Posted on 04/05/2018 4:09:49 PM PDT by SpeedyInTexas
“Two arguments”
Actually, here is a 3rd argument. Produce some of the goods in the USA to avoid the 25% tariff.
Down 1% on an annual basis. Hey only will take 100 years to balance our trade.
"...Whatever debt China does sell is simply purchased by other countries. For instance, in August 2015 China reduced its holdings of U.S. Treasuries by approximately $180 billion. Despite the scale, this selloff did not significantly affect the U.S. economy, thereby limiting the impact that such an action may have on U.S. decision-making..."
Is it a risk for America that China holds over $1 trillion in U.S. debt?.
Just say maybe or probably.
China needs to be confronted about some of its practices (we have won against them in the WTO on many things but they just ignore the rulings), but many “average Americans” will also take a hit on their businesses and this will result in a loss of jobs even without the tariffs due to uncertainty - not to mention consumers getting less bang for their buck.
In addition, “trade deficits” aren’t just a number on paper - the part of it pertaining merely to the purchasing of goods is not a loss of wealth but an exchange of wealth. For example, if they are truly running the prices down on goods like steel to be less than their actual worth, then on that product they actually would have a trade deficit with us. But, there are also other aspects to a trade deficit than just this - such as them imposing tariffs on our own products and not opening their own market to our products.
The economics are far more complex and far reaching than you are describing. Bush also imposed steel tariffs which did not have a positive effect and caused more people to lose their jobs than those that gained and did damage to US GDP. That is not helpful to the “average American citizen” by any stretch of the imagination.
It was indeed already underway - did Smoot-Hawley make it far, far worse and much longer lasting? Yes...then Roosevelt’s policies exacerbated it even further.
The Tariff Act of 1930 (codified at 19 U.S.C. ch. 4), otherwise known as the Smoot–Hawley Tariff or Hawley–Smoot Tariff, was an act sponsored by Senator Reed Smoot of Utah and Representative Willis C. Hawley of Oregon and signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels.
My understanding is the law was signed in 1930 but didn’t go into effect until 1931.
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