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The Feds can devalue the US dollar by printing tons of dollars and buying foreign currencies. Exports increase and imports decrease. However, a cheaper dollar also means that assets in the US (stock, bonds, real state) also become cheaper, and foreign investors buy them even more, the account deficit increases and you get high inflation in the domestic market. Nothing is free.
Most countries in Latin America pursue this policy of high inflation and devaluation to keep their exports industries afloat but the local populace pays for it with very low wages, unaffordable housing markets, high interest rates and lower standards of living.
In a generation I would bet that we the people and our gov'ts own an s-load of Yuan, and yuan based debt and investment paper.
Not just a war with China, but apparently Trump is planning trade wars with Japan, Germany, All of Europe, and Mexico. He has probably also threatened others that I have not heard of.
Will US Companies succeed in a global trade war? Who will they sell goods to? And since our goods will cost a whole lot more to export, how can American companies beat the low prices from China and Mexico? Will it be quality? We don't manufacture any more so, will we have to relearn quality? How long will that take?
Will US corporations - the great patriots they have already proven themselves to be - just abandon America in order to sell to the rest of the world?
I'd like to hear what those who have studied (not just taken an Econ 101 college course) trade and trade wars think.
Can they compete in a trade war? Yes, the US has a population has 325 million with GDP (purchasing power parity) per capita of $57,000. The EU has a bigger population but even Germany and the UK have a much lower GDP (purchasing power parity) per capita than the U.S. Japan has roughly 1/3 of the US population and a GDP (purchasing power parity) per capita $38,894.
The BRICS countries maybe with the exception of Brazil are just net exporters of finished consumer goods. There is little internal demand for anything but cheaply made goods, which America ironically has outsourced to the BRICS countries.
So, US companies having exclusive access to US consumers stand to make much more than EU companies. Yes, a pair of crappy sneakers won't be $15, but a pair of decent sneakers will cost $60 and last as long as 4 pairs of crappy sneakers. That's what happens in Western Europe and Japan where people for the most part buy quality domestic or regionally made goods over cheap imported goods.
The real issue lies elsewhere. The BRICS countries need high quality industrial goods, the kind of machinery that makes other stuff. The main competitors to US firms are Western European countries (France, UK, Germany, Italy, Holland), Japan, and to a small extent Russia and China.
Typically, these things are part of larger projects that require project funding and loans to make that happen. Since US dollars are used in international trade, instantly, the US has a price advantage as currency exchanges are eliminated, and until China started handing out loans as political favors, the US provided most of the funding because its capital market was most developed.
Not sure but I think under the WTO regime, some of the project loans were considered illegal subsidies. To solve this, the US would contribute the bulk of funds to an international organization sponsoring the project, the sponsor would then make the loans to purchase the machinery from countries other than the US. Another great way the US shot itself in the foot with a trade deal.
These problems have been known for the last 30 years.
Yes, the US will be fine and will actually prosper.
Protectionism is a trade war, because as soon as protectionist tariffs come about, those affected WILL reciprocate, to protect their own industries. Why would they not? Everyone loses in them.
So tell China to eliminate their tariffs if it bothers you that much. I see no problem with it. And true to you word, the US is reciprocating. I am proud of my nation's bold move.
Even by taking into account the top 25, the US represent 13.10% of the top 25.
But there are a whole 86.90% of the countries who can still export (within the top 25).
The European Union is at $441,134,126,068 or 38.78%, without taking into account the UK, and that is to be compared to the US with $149,122,000,000 or 13.10% - all numbers in % against the top 25.
Taking into account the UK, the gap is bigger: $473,788,981,393 or $41.61%.
Anyway, I believe there might be some disruption but I doubt there would be any specific issues if the US stopped exporting food. Some other countriest will just take the void.
Just wheat and corn alone....this would be bad enough. If you suddenly removed 1/3 the worlds corn exports and 1/6 th of the total wheat exports..... That would cause major disruption in markets. Prices would climb fast and alot of people would starve.
China employs protectionism. Why hasn't that prompted reciprocation? Because we've been pushovers. Those days are over.
I suspect you don't understand international economics, and further suspect you are only interested in confirmation biases. Trump loves his fanboys, right?
Many investor will flock to the US and invest there as there is a market in the US .... Then there is some countries that do buy from the US , like Canada, and the UK and a few others , but some country do block US products out of the country, like China and Japan
Many investor will flock to the US and invest there as there is a market in the US .... Then there is some countries that do buy from the US , like Canada, and the UK and a few others , but some country do block US products out of the country, like China and Japan
Guess who the largest buyer of US goods is? Guess who is the largest buyer of Canadian goods? And guess what? It is almost a balanced trade between them, sometimes Canada is ahead, and sometimes the USA is.
The globalization of our recent era, was begun during World War II and has progressed continuously since then. It is at the root of our economy and our rise as a world power.
If you care about the truth you don't have to keep spouting this nonsense. You can look it up. US global trade was a pittance until the 1970s, when it started ramping up:
Trade isn't the problem, rather it's our massive trade deficit and the effect this has had on wages and domestic investment.
The US still trades less than other major countries, and we are less dependent on trade:
As a courtesy to others, maybe resize graphics before posting them?
Vbulletin automatically resizes it on a laptop. It shows fine here.
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