China wasn’t ready for the trade war with the United States | Hacker News Reader

China wasn’t ready for the trade war with the United States

nytimes.com

79 points1PlayerOne157 comments

Mr. Bush also shared a private exchange with Chinese President Hu Jintao in which he told the Chinese leader that the thing he worried most about and that kept him up at night was another attack on the United States. Mr. Bush said he then asked Hu, "What keeps you up at night?" Hu responded, "25 million new jobs a year." [1]

I think it's clear that China has a lot more to lose in this trade war. The bargain that the Chinese people have made with the government is that they will sacrifice personal liberties for economic prosperity. Once the latter is put into jeopardy, chaos will ensue.

[1] https://www.realclearpolitics.com/articles/2010/11/15/decisi...

I found your statement about sacrificing personal liberties for economic prosperity a fascinating way to abstractly summarize CCP's rule.

I resonate with you - I think the Chinese government is hot-pacing through economic high in the short term but there are major consequences if they overreach. The more they do so, the more they get push back from the rest of the world - Streisand effect infiltrates the general populace if they're unhappy (currently, China is pulling millions out of poverty - a good thing) and then you see real consequences of trading liberty for economic stagnancy.

In game theory, "a single hawk in a population of doves" is an inherently unstable state - Hawks will lure other Doves to follow Hawk-like behavior and eventually you'll have majority of hawks struggling to survive. This behavior will oscillate between two unstable points until hawk/dov ratio equilibrium is reached.

The Chinese government has employed a number of hawk-like behaviors in the global economy - cut loose IP, subsidies for local firms, state-owned enterprises bypassing law, currency manipulation, driving-out non-Chinese firms that pose threat of domination, IP theft, cloning, etc. for short-term gains. I don't see how this behavior can be tolerated for long.

Once China becomes a/the leader it develops its own technology and prevent others from using/stealing it, just like the US did.

It's true to some degree here in the US as well. Look at Donny's approval ratings. They started to lessen as the government shutdown went onwards and when the market was not doing well in December and have only recently recovered. if you look at all the past president's approval ratings, they tend to take a hit when the economy is not doing well.

I think that the assesment that the Chinese people have traded libery for prosperity is right, but is part of a larger mechanism. Many countries have this bargin in place. Ceasar pillaged his way through Gaul and Germania and was loved by his people (though there is a LOT more to Cesar) and Octavian largely continued this. Trajan did the same in Dacia and just plain gave out money to the plebian class. G. W. Bush just gave everyone a check too and his approval ratings went up.

Empires tend to be extractive by nature, funneling 'wealth' from the frontiers to the capitals. As a species, technology has largely allowed us to open up new frontiers like never before and extract a lot of weath from those areas (deeper oil, sparser gold, digital information, better nitrogen fixation leading to more grain per square meter, etc).

Have we run out of low-hanging fruit here on Earth now? I think not, technology/knowledge isn't like that, it's more fractal. But I do think that the easy stuff, the gold just lying there on the ground, isn't here anymore, and the entropy of our economy is starting to pile up.

Things will be just as good as today, largely, but we've got to understand that we're finite now. It won't get better at the same acceleration we've seen for 200 years.

Tariffs against China are actually a tax on the American citizens, and only causes increased prices and unemployment.

false. no matter how many times people say this your statement is incorrect.

Consumers faced with higher prices will spend less and save more. Taxes are only applied to transactions. Higher tariffs will shift consumption to lower-priced goods - you say those goods don't exist?

That's how new business and market opportunities arise. Production will shift geographies, as the tariffs are geography-specific.

China's government is playing checkers, I never thought I would say this, and Trump is playing chess.

Both clauses are false?

"Tariffs against China are actually a tax on the American citizens" is undeniably true.

"Tariffs are a tax on imports. They're typically charged as a percentage of the transaction price that a buyer pays a foreign seller. Say an American retailer buys 100 garden umbrellas from China for $5 apiece, or $500. The U.S. tariff rate for the umbrellas is 6.5 percent for umbrellas. The retailer would have to pay a $32.50 tariff on the shipment, raising the total price from $500 to $532.50."

- https://www.cbsnews.com/news/what-are-tariffs-and-how-would-...

The latter clause is a matter of second order effects that people can disagree with.

You proved my point. Umbrella seller will sell fewer of those China-imported umbrellas. In comes African umbrella maker for $4 apiece.

Actually, if the African umbrella maker could make a profit at $4, they would already be doing that, pre-tariff.

So they are more likely selling at $5.15 (or some other higher number), which means that the US consumer pays an extra 15 cents per umbrella.

