Trump Plays Dangerous Game Of Chicken With Trade Tariffs

[maximumpossiblesuffering]

You think the other countries do not have their self interest at hand? They have the unfair trade advantage which is why they are not going to give it up willingly. That is why you need the tariffs as a cudgel! What the US has is leverage because we are probably, the largest market on the planet. If they want to continue doing business in the US, they have to engage in fair trade which is simply, this. If you export $100 billion into the US, you have to buy $100 billion in US products! Why do you think the Chinese suddenly, promises to buy another $200 billion in US products? That is to alleviate our anger and demand for fair trade. If we had fair trade, we would not be adding to the deficits because both sides would be equal to zero without a surplus! A win-win for both countries.
Now, what happens in a trade war? Tariffs are levied on products of both countries. Who loses out? The countries with larger exports loses out! This is just simple math. Say China levies a 25% tariff on US goods and we retaliate by levying 25% tariff on Chinese goods in turn. I read China exports like $200 billion to the US but, buys only $50 billion in US goods? Do the math. Who is going to collect more tariffs? When Chinese goods become more expensive, it hurts US consumers per the arguments of liberals. Not necessarily. Take note, most goods now are produced by multiple countries. So, poorer countries goods could end up being cheaper than Chinese goods. If I have to buy foreign goods, I will not reward China if we have a trade war with them? Why should I? That is aside from the fact that another import probably, is just as good and now, cheaper? Here is the kicker, when Chinese goods become too expensive from tariffs, demand goes down quite a bit. Chinese companies suffer huge losses, layoffs at Chinese companies now struggling. Whose economy took the bigger hit?

A trade skirmish started after the Financial Crisis of 2008/2009 in the form of legal actions against foreign branded companies. For example, Volkswagon and the emissions scandal in the United States and Microsoft as well as Google anti-trust actions in Europe.

Government actions such as listed above increase the cost and risk of doing business in that country. This will lead to either less business being done or higher prices. The net effect of this is a tax paid by a company that productivly uses capital to a Government that hisorically does not utilize money effectively.

The net effect of this is higher unemployment than would be otherwise. If prices go up, less people will be able to afford the product, demand goes down, and there is less need for employees. If the business decides to not expand because of regulatory fears or marginal producers leave the affected industry, employment is affected directly and unemployment rates go up.

Increased trade tariffs will have the effect of lowering domestic demand for foreign goods and lower foreign demand for domestic goods because of higher prices. In addition, most citizens in other countries tend to be very nationalistic. They will tend to boycott U.S. goods in protest to the U.S. action of attempting to change the trade status quo. Furthermore, demand dislocations will upset industries that directly or indirectly provide for or rely on the trade tariff affected industry or industries.

The predictable end result of a trade war is reduced economic activity and increased unemployment. Given the high global government, business, and consumer debt in most countires, the potential for a catastrophic economic outcome is high in our very connected and leveraged world.

The point of renegotiating trade agreements is to get an actual agreement, not escalating trade tensions.

Most of the world powers know what a trade war can bring. The Great Depression of the 1930’s and World War II was the result of a trade war according to many scholars.

Hopefully, a sustainable trade agreement can be reached before the global economy takes its plunge.

 

[dozu888]

That is basically what my Dad says. I thought it was american arrogance. I guess I was wrong.

please educate your friends as well.... it's so bad to see the younger generation getting brain washed by all this lefty socialist bull shit.... don't they realize it's a good thing that there are jobs waiting for them when they graduate.

 

[d08]

You think the other countries do not have their self interest at hand? They have the unfair trade advantage which is why they are not going to give it up willingly. That is why you need the tariffs as a cudgel! What the US has is leverage because we are probably, the largest market on the planet. If they want to continue doing business in the US, they have to engage in fair trade which is simply, this. If you export $100 billion into the US, you have to buy $100 billion in US products! Why do you think the Chinese suddenly, promises to buy another $200 billion in US products? That is to alleviate our anger and demand for fair trade. If we had fair trade, we would not be adding to the deficits because both sides would be equal to zero without a surplus! A win-win for both countries.
Now, what happens in a trade war? Tariffs are levied on products of both countries. Who loses out? The countries with larger exports loses out! This is just simple math. Say China levies a 25% tariff on US goods and we retaliate by levying 25% tariff on Chinese goods in turn. I read China exports like $200 billion to the US but, buys only $50 billion in US goods? Do the math. Who is going to collect more tariffs? When Chinese goods become more expensive, it hurts US consumers per the arguments of liberals. Not necessarily. Take note, most goods now are produced by multiple countries. So, poorer countries goods could end up being cheaper than Chinese goods. If I have to buy foreign goods, I will not reward China if we have a trade war with them? Why should I? That is aside from the fact that another import probably, is just as good and now, cheaper? Here is the kicker, when Chinese goods become too expensive from tariffs, demand goes down quite a bit. Chinese companies suffer huge losses, layoffs at Chinese companies now struggling. Whose economy took the bigger hit?

Spoken like a true socialist. "Quality of the products does not matter! competition does not matter! you have to buy our products whether they're total garbage or priced ridiculous! let's go comrades!".

 

[volpri]

please educate your friends as well.... it's so bad to see the younger generation getting brain washed by all this lefty socialist bull shit.... don't they realize it's a good thing that there are jobs waiting for them when they graduate.

Most of my friends are all old. I am too. Dad has been saying stuff like this since the 70’s. Dad is 85 and still has his garden.

 

[smallfil]

Spoken like a true socialist. "Quality of the products does not matter! competition does not matter! you have to buy our products whether they're total garbage or priced ridiculous! let's go comrades!".

