Trade War Has Damaged U.S. Chip Industry
nytimes.com
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China's rise will continue and dominant until their demographic bubble bursts and they turn into Japan when a falling population. I am curious if China can change course on its demographics in a way that Japan couldn't? Tech dominance is all but assured but if the demographics issue isn't resolved, they will clearly stagnant.
1. Hollywood's current stance on IP has reversed from when it was founded and actively undermining Edison's cinematography IP. Same goes for aircraft engineering in France in light of the Wright brothers patent war, and the inchoate American industry vs British IP.
Its government guaranteed monopoly for a reason, and has no real human good. It has economic good, for the companies that use it for extravagant profit (and presently that includes almost all top 10 companies due to the value of software IP). But that economic boon to a few investors in dominators of the global IP market costs all of humanity in spades of lost innovation and rent seeking for culture or technology decades old at this point. Perhaps a few independent artists or authors in the last century would have elected to not produce their masterwork without state monopolies on reproduction and distribution. But billions of dollars change hands every year as corporations buy one another for IP portfolios to sue one another and those small time creators who might have made a masterwork without the looming threat of weaponized corporate IP overshadowing entire industries.
On the other side of the pond China has entire cities dedicated to tinkering, shopcraft, and the sharing of ideas and innovations because they don't have this heavy burden upon all their creative minds. Until now we could not see the flip side, the true costs of maintaining a regime of IP control overshadowing the economic realities of information and the human benefits of its liberation. China's government is a disgusting abomination of human rights abuse and genocide, but its people will hopefully show the working class of the world that there are alternatives to being under the creative boot of the wealthiest men on the planet.
They are currently the best at refining rare earth metals and they are not interested in sharing it.
Have a look at the patent graph: https://www.nationaldefensemagazine.org/articles/2019/3/21/v...
There are excellent groups in all countries, but in terms of superior tech on any side, I have not seen any.
There are great companies that facilitate genetics research, but the best tech in that case still is American (Illumina, Affymetrix, 10X genomics).
Company IP is up for theft, one way or the other. I think, that is not going to be an edge for long - given the amount of Capital China has amassed.
China is preparing to allow massive amount of immigration from neighboring Muslim countries.
I have been following local news in Pakistan, Afghanistan, Malaysia.
The Chinese leadership is well aware of their demographic cliff problem, this is why they relaxed their one child policy.
A single generation ago they were freaking out about over population, so they are not anywhere near running out of people.
The Muslim reeducation camps are trail runs for future policy to bring large numbers of Muslims living in proverty today into china, to work in their factories.
This may be 20,30 years down the line though.
What's crazier is that the strategy of economically integrating China with the world was a Rebublican economic-liberal one to start with. The plan was to make the rest of the world look like America and be trading partners, providing markets for American companies. Someone forgot the last bit.
It's understandable though from China's perspective, that they aren't willing to give up important strategic sectors like social media or internet search to some US corporation. Especially so with their intention of being a rivaling global superpower to US one day. But it seems the economical aspect of increasing the revenues of Chinese companies has been as important or even more, which makes this practise more or less just cheating. Not that others are playing always fair, but China seems to be doing it considerably more than the others.
Just as an anecdote, AWS offers its Chinese region as a separately owned Chinese company, completely separate from other AWS regions. To me it speaks volumes how restrictive and hostile the Chinese market is to foreign companies, can you imagine having to do the same for each country? It would be a nightmare for global economy. https://techcrunch.com/2017/11/13/aws-exits-china/
"National Interest" is the key phrase, and the US has similar protective barriers in key industries. Food security is one such area that the US protects, and to that end, it provides a lot of agricultural subsidies preventing a lot of foreign farmers from entering the American market. The pearl-clutching when China does the same in their national interest is lacking in self-awareness.
The US agricultural subsidies have interesting first- and second-order effects (cheap corn syrup, obesity and corporate farm consolidation) - but I digress.
* Coke
* Starbucks (the largest one in the world is currently in Shanghai)
* KFC
* McDonalds
* Pizza Hut
* Domino's Pizza
* US movies regularly make as much money in China as they do in the US.
