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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.
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?"
So that's what the i stands for.
idiotPhone.
genius...
Science advances one funeral at a time- Max Planck
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.
Maybe then people will finally come to realize what the iPhone really costs.
The labor cost of an iPhone is small, and going down as automation gets better. Most estimates put the labor cost of assembling an iPhone at less than $10. American manufacturing labor is about 5 times as expensive, so Americans will earn $50 assembling them, right? Wrong. Americans are more productive, by at least a factor of 2, and there will be greater incentive for automation. So the cost may be about $20, for a marginal cost increase of $10. But that will still lower unemployment in America, right? Maybe. If Americans spend an extra $10 on an iPhone, they have $10 less to spend on other things, reducing demand and lowering employment. These lost jobs will be spread through the economy, so you can't point to one person and say "this guy lost his job to protectionism", but the job losses are still real.
Then there is the issue of retaliation. If we put barriers on Chinese goods, they will put barriers on American goods. China is the world's biggest market for new aircraft, and a lot of Boeing jobs in Seattle will become Airbus jobs in Toulouse, and later Comac jobs in Shanghai.
So we will have fewer $80k/yr jobs making carbon fiber composite aircraft wings, and more $15k/yr jobs making plastic toys for Walmart. The $80k jobs support a lot more service jobs, as that employee spends his money. As production jobs shift to lower productivity and lower pay, many service jobs will disappear.
If a real trade war gets going, it is also possible that the US dollar will lose its status as the world's reserve currency, with big negative consequences for the American economy.
Protectionism is not a "new idea". It has been tried many, many times throughout history. It has never worked out well, and it won't this time either.