Posted on 09/24/2018 10:27:23 PM PDT by Olog-hai
The United States cannot win its tariff war with China, regardless of what President Donald Trump says or does in the coming months.
Trump believes he has the upper hand in this conflict because the US economy is so strong, and also because politicians of both parties support the strategic objective of thwarting China’s rise and preserving US global dominance. But, ironically, this apparent strength is Trump’s fatal weakness. By applying the martial arts principle of turning an opponent’s strength against him, China should easily win the tariff contest, or at least fight Trump to a draw. […]
In handicapping the US-China conflict, another economic principle — rarely used to explain the futility of Trump’s tariff threats — is much more important than Ricardo’s concept of comparative advantage: Keynesian demand management. […]
With little spare capacity available, the new investment and hiring required to replace Chinese goods would be at the cost of other business decisions that were more profitable before the tariff war with China. So, unless US businesses are sure the tariffs will continue for many years, they will neither invest nor hire new workers to compete with China.
Assuming that well-informed Chinese businesses know this, they will not cut their export prices to absorb the cost of US tariffs. That will leave US importers to pay the tariffs and pass on the cost to US consumers (further fueling inflation) or to US shareholders through lower profits.
Thus, the tariffs will not be “punitive” for China, as Trump seems to believe. Instead, the main effect will be to hurt US consumers and businesses, just like an increase in sales tax. …
(Excerpt) Read more at irishexaminer.com ...
Anatole Kaletsky is chief economist and co-chairman of Gavekal Dragonomics. A former columnist at the Times of London, the International New York Times and the Financial Times, he is the author of Capitalism 4.0: The Birth Of A New Economy, which anticipated many of the post-crisis transformations of the global economy.Well of course hacks like this would cheer on Red China.
They need our market more than we need theirs.
They’re counting on that famous American lack of patience.
Nope. Not only is China going down - but Brett Kavanaugh us going to be Justice for over half a century so there.
>> ironically, this apparent strength is Trump’s fatal weakness.
Ironically, the apparent right to abortion is a fatal weakness.
Argument is silliness squared.
It ignores the rest of the world for one.
Foreign competitors will also angle to take some of the Chinese business.
And if the Chinese lower prices (or mess with their exchange rates) to adjust for tarriffs, how are US importers going to get dinged?
Once you have a hundred Chinese companies dumping 200,000 employees on a Friday...the leadership will meet and discuss implications of angry and unemployed Chinese on the streets. The trade war thus ends real quick.
Geez, libs are idiots...
Since Trump was elected and started this trade war with China which most economists indicated would be ruinous for otr economy the US stock market is up 27% and the Chinese market is down 20%. Every time Trump layers new tariffs on China the US market surges to new highs. The economists might want to listen to the markets rather than their own inner voices. Seems to me the markets are telling us that the best thing we can do from a trade perspective is unload China altogether as a trading partner
Hey we got along without their junk before, we can do it again. Besides our landfills are getting full of cheap disposable goods.
China has more to lose.
America buys more from China so raising tarrifs hurts the Chinese more as it creates price parity for products made in the United States consumes by Americans. Prices will rise but so will quality.
False argument. Consumers will buy what they can afford and buy cheaper items. If cost is passed on to consumer, consumer will buy item from someone else or not at all. That doesn't fuel inflation. Others will fill the vacuum caused by pricier Chinese goods, which will hurt China not us.
This guy’s from the Paul Krugman school of wishful economics.
This guy’s from the Paul Krugman school of wishful economics.
Only problem with your logic is you’re conveniently ignoring the fact that CHINA IS the cheapest game in town. There are generally no cheaper alternatives that can instantly fill in where China’s cheap products did.
So, I’m sorry to say, but US consumers WILL be paying more and it WILL mean INFLATION.
As much as anyone here wants the US to win, I don’t think any country wins when there’s a trade war.
Lol... after this round, they only have around $40B of US imports, and most of that is Boeing. The Chicken Littlesbare crying again.
That’s funny said the EU...
You're wrong. US consumers don't have to buy. Generally, if something is really dirt cheap people buy on impulse even if they don't need it. When something from China is pricier, people think twice about whether they actually want it or not, and may skip it or buy from another seller. There are cheap products from Vietnam and other countries. China is not the only game in town. I have bought cheap stuff from China, because it's dirt cheap and I don't necessarily need it. When the price goes up and is comparable to other countries goods, then people may not buy on impulse. There are many things from China that I can do without. Same with most people.
Look to a commie Irish to trot out the failed Ricardo and Keynes theories to justify the further economic genocide of US citizens.
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