That 15 cents is additional and what people refer to as a "tax", though it isn't a traditionally levied tax.

Markets are not perfectly efficient - this is why arbitrage exists.

It likely will take some event, some slack, some inelegance for a business or entrepreneur to notice that the delta between that $5/umbrella and where they can figure out how to deliver it for $4 is worth spending time and attention on.

Markets are not perfectly efficient. Markets are perfectly imperfect.

Your comment just made my day. This was a perfect description.

You make the perfect point that fair trade advocates push for. China's $5 umbrellas are heavily subsidized by the government (and mostly through debt and near zero environmental controls). African umbrella companies can now sell at $5.15 without subsidies, setting the actual market value for an umbrella without the Chinese government causing an over-investment in umbrellas through the market distortion of (grossly unfair) subsidies.

> You make the perfect point that fair trade advocates push for.

Totally get it. There's a line between a country being good at making a product through "natural" causes (having a climate to grow grapes for wine) and the government subsidizing the production of wine because they want a wine growing industry. Where that line is depends on a lot of actors, but some things fall on one side of the line and others on the other.

However, for the end consumer in the importing country, they win if the government of the exporting industry wants to subsidize wine production. The consumer gets cheaper wine.

Now the argument for fair trade is that the local producers of wine will be hurt. And I get that (especially when you are talking about job losses and/or loss of strategic capability around food production or technology).

But overall the consumer in the importing country wins. If China wants to give dollar bills to the American consumer for umbrellas, why shouldn't the consumer take them?

I see what you're saying, but there's one further point you should address. It's not the Chinese free market that's giving the US consumers $5 bills for wine, it's the Chinese government. So consumers are enticed to buy wine which they might not have in a market distortion, which hurts not just US wine producers, but Chinese beer producers who compete in the tasty alcoholic treats export market. Maybe a short term gain for US consumers who enjoy their nightly reds and whites, but in the long term, market development will be unnaturally stymied.

> market development will be unnaturally stymied.

I understand where you are coming from, but markets are created by the rules of the government. Some governments (The Netherlands, CA) say that selling marijuana is OK. Some say that it is ok for some people to buy marijuana (medical) and others can't. Some US states say that no one can buy marijuana. Which is the "natural" market?

I understand that you are saying that the Chinese government is causing distortions and there is a fairer way to "trade" but that's something for the Chinese state and political actors to decide. This is the same as the way that the USA has decided that trucks are different than cars and should have a different set of import limitations--in both cases this is a political consideration.

Very good metaphor and I see what you’re saying. And I’m convinced you are correct now. The only thing I’d add is people would still have to weigh the indirect costs of the Chinese wine which might have an emotional cost from supporting economic injustice or lax environmental laws. But the data is pretty clear that nearly zero consumers care about this and would be better off with their $5 (Chinese) chuck.

He didn't prove your point. You're not making sense. You agree with him except for the last point. The parent comment said:

Tariffs against China are actually a tax on the American citizens, and only causes increased prices and unemployment.

and as far as I can tell you believe:

Tariffs against China are actually a tax on the American citizens, which causes increased prices and (eventually?) a shift to a different producer.

but that's not the argument you're making.

Are there other locations in the world that has either the current capacity or the ability to ramp up to that quickly and cheaply to match China's current production levels? Supply doesn't come out of nowhere, and America is a prodigious consumer.

No he hasn't. You haven't proved that African umbrellas even exist for $4. If they did, we would have been buying them instead of the $5 chinese umbrella long ago, or at least the people who didnt want chinese umbrellas would have supported them.

Suppose the cost that the market will pay for umbrellas is X. Presumably the Chinese manufacturers have found X and set their prices accordingly and have profit Y per umbrella. Now the price increases by tariff Z - either fewer umbrellas will be sold or Y will decrease to mitigate price increase, or some combination of both.

Tariffs are a tax on imports and in some sense have to be paid by the customer, but they are also a problem for the supplier.

This reasoning is similar to Donna Brazile ordering radio ads in New Orleans and Chicago for Hillary on the theory people there will call up their relatives in swing states and remind them to vote

You ignore the degree of price inelasticity for the products China produces and exports to the U.S. If we were still in the TPP, the U.S. could still come out ahead, but once the U.S. withdrew, the remaining countries have been cutting deals with China. The question is whether those deals make up for the U.S. losses enough for China to weather the economic storm in the short term for a longer term gain.

Global free trade benefited the American consumer by letting them keep more money in their pocket for other things through cheaper products. And these fake tariffs which China does not pay a dime of, are a regressive import tax that in that short term negatively impact the American consumer by taking money out of their pocket.

