A Step Away From China - Is Trump Really Wrong?

[mark46]

The effect of Trump's policies is to greatly reduce trade with China, both exports and imports.
The US economy depends relatively little on exports, now even less. We will continue to have top trade partners in Canada, Mexico, South Korea, the UK and Japan. And yes, we will find somewhere to purchase inexpensive clothing for sale at Walmart.

Yes, prices at Walmart will go up a bit. Yes, some farmers will need to change their business models.

Obviously, there are lots of reasons to want to punish China. Perhaps, Trump has found the best end game: lots, lots less trade between the US and China.

QUESTION
Are we wrong in trying to become less dependent on trade with China?

 

[essentialsaltes]

The US economy depends relatively little on exports, now even less.

$2,500,000,000,000 in exports is not exactly nothing.

Perhaps, Trump has found the best end game: lots, lots less trade between the US and China.

I really doubt that. The world does not consist of just the US and China. If China is buying less from the US, that just means that some other country is benefitting from Chinese demand. Brazilian soybeans, French wine. The best end game does not mean us cutting off our own nose, while others benefit.

QUESTION
Are we wrong in trying to become less dependent on trade with China?

Phrased this way, I quite agree that we shouldn't be dependent on any foreign power. But the Trump go-it-alone method is terrible. China doesn't steal IP from just the US, but from other countries. By coordinating with our other international partners on trade issues, the world could bring collective pressure to bear on China. Instead we're locked in an unwinnable feedback loop of increasing tariffs on each side, while the rest of the world laughs.

 

[friend of]

But the Trump go-it-alone method is terrible.

Trumpian protectionism is "go-it-alone" almost exclusively when it pertains to China. The rest of the world considers his trade measures to be austere, but this is because the U.S. has been overtly generous in its trade policies for some time now.

China doesn't steal IP from just the US, but from other countries.

Fantastic! That makes it okay!

By coordinating with our other international partners on trade issues, the world could bring collective pressure to bear on China

Easier said than done. Most international partners do not want to aid in the Trumpian clampdown as they view China to be a beneficial trade partner, especially in the case of outsourcing labour. The rest of the world isn't laughing about it, though.

 

[Belk]

Trumpian protectionism is "go-it-alone" almost exclusively when it pertains to China. The rest of the world considers his trade measures to be austere, but this is because the U.S. has been overtly generous in its trade policies for some time now.



Fantastic! That makes it okay!



Easier said than done. Most international partners do not want to aid in the Trumpian clampdown as they view China to be a beneficial trade partner, especially in the case of outsourcing labour. The rest of the world isn't laughing about it, though.

In what manner has it been overly generous?

 

[miamited]

The effect of Trump's policies is to greatly reduce trade with China, both exports and imports.
The US economy depends relatively little on exports, now even less. We will continue to have top trade partners in Canada, Mexico, South Korea, the UK and Japan. And yes, we will find somewhere to purchase inexpensive clothing for sale at Walmart.

Yes, prices at Walmart will go up a bit. Yes, some farmers will need to change their business models.

Obviously, there are lots of reasons to want to punish China. Perhaps, Trump has found the best end game: lots, lots less trade between the US and China.

QUESTION
Are we wrong in trying to become less dependent on trade with China?

Hi mark,

Well, one of the things that we're seeing is that now Chinese manufacturers just use a middle man. They continue to make the same volume of goods that they always did. But instead of exporting them directly to the U.S., they export them to Vietnam or South Korea and someone there makes up a new bill of lading showing that they are from that country and off they go.

Yes, it's illegal under U.S. law, but China isn't beholden to obey U.S. law in China. China merely sells them to some business in Vietnam and if asked, they say that they just sold all these goods to Vietnam and what that business did with the goods is up to the Vietnamese business. One has to be able to prove that the goods were exported to Vietnam with the foreknowledge that they were going to then just be sent straight to the U.S.

