Here's something else to consider. The 50 states do NOT have equal cost of labor, equal resources, equal cost of living, etc., etc. So, guess what? Some states have a trade surplus and others do not. Do you think a tariff war is warranted? Or, do you think the states have to buckle down and figure out how to compete? You're not necessarily going to create a surplus that way. You WILL raise prices, but that doesn't mean anyone will buy the product. So, we have Harley moving to Europe due to new tariffs. Did that help our trade balance? Did it help employment? The fact of the matter here is that Trump isn't trying to protect a particular industry. He is trying to inflict pain so he can get a better NAFTA, WTO, or China deal. Inflicting pain in a trade war is not anything even slightly similar to negotiated moves to protect an industry.
States can't unilaterally impose tariffs, Silly! No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress. — United States Constitution Article I, § 10, Clause 2 Harley Davidson only exists today because Ronald Reagan erected a tariff wall of a 10-fold increase in heavy motorcycle tariffs. I think Harley Davidson just made a massive mistake, but, time will tell. You are already on record stating that trade policy implemented to maintain a surplus is just fine, so, that's what we will do! Great pont by the way, in aiming for balance, rather than a surplus, we were aiming too low!
I didn't say anything about maintaining a surplus. The Harley thing shows that when tariffs are raised against another country it can cause production in OUR country to decrease. Raising tariffs on foreign steel raises prices on US steel. The point with states isn't that we're not allowed to do that. It's a though experiment concerning how my state could deal with your state if we had tariffs at our disposal. In the end, we have to be competitive. We can't create tariffs to require other countries to buy our junk. By far the largest part of what's going on today is that we're rich (as a nation) and other people are making stuff we want. We can't fix that by requiring them to buy our stuff. And, preventing Americans from buying foreign goods lowers our own standard of living by making stuff more expensive and/or less available.
You are quite supportive of countries engaging in trade policy that maintains surpluses, we have no trading partner running a surplus that you have condemned, you are quite thrilled with the practice, you have yet to find a single fault with any one of them, so we are going to do the honorable thing, and emulate their exemplary policies. They were a dying company when Ronald Reagan raised heavy motorcycle tariffs, ten-fold, to protect this very company, and look at how grateful they are. Trump's pointed out, they are making a very big mistake! No it doesn't, it raises effective prices on foreign steel, Silly! Sure we can. Nobody claimed we could. You're free to buy foreign goods, but you'll hit the tip jar for Uncle Sugar when you do. Or, you can simply buy American and support your neighbors job and wage levels, it's up to you!
Naturally Nations want to maintain their surplus with us, its an addition to GDP. A trade deficit is a subtraction from GDP. Take China, for example: They import $129,893.6B from us, that they can slap tariffs on. We import $505,470.0B from them, that we can slap tariffs on. Their leader has pledged to respond stroke for stroke with us. Even with only an elementary understanding of Game Theory, can you see China's problem? We hit them with round one, they responded by matching. We are hitting them with round two, at midnight tonight and they have pledge to respond in kind. Are you seeing the problem here for China? Trump has already said he will go to a half Trillion if necessary, to get a round that's not responded to. How many rounds the Chinese Leaders choses to go, is up to him, the opponent always gets a vote in a conflict, but, he runs out of head room at $130B and we at that point still have a $375B of their exports we can hit.
I think you are overlooking something. You are assuming that people will continue to buy the same amount of stuff even if the price is higher due to tariffs. That is clearly not the case or no one would ever move offshore.
I have a question for you. Lets go back to the phones again. Lets say we import a Chinese phone (maybe NTE, but it could be Apple) That phone uses US designed chips (maybe Qualcomm). Those chip are made in Korea (for the sake of discussion) and never enter the US. China puts some labor in the phone then sells it to the US. I think from the standpoint of GDP if we buy fewer of those phones GDP goes up, but Qualcomm goes down. I think you may be overlooking this in your deficit calculation as well, and it is a very large number.
Actually, as much as China engages in industrial policy, they may pay the tariff and eat the increase in a bid to maintain market share.
Now you've reverted to lying, carving pieces out of what I said and claiming that is my statement. I'm not interested in that kind of lie. It's now time for you to apologize.
Ideally, China further opens its markets to our goods, but, instead they are now sending up signals that they may slap a 25% tariff on our crude that we export to them, not really a big deal, I'm sure someone else will buy it. But, if they refuse to increase the business they want to do with us, there are many other counties that can produce what we purchase from them, that aren't using our trade surplus with them to build islands in the middle of shipping lanes vastly expand the military and so forth. They steal a lot stuff from us. They hack us a lot, they have our universities filled with their students that are a part of their industrial espionage, so, some long overdue pushback. Our MFN status was always for democracies with labor and environmental laws similar to our own, China was a departure and an experiment, it's had its drawbacks. China's industrial environmental standards are horrific, we should probably be ashamed that we buy anything from them, given what a polluting nightmare they are, but, baby steps, they either open their markets further or we further diversify our supply chain, they currently hold too much of it.