It's not at all clear how the market will adjust. Or even if it can because Trump keeps changing his mind on rather important details. What he supposedly ultimately wants is "fair trade" as in no tariffs for anyone? I doubt that he's completely non-protectionist if it turns out some other country can simply out compete the U.S.

But then what does 0% tariff/import tax actually translate into in terms of the geographic location for production? It definitely moves to the location with the cheapest net cost for labor and taxes. And that's not going to be the U.S. Which is fine, the American consumer still comes out ahead, but that is not at all compatible with the claims Trump makes about his notion of protectionism creating high paying American jobs. That is a fantasy on the face of it.

Or, this represents the real price of goods including externalities which are ordinarily absorbed by Chinese citizens...

Those tax duties are arbitrary.

Chinese citizens have become dramatically richer through exports and the price of Chinese goods simply reflects that costs are lower in China (though the difference is narrowing).

> Those tax duties are arbitrary.

Most taxes associated with externalities are arbitrary (in amount), because externalities are much easier to see than to quantify.

In $DAY_JOB we've not upped prices, the massive tax cuts easily made up for the cost of sending the work elsewhere or incurring the expenses/realizing the benefits of doing the work over here. I realize not everyone has that luxury.

So is not allowing American companies to compete on Chinese markets, not having your intellectual property rights upheld and competing against a country which is still categorized as a developing nation.

Before trump came in 4million jobs was lost to China alone, in exchange we got cheaper flatscreen televisions.

I'll take more expensive flatscreen televisions to make sure that China doesn't end up running over us all any day.

The chinese government (not the chinese people) is being controlled by a bunch of powerhungry men who will do everything to take over the world.

This is not just about economics it's about taking a stance for a more fair market.

So yes it will cost but it will be worth it.

Just to clarify, the cost will be worth it if we get something in return.

Right now we have tariffs and all the negative things in the first sentence.

Right now we have the lowest unemployment ever plus a number of other amazing numbers. To claim the US economy is bad right now would be pretty out there.

And thats despite us already having started the tarrif game with China.

I can live with a few things being a little more expensive when the jobs are coming back even in blue collar areas as they are right now.

You seem to be implying that current low unemployment is caused by tariffs on china. I rather suspect that it is caused by continuing low interest rates and has nothing to do with tariffs.

No, I am implying that despite our war with China which have already been going on (with tariffs) we still have one of the lowest unemployment and strongest economies ever.

Make of that what you want.

There's a lot of mainstream pressure to back off on the Chinese tariffs. Why exactly is that? Who stands to gain?

Do we have a moral obligation to trade with China so that they are raised up? No, I think not. They are already an incredibly rich and powerful country and have begun to challenge world democracies for influence.

Will the tariffs collapse our economy? Why should they? There's a big world market out there and plenty of countries to trade with that share our values, or at least do not threaten us.

Will the Tariffs make US companies less competitive? Why would it as long as the tariff is applied evenly to goods being imported.

Will the Tariffs make the US consumer worse off? Our largest consumer expenses in the US are housing, education, healthcare, transportation and food. If electronics and minor appliances get more expensive, I don't expect that would have a big impact on most people's budgets.

Will China go to war with us to protect their interests? They couldn't yet anyway.

Maybe someone with more knowledge on this topic than me could explain who stands to gain (besides China) from getting rid of tariffs.

I agree.

People seem to believe there was some well-balanced system that Trump is just destroying for the fun of it. There was no free trade to begin with but instead a corrupt set of agreements to allow US companies to export jobs out of the country in exchange for cheaper products.

I for one is grateful for the fact that we finally have a president who doesn't just allow China to run over us and provide them with all sorts of special treatment. Sometimes you need someone rude and obnoxious and tough to implement the necessary politics rather than just allowing the "experts' to run a game that's obviously been hurting america.

Free market means both sides have access to each others markets. China haven't lived up to their side of the bargain. It's time to stop that.

>> Sometimes you need someone rude and obnoxious and tough to implement the necessary politics rather than just allowing the "experts' to run a game that's obviously been hurting america.

America was not run by the "experts", it was run by politicians just like it is today. The situation was different, China was not this assertive nor this powerful, nor this rich. It seamed like/was a good trade-off to get cheap labour so that US companies could export competitively worldwide. It worked.

To me it's just the way it was supposed to work. Situation is different now so terms have to change too. China is now a rich and great market for US products which was not the case 20 years ago.

