US' Proposed China Tariffs Would Target Robotics, Satellites (engadget.com)

An anonymous reader quotes a report from Engadget: The U.S. Trade Representative has published the list of Chinese products that would be subject to its proposed tech tariffs, and there are a few clear themes. The move would hike the costs of about 1,300 products, including industrial robots, communication satellites, spacecraft and a slew of semiconductors.The aim, as before, is to punish China for allegedly goading American companies into transferring their patents and technology to Chinese firms for the sake of claiming economic superiority. The USTR claimed the proposed tariffs would stymie Chinese plans while "minimizing the impact" on the American economy. The tariffs are still subject to a 60-day notice process that would include public comments until May 11th and a public hearing on May 15th.

Comments

So... let me get this straight...

[Opportunist]

Importing cheap semiconductors to the EU, designing and assembling my technology in Romania and then selling the finished product to the US could well be cheaper and more profitable than producing it in China and importing it directly from China to the US because the tariffs are going to even out the cents I have to pay the Romanians more? And all that without risking having my designs stolen so the Chinese could crank out cheap knockoffs?

On behalf of the EU, I wish to express my gratitude towards dear leader across the pond.

Just remember - there is no trade war

[OzPeter]

We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!

When you’re already $500 Billion DOWN, you can’t lose!

And this folks, is what leadership has come to mean today.

Re:Just remember - there is no trade war

[bluefoxlucid]

Remember as well that imports make your citizens wealthier (and, if the differential is large enough, creates a net-increase in domestic jobs); exports draw money in (creates jobs directly, and gets cash for productivity); and your customers can move to another exporter if they find it cheaper elsewhere (e.g. buy from Indonesia instead of China), so exports are lucrative but also put you in the submissive position of the power dynamic and risk propping your economy up on a basis that may vanish at any time.

Trade deficit doesn't mean "becoming poorer"; it means we're becoming richer by two mechanisms, and one is in greater force than the other. It's like saying you have access to food and shelter, but you have more shelter than food and so you must be losing and you need to cut back on shelter and have less of a house.

Played correctly, the US has an advantage

[Karmashock]

The US has a trade imbalance with China... that means the US imports more from China than China does from the US. Therefore, quid pro quo... the US can deny China more revenue than China can deny the US.

Sure, the US can hurt ITSELF by denying ITSELF Chinese goods which the US ITSELF makes more expensive in the US through tariffs. However, with really no exceptions there are comparable trade partners that can offer the same good at either the same or very similar price point.

What is more, there really isn't anything China produces that has to come from China. They don't own any IP that anyone cares about. The only reason anyone does anything in China is mostly due to low labor costs which are less relevant now for two reasons. First, Chinese labor costs have been going up such that labor costs are often cheaper somewhere else if that is important. And second, the rise of automation is rendering the relevance of labor costs of that type... less relevant.

Will tariffs help US producers? Maybe. They can and they sometimes don't. It is complicated. There are countries with very high tariffs that have absolutely flat-lined manufacturing... which results in things being more expensive for consumers without any pay off in terms of domestic production. Then there are places where tariffs are hugely helpful to domestic production.

A big part of the controversy so far as I can see if that there is a myth about "free trade"... that it is "the american way" and that "it actually exists anywhere". Historically, the US Federal Government funded itself principally from tariffs. This didn't really stop until the Cold War when very generous trade deals were offered as an inducement for fence sitting nations to join the "first world". For reference, first world during the Cold War referred to any nation allied with the US. Second world referred to any nation allied with the Soviet Union. Third world referred to any nation not allied with either the US or Soviet Union. Regardless, "free trade" was a marketing term the US used to brand its trade deals. The US was branding everything it did as "free" something. Freedom fighters, Free World, Free Trade etc. US Free Trade doctrine was only created to put pressure on the Soviets and has really no purpose in the 21st century unless again applied to serve some kind of geopolitical agenda. Instead, the US is applying the concept mindlessly with no particular purpose. Its cited as "the american way" like its something essential to American values when any fool that looks at history can see when it came around and why. Second, ACTUAL free trade only exists domestically within certain nations and doesn't really exist in any international context and never did. Trade is conditional. The US doesn't have free trade with Mexico and Canada through NAFTA much less with anyone else. And neither does any other country.

