Posted on 05/06/2019 1:21:11 PM PDT by Innovative
A Chinese delegation will travel to the United States for trade talks this week after President Donald Trump’s latest tariff threat, according to sources familiar with the matter.
Trump reignites the trade war with Beijing on Sunday, raising doubts about whether the Chinese team will come to Washington to try to strike a trade deal as planned.
Stock markets initially plunge following Trump’s tariff threat but recover throughout Monday.
(Excerpt) Read more at cnbc.com ...
“Right now, China is the world’s factory, not because of low labor, but because they have the raw material...”
Wrong.
Raw materials is a major weakness and competitive disadvantage of manufacturing in China. They are exceptionally dependent on imports of raw materials, including oil - their energy costs are also relatively high because of that.
“India, Vietnam, etc...just cannot compete.” They obviously can, and are. India has more people, lower wages, faster demographic and economic growth, and a higher skill level. They are the second largest producer of Ph.D.s in the world after the USA, and have a much higher level of English language capability and cultural understanding of the US society and market.
Apple supplier Foxconn is shifting their main production from communist China to India, and Netgear announced this week that they are following.
Last one out, turn out the lights.
There is a saying now current in China. This may be the worst year in a decade, but it will be the best year of the next decade.
Japan’s “lost decade” after its bubble burst, stretched into two decades. By financial measures of debt and currency mis-valuation, China is significantly further out of balance than Japan was. We can manage an orderly withdrawal of the supply chain from China over several years, but a major debt and/or currency crisis there will likely be a big hit to the global economy. Another reason for businesses to get out while they can.
“The bottom line is American consumers take it up the *** on prices with tariffs.”
In theory, theory and practice are the same.
In practice, they are not.
The general theory that tariff costs tend to be passed on to consumers, will be affected by several factors.
If several competitors share similarly low cost structures, then normal forces of supply and demand will keep prices down.
The rest of the world is free to compete on price - these tariffs are only on communist China. They are punishment for a trade cheater, not protection of uncompetitive domestic industries (with the minor exception of the steel and aluminum tariffs).
Thank you for a well written, informative post. I learned some stuff. ;)
Is it illegal to make trades on ETFs and stock indexes based on "insider information" that is entirely political in nature?
You can't reignite something that has on going for 30+ years.
This is bad news. We want the tariff, we need the tariff.
Duh. In the beginning when demand would out strip domestic supply. Where did you learn economics in a comic book?
Prices will be higher until domestic suppliers come on line. The situation is dynamic and not static like free traders would have us believe. Lies, bully scare tactics and deception are the hallmark of the Free Traitor™.
Why an across the board tariff is needed to being manufacturing back to the USA. Globalists have to be force to pout America first.
To balance the difference in labor costs between the USA and the 3rd world would not take much. Frankly, most manufacturing is not labor intensive. That's the point of mass production. Maybe 7% of retail prices goes to labor, and that's for domestic union labor.
You Free Traitors™ need to quit acting like you need to educate Patriots in economics. We understand economics WAY more than you realize.
Protectionists, (Patriots) understand that a tariff will increase prices. We get it. WE WANT THAT. It's a one time inflation due to higher labor costs in the USA. Again, we understand the economists. We are not stupid. But the payoff from higher import tariffs comes in lowered social costs and higher quality products. We are willing to pay more for a strong viable industrial base. I WANT TO PAY MORE.
I am not so greedy as to destroy the USA industrial base, cause social havoc, lower GDP growth, in order to buy a cheaper poor quality Coolie made consumer goods. IT'S NOT WORTH IT AT ANY PRICE.
When you call people “consumers” you reduce them to unthinking insect status. Globalists like you should be be ashamed of yourselves. You all should be hunted down and exiled to the third world.
Be careful on “learning” from the globalist lies you get from Free Traitors™.
What you describe works if we don’t have a free market.
The only tax in the Constitution is the tariff. The unconstitutional income tax was amended in.
Americans will pay most direly with the continued takeover by China.
Trump is doing heroic work on this front.
And the outward economy and consumer prices are only pieces of the full picture.
We will be far better off and in the long run save more as a country if we localize what we can from our China trade and get the bulk of it shifted to less threatening and more free actual allies—like India.
You misunderstand what is happening, completely.
You will pay $1,25 for the chinese can opener but the China manufacturer still gets the sale. The trade imbalance is still in favor of china. You will pay the china tax but nothing to thwart china trade has happened except you payed a tax
what should happen is that you buy a $1.00 can opener made in say korea or the philippines, or perhaps but un likely the usa. in that instance, china loses the sale.
however what will happen is all can opener prices will rise to say $1.20 as other manufacturers are able to raise their prices
What happens to the price when one of the "others" adds a third shift and sells theirs for $1.15?
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the market is then working to stabilize the price of the can opener
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