
Trump Readies Sweeping Tariffs and Investment Restrictions on China - gonyea
https://www.nytimes.com/2018/03/15/us/politics/trump-china-trade-measures.html
======
beiller
Just my opinion but I think trade wars is heading in the wrong direction. We
need to open trade more. At first it will cause pain and inefficiency, but
specialization and collaboration has a larger net benefit to humans than both
countries manufacturing everything themselves. But of course over
specialization weakens the whole system when a piece goes missing perhaps.

~~~
Khaine
I agree. However, it only works when trade is fair.

Overall, what has happened is that low skill and unskilled jobs have gone to
where labour is the cheapest. This has benefitted the poorest of the poor, at
the expense of poor people in first world countries. The other consequence is
that labour and safety standards are effectively eroded as where these jobs
are offshore to are unlikely to enforce these requirements. The result of this
has been to reduce global poverty and drive down the prices of goods (i.e.
clothing).

However, then you have places like China which then place restrictions on
market entrants, enable local companies to steal intellectual property and
undercut western companies, without legal recourse. No-one has been willing to
call China on these actions for fear of losing out on the entire market.

~~~
simonh
Not much I can disagree with there, except that apart from labour and safety
standards none of what you describe is in any way unfair. Being poor and
willing to work for less money isn't cheating. Meanwhile, as they develop and
labour wages rise and the pool of untapped labour dries up, the bargaining
power of workers in China and elsewhere to get improved wages and conditions
also rises. We can see that happening in China now.

It’s indisputable that China has used many protectionist manoeuvres to hamper
and limit foreign participation in Chinese markets, but western countries have
been willing to accept that in return for having access at all. If we want to
renegotiate that position fine, and maybe judicious use of tariffs and
restrictions could be a useful tool to use to prompt serious negotiation, but
that’s not the same thing as just flat out hitting the nuclear button and
going for an all out trade war, which is what seems to be happening.

~~~
Khaine
It may not seem unfair to you and I, who have skills and knowledge that keep
us highly employable.

I think in its totality trade has globally reduced poverty, and improved lives
globally. But that doesn't mean that there are not people who have been harmed
by it, and see it as unfair. If your grandfather and father worked in a steel
mill, and you worked in that steel mill and got let go because "its cheaper in
China" then I can understand why that person may not feel that it is fair, to
be sacked from everything they know. Whose family helped build and run that
mill, through blood, sweat and tears.

Historically, elites have tried to mask this by saying that these low skill
jobs will be replaced by higher skilled and higher paid jobs, and through
training those low skilled works can just take these higher paying jobs. The
rise in Trump is in large part due to the perceived callousness of elites on
those who have been made worse due to trade. I think this is the key failing
through-out the Anglosphere. How to get unskilled people into work, how to
enable them to maintain their dignity, and do an honest days work for an
honest days wage.

------
crocal
Are we really back in 1929? Seems like it [1]. [1]
[https://en.m.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act](https://en.m.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act)

~~~
misja111
The US has a trade deficit towards China, so China has more to lose in a trade
war than the US. Therefore the US can try to impose a limited amount of trade
sanctions on goods from China without getting punished for it. It seems just
common sense economics to me.

~~~
dnomad
There's nothing common sense about this. It's just stupid. But do few
Americans understand economics that I can see the majority falling for it.
People will happily vote to cut their own throats in order to punish some out
group.

For future reference the giant trade deficit has benefited the USA enormously
and increased quality of of life of most Americans. The incredible thing here
is not that we import so much from China but that the hyper-productive Chinese
exporters and manufactures have been so willing to surrender real goods and
labor for the green pieces of paper we call currency which the government can
create at the push of the button. This was the trade of the century.

I suspect that this will ultimately only help China and hurt America. China
will be forced to develop their own internal markets and diversify their
exports more -- which they've been doing already. You'll also just see more
action from other low wage exporters like Vietnam. In the end Americans will
just as price increases. Tariffs won't bring back jobs, reduce the extreme
inequality that's killing the country nor are they real investment.

~~~
andosa
That's a shortsighted view. As the saying goes, "you can have the free apples,
as long as I own the orchard". At some point, there will be no more free
apples, and you have no idea how to farm

------
megous
Trump will tax americans for $30bn per year in imported goods/raised domestic
prices. Many cheer their increased costs. :D

There are no global benefits to limiting trade, which this action is. Neither
are there any overall regional benefits. Certain industries will benefit, and
certain industries will lose, on both sides of the border, as markets adjust.

Some people will be forced to do their trade with different people for higher
prices, rise prices, or close business, or suck it up in private life. That's
about it.

------
fovc
I'm very much in favor of free movement of people, capital and goods, but
would like to point out that David Ricardo himself had to caveat his free
trade argument:

 _Ricardo recognized that applying his theory in situations where capital was
mobile would result in offshoring, and therefore economic decline and job
loss. To correct for this, he argued that (i) most men of property will be
satisfied with a low rate of profits in their own country, rather than
seek[ing] a more advantageous employment for their wealth in foreign nations,
and (ii) that capital was functionally immobile._ [1]

I definitely did not learn this in Microeconomics when we studied comparative
advantage.

[1]
[https://en.m.wikipedia.org/wiki/David_Ricardo](https://en.m.wikipedia.org/wiki/David_Ricardo)

~~~
logicchains
Did you study Macroeconomics? It's a fairly accepted phenomenon:
[https://en.wikipedia.org/wiki/Factor_price_equalization](https://en.wikipedia.org/wiki/Factor_price_equalization)
(identified there by
[https://en.wikipedia.org/wiki/Paul_Samuelson](https://en.wikipedia.org/wiki/Paul_Samuelson),
about as "mainstream" as it's possible for an economist to be).

"Whichever factor receives the lowest price before two countries integrate
economically and effectively become one market will therefore tend to become
more expensive relative to other factors in the economy, while those with the
highest price will tend to become cheaper. An often-cited example of factor
price equalization is wages. When two countries enter a free trade agreement,
wages for identical jobs in both countries tend to approach each other."

It could be argued that this is a good thing if one considers the benefit of
bringing third-world people out of abject poverty to outweight the loss of
slightly reducing the living standards of first-world semi-skilled labour.

------
bobosha
seems to be an example of cutting of one's nose to spite the face. This will
unfortunately prove counter-productive.

------
_0ffh
Is it possible to bet on a rising consumer price index?

------
pasbesoin
A couple of decades too late.