What I find so hypocritical is that here's a man whose businesses use hundreds of H1B visa workers at many of his resorts and hotels because he doesn't want to pay what American workers make for an honest days work. So it's just a way for him to not pay fair American wages. Yet, he's all over these other American companies that also want to use foreign labor because it's cheaper than paying a fair American wage. If Donald Trump thinks that American businesses should stay in America and pay fair American wages, then he ought to be willing to do the same thing himself. Hire American workers for his business and pay them a fair American wage.

God bless,
In Christ, ted

 

[miamited]

Hi again mark,

Speaking of hypocrisy, does anyone remember this late night interview between Donald Trump and David Letterman?

Do you really believe that his tie is the number one selling tie anywhere in the world? Do you believe that he's been very open about it? Did he shut down his Beijing factory and open one in Queens? He said he'd love to do that. What do you suppose stopped him? MONEY.

God bless,
In Christ, ted

 

[friend of]

In what manner has it been overly generous?

The U.S. has been taken advantage of for decades. Plain and simple.

 

[Kentonio]

The U.S. has been taken advantage of for decades. Plain and simple.

It must have been hugely burdensome to US consumers being forced to buy all those low cost products sources from China. The poor dears..

 

[Mountainmanbob]

QUESTION
Are we wrong in trying to become less dependent on trade with China?

No
Far past time
to even the playing field.
Thank you Trump.
M-Bob

 

[Speedwell]

No
Far past time
to even the playing field.
Thank you Trump.
M-Bob

Yeah, Big brother made good has come back to town and is going to whomp all those bullies who have been doing us down.

 

[Belk]

The U.S. has been taken advantage of for decades. Plain and simple.

OK. How has it been taken advantage of and what in it's trade agreements allowed that?

 

[Gene2memE]

The US economy depends relatively little on exports, now even less.

You're kidding, right?

12.5% of US GDP is generated by exports. That's one dollar in every eight.

US exports are at record high levels in terms of dollar value and very close to record levels in terms of percentage of GDP.

We will continue to have top trade partners in Canada, Mexico, South Korea, the UK and Japan. And yes, we will find somewhere to purchase inexpensive clothing for sale at Walmart.

Yes, prices at Walmart will go up a bit. Yes, some farmers will need to change their business models.

Do you understand how global supply chains work?

It's not just a matter of stopping doing business with one country and bringing things back home. Setting these up takes years of work. If you're a big manufacture (like Boeing, or Caterpillar, or Apple) then extricating your business out of China and in-sourcing (or setting up elsewhere) could be the work of DECADES.

If you have access the the WSJ, i suggest this article as indicative of the problem:
U.S. Companies on China: Breaking Up Is Hard

10 years ago, I did some consulting work for General Electric in Europe. The work on that project means a new factory is going to be built in the Czech Republic, in 2021.

That's the sort of timeframes you're looking at.

Obviously, there are lots of reasons to want to punish China.

There are lots of reasons to want to punish the US as well. Let's not act like one side is wearing the white hat here and one side wearing the black hat. Let's also not forget that the US relationship with China has historically been exploitative and heavily weighted in the favour of the US and its economic interests.

Now that this power relationship has shifted, certain elements in the US are uncomfortable with this and are seeking to rewrite the rules that they helped to set up.

Perhaps, Trump has found the best end game: lots, lots less trade between the US and China.

QUESTION
Are we wrong in trying to become less dependent on trade with China?[/QUOTE]

Yes.

Trade is not a zero sum game, comparative advantage means both sides gain significantly - which is something that neomercantalists like Trump completely fail to recognise.

The US (still) gets vastly more out of its economic relationship with China than it would if no trade existed.

 

[friend of]

OK. How has it been taken advantage of and what in it's trade agreements allowed that?

They're not paying their fair share in NATO defense spending, for one.

 

[friend of]

It must have been hugely burdensome to US consumers being forced to buy all those low cost products sources from China. The poor dears..

Well I think sweat shops are borderline unethical, in any case...

 

[mark46]

How exactly is trading much less with China "going it alone"?

Trump has signed or is in the process of signing agreements with Canada, Mexico, South Korea, Japan, the EU and Great Britain.