China has higher tariffs on US goods into China than the US does on Chinese goods into the US... and that was before Trump or any of this current bullshit.

Restrictions are happening everywhere all the time for various reasons. Some of the restrictions are a matter of law and policy and some are a subtle consequence of process or relationship. The net effect either way is that goods don't flow freely. They're restricted and regulated and taxed and have quotas applied etc.

US goods when they go nearly anywhere are limited in some way. US goods to Japan for example sometimes ROT on the pier because the Japanese want to protect their domestic market by limiting US trade. Countries come up with all sorts of pretexts to do it. Health and safety is a popular one. Differing regulatory standards which are approved at time X and then suddenly are questioned at X+1 at the worst possible time fucking over who ever chanced the market.

As regards China specifically, their fast and loose treatment of trade agreements, business agreements, licensing, intellectual property... etc is well known at this point. We're due a big shift in trade relationships with

Re:Played correctly, the US has an advantage

[hey!]

General Omar Bradley once said, "Amateurs talk strategy; professionals talk logistics." In other words winning a war depends not just on the damage you can inflict, but on your ability to sustain the conflict.

Let's suppose it's true, as you claim, that China will suffer greater damage in a trade war measured in dollars; that's a secondary point. The side that "wins" (note scare quotes) is the one that can maintain its will to fight the longest. You win a trade war by being the first to inflict economic damage that is too painful for the other side to sustain politically.

Suppose the US loses a million jobs as a result of the trade war. Now imagine saying to those million people who are out of work, "It's OK because China lost two million jobs. We won." Now further imagine China gets to decide exactly in which Congressional districts those one million jobs will be lost -- because for practical purposes they do.

It's important not to overestimate an enemy's strengths, but you can't ignore them either. The Chinese leadership isn't beyond public opinion, but it doesn't have to put a key part of its government up for elections every two years. Over here Democratic discussion sites are full of lugubrious hand wringing over the effects of a trade war, but there is a very discernible note of glee over what it is going to do to the Republicans.

Re:Played correctly, the US has an advantage

[Karmashock]

Nice try at a strawman.

What I said was:
1. Prior to WW1, the US Federal government relied primarily on tariffs.

2. Free Trade was generally promoted by the US government as a marketing term to describe the US trade deals that came along with First World association. It was a geopolitically motivated bribery to get countries to side against the Second World and join the First World.

3. Actual Free Trade doesn't exist and never did internationally. Cite any trade arrangement you like and I'll show the limitations in it. It doesn't even exist in the EU and the entire selling point of the EU was "free trade" within the EU. But it doesn't even exist within the EU. True, there are generally not tariffs within the EU. But there are quotas that forbid member nations from producing more than X units of all sorts of products. There is inbuilt protectionism for French agriculture and German manufacturing for example. Thus as there is protectionism there is not free trade. And if it doesn't even exist within a trade federation that was specifically created with the stated goal of free trade... where else are you going to presume it actually exists?

This is a hopeless argument. Objectively examine the concept and its empirical real world application. Tell me why I'm wrong.

I guess we're in a trade war

[Okian Warrior]

Importing cheap semiconductors to the EU, designing and assembling my technology in Romania and then selling the finished product to the US could well be cheaper and more profitable than producing it in China and importing it directly from China to the US because the tariffs are going to even out the cents I have to pay the Romanians more? And all that without risking having my designs stolen so the Chinese could crank out cheap knockoffs?

On behalf of the EU, I wish to express my gratitude towards dear leader across the pond.

Don't discount the economic damage done by the cheap knockoff process - it's so common that it's become a meme. It's nigh impossible for anyone to make electronics in China any more, even small hobbyist designers (think Adafruit and Sparkfun) get their products copied and sold for pennies.

