
Giant shipload of soybeans drifts off China, victim of trade war with US - anigbrowl
https://www.theguardian.com/business/2018/aug/08/giant-shipload-of-soybeans-drifts-off-china-victim-of-trade-war-with-us
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freddie_mercury
The ship has already docked & been unloaded:

[http://www.globaltimes.cn/content/1114855.shtml](http://www.globaltimes.cn/content/1114855.shtml)

(It is already Saturday in China.)

~~~
duxup
It isn't clear if they chose to take the hit of the tariff or if they got some
deal or something...

~~~
andy_ppp
Probably took the hit because they are moving something else on... its really
interesting how sometimes the arrival time or next few journeys can change how
profitable a ship is for a charterer.

~~~
duxup
Yeah with 400k in extra costs ... 6 mil is a big hit but I'm not sure they
were going to avoid that total if they went elsewhere or such.

------
ehnto
Surely it is anchored, and drifting about its anchor. Not aimlessly burning
fuel sailing in circles. Minor point to the story I guess, but it would be an
immense waste of fuel to be underway for no good reason.

~~~
donbright
well its an interesting question.... if 'waste' is the limiting of movement of
goods or services, then every single tarrif and trade barrier is theoretically
a cause of 'waste', since at some point every single product that is under
trade barrier winds up in a similar situation to this ship, does it not? even
if it at a small scale.

so if someone makes 25 Talos Power9 computers and the market would support 25
of them, but there is a tarriff that discourages one from being sold, then you
have 1 machine sitting there, essentially on a proverbial virtual boat. Maybe
its not burning fuel, but its taking up space somewhere, costing rent and
overhead. Not much but a little. Now multiply that tiny amount times a billion
other products ...

just a thought experiment...

~~~
TheSoftwareGuy
You’ve just discovered something economists have known for decades: free trade
is generally good

~~~
CapacitorSet
The logistical inefficiencies of dealing with tariffs are arguably a minor
component when evaluating free trade, since they account for a small fraction
of the total value of goods.

~~~
pjc50
25% tariffs involved here are not small; larger than most normal profit
margins.

~~~
AnthonyMouse
> 25% tariffs involved here are not small; larger than most normal profit
> margins.

Profit margins are set by competition. The customer might pay $5 except that
your competitors are charging $1 so you can't even charge $1.10 or the
customer buys from a competitor. If everybody's costs increase by 25% then
everybody can increase their prices by 25%, because you can't profit at $1
anymore but neither can your competitors. Unless your competitors aren't
subject to the tariff, which is kind of the point.

Meanwhile the revenue the tariff generates offsets some tax that now doesn't
need to be collected somewhere else and would have caused a similar
inefficiency or cost increase in some other place.

Tariffs suck because taxes suck and tariffs are taxes. But for a given amount
of revenue generated, it's better to tax somebody else's economy than yours.

~~~
antidesitter
_Meanwhile the revenue the tariff generates offsets some tax that now doesn 't
need to be collected somewhere else and would have caused a similar
inefficiency or cost increase in some other place._

Different forms of taxation can have different economic consequences.

 _it 's better to tax somebody else's economy than yours_

Thinking of tariffs as "taxing somebody else's economy" betrays a
misunderstanding of the concept of _incidence_ (as in
[https://en.wikipedia.org/wiki/Tax_incidence](https://en.wikipedia.org/wiki/Tax_incidence)),
since you're raising prices for _your own_ imports.

~~~
AnthonyMouse
> Different forms of taxation can have different economic consequences.

Yes, of course. Car tax has different economic consequences than [real]
property tax. But a tariff on cars looks a lot more like a tax on cars than it
does a tariff on real property.

Actually "tariff on real property" (meaning [high] property tax owed only by
foreign nationals and corporations with foreign ownership) might be one of the
best possible methods of generating government revenue.

> Thinking of tariffs as "taxing somebody else's economy" betrays a
> misunderstanding of the concept of _incidence_ (as in
> [https://en.wikipedia.org/wiki/Tax_incidence](https://en.wikipedia.org/wiki/Tax_incidence)),
> since you're raising prices for _your own_ imports.

