[Poll]Your prediction of the escalating trade taxes...

Discussion in 'World News, Current Events & Politics' started by Taleweaver, Jun 20, 2018.

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  1. Not much: boosting in the press, but most/all of this will be quietly lowered/removed in the future

    19.6%
  2. The current+announced taxes will take place, no one will like the other's taxes, but everyone abides

    13.7%
  3. This goes until US citizens won't take it anymore and Trump's government is (figuratively) crucified

    21.6%
  4. Other countries will join China and things will escalate until the USA is as isolated as N. Korea

    21.6%
  5. The trade war at some point escalates into an actual war

    3.9%
  6. I have no freaking clue, so...CARROT CAKE COMEDY CHOICE!!!!!!

    19.6%
  1. morvoran

    morvoran Trump supporter

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    Drinking leftist tears...Yummy!
    Don't forget about Mexico. Companies are also moving to Mexico while unskilled workers are illegally crossing our border to take the crappier jobs we need to stay employed because our good manufacturing jobs are going down there.

    Thanks to Democrats looking for a bigger demographic to keep them in power, they are killing our trade with other countries since you can't trade with those that are making your products for you. Oh, but F*** Trump because "he's racist"? Give me a break.
    While the blind faith lefties are bending over to snatch up all the false promises the Democratics are feeding them, their leaders are taking advantage of their backsides.
     
  2. FAST6191

    FAST6191 Techromancer

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    Nov 21, 2005
    United Kingdom
    While I don't necessarily disagree with thing playing out somewhat like that (and also ponder what is to be the fate of the millions in the working and semi skilled middle classes in years to come) I do have to ask is there scope for semi skilled manufacturing jobs these days if it is somehow to be brought onshore?

    I can build robots to do things as well, if not better, than a lot of humans ever would and that is not set to stop any time soon (quite the opposite -- modern big data style vision APIs are probably going to have some real fun in the coming years). So magic some things onshore, deal with the environmental stuff (manufacturing is not pretty or not cheap if you make it, and not just in abstract trying to get people in landlocked locations preventing whales from being unable to communicate or something), possibly deal with the training and social stigma and you will get put out of business by some upstart with a few million* in loans (if not less) and a crew of a few dozen engineering grads. At that point you are either impeding free enterprise within your own borders or subsidising workers, neither of which are a particularly easy sell for many voters (especially not the ones keeping the current mob in power).

    *that might even be too high. Many of these robots can be made for about 100 grand outlay, lifetime of years and maintained for a lot less (also have 24 hour operation). If with taxes, pensions, healthcare, admin and the like my worker is costing me 50 grand a year for similar work outputs...
     
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  3. Xzi

    Xzi All your base are belong to the proletariat

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    Dec 26, 2013
    United States
    Spiraling Out
    For the most part I agree with this, but ultimately tariffs do nothing to solve the issue. As long as Americans continue to buy Chinese goods from Wal-Mart and Amazon, we're just imposing higher taxes on ourselves. Not to mention strangling our agricultural industry. Like it or not, as things stand now there can be no victory in a trade war with China. They've got all the leverage. The methods by which we slowly wrest control from them as our primary supplier of manufacturing labor have to be a lot more subtle than this, and unfortunately, the current administration is anything but subtle.
     
    Last edited by Xzi, Aug 24, 2019
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  4. Hanafuda

    Hanafuda GBAtemp Addict

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    Holy shit, Xzi and I are in near total agreement about something!
     
    Last edited by WeedZ, Aug 25, 2019 - Reason: Not an image board
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  5. UltraDolphinRevolution

    UltraDolphinRevolution GBAtemp Advanced Fan

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    In a way, China is farming the lower classes in the US by holding US bonds (still number 1 in the world, but much lower than in the past) and the USA are farming cheap laborers in China.
    In case of a decoupling of the economies the best outcome would be for the USA to re-establish a solid middle class (unlikely, to be honest - the production would likely move to other low income countries) and for China to avoid the middle income trap (forced to put emphasis on high-end products).
     