Then there's the direct theft of IP (trade secrets, business practices, and such) that the FBI estimates at $600B/year.

Then there's selling steel and aluminum at below-market prices until our domestic producers go out of business (at last count, we had one steel foundry left that was capable of making the steel plates needed for military hardware).

Then there's the lack of IP enforcement, so that lots of Chinese run pirated code and view bootleg media without paying for it.

Then there's "thousand grains of sand", where Chinese students and scientists (in the US) coming back to their country are encouraged to bring one or two small pieces of technological or scientific information.

Then there's keeping their currency artificially low, so that we always have a trade deficit with them (they end up getting more and more of our money).

China has consistently violated their trade agreement in every possible way, and has done so for decades.

We're *already* in a trade war, it's only just now that we're doing something about it.

Re:I guess we're in a trade war

[Jzanu]

And already losing it. Soybeans and pork, anyone?

Re:I guess we're in a trade war

[PolygamousRanchKid]

And already losing it.

. . . as in any war . . . the little folks always lose . . . no matter what side they are on . . . none of the little folks win.

. . . maybe some big business folks and politicians win.

The rest, lose.

And we're all little folks.

Re:I guess we're in a trade war

[gnick]

And already losing it.

My president sent me a message that said "trade wars are good, and easy to win". You're not calling him a liar, are you?

Re:I guess we're in a trade war

[AmiMoJo]

Don't discount the economic damage done by the cheap knockoff process - it's so common that it's become a meme. It's nigh impossible for anyone to make electronics in China any more, even small hobbyist designers (think Adafruit and Sparkfun) get their products copied and sold for pennies.

So the Chinese are basically IKEA... They clone more expensive furniture, mass produce it out of cheap materials and massively undercut the master craftsmen who built the originals.

Then there's selling steel and aluminum at below-market prices until our domestic producers go out of business

That is indeed a problem, but pissing off your allies who you need to solve that problem by slapping them with tariffs too isn't the way to solve it.

Then there's the lack of IP enforcement, so that lots of Chinese run pirated code and view bootleg media without paying for it.

On the other hand, there's a ridiculous level of IP enforcement in the US. Perpetual copyright, ridiculous patents on rounded corners, even patent trolls whose sole business is suing other people who can't afford to defend themselves. Also, it's not like piracy is rare in the west either.

Then there's keeping their currency artificially low, so that we always have a trade deficit with them

The US is just as bad, with corporate welfare programmes and bailouts. The way to fix it is not to double up and start a trade war, it's to do what the EU does and agree to some rules banning it in exchange for trade.

Re:I guess we're in a trade war

[Maxo-Texas]

So far China is mostly directly targeting areas where Trump and republicans won the election.

Interesting way to play the situation.

The more likely result of these tariffs is that the u.s. will literally be cut apart from the global economy and everyone else will move on without the u.s. That and/or a huge recession (with the risk of a global world war that brings).

I've already seen some fools talking about taking on China militarily.

China would need to get *1* of their 260 nuclear missles above the u.s. and most of the u.s. would be back to the 1800s.

Mr. Trump's attitude about war and nuclear weapons is much to trivial. He doesn't take them seriously.

Nope. Linear versus curved

[Okian Warrior]

Making things more-expensive by producing them domestically when it's cheaper to do so abroad always hurts the poor and middle-class by reducing their purchasing power (making them more-poor).

Let me introduce you to the difference between linear functions and curves.

Assume you eliminate one job at $40,000 per year, but make widgets cheaper by $.02.

If there are enough widget sales across the country, the aggregate savings can add up to much more than the $40,000 lost domestically. One person has to find a new job, but millions of dollars can be saved overall.

The problem is that "one person has to find a new job" isn't free. It puts stress on the job market, driving down salaries, and incrementally increases the chances of someone turning to crime and welfare.