Now stop it, you are embarrassing yourself. You took the position that our trading partners surpluses were not a problem, but our desire to have smaller deficits with them was an unjust act of trade war. It was a dumb position for you to take, its not my fault that it didn't hold up under debate. You might as well blame me for your house plant not working as step stool to change your ceiling light. Some attempts, no matter how well meaning, simply aren't going to work out.
I suspect China buys almost as much US stuff as the US does. They just don't import it. The US companies have gone to them. There are probably a thousand US companies that either own factories or contract China factories to produce their products for consumption in China. Maybe they could hire Scott Pruitt to run their EPA. I hear he is job hunting. I'm not sure China isn't thinking about taking all of Iran's oil, just to jab Trump with a sharp stick. No, Trump has no idea what he is doing. http://www.jiesworld.com/international_corporations_in_china.htm
If they think the Iranian consumer can replace the American Consumer, they are welcome to it. I have a feeling that its a bit easier to replace 3rd world producers than it is first world consumers. Each of us has the leverage of our consumer base. We gave them $505B in access to our consumers, in exchange for $130B in access to theirs. They made a good deal, and now we are going to improve it a little bit. How they respond to that, and how much damage is done to our trading "partnership" is up to them, but we are reducing this deficit. If American Companies want to invest in China, build factories in China, hire chinese to make products for chinese, what is my responsibility to make sure that all works out profitably for them?
We imported $505B from them last year. They imported $130B from us. We are putting 25% tariffs on $34B worth of goods we import. If the US consumer buys it anyway, that 25% goes toward reducing our Federal debt, or, if the US consumer buys the product from a non chinese supplier, China loses the sale. So, we will either reduce our imports from China to $471B, or reduce our Federal Debt by $8.5B, or some blend of the two. They have said they will retaliate in kind. That leaves them with $85B in imports, or $8.5B in tariff revenue, or some combination of the two. And if they do retaliate, Trump has another list in the cooker of tariffs on another $16B in goods. So either our imports drop to $455B or, another $4B goes to deficit reduction. If they match, they are now at $69B in imports or $4B more in the treasury, and by matching, they have invited Trump's next salvo. Trump has said he will, if pushed, put tariffs on $450B in Chinese goods. After only two rounds, we still have $455B in imports from them to attack, and they are down to $69B from us to use in response. You are claiming Trump is making a monumental blunder, game it out and demonstrate your point, because, it's not obvious.
According to the Fed they are not concerned about tariffs. In fact they are more worried about the slowdown in the EU. A trade war may actually help us since the Fed is worried that the economy is going too strong over the last couple of months.
Not a consumer. An oil supplier. Yes, and I think we lose that battle. We have many more companies supplying China than they have in the US. So every dollar we take out of their economy also hits American companies bottom line.
They are welcome to defy US sanctions against Iran. And we are welcome to restrict Chinese Access to US consumers. Like I said, I think it will be easier for US to find third world suppliers than it will be for China to find First World Consumers. China isn't putting tariffs on goods produced in China by US companies, and we are not putting tariffs on goods produced here, by Chinese companies, Silly!
Oh, that's easy. Everyone knows there are only 2 more years of Trump if he goes thru with this. The Chinese have a much higher pain threshold that the US. The fact of the matter is they have no market to buy 400 billion more of our stuff even if they wanted to. No, I think they will trade us right on down and then just see what happens. US business and consumers will go absolutely nuts.
You just don't get it. If the Chinese people have less money because they aren't selling as much they won't buy as much. That hits US companies in China. Your not looking at it globally.
Oh I don't know, I think first world consumers are probably in shorter supply than 3rd world producers of cheap manufactured goods. Our tariffs on Chinese goods, in the totality of the US economy is barely a rounding error, but, it's a bit more than that to the Chinese. I'm fine with diversifying away from China, I think we do too much business with them and they are using our money for a military buildup. Why do you want to fund the Chinese Military build up?
So, you want me to make sure US consumer money flows to Chinese producers, so that they can consume from US companies, producing in China, to produce foreign profits, they don't pay US taxes on? Why is it in my interest to do that?
I don't really want to fund China's military, but I don't want to be stupid about it. Your thinking small still. Picture in your mind Apple building a new city in Vietnam to build iPhones and trying to staff it. All the while knowing the next President will turn it all around? Stupid, just stupid.