* General Motors sells more cars in China than in the US.
Part of the reason that AWS has two separate companies is because China, the US & the EU have laws like the CLOUD Act, GDPR and CDPR. It is easier to keep all companies seperate or at least siloed which is what most large companies do.
China is the most populated country on earth and an emerging superpower. They have every right to consider themselves exceptional, just the way the US considers itself exceptional.
To posit another angle: most international nations are smaller markets than the US (individually) so it doesn't make sense to customize things for every nation, which would be a goddamn nightmare. But this is a country of over 1.3 Billion people. China would need to be an exception anyway, and AWS having a subsidiary in China doesn't illustrate the unfairness of China's practices as much as the reality of how important that market really is.
What's an international nation?
Being highly populated and powerful is not really an exception in history. The USA got (? gets) its sense of exceptionalism from their innovative form of government/constitution that provided more freedoms than any government in history. The roots are based in a sense morality.
Perhaps most America's problems are more internal than external and when the game is rigged in favor of one country we don't see them complaining. Maybe everyone is the same.
It's just like two people marry together for different intentions, just too hard to yield something good out of it to begin with.
This is both a democrats and republican making. Trump is right about this war even if it will cost some, in the long run we are better of.
I do remember how economists were lining up to shout their party line, that protectionism doesn't work and China was only hurting themselves. For some reason I don't hear so much of that these days, now that China's investments into local companies have started paying off.
That's absolutely absurd.
As for letting China continue to reap the benefits of being defined as a developing nation, yes, that's absurd, and also needed to stop 10-20 years ago.
20 years ago there was close to 700,000,000 people living on less than $2 a day and there was no underground subway in all of China. Do you really think this was developed?
A few cities (Beijing, Shanghai, Guangzhou & Shenzhen) are developed (~6% of the country) while the rest is still not very developed but improving.
Should it still be developing? Probably but not for much longer. How much is up for debate. Some say now. I expect it will happen sometime in the next 10 years.
Letting China win this with their mafia-like government, where there is no rule of law only rule of the party, is simply not an option.
Right now the biggest challenge is the western politicians who hate Trump so much they don't care if they help the Chinese. Anything to get him down.
But yeah I agree that it's definitely late in the game. We can still win this though.
Absolutely wrong. What do you think the TPP was meant to do?
The only thing Trump does is short term bluster and outbursts with no long term plan at all. Tariffs are short term plays. Long term strategic thinking requires creation of alliances and allies.
The fundamental difference always seems to be if you can persuade the world that your ideas and system is good, or you demand it by force. The latter is not a very effective long term strategy.
Politics isn't debate club. It doesn't work that way especially not when you are dealing with a mafia organization like Chinas ruling party.
I would argue that China opened access more than the US did. During the Mao era, it was basically impossible for US goods to enter the Chinese market. The converse was not true: Chinese goods could enter the US market. So during liberalization the Chinese opened up more than the US did simply because they had so much further to go.
The situation defacto is that china and the chinese has free access to our markets while we don't have free access to theirs.
The situation is that defacto china is benefitting from their developing nation status outcompeting western companies just on shipping prices.
Very few US products enter the chinese market plus those who do are forced to give over their IP.
US companies do very well for themselves in the Chinese market. The reason for the trade imbalance is not Chinese protectionism, but rather structural issues in the United States and the Dollar's role as global reserve currency.
Some American brands are everywhere....
Obviously some have been heavily restricted, most prominently internet media companies.
The US has a trade deficit with almost all of its trading partners. That is a structural issue.
> no IP protection
That's a crude caricature. There is IP protection in China. If that weren't the case, American microchip designers would not be making such large licensing fees in China. As far as I understand it, as a non-expert, IP protection in China is actually fairly good for a developing country.
> Thats not the same as China being open to western companies like the west is to china.
Western brands have much greater penetration in the Chinese market than vice versa. Moreover, much of the American trade deficit with China is actually made up of Western companies doing production in China.
But has nothing to do with what we are talking about here.
It's not a crude caricature. IP protection in china is non existing which anyone who even done a little business in china knows very well. It's litterally one of the biggest criticisms so I am not sure where you are getting your information from, none the less it's incorrect.