What you experience now is a bit of envy and naive confusion. "You" expected China to be forever the cheap way to produce US products and sell them worldwide. I'm pretty sure that both the experts and the less experts knew this day will come.

I wouldn't mind if Africa would follow a similar path(except the communism/dictatorship). I don't think it would be bad for the world nor for the US. Some countries need to "cheat" a bit to have any chance of catching up with the developed world.

Thats why i wrote "experts" they weren't experts they were just pretending to know what they were doing pointing to all sorts of academic research which turned out to be wrong.

Trump is running the country on gut-feel about a lot of things. His way of doing it which all the experts scream "dont" about.

And not the experts didn't know it would come as they believed in globalism and had no problem exchanging american workers for it.

ah nooo

what happens is this:

1 User consumers spend less choosing other lower price non China products. 2. Factories move from China to India and other Asian locations 3. Some Tariff money does get into US Treasury 4. I do not think that really any US Politician is worried about any increase in China unemployment...

The real strategy is this...

China monetary system upholds Russia's

Trump's real move is against Russia not China despite his shaddy collusion dealings with Russia

Relevant: trump is raising tariffs on $200B Chinese goods to 25% this Friday, and coming soon, 25% on additional $325B Chinese goods as well.

This is the disengagement of US economy with the Chinese economy as we speak. No more IP theft, no more US factories for China, no more knowledge transfer, no more opioids from China.

Perfect timing, what with US growing healthy at 3% and wage growth, and China suffering from debt overload and demographics decline

what freaks me out is it's almost as if someone planned this.

> what freaks me out is that it's almost as if someone planned this.

Why would prior planning freak you out? This is a bit confusing to me.

I tend to not give political leadership much credit in that area...(successful planning and execution)

Ah, that's interesting. I tend to view political leadership as intelligent, calculating, and manipulative but in service of "greed," that is for their own gain or that of their major donors, as opposed to their voter-constituency.

As such, planning doesn't surprise me but genuinely beneficial legislation does.

The fact that the national (and international) media's narrative about Trump and company might be wrong?

I'd think that would be giving him too much credit. I think it's more of "a broken clock is still right twice a day".

Trump can declare tarriffs and fit the whole decleration in a tweet, it's instant gratification for his feedback loop and keeps all things Russia related further down the news feed.

Too bad that Mueller thing didn't have much Russia related.

My narrative about Trump is from listening to him speak and reading what he writes.

From this I get the impression of someone whose ignorance is far deeper than their stupidity, whilst being pretty damn stupid.

The one thing he does seem to know is some NLP techniques, of the kind employed at shady car dealerships, though he seems to be doing that more by rote rather than displaying any deep understanding.

edit - however I do like his assertion in a tweet recently that his first two years of governance have been a kind of German cake.

We're living in a world where neither the entire political machine of the oval office nor the very spell check on the device he is currently using to type can keep the commander in chief from admitting even to himself that he made a simple spelling mistake. Wow.

German cake? Care to link?

https://www.tribuneindia.com/news/world/trump-s-twitter-typo...

Hucksters never let you see how smart they are.

He is a sports-star of bullshit. He's not the best by a long shot, I have better in my own family, he's not got the vocabulary to play a wide field for one thing, but he is in the leagues.

edit - just reading the news this morning. He is perhaps further up the leagues than I thought.

No one questioned that the US could hurt China. Did we forget that that isn't the point? So far the US has not gained anything from this.

Its going to happen. Right now China is on the brink of some massive starvation due to their hog epidemic. [1] Pork is their largest meat consumed. When they've slaughtered 90% of their herd, the price of pork will go through the roof across the globe. This will increase the cost of all agricultural goods.

When food becomes expensive for China what will their newly affluent middle-class do? What will the poorer people do?

1. https://news.ycombinator.com/item?id=19823238

Just found the source of this epidemic:

https://www.youtube.com/watch?v=EQ9bP6wo8rA&list=WL&index=49...

To what end? Xi Jinping can just wait until the next president to negotiate away the tariffs. The public certainly hates them. Right or left, I don't see how anyone can see these surviving through another administration.

Nit: His name is Xi Jinping, where Xi is his family name and is pronounced sorta like ”she.”

Thanks, fixed. Learned a new thing today.

So Trump did a good job, but let's hope someone undoes his trade policy because "fuck Trump"? Not sure what your point is.

Depends on who the next president is. If Trump is reelected or the Democrats nominate a more populist candidates (i.e. Bernie Sanders), it might not matter who's in the Oval Office. After 8-12 years of tariffs, it might be too difficult to come back from for China and the US.

> The public certainly hates them. Right of left, I don't see how anyone can see these surviving through another administration.