I am more capitalist than you are! Let me guess? You are a globalist who favors the status quo. What competition are you talking about when you are trying to dominate the world's economy and turn them everyone into slaves! Quality of product? You do not know what that means! Most of the products exported by China by example, are junk! There is no sugar coating that! President Trump is correct with his America First policies and I support it and most US businesses! You insult me by saying I want junk? Certainly, not your junk from whatever hell hole you crawled out off! Globalists, you are done! Take that to the bank because all the other countries are waking up to all your lies!

 

[smallfil]

A trade skirmish started after the Financial Crisis of 2008/2009 in the form of legal actions against foreign branded companies. For example, Volkswagon and the emissions scandal in the United States and Microsoft as well as Google anti-trust actions in Europe.

Government actions such as listed above increase the cost and risk of doing business in that country. This will lead to either less business being done or higher prices. The net effect of this is a tax paid by a company that productivly uses capital to a Government that hisorically does not utilize money effectively.

The net effect of this is higher unemployment than would be otherwise. If prices go up, less people will be able to afford the product, demand goes down, and there is less need for employees. If the business decides to not expand because of regulatory fears or marginal producers leave the affected industry, employment is affected directly and unemployment rates go up.

Increased trade tariffs will have the effect of lowering domestic demand for foreign goods and lower foreign demand for domestic goods because of higher prices. In addition, most citizens in other countries tend to be very nationalistic. They will tend to boycott U.S. goods in protest to the U.S. action of attempting to change the trade status quo. Furthermore, demand dislocations will upset industries that directly or indirectly provide for or rely on the trade tariff affected industry or industries.

The predictable end result of a trade war is reduced economic activity and increased unemployment. Given the high global government, business, and consumer debt in most countires, the potential for a catastrophic economic outcome is high in our very connected and leveraged world.

The point of renegotiating trade agreements is to get an actual agreement, not escalating trade tensions.

Most of the world powers know what a trade war can bring. The Great Depression of the 1930’s and World War II was the result of a trade war according to many scholars.

Hopefully, a sustainable trade agreement can be reached before the global economy takes its plunge.

Before NAFTA and globalism, what did the US have before? We had bilateral trade agreements with countries. It benefited both countries until, liberal politicians in the US sold US interests to back their foreign sponsors lining their pockets! Switzerland, the world's richest country in the planet is not part of the European Union? Ask yourself why not? Their economic minister on TV said that they will not sign any trade agreements they deem unfair to Switzerland. So, if it is good enough for them, why is it not good enough for the US? Switzerland has more trade with other countries than the European Union combined? Ask yourself why? If globalism is so good as they tell you, why did Germany have to bailout Portugal, Greece and Ireland? Right now, Italy and France are at the brink and possibly, could fail. Nobody wants a trade war and it is far easier to come to fair trade agreements but, let us get real. Those with unfair trade agreements would like to keep them to keep their advantages. Why wouldn't they when they will come out ahead each and every time? All the US is asking from fair trade which benefits most countries and not just the few taking advantage of others! A level playing field for everyone. If not, then, the US has the right as other countries to review their trade agreements and do like Switzerland and refuse to sign any future unfair trade agreements.

 

[Metamega]

Many here probably have way more education than I do on history and economics and maybe this is just me having one too many beers tonight... but had any nation in the history of man kind stayed at the top forever?

Maybe trade deficits are a problem or maybe it’s just history repeating itself.

 

[fordewind]

To put it simple, the USA doesn't need the world, it's the world who needs the USA

100%.Everybody`s stealing from the US.

 

[Gotcha]

To put it simple, the USA doesn't need the world, it's the world who needs the USA

I feel like the ship has sailed and its too late. US economy is all about consumption. Everyone needs lots of cheap shit that is replaced the next day. All this cheap crap could never be made in the US because then it of course wouldn't be cheap.

The way out of these messes is always slow and gradual. Just like increasing interest rates, it has to be slow and steady. With Trump starting a major trade war, there simply isn't enough time to switch the population from accepting crappy jobs to make stuff, and re-adjusting of prices on everything to take into account how expensive everything will be.

The US of course has all the resources it needs to be self sufficient, but its population isn't lined up to make the sacrifice. China and other less established economies are much more able to adjust to a period of making do with less until a new normal is established. In fact, in China with strict rule, they can easily make harsh changes overnight to adjust to any new normal whereas in the US, it will be chaos.

 

[vanzandt]

I feel like the ship has sailed and its too late. US economy is all about consumption. Everyone needs lots of cheap shit that is replaced the next day. All this cheap crap could never be made in the US because then it of course wouldn't be cheap.

The way out of these messes is always slow and gradual. Just like increasing interest rates, it has to be slow and steady. With Trump starting a major trade war, there simply isn't enough time to switch the population from accepting crappy jobs to make stuff, and re-adjusting of prices on everything to take into account how expensive everything will be.

The US of course has all the resources it needs to be self sufficient, but its population isn't lined up to make the sacrifice. China and other less established economies are much more able to adjust to a period of making do with less until a new normal is established. In fact, in China with strict rule, they can easily make harsh changes overnight to adjust to any new normal whereas in the US, it will be chaos.

Here's the question though....Will AI and robots change all this?
I mean set aside the whole "humans replaced by robots" and UBI debate.
A completely automated factory making cheap Venetian blinds for HD in Peoria will basically cost the same as building one in the Chen-Zaou Providence in China. Alls it takes is the investment capital.

"The times they are a changin'". -B.D.