Chinese don't need their brands to western markets they just need to produce for our markets. The difference is that the west doesn't hinder chinese companies to compete on our markets, china does hinder us competing on theirs.
Rather than going back and forth with "Yes it is," "No it isn't," I'll provide some hard facts here.
China has been ramping up IP enforcement over the past five years or so. In 2014, China began establishing specialized IP courts in major cities, and over time, more and more have been created. These courts have been hearing a rapidly expanding number of cases. The number of IP disputes heard in Chinese courts has increased by 30-40% every year for the past few years. Last year, Chinese courts heard nearly 300,000 IP disputes. 10% of patent cases in China are brought by foreign companies, and they win 70% of cases.
There have been problems with the Chinese court system when it comes to IP. The penalties for IP infringement have historically been low, but they have been increasing. Evidence discovery has been difficult, but new procedures have been introduced to enable it. Foreign companies have felt that local companies are favored, but the central government has been pushing for stronger enforcement of foreign companies' rights, and the statistics show that foreign companies are now as successful as Chinese companies in their cases.
In light of all this, I think it's fair to say that the picture you're painting is crude. China is actually becoming one of the most active venues for IP litigation in the world, going just by the sheer volume of cases they handle now.
1. https://www.limegreenipnews.com/2018/09/china-ip-litigation-...
2. https://thediplomat.com/2018/01/chinas-progress-on-intellect...
3. https://www.ipwatchdog.com/2018/05/07/rapid-changes-chinese-...
4. https://www.scmp.com/news/china/politics/article/3001407/jum...
Progress isn't the same as a satisfactory situation. Anyone who has tried working in China knows exactly what the problem is.
If not for Trump we wouldn't even be having this discussion and China would now have more or less complete domination on large parts of western infrastructure.
I have no idea what make you think that you are making any kind of argument here. It's a known fact even by the EU that china is not giving us access to their markets and har not actually securing IP and are in fact forcing it onto chinese hands.
That's not something I am just making up it's at the heart of the conflict.
What isn't a fact? Everything I wrote about the development of Chinese IP enforcement is detailed in the sources I listed at the end.
> It's a known fact even by the EU that china is not giving us access to their markets
That's not a known fact. American and European businesses not only have access to the Chinese market, but also have very significant presence there. China is the biggest market for Boeing and Airbus. It's the biggest market for General Motors and Volkswagen (and VW is the largest car brand in China), and the second largest market for Ford. I could go on and on like this. China is obviously still strongly export-dependent, but its consumer economy is growing quickly and foreign companies have a huge presence in that sector.
> and har not actually securing IP and are in fact forcing it onto chinese hands.
In my last comment, I cited to you the figures on the rapid growth in the number of IP disputes heard by Chinese courts. I told you about how specialized IP courts have been set up in major Chinese cities over the past five years, about how penalties for IP violations have been significantly increased, about how evidence discovery has been made easier, and about how effective foreign companies are in winning patent disputes in China (a 70% win rate). Those are facts.
I find that people outside China often have an image of the country that lags 10-20 years behind reality. The image you're painting would have been more accurate in 2009. In 2019, it's woefully out of date.
China has no excuse for not enforcing IP rights and no excuse for their forced technology transfer. There is no defacto improvement in China thats the reality you apparently refuse to understand.
You keep missing the point of this discussion and thus the point of the conflict with China.
China doesn't protect IP exactly because of the way they operate. Why do you think they don't want to enforce IP rights in China?
The idea that China doesn't protect IP is a cliché one hears in the West, but it's not accurate. Developing countries generally have much weaker IP enforcement than developed countries. But as far as developing countries go, my understanding is that China actually has pretty strong IP enforcement now. There have been massive changes to the Chinese legal and regulatory system as part of its entry into the WTO, but a country that had a GDP/capita of just hundreds of dollars a generation ago is not going to become Western Europe overnight.
How is that so? The US people brought all those products in exchange of what exactly?
China strongly discouraged their citizens and companies from buying US products and making the US stronger, but the US encouraged their citizens to buy from China, making China stronger.