  6. morvoran

    morvoran Trump supporter

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    Dec 19, 2010
    United States
    Drinking leftist tears...Yummy!
    I can't believe it either, hanafuda. It almost sounds like Xzi is waking up and becoming a nationalist and against increasing taxes. And to think, I thought he was a lost cause.


    Actually, with the US being the world's greatest economy and being self sufficient on most things we as Americans need, we have all the leverage. China is increasing tariffs on about $75 million of our goods while we are increasing tariffs on over $300 million. You can agree that is a very big difference. To compensate, the goods we buy may increase pennies on the dollar. China is devaluing their yuan. Chinese workers are already paid very little as it is, so if their currency loses value, then they become poorer. China can only devalue so much before their people start to revolt and protest. American companies doing business in China are already starting to look at alternatives elsewhere. Stock holders are pulling out of China based companies (see the latest drop of the DOW this past week).

    In the long run, the tariffs will work in our favor if China still wants to have an economy at all. If you still disagree, then think about the Albert Einstein's definition of insanity, "doing the same thing over and over again and expecting different results" which is what the several past presidents had done.
     
  7. Xzi

    Xzi All your base are belong to the proletariat

    pip Contributor
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    Dec 26, 2013
    United States
    Spiraling Out
    I'm not against increasing taxes, it's a matter of what those taxes pay for. As it stands now they're paying for absolutely nothing except a giant foreign policy blunder. Not to mention your "nationalist" president is the one who imposed these taxes on us, but I suppose hypocrisy is to be expected from every Republican politician by now.

    China is both more disciplined and more authoritarian, so it's easy for them to stop buying the goods they've put tariffs on. The same can't be said of the US. We haven't stopped buying Chinese goods with tariffs on them, or even slowed down our consumption of those goods. Which means we aren't hurting their economy at all, only our own. Even despite the unrest in Hong Kong, we're the ones on the cusp of an economic recession, not China.
     
    Last edited by Xzi, Aug 25, 2019
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  8. matthi321

    matthi321 GBAtemp Fan

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    Jan 14, 2013
    i dont think anything major will happen
     
  9. supersonicwaffle

    supersonicwaffle GBAtemp Regular

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    Germany
    I can't really fault a country for implementing tarrifs on steel TBH. As @Hanafuda mentioned the local steel industry and independence of other country's steel is incredibly important to their military.
    As a matter of fact the earliest precursor to the EU the "European Coal and Steel Community" was an initiave to force European countries into a dependance on each other for their military in order to facilitate friendship and peace after WW2, especially between France and Germany.
    Sure it can be seen as isolationist and it could be argued that you don't need to protect your local steel industry from imports from NATO allies, on the other hand NATO allies are mostly not spending the agreed upon money on their military but are profiting of the US' steel imports.

    What isn't clear to me is the difference in attention when Trump does it as opposed to the EU. I've mentioned in another thread that the EU for example implemented tarrifs of almost 50% on bicycle products from china. In January of this year they also implemented tarrifs on E-Bikes with the default being 83.6%. There's different tarrifs for some manufacturers, notably a subsidiary of Taiwanese company GIANT who is the world's biggest bike manufacturer, their Chinese E-Bike subsidiary is hit with 27.5% import taxes.
     
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  10. notimp

    notimp GBAtemp Addict

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    Sep 18, 2007
    Ehm, I think you've got that reversed.

    US is imposing trade barriers on other countries, to slow down their economic growth. In the simplest most abstract explanation. To stop them growing, while the US is not so much, so the USD remains strong and will buy you more.

    China cant do much, because they have engineered themselves a fast growing economy. If that stops too abruptly - they'll have themselves a few revolutions on hand. So what they gonna do? Stop manufacturing iPhones? It will hurt them more.

    The whole point of beginning a trade ('tarrifs') war is, when you know that you will win it. And when you don't want to produce 'win/win' outcomes (where for example china currently wins a little more), which is what free trade produces.

    China now can retaliate, but what they gonna do? Not buy soy from american farmers? The us can take that...