Citation needed. Free traders certainly hate the tariffs, but only a tiny fraction of the public are committed free traders. Also Democrats are dispositionally far more favorable to tariffs and protectionism than Republicans, so unless Trump doesn't run or the Libertarians win the presidency (ha!), I don't see the next administration being much of a swerve in the direction of free trade.

This affects some of my family directly and has a very noticeable impact on local businesses who had become accustomed to and were investing pretty significantly in attracting Chinese interest in their products (California wine industry). While the industry existed for a long time before the Chinese market became a factor, starting in the recession their was definitely a push to attract Chinese individuals to california wine, to the point where many major tasting rooms were recruiting people who speak mandarin, and some folks I know regularly had relatively wealthy recent Chinese college graduates working harvest jobs. I have not been aware of a Chinese intern in our circle for years, and also haven't seen a listing looking for Mandarin in months if not longer.

https://www.sfchronicle.com/business/article/California-wine...

I imagine the situation is similar for many other non-essential exports to China.

First of all, once factories leave China, they don’t go back. China’s wage is already at a level similar to Mexico, and is more expensive than Southeast Asia.

Second, both Democrats and Republicans leaderships are anti-China. Chuck Schumer, senate minority leader and a democrat, told trump to “hang tough” on the Chinese tariffs. Bernie Sanders slammed joe Biden when Biden made a remark about how China isn’t a threat.

Yes, exactly. Vietnam stands to reap the benefits. Factories are opening in Vietnam en masse. Once they're up and running, the lifting of tariffs against China won't matter. Chinese workers are higher paid than they used to be. Now China will have to make their way as an advanced, developed economy (with lower growth), just like everyone else.

The Chinese are also shifting a lot of their polluting heavy industry to Cambodia.

You know where those factories aren't opening?

The United States.

Which seemed to be the whole point of this exercise.

I don't agree with that. Some, though definitely not all, manufacturing is moving back to the US. But even getting manufacturing to shift out of China to other countries is smart policy, because it reduces the US's concentrated economic dependence on its main strategic rival.

I haven't heard of US factories being one of the main arguing points. Wiki has these listed [0]:

1.1 Structure of China's political economy system

1.2 Accusation of theft of intellectual property, technology and trade secrets

1.3 Forced technology transfer from US companies to Chinese entities

[0]: https://en.wikipedia.org/wiki/China%E2%80%93United_States_tr...

> 1.1 Structure of China's political economy system

So you're cheerleading, of all places, Vietnam?

> 1.2 Accusation of theft of intellectual property, technology and trade secrets

Will still take place.

> 1.3 Forced technology transfer from US companies to Chinese entities

This only happens if you want to invest in China. It's a trade-off that's up to each individual firm doing it to make.

Also, I have a hard time believing that Trump's base give two shits about any of these things, beyond a bit of nationalistic ra-ra-ra. None of this has any impact on the life of someone pissed off that their best life prospects consist of collecting dole in the rust belt.

I'd rather Vietnam gain access to military-adjacent tech than China, or grow their economy with factories from US companies, etc - because while Vietnam's main threat is China, China's is the US.

A bunch of mid-strength countries is better for the US than a superpower competitor.

The way things are going it's not all certain that Xi won't be waiting until January of 2025.

I'd be willing to wager that this will be the case.

>This is the disengagement of US economy with the Chinese economy as we speak. No more IP theft, no more US factories for China, no more knowledge transfer, no more opioids from China.

Great, it is going to screw both parties and then they will blame each other and we will be very lucky if we avoid war. Yippidee-fucking-doo-daa.

That sounds a bit optimistic on the no IP theft or opioids front.

more like a negotiation ploy.

Guess I better put in a few Ali Express orders now.

> Perfect timing, what with US growing healthy at 3% and wage growth, and China suffering from debt overload and demographics decline

A stopped clock is right twice a day. Trump is a clown who has very near zero policy success (by his own agenda, not my opinion of his success). But his self-immolation strategy here might actually pay off. He's desperate for positive headlines (both to stroke his ego and distract from investigations into lawlessness), so hopefully he won't bluff his way into a stalemate.

The biggest factor working against Trump is the fact that he's just not credible. No one in their right mind can rely on him to honor any agreement he's ever made, so if I were China I'd be pretty concerned about the stability of any deal. BTW this factor also sank his domestic agenda: he can't get his own party on board with legislation because they don't trust him. His only options are to press buttons that Congress granted the President long before they ever suspected someone like him might take office.