This worked out well for China.
In the past, virtually none of them had enough money to buy products made in the high end (The US generally makes high quality but expensive products)
What's happened since the 1960s is more that the Republican party has been charging madly off into the far right (and, in some cases, simply into looney-land), while the Democratic party has shuffled nervously rightward after them.
You'll note that it's far from true now to say that the Republicans are doing much of anything that the Democrats would have done in the 1960s (aside from things that were prevalent across the board at that time, like racism and sexism).
>Eric Rauchway, professor of American history at the University of California, Davis, pins the transition to the turn of the 20th century, when a highly influential Democrat named William Jennings Bryan blurred party lines by emphasizing the government's role in ensuring social justice through expansions of federal power — traditionally, a Republican stance.
The article[1] goes on the state both parties started changing stances to try and win the new Western states.
[1]https://www.livescience.com/34241-democratic-republican-part...
I will note that this isn't a complete slam dunk of an argument, I would say the left in the 60's was motivated more by the general principle of free speech, whereas I would say the right today is more motivated by self-benefit. And also I suppose it doesn't go without saying: the first amendment and the general principles of free speech / censorship are similar but distinct ideas.
In other words, protecting freedom of expression by politely tolerating hate speech has the effect of making the targets of hate speech less free to express themselves in practice. Like a heckler's veto, the presence of hate speech dissuades minorities and the less powerful from engaging at all. It's not freedom from being offended that the left wants, it's a less corrosive public sphere that doesn't demand that the weak struggle through a painful headwind in order to be heard at all.
Having a extremism-based standard for measuring freedom of expression creates a requirement that participants tolerate the material harm of extremist expression. The left wants to shift the standard of measurement to tolerating more speakers of different kinds, rather than more subjects of varying extremism. The left still believes in maximizing freedom of expression, they just recognize that there are different metrics that may apply.
It is an example of the paradox of tolerance: If a group believes in tolerance, absolutely, to the point that they tolerate intolerance, then over time, those who are intolerant will tend to gain power within the group and the tolerance will be eroded (except, of course, the tolerance of those intolerant beliefs that usurp them).
Absolutism of any kind is generally going to lead to problems in our imperfect, non-absolute world. Free speech maximalism is just one example of that. If we put people and their genuine needs before abstract principles, that will tend to be a better guide for how to make a society that serves everyone—and, indeed, allows the greatest freedom for the greatest number.
Another is the saying "tolerance isn't a virtue, it's a peace treaty", which I think really cuts through the apparent dilemma you highlight.
This is what happens with religion. Everyone is welcome and encouraged to believe these truths and questioning them will get you kicked out or ex-communicated or at best ignored and re-educated.
Some issues I see with this perspective:
- a very small percentage of people, regardless of where they fall on the political spectrum, think about these matters in anything approaching the level of complexity displayed in your comment. This thread is absolutely full of people who seem to have lost the ability to distinguish between reality itself and an extremely lazy interpretation of reality. I can appreciate the frustration that's brought them to this point, but the ability for a small percentage of people like you to skillfully articulate a steel-manned version (that may not actually be technically accurate let's not forget) of the beliefs of an emotional mob doesn't give me a lot of comfort
- not all powerful actors are behaving in a completely honest or as well thought out manner, or may believe that censorship "overreach" is strategically justifiable, from an "ends justify the means". And this may very well be a reasonable and even correct belief, at this snapshot in time, and under these particular circumstances - but what about the future? What if we get another Trump-style leader in the future exploits well-intended limits of free speech toward an undesirable end?
- by not extending any effort towards understanding the real and extremely psychologically complex motivations that are actually behind the emotional lashing out of people (that we all know very well happens with humans, that can be observed throughout history, and on this very forum), often along "racist" lines, those who propose to curtail free speech may be acting in an overly enthusiastic manner (not to mention, if people can't be bothered to even consider calming down and making a serious effort to understand what is actually going on, why should I trust they have the mental capacity to make wise decisions on something as important as free speech?)
