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Comment by elago | Hacker News Reader

I'm curious how are you coming up with these economic projections? Are you running simulations? Reading reports? Are you an economist?

What if China just sells to other customers? What is China subsidizes it's manufacturers, so they get paid and keep their production capacity whether or not they're actually producing? Exactly like soybean and corn farmers in the US are btw.

The whole thing seems incredibly complex, and most of the economic opinions I read about don't say "markets are better when the goverment skims 25% off of all transactions".

So I'm curious how you immediately come to the conclusion "USA Wins, China has no leverage, game over".

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They can try selling to other customers, but US is still around 25% of global GDP and probably a larger percentage of the market for the components that have been tariffed. Chinese government would have to print a lot of money to make up for that, which causes it's own issues, especially when considering the amount of debt China has already racked up.

The point isn't for the government to skim 25%, it's to get China to trade fairly or if worse comes to worse bring manufacturing back to the US.

In the event of a trade war US has leverage because we have the market and a essential product, food. US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food.

> US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food.

But they aren't dependent on importing that food from the US. Brazil, Australia, Thailand, Indonesia, Malaysia, Canada and Argentina are all happy to step up and take over for US producers who are now going to see demand fall through the floor and these producers have been preparing for the inevitable shoe to drop in retaliation for US tariffs for months now. Luckily most of the damage is going to be felt in those central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers.

But I am sure people are just going to be overjoyed when their Christmas electronics are significantly more expensive, and we will see how long they believe delusional statements like ones claiming that this action will "bring manufacturing back to the US" -- I am betting that line will get you a beat-down in the Midwest by next spring.

> central plains red states, so we can all ruefully shake our heads and remind them that this is what happens when morons elect one of their peers.

say what you will about trump and 'central plains morons', but last time I checked, NYC isn't in kansas so 'their peers' is a bit of a stretch..

> if worse comes to worse bring manufacturing back to the US

If these tariffs are on components and not manufactured goods, then it seems like it would push manufacturing into China, not bring it back to the US.

Not if the goal is to bring back component manufacturing.

Who’s going to buy the US-made components if the manufacturers that use those products have already moved to China because of the tariffs?

Probably those same manufacturers, depending on whether the added labor premium is less than the cost of shipping finished goods across the Pacific.

As a first-order approximation, transoceanic shipping is essentially free. A quick google gives me $5,000 to ship a container from China to a US port. Considering the volume that a 40' container can hold, yeah, that's pretty much free.

Compare that to even cheap US labor rates and it's a no-brainer.

The stated goal only matters insofar as it affects the policies that are created.

In 2018, it's a whole lot easier to avoid doing any manufacturing in the US than it is to avoid using any components made in China; and both approaches avoid the tariff as written.

If the goal is to bring back component manufacturing, they need to go back to the drawing board.

Maybe.... that is the purpose?

These whole shenanigans are quite transparent, really, aren't they?

> US consumers can live without another 42in tv, Chinese can't live without food and they are entirely dependent on importing that food.

All fair points, but can US politicians live with opposition from the agricultural lobby and/or rural vote? Political expediency beats long-term economic planning when politician's livelihoods are on the line.

> The point isn't for the government to skim 25%, it's to get China to trade fairly

How is it currently unfair?

"consumers can live without another 42in tv." So you think. Americans will rage if these taxes land on them. There will be hell to pay. Fuck with Americans TVs and iPads, we will go to war.

> and most of the economic opinions I read

Have you read the economic opinion on income taxes?

Hint: They also make markets less efficient. But nevertheless we think the trade off is worth it.

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