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Comment by socalnate1 | Hacker News Reader

The actual study is here: http://www.econpol.eu/sites/default/files/2018-11/EconPol_Po...

It seems that they completely omitted analyzing the impact of the retaliatory tariff's; which is odd - as that can often be a major reason not to impose a tariff in the first place.

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Under normal circumstances retaliatory tariffs may be important, but I think because of the relatively asymmetric nature of US-China trade (the US's massive trade deficit to China), I'm definitely more interested in how the tariffs are affecting the Chinese manufacturers and American consumers. But yes a more complete analysis should look at both sides.

I’ve often wondered why given our position vis a vis China, economically, previous presidents have been reluctant and unwilling to take these steps. Before Obama and Busch, it was Reagan and Busch senior who were reluctant to tske steps against Japan. We had the upper hand and also had logic and trade law on our side, but other than token measures were weak in this regard. Were they just too deferential to short term concerns and or offshoring interests?

Reagan and Bush believed in free trade - maybe not completely, but it was something like believed would turn out better for the long run. Note that nobody worries about Japan taking our jobs anymore.

Since we don't have parallel universes to play with we can never experiment to see which approach is better.

By all means fair trade. But what Japan was doing wasn’t fair trade. We’d open markets but they’d put up all kinds of reasons and non tariff barriers to exporters, up to ridiculous extremes such as saying Rossignol (French) was unfit for Japanse snow. I mean even if this outrageous claim were true, let the buyers decide. Sure, Japan now is not overly unfair, but in the mean time over 20 years US workers had unfsir competition. Same was happening with China, but now someone is finally willing to call things out snd say “enough”.

It’s “Bush”, on the off chance that you didn’t know that.

Imports from China are rising

https://fred.stlouisfed.org/series/IMPCH

but the prices of those imports are falling.

https://fred.stlouisfed.org/series/CHNTOT

This can mean two things: either the Chinese are cutting prices to cope with tariffs (a benefit to the US), or Americans are displacing expensive Chinese goods for cheaper Chinese goods -- which means the demand elasticity is high and most of the burden goes to the Chinese producer, as explained by the diagrams in your study.

Imports from China are rising because importers expect prices to rise. If you want to know if tariffs are harming China you should look at FDI.

This is what the Maersk CEO said recently. Everyone is importing more now in case prices and tariffs rise. He also mentioned that US exports to China has slowed presumably because the Chinese government force the hand of Chinese companies more easily.

Third thing: the Yuan is sliding, negating the impact of tariffs.

Yuan has already slided nearly 10% since May, and I think may slide another 10% within the next 12 months. Ultimately I am looking at 7.7 - 7.8 range.

Politics and public opinion are major aspects in these disputes.

If a country slaps tariffs on your products it is very difficult not to retaliate. That's true in general and that's especially true in China regarding any foreign action that may be painted as unfair (For historical reasons this is always a big deal).

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