    Escalating that thing currently isn't on anyones to do list (except for the US), because the US beats any other big economy in terms of being 'self sufficient' / not heavily dependent on one single other countries economy.

    Outcome for a US citizen: Some chinese goods will become more expensive, because the business usually hand on their trade expenses down to the customer. Which in return will incentivize producing some goods locally again (automation, not a big jobs winner), or more likely find different ways of sourcing them.

    The US is literally slowing down chinas growth and china has not very much they can do (they have hundreds of billions initiatives to open up new trade routes and markets to europe and eastern europe (reducing transport cost)) but they arent finished yet.

    Militarily they can't do much either. They can publically complain - which they do. Then we can point at Hong Kong, which we do. Thats all.

    Stop the panic. If its a war - the US certainly isnt loosing it.

    China needs USD more so than it needs EUR. :) The leaver here is, that china is a manufacturing giant, that can source much of the stuff they do themselves by now - but still have dependencies in important industries that are 'probably designed' so they cant get rid of important dependancies (think 'the software every android phone runs', there are others in other fields as well), so part of their dependencies have to be paid in USD. If they sell less to the US - guess what happens to their USD supply. :)

    Bicycles, as huge as that industry might be for them - isn't a key economic sector by any means. :)

    Also - if it doesnt hurt them production wise, or in sourcing goods (so only 'sales' wise), they don't mind so much. They will do empty spending on 'steel goods' they produce - which will then land on a landfill - directly. That they dont care about - as long as they can control it (currency fluctuation (impact)).

    In simple, when the US does it, targeting key sectors (cars in germany, electronics manufacturing in china), it hurts more. (dependency wise.)

    Here is the deal.

    Trade configurations:

    win/win: China will currently win more than the US.
    lose/lose: China will currently loose more that the US.

    The idea that china is this mega monolith you cant do anything about but to agree to their terms, currently gets challenged by US trade policy. And china has a real issue in terms of demographics.

    They have developed a lower middle class - but the country is very diverse, so they have regions that still are very poor. They had an issue with family planning, where the one child policy has produced an aging society, which is fine at the moment, if productivity can be kept high, but also comes with huge social issues.

    So if growth for them - stops - societies won't be happy. (Cut off expectations, huge old people problem, wealth distributed very unevenly, ...). China is 'top dog' currently. Now the battle wages over how fast they raise to the top. And if they can get to first, before 'their fuel runs out' so to speak. :)

    All quite normal, still.. ;)

    This is the notion I'm following - btw:


    The lecture is already 9 years old, so not 'current politics' exactly - but it describes in broad strokes, what seems to be relevant today.
     
    Last edited by notimp, Aug 25, 2019
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  11. supersonicwaffle

    supersonicwaffle GBAtemp Regular

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    It’s only one example. The EU has imposed tarrifs of up to 16% on Chinese steel since early 2016, a year before Trump took office. Look at the relevant news articles, if the EU does it it’s protecting the local industry if Trump does it it’s a trade war.

    Sure, go ahead and tell me how I got literally the same thing somehow reversed though.
     
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  12. notimp

    notimp GBAtemp Addict

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    Sep 18, 2007
    I think its volume and dependency.

    So with Euros chinese would do what? Buy european real estate. Companies. Patents. With USD they would pay license fees for the OSes their products are running, pay for oil which they need, pay off international loans...

    So (for the purpose of the argument, steel and bicycles are the same), lets say china produces 850 mio tons of steel a year. You use coal for that - which you have in country (or can import cheaply - you control the import routes), you use steel which you have in country (or ore you can import cheaply - you control the import routes).

    So lets say the EU hits you with tariffs, you - as china - let the steel plants still crank full speed, full production, full salaries. Then bury the steal in the dessert. Fuck over suppliers a little - tackle the losses over time.


    It becomes an actual issue - when you arent able to 'postpone' paying for those losses in your own currency.

    So - you produce a product - that doesnt get to be a full product, before you spend USD. And you tell the supplier - here take Chinese Renminbi-Yuan, and the supplier tells you, no - we only take USD. Then you cant control the impact that will have on your production ecosystem - hence, social instability issues > caused by another country.