I don't think that any of these treaty arrangements involve the US trading less.
=====
You are correct. We are involved in a feedback loop with China. Since China will not stop its unfair trade practices that steal from the US, it is REASONABLE to have a goal to reduce purchases from China. So, this feedback loop is resulting in fewer purchases both ways. The OPEN question is whether we are willing to accept higher prices for replacement goods made in countries with fairer trade practices. If not, we can continue to allow China to take advantage.

.

Phrased this way, I quite agree that we shouldn't be dependent on any foreign power. But the Trump go-it-alone method is terrible. China doesn't steal IP from just the US, but from other countries. By coordinating with our other international partners on trade issues, the world could bring collective pressure to bear on China. Instead we're locked in an unwinnable feedback loop of increasing tariffs on each side, while the rest of the world laughs.

 

[mark46]

In essence, Trump is increasing trade with many countries while he decreases trade with China. I think that is OK. And yes, I am an unabashed free trader. Supporting free trade does NOT mean that a country should accept trade with a country that refuses to play by world rules. "Free trade" should mean free trade WITHIN the circle of country that we wish to trade with.

You're kidding, right?

12.5% of US GDP is generated by exports. That's one dollar in every eight.

US exports are at record high levels in terms of dollar value and very close to record levels in terms of percentage of GDP.



Do you understand how global supply chains work?

It's not just a matter of stopping doing business with one country and bringing things back home. Setting these up takes years of work. If you're a big manufacture (like Boeing, or Caterpillar, or Apple) then extricating your business out of China and in-sourcing (or setting up elsewhere) could be the work of DECADES.

If you have access the the WSJ, i suggest this article as indicative of the problem:
U.S. Companies on China: Breaking Up Is Hard

10 years ago, I did some consulting work for General Electric in Europe. The work on that project means a new factory is going to be built in the Czech Republic, in 2021.

That's the sort of timeframes you're looking at.



There are lots of reasons to want to punish the US as well. Let's not act like one side is wearing the white hat here and one side wearing the black hat. Let's also not forget that the US relationship with China has historically been exploitative and heavily weighted in the favour of the US and its economic interests.

Now that this power relationship has shifted, certain elements in the US are uncomfortable with this and are seeking to rewrite the rules that they helped to set up.



QUESTION
Are we wrong in trying to become less dependent on trade with China?

Yes.

Trade is not a zero sum game, comparative advantage means both sides gain significantly - which is something that neomercantalists like Trump completely fail to recognise.

The US (still) gets vastly more out of its economic relationship with China than it would if no trade existed.[/QUOTE]

 

[mark46]

$2,500,000,000,000 in exports is not exactly nothing.

Not nothing, but a much lower percentage of GNP than those countries that depend on exports.

Exports of goods and services (% of GDP) | Data


Besides, I am suggesting that I tend to like Trump's idea of substituting trade with China with more trade with Canada, Mexico, Japan, Korea, and the UK is a good idea. Trump is even making small deals to increase
exports to the EU. OF COURSE, he should back off the new tariffs with those countries. Trump favors bilateral arrangements. I would expect more in the next year. [I seem to recall recent talks with Coata Rica].

 

[civilwarbuff]

It must have been hugely burdensome to US consumers being forced to buy all those low cost products sources from China. The poor dears..

It has been hugely burdensome to US workers who have lost their jobs because China's unfair trade practices and currency manipulation has forced factories to transfer their operations overseas (primarily to China due to the aforementioned issues) in order to stay in business. Of course one cannot expect sympathy for the 'poor dears' if such ones have not had such experience.....just sayn'......

 

[civilwarbuff]

Yeah, Big brother made good has come back to town and is going to whomp all those bullies who have been doing us down.

So you don't agree that China engages in unfair trade practices and currency manipulation?

 

[mark46]

Please list the industrialized countries who are less dependent on exports that the US.

Exports of goods and services (% of GDP) | Data

We should be trading more with others and less with China.

You're kidding, right?

12.5% of US GDP is generated by exports. That's one dollar in every eight.