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One stupid government control which then needs another stupid government "solution" to put things back in order. Ayn Rand is laughing, I think. or crying.
In both cases it is also a way to buy support for the regime in power.
Soybean farmers won't learn the lesson needed if the feds prop them up by increasing the federal debt.
We have two choices: keep allowing China to take advantage of us or do something about it. Trump has decided not to continue to ignore the problem and do something about it, and it's just about the only thing he can do short of going to war or a full trade embargo. No, it's not going to be pretty in the short term, but if the result is true trade equality in the long term, I support the move.
It's about cash flow or more accurately "wealth flow". The international trading systems are currently rigged for the US wealth to flow outward and receive very little in return. Our "trading partners" have placed check balls in the wealth pipes where it all flows towards them. The sad thing is our politicians helped them rig it --- until Trump! MAGA!
I don't like the idea of subsidies in a fair system, but this system isn't fair and we will need to protect our own for a while. Yes, the Chinese buy our soy beans, but they do it with our own money they got by virtually stealing it in the first place.
Fed gov shouldn't be subsidizing anyone long term anyway. Loans yes, subsidizing no.
Honestly, I do not see how America's manufacturing can compete in a global marketplace aside from full automation, even agriculture so some degree. Our standard of living, wages, is just too high to manufacture cheaply using human labor.
One huge step in equalizing our trade imbalance would be to force them to decouple the yuan from the US dollar. With the yuan being recently introduced as a world reserve currency, we should be pushing for it to stand on its own. As soon as that happened, its value would rise significantly and the imbalance between the two currencies would shift dramatically in our favor.
I would also note that China's costs are the result of their protectionist government policies and their aforementioned currency manipulation, so any comparison of the two is error-prone to say the least. And when one ties in their economic system under communism, the contrast can't be more stark.
Chinese goods cost 1/3 of buying in the USA. Anything less than about 200% tariff won’t stop me from buying from them. I would say others won’t stop buying from them. So The balance of trade won’t get better and most likely will get worse as China retaliated with their own tariffs. My point is that what trump is doing isn’t going to do anything to China because the imbalance is so large
Point #2- China isn’t going to let their Juan appreciate because that devalues their holdings of us follars
Point#3- in the end we have to have a massive devaluation of the dollar to fix this
1. We do nothing - as you seem to advocate. We continue to see US assets purchased by Chinese corporations until the Chinese own more of the US economy than we do. We continue to see US intellectual property siphoned off into the hands of the Chinese. We continue to see US manufacturing capabilities degraded until the point comes that we can't even defend ourselves - or our allies - against Chinese military aggression.
2. We implement tariffs in an attempt to force them to change their trade policies. In the short term, this will mean a hit to US exports to China. In the long run, China is forced to adopt more free market policies and stop government subsidy of their industries. Free trade ensues.
3. We attempt to force them to devalue the yuan and change their monetary policy. This would be very painful for the Chinese because the yuan's value would skyrocket, devaluing their goods. It would in very short order address a large measure of the trade imbalance as prices reflect true market values rather than the manipulated values imposed by the peg.
Only option three pushes the majority of the pain onto China, but as we can't really force them to do this, our options are limited to #1 and #2.
As for your argument regarding the gold standard, again, I don't disagree. But the likelihood of us returning to that is in my estimation so remote (especially in relation to #1, #2, or #3 above) it is forced to the realm of pure speculation.
#2 wont fix the problem. Free trade wont fix it, since their wages are so low compared with ours, and our products are so expensive for them.
#1 will just lead to #3 but involuntarily
I know Monsanto provides 90% of the seeds to farmers, so they are indirect beneficiaries, and I think they are now foreign owned IIRC.
Who else is getting paid off by this looting? Cui bono?
What is the trade imbalance of Ohio to Utah? You don't know because it doesn't matter.
What is your personal trade imbalance with your local supermarket? It is enormous, yet you benefit from the interaction!!!
That is what matters folks. If it is a mutually beneficial interaction then allow it to continue.
Trump is right about fair trade, but this is NEVRE going to achieve it. Governments on both sides profit from the trade war, which is paid for by the citizens.
It's easy to paint Trump as stupid, but my bet is on him to know better how to create a truly dynamic market less governed by politics. Anyone who reviews the "great" deals America has with our "friends" should be sensibly horrified with the tariff load that shuts us out of many world markets. The World Trade Organization is a farce, being only slightly less anti-American than other globalist-backed bureaucracies.
You make an excellent point that we, probably more so than any other people, have the potential to be completely self-sufficient.
What's happened to China is a rapid pace of industrialization that has gotten ahead of their ability to train new workers. As a result, quality control practices common to the U.S. and Japan are not exercised in Chinese industry.
I would say that to achieve their low prices they need to push out mass appeal items where they can have high production rates. In addition, there is blistering competition aming Chinese companies (much more than here). Entrepreneurship is alive and well in China and that’s one reason they have grown so fast
If it wasn’t for the ability to buy low cost Chinese parts that we assemble into finished goods that we design here, our 10 employees would be out of work
We are only one infinitessimal part of the USA economy but we have found a niche. Right now, take away China and we couldn’t compete without serious automation that wouldn’t pay for itself. our customers will not be able to afford for us to hire USA workers and make the products we make.
Cut off china or put 200% tariffs and we go the way of the dinosaurs. Half of our business is exported out of the USA. (not TO China because they don’t have the money to pay for our high wages and production costs)
Otherwise, you tend to get what they THINK you want, but with the filter of the chinese culture and language. Mistakes are taken care of quickly in my experience and you dont have to go through 6 people to get it fixed.
All in a sudden~it's allegory time, y'all~me dino recalls the opening scene in the movie Troy. Brad Pitt's character, Achilles, slays the champion of another king and repeatedly yells at the enemy army, "Is there anyone else?".
And there isn't.
But to vote for the forlorn hope of an independent to help out Bolshevik Bernie or The Evil Hag? Nope, not me dino.
Some day I may vote for a Libertarian Party candidate but that candidate will first show me some hope of winning.
Too bad about Trump, he is getting closer to the swamp every day it seems. These trade issues might indeed let the dems win in november.
Yeah, yeah, I know. The currently swamp-wading Donald (perhaps testing the murky water's temp?) is a Bad Hair Day and raspy chalkboard scratching Cackles The Evil Hag trusted an old person's fart.
https://www.pinterest.com/pin/3885059...
Trying to remember if I called Johnson "Goofy Gary." Knowing me dino. I likely did.
https://inetsgi.com/images/668/images...
Take note that exports to China still are greater than the next 9 highest countries receiving soybean exports combined.