This is pretty silly. Us companies will still want to hit the Chinese market. Tariffs won't stop that.

Excellent article with some game theory analysis on this: https://www.economist.com/graphic-detail/2019/04/27/why-you-...

The United States wasn't either.

We actually are. With a strong economy that's exactly the time you do it.

Didn't the Laffer curve on bond markets invert recently?

> Laffer curve on bond markets

Yield curve, Laffer curve unrelated

That's the one, I screwed up my terminology (not an economist, just dated one for a while).

Inflation is not up even though it was supposed to be.

Lots of things are changing because Trump doesn't follow the "experts" but have his own way of approaching China for better or worse. Right now mostly for the better.

Really? Could you send a note to the soy and corn farmers?

'Trump Trade Tweets Send Grain Markets Diving to 42-Year Low' - https://www.bloomberg.com/news/articles/2019-05-06/grains-so...

"Mostly for the better" does not imply totally for the better. Of course you can find counterexamples, but that totally fails to answer the point. If you want to actually argue the point, you need some statistics about the economy as a whole, not about one sector.

>"Mostly for the better" does not imply totally for the better. Of course you can find counterexamples, but that totally fails to answer the point. If you want to actually argue the point, you need some statistics about the economy as a whole

Really? Lets look at the context;

>'Lots of things are changing because Trump doesn't follow the "experts" but have his own way of approaching China for better or worse. Right now mostly for the better.'

How would looking at the economy as a whole reflect on the way Trump approaches China? If I want to keep to that subject, I look at the situation with the sectors of the economy being impacted by the trade war with China and not the economy as a whole.

And I look at 4 million jobs being lost to China because Wallstreet, big companies and politicians on both sides of the political spectrum decided to trade American jobs for cheaper flatscreens, decided to introduced competition IN America through things like H1Bs and lax immigration rules both providing plenty of cheap labour and hurting ex. young black men the most because of extremely low wages.

It's not serious to take one thing and pull it out of the whole ESPECIALLY when the goal of tariffs is not to make it the new normal but to force China to give us better access to their markets.

If you can't see that we have no base for a rational discussion.

You're confusing China losing with the US winning. We both lost.

How can the strongest economy for more or less everyone especially minorities, increasing salaries, increasing jobs in blue collar industries be the US loosing?

I think you are the one who is confusing what the trade war is about with what is economic theory.

The tarrifs is not economic policy it's a tool to win the tradewar with china and give us better terms.

How anyone can be against that is beyond me unless they working in the tech industry and don't really feel the reality of the last 30 years of destroying the american middle class.

>How anyone can be against that is beyond me unless they working in the tech industry

Most economists?

Most economists thought Trump would ruin the economy and have been wrong repeatedly.

Most economists are wrong most of the time about most things.

The proof is in the pudding.

All it cost was a trillion dollars deficit tax cut, and subsidies for the farmers that can't sell their crops. Do you really believe this is sustainable?

It's not meant to be permanent.

We already introduced tarrifs, they didn't hurt the economy overall, on the contrary.

What i don't think is sustainable is the 4million americans who lost their jobs to china because of the wheeling and dealing of Wall Street and Washington.

It's worth it because if he succeeds getting better deals all Americans benefit and we stop chinas blatant abuse of things like their developing nation status and complete lack of defending IP rights and access to chinese market for most companies.

That's whats not sustainable.

I'm just not convinced the game of chicken can be won. We should actually be investing this effort in out competing, not hoping we win this idiotic game. The only real resolution I see is a return to normalcy or a dissolution of US and Chinese trade, which simply hurts us both in the long run. You act like jobs that aren't in China will come to the us when theres no guarantee of that and you're ignoring jobs lost because if this.

How do you outcompete someone who is cheating?

I am not ignoring jobs lost I am looking at a reality of the lowest unemployment we've seen in a very very long time, lowest ever for minorities.

Jobs are coming back, wages are going up.

You are completely ignoring that the reality is disproving your concern.

Whether you think it can be won or not is beside the point. I am sure you didn't think Trump could win the presidency and I am sure you though if he did the economy would be in chaos.

What about, maybe, just maybe, you were wrong and need to rethink how you think about these things?

Your logic is circular. You've already admitted that the current state is propped up and temporary and we need to ride this out and yet it's proof that Trump's policy is sound? You can't have it both ways.

If mine is circular yours are too. You cant have it both way.

How about a dodecahedron made of honey badgers?

One thing to keep in mind, you are currently in a ten year bull market, the longest running in history. There is a hell of a lot of inertia there, so I really would not be counting my chickens just quite yet.

https://www.cnbc.com/2019/02/27/the-bull-market-is-about-to-...