    If you only ever take losses in your own currency - you dont care. You can inflate that away later - but the USD you dont control.

    So its only an issue, combined with "built in dependencies", which the chinese economy has, which is why the US can control them in a trade war.

    Why are we calling it a tradewar now, and not - when the EU set markups on cheep chinese steel (the us did as well I'm sure), because the chinese are just coming forward now (south chinese morning post, other state owned media)- complaining, that this is purely a tradewar - and fought to hurt their economy, not benefit the USes.

    Which is correct. :)

    I think I got it right, if not - criticise away. :)
     
    Last edited by notimp, Aug 25, 2019
  13. supersonicwaffle

    supersonicwaffle GBAtemp Regular

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    You still need to make a compelling argument why trade defense measures by the EU are considered fair but US measure aren’t. The notion that China hasn’t complained so far is ridiculous, they’re also no strangers to trade defense themselves.

    I think it’s far more likely you aren’t aware of the Chinese perspective to EU trade defense because it hasn’t been reported on as much as it is now with the US‘ measures.

    Some might blame trump derangement syndrome.
     
  14. notimp

    notimp GBAtemp Addict

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    There is no fair in international relations. :)

    (Difference between public moral, and international/trade law.)

    I argue in 'effective' in slowing down economic growth in china, or not. Steel tariffs were effective to protect european or us economies, from being flooded with chinese steel, but didn't slow down their 'internal planing' (because they might actually have slowed down growth a little) by much. :)

    Also - the question in regards to was it economic warware - gets answered by answering 'was it an aggressive, or defensive act'? And thats probably why the chinese gouvernment din't say much in the steel tariffs case, but they did now.

    I'm sure - if europe had a way to impose harsher sanctions on china, they would at least think about it as well. Even though their public credo always was 'free trade only produces winners' historically.

    We step back from that, when talking about issues, like the chinese buying out patent stock from our business ventures - and then we do something against that. That also can be seen as 'amoral' but moral doesnt count.

    This is not a 'moral failure' of the US. It just is. :) (Might be registered as an aggressive act in international relations, but eh - its the us (hegemony) they do it all the time ('are allowed to').)
    --


    Tariffs to protect you local economy - Using the example of steel tariffs.

    Why do you use them?

    China has little to no environmental standards on heavy industry (still), and they have cheap labor. At the time, when steel tariffs where established, they controlled close to 50% of the world market - and started pushing steel at dumping prices (they took losses), because of an over production caused by the financial crisis (they produced what they forcasted as 'need', then had no buyers, because economic crisis).

    If you are faced with that - you pull up trade barriers, because otherwise, your own steel industry will be outcompeted, and faced with having to close shop. If you are germany - thats not a good idea. (Strategic branch, key industry, matter of resource security, matter of national security.)

    Thats why tariffs arent always bad.

    But yes they can also be used for economic warfare.
     
    Last edited by notimp, Aug 25, 2019
  15. supersonicwaffle

    supersonicwaffle GBAtemp Regular

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    Germany
    Your original argument had nothing to do with effectiveness. You told me I was wrong for saying the US and the EU are doing the same thing because the US‘ trade defense is designed to stop Chinese growth which implies the EU‘s isn’t. You’re yet to form a coherent argument regarding your original claim.
     
  16. notimp

    notimp GBAtemp Addict

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    Sep 18, 2007
    I've extended my answer with an edit.

    Ultimately (and this is a cop out), it has to do with 'perception of effectivenes'.

    If any state puts steel tariffs on china - they feel that they can do something about it, compensate - keep their economy going.

    If the US starts draining the USD income flow into their economies, they feel that another state is basically shaping their political future, because there is really not much they can do.


