Slashdot Mirror
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.
Maybe then people will finally come to realize what the iPhone really costs.
If a trade war occurs with China, consumer prices will significantly inflate. Tech company stocks will fall significantly, as a large amount of gear is sourced internationally. For those with an interest to keeping your 401(k) safe, I suspect the first thing is to consider which companies source to China, as opposed to countries that use Taiwan, Korea, Japan, etc. Hmm. I wonder if anyone has made just such a list; e.g. "How to prepare your 401(k) for a trade war with China"!
Because he will extract concessions. That's what you can do when you have a persistent trade deficit. The Chinese only understand force.
Americans already make cars. Even "Japanese" (Honda, Toyota) cars sold in the US are usually made in the US.
iPhones and other smartphones being made here will probably up the prices slightly, but most of the estimates I've heard are absurd. 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.
(This is not to suggest that I welcome a fascist in the White House, or a trade war with China, obviously. I just wish we hadn't lost most of our electronics manufacturing capacity with the end of Commodore in the early nineties.)
You are not alone. This is not normal. None of this is normal.
China has absolutely no appreciation for how much of the Republican base and the blue dog democrats are at a total ZFG attitude toward free trade now. What are you going to do, China? Make my LG G5 that was made in South Korea more expensive? Make it harder for Hyundai, Kia, Honda and Toyota to produce their parts in South Korea and Japan and then assemble them in the American South for millions of Americans? Ford management is probably saying "yes, more please" as this will primarily hurt GM and Chrysler since Ford mainly outsources to developed countries and Mexico.
Our trade partners are probably splitting their sides over this. South Korea's response will simply be "we see China is acting like a crybully bitch. You want to trade with someone who ain't a bitch?"
You missed the point. China buys large numbers of cars made in the US. The Chinese market is so large that if the US is restricted we will suffer loss of jobs as well as income. Apparently I phones are also popular products that we export to China. China has enormous economic power these days. If we get into a disagreement over tariffs the chances are that China will win.
Americans already make cars. Even "Japanese" (Honda, Toyota) cars sold in the US are usually made in the US.
iPhones and other smartphones being made here will probably up the prices slightly, but most of the estimates I've heard are absurd.
iPhones could be made completely in the US and Apple could charge the exact same price for them as they do now and the only difference is Apple's profits would go from ridiculously obscene to only slightly obscene.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
If China were to do such a thing it might... reduce unemployment in the US.
This sort of drivel is why we have Trump in the White House. Idiots who think a naive sound bite is a valid substitute for sane trade policy and economic reality. A trade war with China would do no such thing. In fact it would almost certainly result in increased unemployment and significantly increased prices on a wide variety of goods. China and the US depend heavily on each other economically. A trade war between China and the US would probably result in at minimum a global recession in the best case scenario.
The trade deficit with China last year was $365 billion. With an all out 100% trade war, China loses $365 billion more than we do. How is that winning?
We have the upper hand since currently we are the ones giving them net money.
Any smartphone manufacturer who employs cheap (foreign) labor ends up with a competitive advantage over a domestic manufacturer, while still benefiting from the domestic manufacturer's decision to build in the US and employ US workers.
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.
It would be a very good thing if electronics makers were to start building in the US, but without being forced to as a group, it's not going to happen because while all of them building in the US together would have no negative impacts, any of them choosing not to participate would negatively impact those that do.
It would (probably) be a good thing but trade barriers will NOT accomplish that goal. Those industries will only come back to the US for one of three reasons. 1) Technological advancement, 2) Labor costs falling in the US relative to elsewhere or, 3) advances in automation turning labor intensive production into capital intensive production. But since the supply chains for electronics production have spent the last 3-4 decades moving to Asia they aren't going to come back quickly even if they ever do. Asian manufacturers have a currently insurmountable cost advantage so production will stay there until that is overcome. Trade barriers will not in any way erase the cost advantage.
The key word is: eventually.
In the short term during a trade war, everyone who works selling Chinese made stuff loses their jobs. Everyone who works making things which require Chinese made parts loses their jobs. Anyone who works making stuff that is exported to China (about eighteen billion dollars of manufactured goods) loses their jobs.
Meanwhile you can't conjure all that manufacturing capacity we had in the early 90s back overnight. It took China over ten years to replace that, and that was with government support. It's reasonable to assume it'll take us roughly as long, and with equal government support. The new factories, however, will be far more automated than the factories that closed in the 90s, so don't expect to get all those jobs back.
The unpleasant truth is that you can't make such a huge change in your economy and then just take it back because the change hurts. Undoing the change will hurt almost as much.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Sadly, we made them that way in no small part because of the issue with their currency Trump is making. He is just decades too late.
Heh, yeah. Although the petty property damage doesn't bother me all too much, I worry much more about the people getting beaten and dragged behind their vehicles like in Chicago because they were the wrong color in the wrong neighborhood. And people burning effigies of Trump in the streets. By goodness, grow up!
Being pissed because your candidate lost is one thing (even if the irony of their lack of self-awareness is lost on them), but trying to start a civil war because you've been mislead by the media is quite another, and it's one lesson everyone has to learn the hard way at some point in their lives or you never truly become an adult. Starting fires and killing people only gives the media whores what they want.
