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Originally Posted by mpyne
I have 2 questions regarding the buy American provision and the threat of a trade war.
1) Who would benefit more in a trade war? Us or the rest of the world given our current trade deficit. Since we are the biggest consumers in the world wouldnt the rest of the world shoot themselves in the foot if they wanted to start a trade war with us?
2) If we have a trade war why would the jobs that would be lost more important than the jobs that are currently lost due to globalization? I dont see people worrying about me because my job was sent to India through no fault of my own.
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I'll give it a shot.
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Who would benefit more in a trade war? Us or the rest of the world given our current trade deficit. Since we are the biggest consumers in the world wouldnt the rest of the world shoot themselves in the foot if they wanted to start a trade war with us?
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I don't know who would benefit. It would be a disaster for us. The countries that produce what we import would to some degree find other markets in the "emerging" countries, like the Pacific Rim and India. Nobody consumes like we do, but the heavy hitters like China are already prepared for reduced expectations. They began downsizing their industry almost as soon as the recession began, while the rest of the world was still scratching their collective behinds. The revenue from the export of manufactured goods was almost "found money" to them. Most of the people alive today remember the pre-industrial China, and they know they'll be fine, but without a few luxuries.
We, on the other hand have
no alternate sources for most of what we use and a trade war would disable our economy completely. Our own manufacturing infrastructure is long-gone, for the most part.
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If we have a trade war why would the jobs that would be lost more important than the jobs that are currently lost due to globalization? I dont see people worrying about me because my job was sent to India through no fault of my own.
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They would not be more important, there would just be more of them. They should be worrying about your job, because unemployment is headed for double digits and double digit inflation is likely to follow that. So many foreign industries want to build new plants here, and some have. China and others complain that we restrict that too much. I would open the doors more, but require something of them, either in terms of jobs, or worker retraining, or both. I do believe as Keynes said, "You get more of what you subsidize and less of what you tax". Ronnie Reagan used that quote often.
In the end, nobody "wins" a trade war. This country in the first years of this Century reminds me so much of Europe between the two world wars. All we need is a new Smoot-Hawley Trade Act, and a Trade War can turn into a shooting war.
Protectionism in the Interwar Period
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