    This (a version of it) also isnt new. Russia complained _heavily_ about price fixing in the (USD based) oil and gas markets, for political reasons. Some (non mainstream, (but not that extreme either) political voices always hinted at that playing a major role in ending the cold war). Hint: Russia lost. ;)

    There the story goes, that the US basically took "military protectorate power" over the middle east from the british after WW2. Which means the following. Lets say you are a member of a monarchy in the middle east, and you have 'a mountain of black gold'. All your neighbors want it. They really, really do. Because it will make you (not so much the population, but thats another discussion..) rich a. f.. So the first thing you need to do with money made from oil, is to buy - nifty weapon technology, that outcompetes your neighbor states by 10 centuries (those are countertrades). Then the acknowledgement of the world police, that it will bomb whoever attacks you - back into the stone ages.

    At that point you two are in a coalition. And the party, thats able to say - ok, then we will pull our military support - suddently owns high negotiating power as well.

    Long story short. Oil can only be payed for in USD. There never has been another oilprice crisis after 1973, but strangely - modern day russia was kept at bay as well by making sure, that their - purely natural resources based economy (not a great design, btw.. ;) ) always got a little less for their natural resources, than they actually expected.

    And thats Opec. ;) Which is a cartel. But also listens to US interests. Sometimes. ;)
    --

    Also - China didnt go into 'capitalism' naively. They knew about this risk. Its not that it would surprise them that that was a possibility. :) Its more.. idk. timing... ;) Its hard to plan a countries economy over 80+ years using central planning. ;)
     
    Last edited by notimp, Aug 26, 2019
  17. ShadowOne333

    ShadowOne333 GBAtemp Guru

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    Mexico
    Trading routes and taxes inflating?
    Why does this sound like The Phantom Menace?
     
  18. notimp

    notimp GBAtemp Addict

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    Sep 18, 2007
    If you ask the average person on the streets in the US, they always think, they'd side with the rebels.. ;)

    (Despite: https://en.wikipedia.org/wiki/Pax_Americana
    https://www.economist.com/the-world-in/2018/12/28/the-end-of-american-hegemony
    https://thediplomat.com/2018/12/what-comes-after-us-hegemony/)

    Welcome to Holywood!

    I hear the latest Tarantino has turned out great again.. ;)
     
    Last edited by notimp, Aug 25, 2019
  19. ShadowOne333

    ShadowOne333 GBAtemp Guru

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    Mexico
    I was just expecting someone to drop a similarity between Trump and Palpatine :P
    It's like The Trade Federation blockade on Naboo.
    Except I'm not sure what part is the Trading Federation and which one's Naboo.

    And people think the Prequels are awful.
    Take that, critics!
     
  20. notimp

    notimp GBAtemp Addict

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    Sep 18, 2007
    On the 'china feels there isn't much they can do about it' point:

    What they are doing now (Economist article I linked a while back.) is actually, that they start harming their economies (for counter tariffs) on purpose, just so the US (Trump states) notices the impact 'a little bit more'.

    So they are playing the game based on american domestic politics, and american public sentiment.

    But whatever they do, they are currently hurting more than the US. (But then they also have a nifty surveillance state and many 'monetary resources' they've stocked up on during the past two centuries 'booming'. They are just a little light on USD. ;) - just as russia was at the end of the cold war. (Same outcome not implied.. ;)))

    Heck, maybe tomorrow they decide to be best friends and buddy up against europe.. Who knows. I'm not indicating, that I would be able to predict the future here. :) Just telling likely stories, that I've heard in the past.. :)


    edit: Oh, and this one has nothing to do with Trump. He didn't invent any of it. :) (Thats why I find it so silly - that people always have to put his name next to political positions, as if it matters.

    Does anyone know, who the current Zbigniew Brzeziński is? ;)
    https://en.wikipedia.org/wiki/Zbigniew_Brzezinski

    From my point of view, Trump is someone that gets briefed at 10am, then goes in front of the press at 1pm, with a helicopter in the background, then goes on a really minor political trip to se his buddy in north korea once in a while - and thats all that it takes to make him happy.) This is one of the things that very likely would have happened in some fashion under democratic leadership of the country as well. The US will not smile all the way, while china overtakes them economically.

    edit:

    Here, even FOX (administration press statement TV.. ;) ) agrees on this.. ;)
     
    Last edited by notimp, Aug 25, 2019
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