If there was only the USA and China in the game, then you'd have a good point.

Hello from Europe. The USA is also currently in a trade war with us.

So lets look at how the economies stack up.

USA GDP - $19.4 trillion

EU GDP - $18.5 trillion

China GDP - $12.2 trillion

Which trade war might be having more effect and which could end up with more economic blowback? Also, might this push China and the EU to make a temporary economic pact? Combined they haul a lot more economic weight than the USA.

edit - apparently, Trump is also starting a trade war with Japan, for reasons - https://www.businessinsider.com/trumps-trade-war-has-a-new-t...

Japan GDP - $4.9 trillion

And despite all that the economy is doing as great as it is. Think about that.

Not sure why you don't think I have a point. Europe is the same problem. They've been having a good deal with the US, now Trump want the juices to flow both ways.

He is re-negotiating all the deals, thats what he ran on and he actually do what he says. I support that fully.

The problem is that you don't actually do the full analysis of this an just stop at tradwars. Look at the bigger picture and you will se there is much sense to Trumps goal.

Nothing has been better yet. So far it has only been not-catastrophically worse.

Lowest unemployment since 1969. That's better.

It's the same trajectory it was before the current policies. The trend is hitting the floor as we're at full employment. (But I can't complain he's not taking us lower than that)

So when the economy is turning bad its also obamas fault i take it?

GDP above 3%. As in above the 2% that the last administration forecast it to never get, ever again.

Not strong enough to raise interest rates.

So strong we don't even need to raise interest rates as inflation isn't increasing.

I dislike almost everything about Trump, but in this particular case his policy might be better than his predecessors. If the trade agreement results in low tariffs and a more level playing field for US companies who invest in China, maybe it will be worth the pain of a temporary trade war?

But this is affecting other countries too.

China/US trade war have cost some Europeans their jobs. Next time they are out to buy a car, do you think they will choose American?

The percentage of people losing their jobs due to China/US trade war is minuscule compared to the total European population and would have literally zero measurable impact on American car sales.

It’s not like Europe all of sudden has 20% unemployment due to the trade war - the way you describe it and everyone becomes anti-American.

Have you been to Europe lately?

Actually, yes. Zurich and Dusseldorf.

EU impose a tax on us cars, thats one of the things trump is changing.

This isn't a typical tit-for-tat trade war that gets worked out at the negotiating table. Several current and former Trump aides want to outright topple the Chinese Communist Party. Quoting Steve Bannon in an NPR piece published today:

"I think ultimate success is regime change ... the goal is quite simply to break the back of this totalitarian mercantilist economic society."

https://www.npr.org/2019/05/07/719947020/inside-the-white-ho...

The other thing going on, alluded to in the same article, is attacking China is red meat to Trump's base (42% of the American population, according to a recent poll). He's built it up into one of the primary reasons behind the collapse of American manufacturing. If the China bogeyman goes away with a splashy deal, will the base be satisfied? Or will something else have to be dialed up to replace it as a political and trading punching bag?

>"I think ultimate success is regime change ... the goal is quite simply to break the back of this totalitarian mercantilist economic society."

The really funny thing is that Bernie Sanders' supporters have the exact same goal in mind.

It's not a surprise that a decent number of Bernie voters voted for Trump instead of Hillary. At least I saw a lot of highly upvoted comments on Reddit from people saying they were going to do that after Bernie lost.

Also good: https://www.npr.org/2017/08/24/545812242/1-in-10-sanders-pri...

Why would that be funny? America broke the Soviet Union with economic power. A lot of people still remember this.

I'd like to see the Chinese equivalent of the Berlin Wall falling.

I think it's funny because the entrenched establishment politicians like Steve Bannon are also the ones most opposed to Sanders and his allies.

Is it Xin Jinping or China's "fault"?

Despite the tone of this article, it seems to me that the current situation is a reaction by the US to China's growing power rather than a failure on China's part.

China and the Chinese party are two very different things.

The amount of atrocities china commit every single day even relative to their size is insane.

I commented about the main point of the article: the trade war.

I don't understand what is the point of your reply...

I disagree with trump in almost every aspect, but I must say that he manage a country like a business man and he is doing some moves because of it that other countries (Like China) can't predict.

If he was operating like a business man, he would be a lot easier to predict. He is still operating like the guy who thinks he is a business man while bankrupting a casino. And he always has been. Sesame Street warned people years ago - https://eu.usatoday.com/story/life/entertainthis/2017/03/21/...

