Trumps gonna win.
- Thread starter jacko
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Let us consider what happens if the US puts tariffs on Chinese goods and they respond by putting tariffs on US goods.
One item we import from China is iphones, there are others, but this example will be applicable pretty much across the board. China does not manufacture the component parts of the iphone, they assemble them. They are also not the only country to do this, several other countries across Asia do this. I suspect the assembly of an iphone is a very small portion of the cost. If the Tariff is only on that small portion of the cost you would hardly even notice a change in the price and Apple might even eat that. However, if the tariff is on the entire phone rather than the value added then Apple would immediately move all the assembly to other countries like India and Indonesia. Either way it is very likely consumers in the US would not notice any change in the cost.
So in response China puts a tariff on Soybeans, our biggest export to China. So what? Do you really think we aren't going to sell our soybeans? No, the only thing that will happen is that the Chinese people will have to pay more money to eat.
Now the GDP of the US and China are roughly the same. However, the population is not. They have approximately 3x as many people on the same income, or essentially the average Chinese makes a third of what the average American makes. And it is worse because 20% of their economy is based on exports while 10% of our economy is. We could get into a trade war with China with minimal losses while the cost to China would be catastrophic. Most stuff we buy from China we could easily buy from Vietnam, Indonesia, India, S. Korea, Taiwan, etc. But the same is not true the other way around. If China puts tariffs on Soybeans the price of Soybeans might go up but we'll still sell all our Soybeans. No one is moving the production of Soybeans to another country.
Also with AI, robots and 3d printers putting tariffs on their exports to the US will simply encourage manufacturers to move there plants to the US. That will increase investment in the US and cause our economy to grow. Since we are no longer shipping all these goods across the oceans you would think the leftists would applaud this as being more green and saving on transportation and fuel costs. Making this move 20 years ago would have made things more expensive, but now the difference is much smaller due to technology and the only reason some companies haven't already made the move is inertia. The Tariffs would simply be the nudge they need.
Now it is true if the world were to go into a full blown trade war that would be bad for everyone economically. But if Trump targets a country like China and gives a specific reason based on unfair policies that will be enough for most countries to simply buckle under.
Tariffs are not a good way to raise tax revenue, but they are a very effective way to put a stop to unfair trade practices by one abusive country.
One item we import from China is iphones, there are others, but this example will be applicable pretty much across the board. China does not manufacture the component parts of the iphone, they assemble them. They are also not the only country to do this, several other countries across Asia do this. I suspect the assembly of an iphone is a very small portion of the cost. If the Tariff is only on that small portion of the cost you would hardly even notice a change in the price and Apple might even eat that. However, if the tariff is on the entire phone rather than the value added then Apple would immediately move all the assembly to other countries like India and Indonesia. Either way it is very likely consumers in the US would not notice any change in the cost.
So in response China puts a tariff on Soybeans, our biggest export to China. So what? Do you really think we aren't going to sell our soybeans? No, the only thing that will happen is that the Chinese people will have to pay more money to eat.
Now the GDP of the US and China are roughly the same. However, the population is not. They have approximately 3x as many people on the same income, or essentially the average Chinese makes a third of what the average American makes. And it is worse because 20% of their economy is based on exports while 10% of our economy is. We could get into a trade war with China with minimal losses while the cost to China would be catastrophic. Most stuff we buy from China we could easily buy from Vietnam, Indonesia, India, S. Korea, Taiwan, etc. But the same is not true the other way around. If China puts tariffs on Soybeans the price of Soybeans might go up but we'll still sell all our Soybeans. No one is moving the production of Soybeans to another country.
Also with AI, robots and 3d printers putting tariffs on their exports to the US will simply encourage manufacturers to move there plants to the US. That will increase investment in the US and cause our economy to grow. Since we are no longer shipping all these goods across the oceans you would think the leftists would applaud this as being more green and saving on transportation and fuel costs. Making this move 20 years ago would have made things more expensive, but now the difference is much smaller due to technology and the only reason some companies haven't already made the move is inertia. The Tariffs would simply be the nudge they need.
Now it is true if the world were to go into a full blown trade war that would be bad for everyone economically. But if Trump targets a country like China and gives a specific reason based on unfair policies that will be enough for most countries to simply buckle under.
Tariffs are not a good way to raise tax revenue, but they are a very effective way to put a stop to unfair trade practices by one abusive country.
Luke 14:31 Or what king, going to make war against another king, sitteth not down first, and consulteth whether he be able with ten thousand to meet him that cometh against him with twenty thousand?
In this case having 10% of your economy based on exports while China has 20% gives Trump the upper hand. He has Elon Musk, Jim Rickards, and Steve Bannon all as advisors while himself knowing how to make a deal. I am quite sure he has already sat down and consulted with very capable advisors as to whether or not this will work.
To me the risk is not that "everything will become more expensive" as some simpletons try to assert. No the risk is that China is unstable and worst case scenario this results in a collapse of law and order in China. Best case scenario China must kowtow to the US and take their place of subservience. Neither option is doable for Xi, so this could force him to realize he has no chance to win a trade war with the US, but he does have a chance at a kinetic war.
In this case having 10% of your economy based on exports while China has 20% gives Trump the upper hand. He has Elon Musk, Jim Rickards, and Steve Bannon all as advisors while himself knowing how to make a deal. I am quite sure he has already sat down and consulted with very capable advisors as to whether or not this will work.
To me the risk is not that "everything will become more expensive" as some simpletons try to assert. No the risk is that China is unstable and worst case scenario this results in a collapse of law and order in China. Best case scenario China must kowtow to the US and take their place of subservience. Neither option is doable for Xi, so this could force him to realize he has no chance to win a trade war with the US, but he does have a chance at a kinetic war.