For each case of producing something cheaper abroad, there's a corresponding *rise* in expenses associated by having an extra person out of work. The 2nd person has a higher social cost than the 1st person.

So there's a tradeoff. The first couple of people out of work is probably a net win for the country overall, but you quickly reach a point where domestic jobs are hard to get, and the curve becomes flat. When there are more people than there are jobs, the social cost greatly outweighs the financial benefit.

Being unable to find work hurts the poor much more than reducing their purchasing power.

You're assuming a linear relationship to a curved function.

Re:Nope. Linear versus curved

[bluefoxlucid]

The problem is that "one person has to find a new job" isn't free. It puts stress on the job market, driving down salaries, and incrementally increases the chances of someone turning to crime and welfare.

Actually, the aggregate of making the widget $0.02 cheaper would add up to $40,000 of savings for consumers after 2 million units per year. Essentially, that IS your savings: the cost of the jobs you eliminate.

Jobs don't come from employer charity; the employer has a need for a unit of labor to keep up with consumer demand. Likewise, price competition sets prices. This means that savings to consumers turn over to become job demand.

The question in creating a job here versus in China is largely whether you're concentrating consumer spending into fewer American hands. The cost of a widget is its manufacturing, shipping, retail, and all other operations and infrastructure support. Reduce the load on that operations and infrastructure support by selling (and shipping) fewer widgets and you lose those jobs. You can do so by concentrating the wealth of all of those into one hand.

So, for example, if the aggregate cost of a bunch of widget purchasing is $10,000 of Chinese labor and $20,000 of domestic activity, concentrating that purchase into a $30,000 domestic worker's hands takes away from $20,000 of other domestic activity. That means the retailer, the infrastructure efforts, and the shipping all become one guy's wages.

When the cost of labor is sufficiently similar (e.g. the Chinese labor costs $28,000 and the domestic labor costs $30,000), you actually might come out ahead by producing domestically: people will be more-poor, but the domestic laborer is doing his local spending at local franchises and small businesses and whatnot, diffusing into local wages and local profits, rather than buying at the Chinese noodle shop in China. When the cost of labor is heavy on your end (e.g. $10,000 Chinese labor vs. $30,000 domestic labor), you have a factory worker who is wealthier than the Chinese factory worker, and everyone else suddenly a lot poorer--and a slowing of your economy, and job loss.

For each case of producing something cheaper abroad, there's a corresponding *rise* in expenses associated by having an extra person out of work.

It's a time function, as well.

The argument that we can have unemployment must necessarily suppose that our workforce can't grow infinitely: we don't have employment capacity to supply infinite jobs. Eventually, our economy hits a carry capacity. This happens because technology scales linearly up to a maximum economy of scale, after which each additional unit produced of a maximally-scaled good costs more than one additional unit of labor.

The simple example is food. You get an amount of yield with modern farming technology when growing food on good land. Run low on good land and you can still grow; you'll invest more labor and get less yield out of poor soil with bad weather. As you can see, we have the capacity to raise the amount of food produced without increasing the cost per unit of food until we exceed a maximum capacity, and then food starts getting more-expensive.

That's general across all production: an input becomes scarce, and we can brute force our way around that. The generic case is, of course, that you simply don't have the labor to produce it, so you need more labor, more people, and more food and water--which means going from nice, cheap food and water to expensive vertical farming and desalinization just to support the labor force of computer programmers and pop stars.

In practice, that never happens. As you suggested, there are wage pressures, and a labor shortage will tend to produce rising wages (wage competition). That produces rising prices as well.

Okay, who cares?

We bring nearly 300,000 immigrant workers into this country every year. Aside from the constant

Re:You're still getting played by the bankers

[Maury Markowitz]

> This is about China using economic warfare to destroy our manufacturing capability

Or it's about China trying to provide a modern quality of life to their citizens.

> almost all of the manufacturing for the war effort was in the United States

Soviet production numbers were pretty similar to the US. Aircraft, tanks, trucks, all pretty similar.