The world is incomprehensibly complex, and getting worse at a rapid pace. I think extreme caution is warranted on any matters related to something so fundamentally important as free speech. If some of these ideas are really so bad, why can good ideas not win out in the marketplace? I have this constant feeling that there is a lack of serious effort, and that there are often not-easily-seen reasons why such an effort cannot be made (Thomas Frank, Jonathan Haidt, and Mark Blyth would be a few people worth listening to if one was interested in starting to get some depth in this perspective).
Trying to find sources on my own has turned up nothing conclusive, nor clear enough to say that a "flip" occurred in any short period.
Does anyone have decent sources for this?
Johnson’s push of civil rights in the 60s simply destroyed the southern democrat wing of the party, who were welcomed into the Republican Party via Nixon’s southern strategy, and the pro-union Northern Democrats became the sole power source of the remaining Democrats.
Now with Trump and his rust belt base, Republicans are losing a bit of their economic liberalism (being more against free trade).
Why is that crazy? Economic-liberals in the US have mostly been Republicans historically.
> Economic-liberals in the US have mostly been Republicans historically.
> <...> people are allowed to rethink their ideas.
Of course people can change their minds and opinions. But that's what is ironic and funny - to completely change your long time historical behaviour.
As Democrates have become more global and open to free trade they lost the poor/uneducated.
The poor/rural/uneducated are not represented in hollywood. So people forget they exist. Everyone seems to run a magazine / is a doctor/lawyer/firefighter. It creates this fake viewpoint that these other people don't exist in the numbers they do.
The Trump administration's stated goals are to obtain concessions for some American industries. Precisely the ones that funded his rise (Coal, Steel, Agribusinesses etc.) or where most of his ardent loyalists are employed.
(The canonical example of exploitative "free" trade is the banana republics, sponsored by the US for the United Fruit Company)
[0]: https://www.cnbc.com/2018/11/27/us-china-tensions-put-chipma...
I still have not quite understood the deal around ARM, that will stop cooperating with Huawei. This is a UK based company, owned by a Japanese conglomerate, Softbank, but they were still affected because they have a development center in Texas.
The logical conclusion would be that if you are a global company and want to keep selling to China (or to whoever will get a trade ban or sanction), you should not incorporate any US tech, or have US development teams. This seems to be quite counterproductive from the US point of view, it means that investing in the US expose you to additional risks.
Take Robert Lighthizer for example:
https://www.politico.com/story/2018/05/22/china-japan-lighth...
https://www.cnbc.com/2019/06/18/watch-robert-lighthizer-test...
I wouldn't for a moment think he doesn't understand the risks involved, so I would be very interested to know what your thinking is...perhaps you're aware of something I'm not?
EDIT: I find the pattern of pattern of downvoting on political topics increasingly disappointing. The specific point of contention here is now whether this trade war strategy will turn out to be a wise move, or could have been executed in a more intelligent manner (I personally hold no certainty on either), it is whether:
"The logical conclusion would be that if you are a global company and want to keep selling to China (or to whoever will get a trade ban or sanction), you should not incorporate any US tech, or have US development teams. This seems to be quite counterproductive from the US point of view, it means that investing in the US expose you to additional risks. "
...is very much missed by trump and his team.
From a "pedantically" logical perspective, I would interpret a downvote as a belief that no one on Trump's team is able to understand or has not thought of this (and many other obvious) possible negative consequences.
More likely I suspect I am reading way too much meaning into downvotes and the actual sentiment is something more casual along the lines of "you're just wrong", but the level of discourse, partisanship and epistemic humility on such topics, often accompanied by an air of intellectual superiority, seems to me like far less than what HN is capable of if we were able to set aside our understandable frustrations. If we can't discuss these topics in a non-tribal, evidence-based manner, then how does one hold the belief that the general public "should" do so? I should also note that I'm far from guilt-free on this matter, but I have been making a sincere effort to be more consistently objective in such discussions, and I would hope that is reflected in my words, provided one is able to set aside our differences in opinions.
This is the problem with the Lighthizer / Ross / general Trump admin for some people. People who have respect for expert / "established opinion" are gonna look at how these people act and call them idiots. And it's not a meme -- it's because people who respect experts are often experts in their own kind in other fields, and they've seen this behavior before, and hint -- it's come from the idiots.
