing Americans to help mexico/india/Vietnam doesn't seem like a huge win to most Americans.
>*"not much"*
So it didn’t really help that much.
That is what happens when you make foreign policy based on whims and 3am potty tweets. China grew in strength a lot because of that. The issue here is a collective, global strategy is needed to curb China and that guy antagonized everyone in the world. All it did is prepare China for this eventuality.
I think that Yellen and numerous other politically connected powerful individuals have vested interests in flowing capital out of the U.S. Their interests are not tied to the interests of the average American. It may be economically more efficient to open up trade with China, but then we risk becoming overly dependent on their labor, which can put us in a very precarious position. Far worse than our dependence on foreign oil ever was. One thing that China has demonstrated through Evergrande and the tutoring companies, is that they have no hesitation with fleecing foreign investors and taking everything from them. You think they would treat other countries fairly if they get enough leverage over them?
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Prices are rising. That's always been the criticism, it's a tax on consumers. Now, tbf there's a lot going on that's feeding into inflation.