It's not misunderstanding it, it's understanding it perfectly well. It's not
that exactly 0% of the burden falls on the domestic economy, it's that it
disproportionately falls outside of it.

When you have a tariff, there are two ways for a foreign supplier to lose.

The first is that there is a competitive domestic market for the same product.
In that case the price won't change much if at all (minimal impact on
consumers), the production will just shift to domestic suppliers who hire
domestic workers. Then the tariff doesn't generate much if any direct
government revenue, but it shifts a bunch of domestic citizens from collecting
unemployment to earning taxable income, which is great in a different way.

The second is any case where the producer has to eat a tax in general, e.g.
because there are substitute goods preventing the producer from raising
prices, so they can't pass the burden on to the customer.

The domestic market only pays if domestic producers can't make [more of] that
product _and_ consumers are still willing to pay the higher price for it. But
even then, it's not _worse_ than generating government revenue from a purely
domestic tax, it's just not any better in that unusual case.

And in practice it will typically be some combination -- domestic producers
will appear charging slightly higher prices (but more than making up for it by
creating domestic jobs), and then the foreign producers have to compete with
them (and other substitutes) so they have to eat most of the tariff but not
all of it. So the burden falls disproportionately on someone else's economy,
as opposed to domestic taxes that fall primarily on your economy.

------
staunch
What's the best argument against Trump's trade war? It's one of his few
policies that I've not heard a good argument against. It seems like it's only
fair that major countries have (roughly) equal trade. And fair that small
countries should be permitted to have imbalanced trade in their favor, though
I'm not sure that's his policy.

If that means things like iPhone manufacturing needs to be moved to the US,
causing the price to double, then it's on Apple & Co to build more automated
processes and/or raise prices. If car and firearms companies can do it, why
not everyone else?

~~~
olalonde
Setting aside the debatable morality of nationalism, protectionism just
doesn't work well in the long term. A good place to start:
[https://en.wikipedia.org/wiki/Protectionism](https://en.wikipedia.org/wiki/Protectionism)

> There is a consensus among economists that protectionism has a negative
> effect on economic growth and economic welfare, while free trade,
> deregulation, and the reduction of trade barriers has a positive effect on
> economic growth. In fact protectionism has been implicated by some scholars
> as the cause of some economic crises, in particular the Great Depression.

~~~
h4b4n3r0
There was a "consensus among economists" that US economy would tank under
Trump, and that it can't grow at anything over 3%, and that "those jobs are
not coming back". To quote Paul Krugman, the perennial darling of progressive
intelligentsia: "No, you could make me total dictator to do everything I think
would work and it still wouldn’t get you up more than a few tenths." There's a
reason why economics is not considered a real science: economists have a hard
time explaining the past, let alone predicting the future. Their "consensus"
is not usually worth the paper it's printed on.

~~~
dragonwriter
> There was a "consensus among economists" that US economy would tank under
> Trump,

No, there wasn't. At most, there was concensus that certain policies he
proposed would have adverse impact, but not all of those policies were
implemented, and policies rarely have their full impact within a 1-2 year
period.

> and that it can't grow at anything over 3%,

No, there wasn't.

> and that "those jobs are not coming back"

To the extent that there has ever even a widespread belief among economists,
much less a consensus on that, it was (and is) on the long-term trend in
certain sectors, not about the absence of positive short-term fluctuations.

> Paul Krugman, the perennial darling of progressive intelligentsia

Krugman isn't a progressive or particularly a favorite of progressives. The
darlings of the progressive intelligentsia don't generally have gigs in the
corporate media.

------
known
World needs US dollars since it's
[https://en.wikipedia.org/wiki/Petrocurrency](https://en.wikipedia.org/wiki/Petrocurrency)
due to
[https://en.wikipedia.org/wiki/Nixon_Shock](https://en.wikipedia.org/wiki/Nixon_Shock)
and till
[https://en.wikipedia.org/wiki/Triffin_dilemma](https://en.wikipedia.org/wiki/Triffin_dilemma)
is resolved.

And CHINDIA can get US dollars by exporting their Services/Products to
America;

