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China Threatens To Cut Sales of iPhones and US Cars if 'Naive' Trump Pursues Trade War (theguardian.com)
US president-elect Donald Trump would be a "naive" fool to launch an all-out trade war against China, a Communist party-controlled newspaper has claimed. From a report on The Guardian:During the acrimonious race for the White House Trump repeatedly lashed out at China, vowing to punish Beijing with "defensive" 45% tariffs on Chinese imports and to officially declare it a currency manipulator. "When they see that they will stop the cheating," the billionaire Republican, who has accused Beijing of "the greatest theft in the history of the world", told a rally in August. On Monday the state-run Global Times warned that such measures would be a grave mistake. "If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance and incompetence," the newspaper said in an editorial. The Global Times claimed any new tariffs would trigger immediate "countermeasures" and "tit-for-tat approach" from Beijing.
I don't know why people didn't see this coming. I suspect a lot of Americans have a rude awakening in store regarding our position in the world.
iPhones and other smartphones being made here will probably up the prices slightly, but most of the estimates I've heard are absurd.
No they are not. For one many/most of the key components for smartphones (and laptops and desktops and...) are made in China too. Where do you think you are going to get parts? The supply chain for these does not exist in the US or EU. Worse China has a monopoly on rare earth minerals without which you cannot build many modern electronics. The US has reserves of these but re-opening the mines for these would not happen overnight.
Trump starting a trade war would drive up prices dramatically on a huge amount of goods and would almost instantly trigger a recession or depression. It would be catastrophically stupid of him to do that. A trade war would benefit no one and it sure as hell would not increase net jobs in the US.
I'd also suspect that the increased wages (higher demand for employees = fewer minimum wage jobs) would more than offset the price increases you'd see.
No it would not. The number of extra people who would be employed by this wouldn't offset the extra cost of production. That is why it is being produced in China now. If that were not true then we would already see production happening here in the US. Furthermore having a few people making higher wages doesn't help the millions who would have to pay more for the product itself. I don't work for Apple or a smartphone manufacturing company so someone else having higher wages doesn't help me one bit.
This vote and the calls for protectionism in the USA and UK strike me as odd. Back in my day... it was the Conservatives and Republicans and similar parties defending trickle-down, supply-side, trade leads to growth, which leads to prosperity for everyone.
Now there's support for reducing freedom of movement in the UK (and other places in Europe), and for the USA to erect trade barriers. All this time, the official explanation was that international trade was not a zero-sum game, that if there's more trade, everyone eventually gains and that protectionism was BAD. I can't remember if state investment on infrastructure was even worse than protectionism, but in any case it was something that Chicago school/Republican politicians just would not have.
Sounds like now In Republican America, state interventions Trump China?
Trump is saying China is manipulating it's currency rate, keeping is low
China is manipulating it's currency rates. It's been well known in the forex community for years, and they've instituted policies that directly depreciate the currency. Japan does the same thing, it's only avoided scrutiny because the manipulated rate puts it almost on par against the US. "Almost" and "not quite" have a lot of meaning in the forex game. S.Korea has much bigger problems right now, like the entire government being so fucked up that there are mass protests against it. And evidence that it was being directly controlled by a group of people in the shadows who weren't in the government. That's not even touching on the really weird shit like the rumors that have been floating around that the ferry sinking with the kids on it a while back was deliberately caused as a human sacrifice for the "8 goddesses".
Om, nomnomnom...
Focusing on iPhones means you're really not paying attention.
China buys about 50% more of EVERYthing than the US does.
If you think the US can win a war like that, you're seriously self-deluded.
China doesn't have the people to replace purchases either, at least not at the same price. They are poor remember? And they are too frugal to spend any amount of money on most of the cheap disposable crap we buy from them.
Look the math is simple and incontrovertible. We send $X worth of goods to China. China sends $(X + 365,000,000,000) worth of goods to the US.
A trade war hurts China more than it hurts us. Can you tell me what specifically you're disagreeing with? I really just don't understand. Give me some numbers to show that the US would be hurt more.
"That is correct. As long as the US has wages that substantially exceed those of other countries there will be a strong pull to locate labor intensive jobs in places where labor costs are low. That is why most US based manufacturing is capital intensive instead of labor intensive."
This is the huge misconception that has been screwing us for decades. Labor rates are NOT the problem. Taxes are.
We have the higest corporate income tax on the planet. THAT is what is causing manufacturing to leave the country. Its not the worker wages, because when we build factories in the USA, we automate the H out of them. There aren't that many workers. Certainly not like Foxxcon where 1000's of workers stand at tables all day and assemble them by hand. We'd have maybe a hundred or two hundred in a factory with 1000's of machines, the workers feeding the machines raw materials, keeping them adjusted and lubricated, checking for scrap, etc. The labor would not be the big part of the price of the product when produced in the USA, but right now, corporate taxes AND regulations have killed much of US manufacturing.
Here's an example from the auto industry. It takes 30 - 33 labor hours to build a car in a US factory. According to the car industries themselves, their workers cost them about $78 / hr. Multiply it out, its about $2500. However, if you study the Fair Tax, the cost of _all_ income taxes to US manufacturing, and this includes the capital gains taxes, worker's individual income taxes, payroll taxes, etc. is 22% of the price of whatever product is built in the USA. So, for a $30K SUV, that is about a $6,600 tax bite while the labor rate would still be only about $2500. You could enslave auto workers, pay them $0, and still not have anywhere close to the size of the effect that getting rid of ALL the income taxes, which is what the Fair Tax people have advocated for a couple decades (and we still do.) But the simple act of lowering the corporate income taxes, and rolling back a lot of unneeded regulations as the new administration is promising to do, will help the auto industry build more cars in the USA, and I believe will likely help the cell phone industry build cell phones in the USA.
I've read in years past - 1 or 2 years ago - that there are exactly zero cell phones built in the USA. Is that right? I don't know, but if so, I think that's about to change.
yeah, cause "hope and change" was so clear?
False equivalence. Obama always stated his policies and they were consistent. Trump is nothing but soundbites and he denies what he is on tape saying the day before.