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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.
When you are 25% of the global market, if a trade war comes, you are in a really good position.
When you are 25% of the global market, if a trade war comes, you are in a really good position.
I would suggest you do a bit of research on this, as I know you will want to re-calibrate your conclusion. The USA DOES have a significant portion of GDP compared to many, but it is not where you think it is, especially when much is inward facing. The USA is number one... for now, but the EU is just behind it, and China is quickly gaining.
... I'd like to hear what those who have studied (not just taken an Econ 101 college course) trade and trade wars think.
BlktopTrvl, the unilateral proposal for USA’s global trade described by Wikipedia’s “Import Certificates” article would minimally increase prices of imported goods sold to USA purchasers by the federal government’s direct expenditure’s due to the policy, (i.e. the assessing USA’s globally traded goods values and administrative costs). Additional increases of prices would only be due to markets behaviors.
Tariffs can provide net federal tax revenues; the Import Certificate policy provides no net tax revenues but it would indirectly subsidize USA’s exported goods prices to an extent entirely determined and caused by market behaviors.
The policy increases USA’s GDP and number of jobs more than otherwise by eliminating or almost eliminating USA’s chronic annual trade deficits of goods.
I would suggest you do a bit of research on this, as I know you will want to re-calibrate your conclusion. The USA DOES have a significant portion of GDP compared to many, but it is not where you think it is...
The US produces about 22% of everything produced anywhere in the world, not 25%.
Quote:
Originally Posted by dillionmt
...especially when much is inward facing.
Export-driven growth is a recipe for LDC's. Mature and prosperous economies should be running the trade deficits that allow export-driven growth to occur elsewhere.
Quote:
Originally Posted by dillionmt
The USA is number one... for now, but the EU is just behind it, and China is quickly gaining.
Both the EU and China are confronting serious economic roadblocks. Trump may well come to put the US into a similar situation, but at the moment, there are few other threats to our economic primacy.
I work in the medical device industry specially in financial planning. We are a small/mid cap sized manufacturer of desposable medical products used primarily in surgical procedures. Our competitors are much much larger than us and have moved production lines in Mexico for a decade plus now.
We opened a plant about 5 years ago just across the border in Cali and were in the process of closing one of our most inefficient plants in Maryland. Now with the proposal of the 20% tax we have stopped the closure of the plant and waiting in limbo for specifically how it will be applied.
This tax will not come from Mexico and will either be paid by US healthcare consumers or the medical device manufacturers. The entire industry has invested heavily in production so not like a few will be able to undercut on price. So in essence the tax will be passed on to consumers and will drive inflation.
It has stopped further investment in Mexico and will protect jobs and potentially stimulate New investment in the US.
... Export-driven growth is a recipe for LDC's. Mature and prosperous economies should be running the trade deficits that allow export-driven growth to occur elsewhere. ...
Regarding “LDC”: I prefer that poster’s explicitly state the entire term rather than employing ONLY an acronym, (i.e. Acrnym), the term words’ initials or slang words when first introducing them within their individual posts. Thereafter the continued use of the Acrnym within the same post is more of a convenience and less of a problem.
My memory has always been poor and I don’t believe it has improved by age. Regardless of the cause, (my unfamiliarity with newer language terms, or terms I don’t often encounter when reading, or due to attempting more precise understanding of what I read or what I’m conveying within my writing), I find myself googling or referring to dictionaries more often.
This tax will not come from Mexico and will either be paid by US healthcare consumers or the medical device manufacturers.
Or not at all, when manufacturers like yourself suspend shifting production from here to other places. It may cost you more to produce your widget here and it may cost the consumer more to buy the widget but guess what? At least the money is staying within the country. You cannot perpetually bleed wealth and remain prosperous.
... Export-driven growth is a recipe for LDC's. Mature and prosperous economies should be running the trade deficits that allow export-driven growth to occur elsewhere. ...
Pub-911, I’m Among the proponents for USA adopting the unilateral policy described in Wikipedia’s “Import Certificates” article because we consider it to be the policy that would be the most net beneficial to our economy.
If the U.S. Congress has determined that we should pursue a more altruistic policy, it should be one financed by our general tax revenues rather than the greater part of the burden being borne by USA employees, their dependents, and enterprises more dependent upon the financial conditions of those earning no more than the median wage.
Refer to Wikipedia’s “Import Certificates” article.
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