> The Chinese see this and have been paying the investment bankers

So based on a baseless assumption and counter-factual claim, now I introduce a conspiracy theory.

And you think the problem in the US is China?

Re:UBI doesn't work

[Maury Markowitz]

> Except the income taxes are not progressive, they're highly regressive. :rolleyes:

They are not. Please read the definition before posting about it.

> Since the payroll taxes are part of the income taxes

Payroll taxes are NOT part of "the income taxes". Have you ever filed a tax return? Did you understand why you were entering those numbers?

> they tax rates were increased for the jump to the next bracket

And he still made more money. It appears you are unaware of the definition of "marginal tax rate" as well.

Re:Tariffs Aren't The Way To Do This

[Barsteward]

Utopia with unicorns does not exist

Re:And how dumb are you?

[Opportunist]

Get together with other markets that face a similar problem. The EU for example. Because that's where China will redirect its trade now, with the US standing at the fence and looking in. Instead of trying to punish countries, punish corporations that try to weasel out of building in the US. When he started out, there was lots of talk about getting fabrication back to the US and there was a lot of talk about companies moving their production back, what came of that? One of his strengths is PR, so why doesn't he use it? You needn't forbid something if you can shame people into compliance, why not start a campaign (needn't be officially by himself, he's shown more than once that he knows how to play social media like a fiddle) shaming "buying Chinese"? Works for corporations just as much as for private citizens, additionally you can make your chances for government (or any public) contracts depend on "how US" your product is. He's got it way easier than the idiots in the EU who have way more bullshit red tape to cut before they can simply demand something like this.

And yes, bringing fabrication home would definitely be crucial to an economic recovery. Hell, the fact that people still CAN buy shit shows that this country could easily recover, all it takes is a small push in the right direction. Get people to buy domestic! Make the "Made in the USA" brand worth something again and put some credible effort behind it.

Focus on what you're good at. We needn't produce everything ourselves, but we should find a way to stop people from buying cheap Chinese crap that nobody needs and breaks within 2 years anyway. Sponsor a TV show that puts a spotlight onto this. Show people just how much money they waste on garbage they don't need, and make sure you single out the Chinese garbage. You have a president that has perfect ties with economy and relevant media, use it!

Deficit is exagerated

[aberglas]

Australia has a huge trade Surplus with China, and a huge deficit with the USA. So the money goes around in a circle.

And if one focuses on the goods, rather than the money, China is supplementing US incomes, which is silly.

However, there is a good non-macro economic reason to restrict some things like robots. The US did well historically by supporting its inefficient watch making industry against the Swiss. When war came, they could make instruments.

But I think that the USA will do what it does best -- large scale farming. And China will do what it does best -- manufacturing and technology.

Re:Tariffs Aren't The Way To Do This

[Maxo-Texas]

The more likely result would be a decade long recession where very few people had jobs.

Look, it's just a fact that even the lowest paid worker in the u.s. needs about $18,000 a year to survive.

You can survive in china for $3000 a year. You can survive in India for about $1800 a year (and many get by on $720 but with a very low standard of living and reduced lifespan).

A tax cut isn't going to cut it. High inflation in china and india are fixing the problem but it's going to be 2045 and 2055 before they approach wage parity (and that's assuming the inflation rate doesn't drop).

Meanwhile, automated factories are destroying even those low paid jobs in china and india.

Your view is unrealistic, simplistic, and naive.

You are a good example of the Dunning Krueger effect. You don't know much so it seems easy. But it's not. It's very hard and it's going to get harder as more automation replaces more jobs. Humans can't afford to retrain for a new career every 5 years. At a minimum, we need to have health care independent of companies (it's a big incentive to fire older and less healthy people and dump them on public assistance) and we need free education for adults. It doesn't have to be harvard level. But we can't put people into unforgivable debt and get thru this. Once they are in debt, they can't retrain any more. And instead of producing resources, they consume resources.