Trump's tariffs and trade war

@cicerone imposter,

From Brookings.edu.

Quote:

There is evidence, finally, that the president’s effort to brush aside the prospects of a trade war has failed to persuade the public. Only 28 percent agree with Mr. Trump’s statement that a trade war would be good for the United States; fully 64 percent reject it, including 71 percent of Independents and 50 percent of non-college whites.

All this helps explain why the public sees the president’s handling of trade in such a negative light: only 34 percent approve, while 54 percent disapprove, including 57 percent of Independents.

As the fall elections approach, expect to see Republicans from bright Red districts sticking with Mr. Trump on trade but Republicans from swing suburban districts breaking ranks and going their own way.

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25% tariffs on steel and 10% on aluminum are going to create more jobs in those industries.

25% tariffs on autos and auto parts would create more jobs in the auto industry.

These are good things.

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@cicerone imposter,

Who cares if the public supports it or not?

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@oralloy,

Trump will in 2020 when those unimportant people start voting.

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@oralloy,

oralloy wrote:

25% tariffs on steel and 10% on aluminum are going to create more jobs in those industries.

25% tariffs on autos and auto parts would create more jobs in the auto industry.

These are good things.

Basically the tariffs are forcing importers to invest in the US economy. The question is whether a situation could ever be created where they would voluntarily invest that money instead of just paying it as taxes.

Why is it that investors will invest in creating jobs in China to sell products in wealthier countries, but they won't invest in the same way in wealthier countries?

The answer obviously has to do with the cost of doing business and the availability of supply-chain products that facilitate production. Apple gave the example of tiny screws that are very difficult to get in the US because there's just one person doing the job instead of an entire team.

The point is to ask why people can't produce what they buy? Why do cheaper workers need to be hired, either as migrant workers or by out-sourcing jobs offshore? Answer: because of minimum wage laws and regulations that drive up the cost and difficulty of doing business.

Some regulations may be good, but others may simply restrict cheaper competitors from entering markets for the benefit of those businesses that dominate a market and want to avoid competition in order to keep their prices higher.

In other words, there are anti-competitive market practices going on.

What's baffling is why Democrats/socialists/unionists want to limit competition to drive up prices when they (should) know that it kills job-creation and keeps more people unemployed. Presumably it's because of the simple self-interest that causes individuals to protect their own wage levels no matter what effect it causes on others.

So how can the Democrats claim to be for workers when they are really just for some workers and not others? They think that everyone will do better if they protect certain businesses/jobs against competition and then tax them to provide for the unemployed, but does it work in practice or do lots of people just end up disenfranchized, deskilled, and unhappy?

Don't get me wrong. I am totally against destroying the environment and making the climate unsustainable by providing more economic power to the people when they are either unable, unwilling, or just too biased in their minds to recognize how they have to live and consume to make human life permanently sustainable on Earth. But then I also can't understand why humans aren't collectively bright enough to come up with solutions for both economic problems and environmental/climate unsustainability that don't just amount to more growth and thus more money to consumers who keep abusing their power to consume by failing to reform toward more conservative and more affordable lifestyle choices.

Many Americans may not want to live like Chinese, without cars and in small apartments, but if giving up driving and living more efficiently would solve both economic and environmental/climate problems, wouldn't it be better to compete with China in that regard instead of just trying to exploit their efficiency gains in a way that is ultimately to the detriment of the US and the climate?

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@livinglava,

Quote:

Why is it that investors will invest in creating jobs in China to sell products in wealthier countries, but they won't invest in the same way in wealthier countries?

It always boils down to supply and demand. The cost to produce things in China is very cheap compared to the US or Europe. But, that's only about China's ability to manufacture things at less money cost when the real cost they are paying is with their health and longevity. Most of their fresh water (1/3rd) and air are polluted. I can vouch for their pollution, because I visited China a couple of times, and in Beijing more than ten years ago, even our Tour Director didn't drink or wash her dishes from tap water. https://www.inkstonenews.com/china/new-study-puts-annual-cost-chinas-air-pollution-38-million-and-11-million-deaths/article/2166591. I believe they have been working to improve their environment from pollution, but they still have a long ways to go.

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@cicerone imposter,

cicerone imposter wrote:

The cost to produce things in China is very cheap compared to the US or Europe. But, that's only about China's ability to manufacture things at less money cost when the real cost they are paying is with their health and longevity.