"The Simpsons" was more explicit about it:

https://www.hollywoodreporter.com/live-feed/simpsons-writer-...

And for anyone who has followed Doonesbury for a while, it kinda feels like the wilder theories concerning the LHC may possibly be true.

https://www.gocomics.com/doonesbury/1987/09/14

And yet he is a billionaire, has lived an amazing life, beat the best republican lineup ever and clinton against all odds is now a president and doing things that other politicians have only talked about. He is going to be one of the most influential presidents ever.

what have you done recently?

If we are talking about things that Trump is unable to do, I did recently help someone who was bleeding fairly badly. By his own admission, Trump cannot do that.

edit - Also, I am not sure what you are looking to achieve, but I am not going to lose any sleep by comparing myself to Trump of all people. He looks miserable.

Just as i dont think he is loosing sleep over what you think.

That's pretty much a given, by both location and temperament.

The news is funny this morning. I might be richer than Trump. And I'm not rich.

The news is not really news. Trump is rich, loosing money doesn't mean you aren't rich.

For some reason, and I'm not sure what exactly, but I'll bet I'll put my finger on it if you'll give me just a minute. But for some reason, that argument wasn't particularly convincing.

Run it past me again, and we'll see if we can spot what the problem is on the second go around. Either something's not quite attached right or maybe something could be on back to front. Was hard to tell in all the excitement and distraction.

I am not trying to convince you, just stating a fact. Why do you think news from the 80’ies is any indication of his economy today. Read the art of the comback, he is pretty transparent. Not sure what exactly you think it is you know thats not already available. You saying he isnt rich?

I think he actually needed the Apprentice appearances just to keep some legitimate spending money going and owes far more than he owns. To put it simply, if fully audited, I suspect he is bankrupt, at least if you only count the money he is legally allowed to keep. Jimmy Carter had to sell his peanut farm before he became US president just to avoid these conflicts of interest. The Onion I think put it best - https://www.theonion.com/you-people-made-me-give-up-my-peanu...

It will be interesting to see what happens when China no longer eats US inflation, so hurray for an interesting future!

Well it will be interesting. For the last decades the US had printed money with bonds and exporters to the US have bought those bonds to spend their dollars and not put pressure on their own currency.

If China is no longer exporting to the US it will no longer need to buy bonds, so if the us is printing money with bonds where dollars are not parked, those dollars increase dollar supply and therefor increase inflation. Money 101.

If those jobs come back to the US, then less need for bonds. If those jobs go to Vietnam, won't they just buy the bonds to keep their currency stable against the dollar?

Why are you responding to your own comment?

Probably because of not knowing about the "edit" button. At least, replying to myself is what I did before I knew I could edit comments.

Money 101 would dictate inflation in us economy, we dont see that. So i guess we need to ad some more nuance to things

China hasn't stopped buying US bonds, or have I missed something?

https://www.economist.com/finance-and-economics/2019/03/28/w...

That's why precious metals are being legalized as tender across the states.

Next time, they will...

I hope this represents a fundamental shift in American trade policy.

American free trade agreements should only be extended to countries that have roughly symmetrical environmental policies, human/labor rights, market access, IP protection, among other things.

Any trade deals less this sensibility amounts to the exploration of people, the planet or of property rights, and should be taxed extensively.

Yep, we should have been more vigilant since 2002 as we kept on importing goods with an unfair deal. I want China to progress as any other country but under fairness and without this atrocious 1 party authoritarian regime. Imagine if they were like Japan or India with free speech and democratic government, hell I would move to Shenzhen!

About the author:

"Professor Joseph Yi-zheng Lian is a Hong Kong native. He obtained his first degree from Carleton College, Minnesota. An economist by training, his Ph.D. was earned at the University of Minnesota.

Prof. Lian taught at the University of California, Riverside and the Hong Kong University of Science and Technology, and was Chief Editor and lead writer of the Hong Kong Economic Journal before serving as a Senior Policy Adviser for the Chief Executive at the Central Policy Unit of the first administration of the Hong Kong SAR government, from 1998 to 2004. He was dismissed from his advisory post after a profiled participation in a pro-democracy sit-in in Central, Hong Kong."

which sounds very different to the NYT bio:

"Yi-Zheng Lian, a commentator on Hong Kong and Asian affairs, is a professor of economics at Yamanashi Gakuin University, in Kofu, Japan, and a contributing opinion writer."

What's the problem?

The author is a pro-democracy activist from Hong Kong writing about China politics. It's up to you to decide if if there is a problem for you or not. It's ok if there is no problem for you. I personally want to know if someone owns stock he writes about.

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