How deeply have you thought about the issue? I mean really, really thought about it. Trying to poke holes in your own deeply held beliefs, that kind of thinking.
“He who knows only his own side of the case knows little of that. His reasons may be good, and no one may have been able to refute them. But if he is equally unable to refute the reasons on the opposite side, if he does not so much as know what they are, he has no ground for preferring either opinion... Nor is it enough that he should hear the opinions of adversaries from his own teachers, presented as they state them, and accompanied by what they offer as refutations. He must be able to hear them from persons who actually believe them...he must know them in their most plausible and persuasive form.”
― John Stuart Mill, On Liberty
I can think of several ways things could play out in this trade war that would end in terrible results for the US, China, the whole world, and every different combination you can think of.
Can you think of even one scenario where the current status quo might produce bad results for even one nation? Or, do you truly believe that our current model (which objectively is still very much protectionist, in a variety of very complicated ways) happens to be designed absolutely perfectly to produce the optimum outcome for everyone under all scenarios that our infinitely complex and unpredictable world throws at us?
Personally, I believe a better approach is for everyone to get out of their ideological mental straight jackets and practice critical thinking, conversation, honesty, and cooperation skills. And if we can pull that off, then maybe then we can hold our respective political leaders to some sort of a similar standard.
China has been playing by their own set of rules from the rest of the world and it's time to end it.
https://www.bloomberg.com/news/articles/2018-06-12/the-1-4-t...
Where are you going to get a good price for steel (and not only steel) when you add a 25% tariff on it when it comes from China? It'll lead to American products also being more expensive and it'll lead to a lower purchasing power in the US.
Other countries can also higher their prices for the US because why wouldn't they? The US isn't gonna get it cheaper from China... This leads to an endless price war that is not good for anyone.
Edit: also see thinkcontext's comment: https://news.ycombinator.com/item?id=17716933
Of course who knows if he will succeed. Ask me in 20 years what the real result was.
Why is a trade deficit bad? Is there some reason the capital account surplus needs to flow out instead of in? What negative effect do you perceive the trade deficit as having in the economy?
Trade deficits are basically neutral. They fund the foreign investment in the US and purchases of US bonds by foreign governments.
The biggest worry over a trade deficit that I'd have are National Security implications due to the dependance on trade with that county. To explain why that would matter, consider the following:
- Because of the much lower wages and regulatory costs, manufacturing here in the U.S. seems to have been strangled in the last few decades and mostly moved over to China.
- This has caused a shift in the way the U.S. economy works, with cheap parts / goods from China being considered a given and a transition to businesses that depend on those cheap imports.
- Once our economy wholly depends on that overseas manufacturing in China, that gives China large leverage over us because we don't have the factories here in the U.S. anymore to pick up the slack if China stopped trading with us and instead found another buyer for their goods.
- MUCH more importantly though, is the affect this dependance on a foreign nation would have on us if China decided to do things that we find reprehensible in the world. Think about what Russia did with Crimea. Now imagine China doing something similar. With Russia we were able to slap strong economic sanctions on them... but if our economy is strongly intertwined that makes taking any strong stance against that nation extremely difficult. I don't think anyone wants their future and safety dependent on strangers from a different society that have different cultural values.