Living without driving costs less than driving, and it is healthier. So driving benefits automotive businesses, such as those that are currently being hit with steel/aluminum tariffs, more than the people who pay money to them. Sedentary lifestyles cause obesity and health problems. I think obesity is less a problem in China where many more people live without driving.

Quote:

Most of their fresh water (1/3rd) and air are polluted. I can vouch for their pollution, because I visited China a couple of times, and in Beijing more than ten years ago, even our Tour Director didn't drink or wash her dishes from tap water.

That's because Chinese industrialism supplies the world and so there is no incentive for people living in the Americas or Europe to limit themselves to products whose manufacture doesn't pollute or cause climate unsustainability.

Quote:

I believe they have been working to improve their environment from pollution, but they still have a long ways to go.

China has very strong centralist, top-down governmental power. What the US should be doing is competing to prove that liberty can achieve reform better than centralized control governance, but the US is hindered by factors that undermine liberty, such as the abuse of the media by corporations and the authoritarian structuring of economic life by corporatism.

It's hard to achieve greatness with liberty when it is hard to even achieve liberty itself because of all the forces that suppress and undermine it in subtle ways.

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@livinglava,

I agree, but there are no easy answers. The biggest problems we're facing today is the have and have-nots that are increasing, and the middle-class losing ground. The corporations are producing greater profits, and the workers are not seeing their pay increase in relative terms. The federal minimum wage is a joke; it's outlived it usefulness as soon as it was implemented. There's no way anyone earning $7.25 an hour can live in most of the cities in this country except those that have already declared bankruptcy. The minimum wage in our city is $15.65/hour. It's impossible to live here on those wages. Many families crowd into one home to survive. Rents hover around $3,000 a month. The average cost of homes is around $1.75 million. We can live here, because we bought our home in the mid-1960's, and I paid off our mortgage in 1998 when I retired. We couldn't afford to buy our own home. Many professional couples can't even buy in this area, and many travel from the Central Valley to work in the high tech industry here. I even heard of one man who lives in Oregon, and he flies into Silicon Valley and works his 10 hour, four days, then flies home. Many are moving out of California, because of the high cost of living here. What surprises me is seeing young families with children still living in our area. I don't know how they're doing it.

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@cicerone imposter,

cicerone imposter wrote:

I agree, but there are no easy answers. The biggest problems we're facing today is the have and have-nots that are increasing, and the middle-class losing ground.

No, that philosophy is economic poison. It results in socialism at the national level and inequalities between nations. It is the reason why European pension/welfare funds invest in keeping the US spending big on goods made cheaply in China using German factory parts.

The US and Europe should be able to host a broad spectrum of income/wealth levels without it resulting in the detrimental aspects of poverty. Everyone should be able to eat, have clothing, and shelter, etc. without them all having to close the income/wealth gap between rich and poor.

Quote:

The corporations are producing greater profits, and the workers are not seeing their pay increase in relative terms.

Look at the environmental problems reported daily in the news. Too much waste, plastics in the ocean, CO2 and other greenhouse gases, deforestation through development, etc. Even the poorest people in the US drive cars and have plenty to eat, even meat every day.

Quote:

The federal minimum wage is a joke; it's outlived it usefulness as soon as it was implemented. There's no way anyone earning $7.25 an hour can live in most of the cities in this country except those that have already declared bankruptcy. The minimum wage in our city is $15.65/hour. It's impossible to live here on those wages. Many families crowd into one home to survive. Rents hover around $3,000 a month. The average cost of homes is around $1.75 million.

Rent and housing inflation is a product of the demand that supports it. If people didn't find ways to pay such high rents and borrow money for mortgages, those prices wouldn't be able to rise so high. Inflation is always caused by a failure of fiscal discipline to keep it in check, which in turn is caused by people borrowing and/or otherwise overspending money.

Quote:

We can live here, because we bought our home in the mid-1960's, and I paid off our mortgage in 1998 when I retired. We couldn't afford to buy our own home. Many professional couples can't even buy in this area, and many travel from the Central Valley to work in the high tech industry here. I even heard of one man who lives in Oregon, and he flies into Silicon Valley and works his 10 hour, four days, then flies home. Many are moving out of California, because of the high cost of living here. What surprises me is seeing young families with children still living in our area. I don't know how they're doing it.

