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We will not do well long term doing business with China the way we have, but change is very hard to implement... tariffs are one of the few immediate options even though they will be painful. Clearly we all want tariff free and reciprocal trade without harsh business restrictions and espionage but we don't have the magic to make it happen... it will take a struggle back and forth.
We will not do well long term doing business with China the way we have, but change is very hard to implement... tariffs are one of the few immediate options even though they will be painful. Clearly we all want tariff free and reciprocal trade without harsh business restrictions and espionage but we don't have the magic to make it happen... it will take a struggle back and forth.
I think the US is far beyond bringing all that manufacturing and processing back here.
Nor, except for those who think a global economy is some kind of malicious plot, is there any need to. For one thing, the minute there aren't cheap laborers, a vast amount of it will move to automation. For a second thing, automation is coming in two or three minutes anyway.
Well, OP, you're preaching to the choir here. Everyone who stops a minute and thinks how tariffs work will agree that it is you and I who will pay these extra costs, not the countries that have the tariffs placed on them.
What I don't understand is the people who say, "Well, we're ready to suffer a little pain for some gain." There won't be any gain. Not in the way Trump is promising. Another less blunt instrument has to be found to deal with China's trade practices.
Well, OP, you're preaching to the choir here. Everyone who stops a minute and thinks how tariffs work will agree that it is you and I who will pay these extra costs, not the countries that have the tariffs placed on them.
When POTUS doesn't understand that and continues to bray about how he's making China pay billions, an awful lot of people take it at face value and/or forget their feeble high school Econ lessons.
I know: I felt like I was reciting the ABCs up there. But too many people really don't understand the connections and believe "we're gouging money out of China" or something.
Well, OP, you're preaching to the choir here. Everyone who stops a minute and thinks how tariffs work will agree that it is you and I who will pay these extra costs, not the countries that have the tariffs placed on them.
What I don't understand is the people who say, "Well, we're ready to suffer a little pain for some gain." There won't be any gain. Not in the way Trump is promising. Another less blunt instrument has to be found to deal with China's trade practices.
Many people believe what they want to believe and anything else is just noise to them (sort of like Charlie Brown's teacher), to be disregarded. And so many of them desperately want to believe Trump.
Trump's tariffs make no sense when we are at full employment. Ricardo's comparative advantage theory: in free trade, nations export what they are most efficient and productive at, while importing things they are not.
Consider Bob, a skilled CNC operator at a plant who makes $30/hour. Boss offers him an hour of overtime, worth $45/hour. Bob's choices are: decline the overtime and go home and make dinner, or accept the overtime and buy a pizza after work for $15. If Bob declines the overtime he is trading away his high-value labor to do low-value labor (cook at home). If he accepts the overtime he is "importing" a low value good (the pizza). Of course the right choice is to work the overtime because he comes out ahead $45 minus $15 = $30.
And so what Trump wants us to do is downgrade our labor from higher value (what we are doing now) to lower value (what the Chinese are exporting to us). We're at full employment so the only way to staff the lower value jobs is to recruit workers from the higher value jobs. How many $30/hour office "knowledge" workers, computer programmers, etc. will want to quit to go work at a newly opened U.S. textile mill for $10/hour?
Again, it makes no sense why Trump wants the U.S. to stop doing high value work and downshift to lower value tasks.
We don't want it here. Go look at where those factories are and what the rivers look like and where they dump all the leftover stuff they can't use.
People think "OMG WAGES!" are the big reason jobs moved away. Wages aren't even on the radar and one of the tiniest parts of the equation.
We can't make lot of the stuff here because we don't have the materials, infrastructure, knowledge nor the desire to rape our environment and workers like they can in Asia. There is also the wee bit problem of there being billions of people in Asia that are up and coming consumers and that fact that they, not us, are going to drive global demand moving forward. Everything is moving there because the supply chain of the future is going to be close to the demand.
We've peaked. Hopefully we won't kill ourselves under our own debt and can eek out retaining a respectable place for ourselves in the world.
American consumers will pay all this higher prices, for the same things. BTW, that is inflation by definition. Inflation may bring economic contraction, even recession.
Inflation also will not bring back manufacturing jobs. If costs went up, more factories will close down, not more factories will be open. Do you think $100 burgers will bring more McDonalds? If wage is mandated higher with a minimum of $1,000 per hour, then there will be less jobs because there will be no sales to support any jobs.
Again, it makes no sense why Trump wants the U.S. to stop doing high value work and downshift to lower value tasks.
We regular folk can't understand the workings of a genius mind.
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