I wonder what specific meaning you attribute to the words "trust" and "opinions" in this context, and how you believe (unless I am mistaken) you happen to know how "people" "trust" "opinions".
"fringe opinions" also seems like a bit of a loaded term to me, the exact meaning of which is left as an exercise to the reader. It also seems to imply that if an opinion is not mainstream, it is wrong, something that history would disagree with.
Can you consider the possibility that some of us have evaluated the situation, taking into consideration that only a subset of the facts are available to us, and also considering that many of the "facts" are surely propaganda, and come to the conclusion that while this trade war isn't a pleasant position to be in and is fraught with massive risk, it is the "best" route to go all things considered, and also that some of us may not hold the belief that we are "absolutely right" in our decided stance?
> don't you think the responsible option would be to measure the effects of small changes (maybe you implement some degree of tariffs without going for all-out war) rather than coming in with fringe views
Given the unlimited time a dictator enjoys, certainly. In a democracy with working timespans of < 4 years, and starting in a position reached by prior administrations who seemed to be happy to not notice the rapidly growing threat of China to America's dominance (for good or ill), no.
> and all the while believing you are absolutely right
How might you know that Trump's trade team believes they are absolutely right, versus posturing? Is there some irony here?
> And it's not a meme -- it's because people who respect experts are often experts in their own kind in other fields, and they've seen this behavior before, and hint -- it's come from the idiots.
If it's not a meme, does that mean it is a fact? Or is it something else?
While we lack the ability to articulate a defense or substantiation of our religion, we more than make up for it with the vigor to downvote, on a platform that censors those with dissenting opinions.
If you review my comment carefully, you may notice (especially prior to my edit) that I haven't stated a particularly strong or distinct "position". Rather, I was asking a specific question about the specific literal words of someone else's stated position/belief.
I suspect that what has happened here in both cases is that subconscious heuristics have automatically crunched massive amounts of data and formed an evaluation in the asker's mind of a particular state in the other person's mind - something that is obviously epistemically unsound if you actually stop and think about it.
And I'm not asking these questions to troll - I believe the prevalence of low-consciousness in public participation in democracy is what makes these sorts of problems possible in the first place. I strongly believe that if people, even some people, were more harshly critical of listening to the words/promises/assurances of politicians and corporate leaders, we wouldn't find ourselves in many of these positions in the first place.
> Trade is a complex issue and Trump single handedly is jeopardizing this sensitive topic by openly declaring trade wars with multiple nations in open platform like Twitter.
It is indeed a complex issue, far more complex than most people are able to comprehend.
EDIT: It's a shame that the implementation of post throttling (claimed to be based on rate of posting) seems to have the side effect of not allowing those who've posted substantive but dissenting opinions are prevented from defending what they've posted, while those who post low quality but popular opinions (often stated as facts) seem to suffer no such restriction. I wonder if lowering diversity of opinions might sometimes lead to insular thinking both within individual forums as well as in our overall democracy. I wonder if anyone cares, more than they care about winning an argument.
> You are suggesting Trump is doing this based on recommendation of his team or in depth analysis of the topic.
Technically speaking, no. I am asking for an explanation of the thinking of someone who has claimed (with no stated evidence) that Trump and his team do not understand: "The logical conclusion would be that if you are a global company and want to keep selling to China (or to whoever will get a trade ban or sanction), you should not incorporate any US tech, or have US development teams. This seems to be quite counterproductive from the US point of view, it means that investing in the US expose you to additional risks."
> Your proof being members of his team.
I've made no assertion, or offered proof. I am asking a question.
I believe my comment above on heuristics is worthy of some consideration.
> Even though trade is complex issue, people will understand careful diplomacy.
They often will yes, no disagreement from me.
> What Trump is doing is like carrying a sledge hammer and out in full swing against trading nations.
A sledge hammer. Oh, ok. If that's the case, then is it clearly logical how incorrect my simplistic interpretation is, and downvotes are well deserved.
> There is no pattern or logic to it, other than scare tactics.
Is this a fact or an opinion?