I don't know how much fiscal discipline it would take to deflate California to the cost of living of the east coast and southeast. Once the sharks of an economy get a taste for meat in large quantities, they don't want to tighten their belts. In order to have a good economy, you can't just tax and redistribute money or force richer people to make less. Rather, you need to have the poorest people living very frugally, yet also have businesses willing to cater to them at prices they can afford.

The main thing is to stop thinking in terms of everyone having similar income and/or lifestyles. If you are concerned with poverty, what you should worry about is making sure that the poor have adequate access to healthy food, warm clothing, modest shelter, and non-automotive transit/infrastructure. Then, those poor people have to accept that they will have to work and save a long time to gain the higher status they often desire, and they may never do so but that doesn't mean they should get angry and go into crime or rebel or seek revolution. They should just concentrate on improving their situation and health and educational attainment, even if that just means having access to good public libraries and using them to learn without getting degrees and higher pay as a result.

In other words, some people just have to work for less money and do the jobs that need to be done so that the economy can provide prosperity for all. Things like personal safety and security from crime, a good natural environment, are a product of moral choices that don't cost anything. People mostly just need to behave themselves and work constructively to solve the problems of how to live better with less spending.

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Trump postpones tariffs to save the auto industry:
http://www.cnbc.com/2019/05/15/trump-administration-to-delay-auto-tariffs-amid-trade-war.html
Sad

Come on, the whining won't be any less six months from now. Just plug your ears so you don't hear the whining and let's get it done.

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@livinglava,

Quote:

cicerone imposter wrote:

I agree, but there are no easy answers. The biggest problems we're facing today is the have and have-nots that are increasing, and the middle-class losing ground.
livinglava wrote:
No, that philosophy is economic poison.

What do you mean it's economic poison? It's a fact. https://billmoyers.com/2015/01/26/middle-class/. If we are not allowed to provide facts about the economy of our country for fear of socialism, we've already lost the war. There is no record of any socialist country that is economically successful. It must be based on capitalism. That's Econ 101.

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@cicerone imposter,

cicerone imposter wrote:

What do you mean it's economic poison? It's a fact. https://billmoyers.com/2015/01/26/middle-class/.

Yes, just like it's a fact that numerous publications report on social-inequalities and 'wealth gaps' etc. to propagate a sense of social injustice in there more income variation than less.

Have you ever considered that having more income and wealth variation is actually an economic resource that allows more people to invest and spend effectively because there are more people willing to work for what others can afford?

The challenge is preventing poverty from resulting in harm and lack of basic necessities. When people commit crime, that's a problem. When they are hungry/starving, lacking warm clothes, or sufficient shelter, that's a problem. Most people who complain about not making enough money just want more 'equality' with people richer than them. They want a bigger house or they want to go out to eat more or go on more/better vacations, or have more money for consumption of non-necessities.

Paying such people more results in inflation of the things they buy with the money. Fiscal discipline is necessary to keep prices in check and suppress inflation. People must save as much as they can and resist spending to keep prices down so that they have more freedom to spend when they choose to.

Quote:

If we are not allowed to provide facts about the economy of our country for fear of socialism, we've already lost the war. There is no record of any socialist country that is economically successful. It must be based on capitalism. That's Econ 101.

Publications about income inequality and wealth-gaps are propaganda that spin facts. There is and always will be differences in income and wealth because equality is relative and subjective. You could gather and report on facts in the most egalitarian societies on Earth to emphasize differences and inequalities and doing so would provoke envy and a sense of social injustice.

Instead of comparing incomes, you should focus on what the poorest people are able to achieve with their income and what they can't. If they can afford healthy food and they have shelter from the elements and warm clothes/blankets for when it's cold, then they have economic security. If they aren't being tortured and/or deprived of environmental standards like walkable/bikeable infrastructure, neighborhoods free of crime, drugs, gangs, bullies, harassment, and other negative influences, then they are not truly poor.

Real poverty lies in the fact that people take on huge mortgages or rent payments to avoid living in certain areas because they are plagued by mean, obnoxious people, crime, drugs, etc. Those who are true 'deplorables' are put in certain areas to drive people into slaving harder to make enough money to afford a standard of living that should be universal and free. No one is entitled to having others build and maintain housing for them and/or doing other labor/investment to sustain them; but they should be entitled to peace and security. People also should be entitled to opportunities that allow them to pay for their basic necessities. No one should be receiving food without providing an equal amount of labor in exchange for the labor used to produce the food. No one should be exploited in exchange for food, but neither should people exploit others to produce their food for them without properly compensating those farmers for the food they receive.

