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Most developed countries have a neutral or positive trade balance. It isn't that hard. The US used to do this also (40+ years ago).
There is a lot of money to be made in supporting the development of production in poor countries and providing a ready place for the sale of that production. That's why it's been happening.
The United States isn’t “most countries”. We are the primary reserve currency and need to meet international and domestic demand for dollars. The system doesn’t work unless we run deficits, including trade deficits.
If a company can pay its labor force $1.5/hr to produce the same product that someone in the US is being paid $30/hr plus benefits, it will have lower costs.
What that said company could do is eventually purchase up shares of its US counterpart, and eventually purchase 50% and put all of it's American workers out of business.
It's happened before.
Remember Zenith?
Didn't think so. It's LG now.
Or perhaps multinational companies just simply have their production all over the world where they also sell. If we look at a traditional manufacturer, it’s not uncommon at all to be spread pretty evenly across Asia pacific, Europe, and North America. I’m not sure why the “Merca” crowd thinks all production should be or needs to be done domestically.
Or perhaps multinational companies just simply have their production all over the world where they also sell. If we look at a traditional manufacturer, it’s not uncommon at all to be spread pretty evenly across Asia pacific, Europe, and North America. I’m not sure why the “Merca” crowd thinks all production should be or needs to be done domestically.
The key will be in automation. That's an even bigger threat for US labor than lower labor costs. If that's the case, depending on tax laws, I don't see why a company wouldn't have operations in the US or as you said, a place where the logistics costs would be lower, but I guess that all depends on how the math works out and what they forecast in the future.
The United States isn’t “most countries”. We are the primary reserve currency and need to meet international and domestic demand for dollars. The system doesn’t work unless we run deficits, including trade deficits.
We (US public) gain nothing from being the world reserve currency. This is done for the benefit of the .1% to the detriment of everyone else. What *we* get is depressed wages.
We (US public) gain nothing from being the world reserve currency. This is done for the benefit of the .1% to the detriment of everyone else. What *we* get is depressed wages.
That's not true at all. The standard of living you experience right now is because of the petro-dollar.
Imagine that the US wasn't the defacto international reserve currency and petrodollar.
Who would buy our debt? How would we get the financing to wage war?
I disagree about that's why it's happening.
It's international competition.
If a company can pay its labor force $1.5/hr to produce the same product that someone in the US is being paid $30/hr plus benefits, it will have lower costs.
It isn't the same. Poor countries have poor infrastructure and capital and usually corrupt government, and inherently lower productivity.
But that is actually beside the point. Most developed countries have labor rates as high or higher than ours, yet they don't have trade deficits. Why is this the case? They simply set polices to acheive that outcome.
Just as a for instance, I used to build custom products that I'd sometimes sell internationally. There wasn't a single European or Asian country I shipped to that did not have high import taxes. Even Taiwan! Typically 30% or more. But I can buy anything I want retail from anywhere in the world and pay no fee.
The United States isn’t “most countries”. We are the primary reserve currency and need to meet international and domestic demand for dollars. The system doesn’t work unless we run deficits, including trade deficits.
ThatsRight, you're contention is pure, (but original) nonsense. Please reconsider your unique concept. I have never encountered a similar opinion or concept anywhere else. You're able to provide some logical basis to support your opinion?
Annual trade deficits are always net detrimental to their nation's gross domestic product, (i.e. GDP). That's a fact embedded within the conventionally and most commonly used formula employed by the world's communities of economists and statisticians for calculating GDPs. Within any other such formulas, that fact's inferred.
Logically, a lesser GDP reflects and is reflected upon a nation's lesser numbers of jobs than otherwise.
ThatsRight, you're contention is pure, (but original) nonsense. Please reconsider your unique concept. I have never encountered a similar opinion or concept anywhere else. You're able to provide some logical basis to support your opinion?
After your embarrassing start to this thread discussing the international tax rate\system, I guess you want to double down on being wrong about the international reserve system too?
Evidence we have seen since the tax reform was signed into law, has proven that the fear that corporations will accelerate offshoring was unfounded. In fact, the IRS just released 22 pages of guidance on how corporations can legally use the special 10.5% repatriation rate. That was the very first thing that IRS legal counsel began working on. Apple has made statements that 200 billion is going to be brought back into the U.S. market. That is just one corporation.
I have a real problem with people who can't seem to separate their political ideology from facts. To say that President Obama was a moron because he was a democrat, is just as stupid as saying that President Trump is a moron because he is a republican. Trump is one of the most successful businessman's of our generation. Anyone who starts an argument saying that Trump is an idiot and doesn't understand the nuances of international trade, looses all credibility with me. A moron can't earn a billion dollars, and certainly can't be a titan of an industry.
Our country is going to crap because 60% of the population can't think past a D or an R next to someone's name. I wish I could say it is getting better, but it seems to be getting worse.
As a libertarian, I fully support President Trumps economic policies. We are just starting to address issues that are 50 years in the making. And the other poster was correct, no President in the last 30 years has tried to address any of these issues.
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