Donald is about to learn that running the USA is much more difficult than pretending to be a successful businessman on reality TV.
Bullshit. China has the capacity to replace all the manufacturing they buy from the US, if they want. Remember they have whole cities sitting empty.
We don't have an extra billion people to replace those purchases.
It's a very lopsided war, and we will lose if China wants us to.
There are two types of people in the world: Those who crave closure
This is why you're confused: Donald Trump isn't a Republican. Not in the traditional sense, anyway. Why do you think everyone in the GOP was trying to tank his campaign. If the liberals are to be believed, they would fully agree with his "racist, hateful, xenophobic, sexist and dangerous" rhetoric. Not that he ever said anything that falls into those categories, mind you, but of course the Republican establishment tried everything in their power to sink him, he came right out and said he's going to knock down their house of cards!
Wait, you're claiming trump hasn't said anything racist, hateful, xenobhobic, sexist and dangerous? Possible not in one sentence. Other than that, you know, refusing to rent to black people is pretty racist. Kind of by definition. And not sexist? Are you fucing kidding me?
SJW n. One who posts facts.
Or are you saying that Trump supporters are opposed to the free market?
I think Trump supporters (primarily though not exclusively working class rural white people) are absolutely terrified of a free market and a great many of them don't understand international trade at all. Sound bites are a lot easier than macroeconomics. Xenophobic sound bites that make foreigners scapegoats for their own failings and those of their country even more so.
Or maybe there coalitions that support candidates for a variety of reasons - and that not all the positions held by the supporters are in common?
Of course plenty of Trump supporters supported his lunacy for reasons other than protectionist sabre rattling. Some for reasons of racism, some for sexism, some for tribalistic loyalty to the republican party, some for pure amusement, some for unreasoning hatreds (KKK etc), some for misplaced fears ("2nd amendment people"), and plenty of other reasons besides. Most of them wrongheaded and ill considered but reasons all the same.
Therefore you agree that not all Republicans are for the free market.
Republicans have NEVER been for a free market. They just want a particular version of a capitalist market. Republicans have routinely been against "free" trade. If you recall during the most recent Bush administration they imposed steel tariffs which had the perverse outcome of reducing domestic steel production, increasing the cost of steel, and reducing employment in associated industries (like automakers).
By the NAFTA is not an example of free and open markets. Neither is TPP.
True but there is no such thing as a pure free market. In actual fact a pure free market would be a VERY bad thing. But those trade agreements DO reduce net trade barriers. Whether or not that is a net benefit to society is a separate question endemic to the particulars of the agreements in question.
Keep saying they're poor. While they destroy our economy.
If China wants, they can replace the $X worth of goods we send them with local manufacturing. If we do the same, our prices double. Theirs won't. Guess who wins & who loses.
It's that simple.
There are two types of people in the world: Those who crave closure
that you simply can not automate cost effectively
What is not cost effective in a low wage country quickly becomes more cost effective in a much higher wage country. The point is, 100 jobs in China will never equate to 100 jobs in the US. The US environment has a lot more pressure towards automation.
The US unskilled labor market just needs to understand/learn that they aren't worth what they feel they're worth in a global economy. On a global scale, it's a "get skilled, or get bent" situation. I'm not saying it to be mean, but that is the reality.
Stop sales of cars and iPhones? The aftermath: tens of millions of Chinese are suddenly out of work, in big cities where they can cause trouble. Chinese currency flatlines. Financial panic, uprisings, revolution.
Go ahead, China.
GOP Congress tied his hands. Trump doesn't have that limitation ... at least not yet.
Table-ized A.I.
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.
You remember correctly. But that was in the 1980s and things have changed. The Republicans began strongly embracing what I call "stupid people" in the past decade. I blame Karl Rove for this. I think it started roughly around 2004. You know how people too stupid to vote correctly in Florida all voted for Al Gore in 2000? They got flipped to the Republican side. This culminated in the queen of anti-intellectualism, Sarah Palin, running for vice-president in 2008.
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.
I don't live in the UK so I'll let others comment on that, but as people without college degrees (not necessarily stupid though) and stupid people began to embrace the Republican Party, Sarah Palin pushed an anti-intellectual agenda that resonated big time with small town, non-college educated America. Palin has said multiple times that the only "real" America is the small town one, which just happens to be where a lot of people didn't go to college. If you can see a map of how the vote was broken out by county in the recent presidential election, you'll see that at least 90% of the US is red with the only blue areas being in bigger cities. As small town people have embraced the Republican Party, they've continued to lose jobs in manufacturing and the small towns where they live don't offer adequate replacement jobs. So this has led to a somewhat large group of people in small town America who see themselves and their small town life under siege. They're very receptive to being told that they are victims of forces beyond their control and only the Republicans can bring back those small town jobs that went away. They also tend to be very religious which brings them into conflict with societal changes like gay marriage where they see these changes as coming out of big cities and being pushed by Democratic Party elites who actively wish to bring harm to them.