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@livinglava,

It's about motivation to improve oneself with hard work and education. The opportunities are open for everybody, but I can understand how opportunities have been decreasing over the years compared to when I was of working age. Trump's tariffs is an unnecessary added tax for the things we buy; it's stupid and hurts people's pocket books and jobs. An increase of 25% for necessary purchases just doesn't make any common sense; it hurts consumers and businesses. China retaliated with their tariffs, and so will other countries. Less sales, less jobs, less income. It doesn't help anyone. Trump brags that the government is now bringing in more money. There's no cure for stupid. https://www.vox.com/2019/5/13/18617818/china-usa-trade-war-trump-tariff. Our economy is very fragile; many are already deep in debt - especially from loans to attend college. When they start working, they're not going to be in any position to buy cars or homes in order to pay off their college loans. It'll be impossible in city like ours in Silicon Valley where homes are now costing an average of $1.7 million. There was an article recently in the San Jose Mercury News about two professionals living here that can't afford to buy a home, so they rent at $3,000 per month. That translates to $36,000 a year, and that has to come from net income (after income taxes). How many earn over six figures to pay that kind of rent? Not many.

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@cicerone imposter,

Cicerone, I think you may be ignoring the trend over time of our trade balance with China and the rapidly growing export of wealth to them. In addition it is quite obvious that China, with its requirements for Joint Venture companies (often with government controlled) Chinese firms and technology sharing amounts to the systematic theft of the intellectual, science and engineering assets of American s and American corporations. Left to continue these things could have serious and lasting effects on our economy and national power.

It is merely popular to say that tariffs are merely a tax on American consumers. However a closer look at the process reveals that tariffs are actually paid by the firm importing the goods, and such firms are subject to market forces on the price of their goods. Such competitive pressure will cause many such importers to change the source of their products (and manufacturing) to other countries, including domestic production here. These knock-on effects are in the long run much more significant than the transient rise in the cost to the American consumer.

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@georgeob1,

Most of us who keep up with economic news knows about China's trade balance with the United States. China's theft of our assets is not new, and our government has done little to stop it. It also works in reverse; the US can also "steal" Chinese intellectual property, but we don't hear about that! The media doesn't cover those kinds of stories. At least, none that I'm aware of. https://www.quora.com/Why-doesnt-the-U-S-stop-China-from-stealing-information. The trade balance is a normal consequence of free trade. They can produce things much cheaper than can the US or Europe. Competition is at work here; and it's the best economic policy. The Chinese are paying dearly for their cheap labor; their standard of living is very poor, and they are polluting their country. One-third of their fresh water resources are now polluted, and big cities like Beijing have air pollution to boot. It's a high price to pay for their cheap labor. Their standard of living is not improving much. http://archive.economonitor.com/blog/2014/05/chinese-living-standards-international-perspective-the-world-banks-ppp-debate/. Their problems increase exponentially because of their increasing population, while the west continues to decrease. It's a huge problem for developed countries, because of the aging of the population, and the imbalance created from it.

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@cicerone imposter,

https://articles.marketrealist.com/2016/08/chinas-population-control-policies-created-social-economic-problems/

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@cicerone imposter,

Well they have made a far more rapid transition to a modern economy while, at the same time, raising the standards of living for most of their citizens than has been seen in a very long time. Such transitions always have their side effects.

Improving their compliance with WTO trade standards and increasing the competition they face from other suppliers is a natural consequence of their success and the preservation of the welfare of our own economy.

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@georgeob1,

One of many problems in China. https://video.search.yahoo.com/yhs/search;_ylt=AwrgEY94o91csTsAMR0PxQt.;_ylu=X3oDMTByNWU4cGh1BGNvbG8DZ3ExBHBvcwMxBHZ0aWQDBHNlYwNzYw--?p=new+ghost+cities+in+china&fr=yhs-adk-adk_sbnt&hspart=adk&hsimp=yhs-adk_sbnt#id=1&vid=4bf6f2c320bac6612c6eaeb7f94aef9b&action=view

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@cicerone imposter,

My wife and I just returned from a trip through Azerbaijan, Armenia and Georgia - a wonderful time. However blocks of abandoned apartments, poorly build with prefabricated concrete slabs, were visible in Baku, Yerevan and Tbilisi -- all left over from Soviet days were visible in all three.

That, of course, is what one gets when he decouples supply and demand - as all socialist systems do.

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Trump's tariffs and trade war

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