> If you can point out to why you think he is doing this in more convincing manner then I think you might not have been downvoted.
So, the first person who makes a comment is now considered correct until someone can offer a substantive rebuttal? Does popularity of a statement play into this at all? Is this covered in the HN guidelines or somewhere else I'm not aware of?
Consider this possibility: might I be trying, although perhaps not successfully, to forcibly inject a bit of objectiveness into these conversations?
Might that be possible?
Also, assuming that Trump doesn't utilize advisers seems to be willful ignorance. Trump studies a topic in depth before making a decision, and he very much listens to experts in that study.
I actually have no good insight to add as I have no idea if the tariffs that Trump has put in place will have the desired effect. I wouldn't even want to hazard a guess. I think it's an area where even an expert can embarrass themselves by claiming that they can predict what will happen -- and I'm definitely no expert. It will be interesting to see how it unfolds, though.
https://tradingeconomics.com/united-states/steel-production
Looking at 5 years or more there doesn't seem to be such big increase in steel production.
And coal is in decline:
https://tradingeconomics.com/united-states/industrial-produc...
Also I read quite a few articles over the last year about closing down of coal mines, mainly in PA and WV.
Nucor is nearly worth more than ArcelorMittal and earned more last quarter than ArcelorMittal did. Unthinkable just a few years ago.
Nucor's sales jumped from $16b to $25b in two years up through fiscal 2018. Net income jumped from $80m in 2015, to $2.3 billion in 2018 (operating income went from $654m to $3.3b).
US Steel Corporation saw its sales jump from $10b to $14b over two years through 2018, net income jumped from negative $1.6b in 2015 to positive $1.1b (operating income went from -$525m to +$950m over that time).
The US steel industry has been a disaster for decades. Now it's one of the strongest in the world financially. China's steel companies are hemorrhaging and require constant state support stimulus by comparison.
We can either have a healthy, strong domestic steel industry, or we can do nothing and watch China put it into the ground through dumping and massive state subsidies. I don't agree with any state protectionism. So long as China gets away with what they've been doing for decades in industries like steel, I agree with protecting important domestic industries. Steel companies (whether they're in the US or elsewhere) are directly competing with the Chinese state, the US state should intervene given the playing field is very uneven.
No, it isn't. One share of Nucor costs more than one share of MT. This comparison isn't even in the ballpark of the correct way to compare two companies' worths. Nucor has 1/4th of the revenue and 1/5th of the production.
> We can either have a healthy, strong domestic steel industry, or we can do nothing and watch China put it into the ground through dumping and massive state subsidies
Steel is an intermediate product. No one buys steel as the final product. Changes in price of steel ripple across other industries for this reason. Steel makes up 2% of world trade and steel manufacturers provide the US with 81000 jobs, while our total manufacturers employ 12 million. On the chip manufacturing side, Intel alone employees over 100 thousand. It's more important to consider what the effects of tarriffs are on other parts of the economy than jerking around a little bit of revenue or job growth in a small specific US industry.
Also, China produces 10x more steel than the US, and is the largest consumer of steel. It makes sense - they're building out infrastructure at a really fast pace.
How many other industries will be hurt in exchange for a "healthy, strong" (whatever hard numbers, if any, those words are actually meant to convey) domestic steel industry? That is all that matters.
You'd have to be really on the pipe to ignore the declining sales volume of derivative products the past couple of years (masked quite nicely by corporates willing to buy back shares and employ a host of reporting tricks) before this trade war™ nonsense.
What are you referring to here? The amount of capital required to develop new nodes means theres only 2 companies left actually competing at the cutting edge. And I would suspect the half life for chip IP is shorter than just about any other manufacturing industry.
And I don't think there is a lack of investment in general, just a lack of (successful) investment in companies that could use some of the newer stuff. Obviously they still have their R&D, but it means very little if they don't have successful (profits/revenue, not VC investment zombies like Magic Leap) companies buying their latest and greatest.
It would also have been extremely negligent of such companies to have ignored the monetary/economic security aspects regarding Chinese incentives. Last year, China imported about $270 billion worth of foreign semi-conductors, a lot of which came from the US or at least on US patents. Them solving that alone with a domestic industry by any means would increase their asset-liability spread to the USD by nearly 30%, and free up USD to put to work stabilizing their banking system.
If you look at industrial applications though. The machine you start designing today probably will use chips designed at least 5 years ago, if its another 5 years before your machine hits the market, that's 10 years before the end consumer even gets their hands on the product. Then you're going to be selling that machine for 10 years, and that machine is going to be running and getting maintained for what? 10 years minimum. But those pre 2000 aren't competitive from a performance pov. I had a Pentium 333 with 32mb of ram in 2000. That's basically microcontroller territory now, something equivalent should cost me pence to buy now, if I were doing it clean slate.
Regarding 'successful' investment. Perhaps? But then there's plenty of capital sloshing around at the moment, I would question why they haven't attracted investment in such a situation. To put it more directly, what do you know that people with billions to invest, and access the experts in the field don't?
I wouldn't say there isn't investment in new industries/tech upstream, but that it isn't in anything at a point that's driving consumer demand/profits.
>To put it more directly, what do you know that people with billions to invest, and access the experts in the field don't?
I'm interested in brain computer interfaces (worked/consulted in multiple research labs, published in journals, familiarity with all the politicking in between academia-industry/etc). I have hands on experience with medical imaging hardware/software and design of systems/sensors, and have seen a couple of great but really expensive systems/companies only target researchers, and many more trash systems/companies with even more funding that continued to get peddled to the public (and research labs sadly), and the only VC firm I've seen that even seems right up the ally with interest in something like this (some of the people behind it), nearly 15-20% of their portfolio companies are filled with corporate hiring startups (and another chuck companies with gov contracts for bread n butter [i.e. easily financed with 4-52 week notes]).
If one follows Robin Hanson's take on our economic system (prestige bias wrt to experts, and how it can go horribly wrong in certain cases outside of wanting to associate with such people), its not hard to see how $10-100 billion or more of other peoples money mostly being burned…
Creative destruction is both a weakness and a strength though.
Yes you have billions being thrown at the wall and seeing what sticks, but some of it will stick, and based on past experience will more than offset what fell to the floor.
The Hedge fund you mentioned, if you're right should be very successful, that will attract more money, until eventually there will be too much money going into these underfunded areas.
You seem to be complaining about essential features of capitalism, on one level you may be correct, just like observing that eating too much pizza will make you fat, but just like the fat, it's an inherent 'feature' that you can't really fix.
Ps "I wouldn't say there isn't investment in new industries/tech upstream, but that it isn't in anything at a point that's driving consumer demand/profits"
Much handwringing has been had complaining about the short termism of the markets, investing long term is good, yes ideally there should be a constant pipeline of new products, I don't think you can write off the industry that there isn't though.
I agree with this statement.
>You seem to be complaining about essential features of capitalism, on one level you may be correct, just like observing that eating too much pizza will make you fat, but just like the fat, it's an inherent 'feature' that you can't really fix.
I may seem that way, but I think this situation does provide benefits for those who can exploit it in the short run. I don't think what we call capitalism as it exists today (on the national/international) level is an upper bound optimal level of resource allocation, just the local maxima/cleanest dirty shirt/etc.
>Much handwringing has been had complaining about the short termism of the markets, investing long term is good, yes ideally there should be a constant pipeline of new products, I don't think you can write off the industry that there isn't though.
I think it would be more fair to say that I'm writing off the industry now, there's alot of people/incentives in crowded positions that need to be wiped out before I'll be more interested.
Maybe? Probably. I don't see how you could 'fix' it though. Sure you could find a better local maxima. As i say, it seems to me to be an inherent feature.
This sounds like the trade war is discouraging US-based manufacturing
That will force US firms to move production out of China and/or the US to cut costs long term, which makes sense. It takes a lot to build a steel mill or DRAM plant and those projects will probably try to weather the storm but other countries can make shirts and plastic toys easily enough. For Micron, they already have manufacturing capacity outside the US but not in China. Defending their legal argument of being a US company that doesn't make US goods is probably hugely cheaper than tariffs.
Tariffs probably shouldn't be used like they are here anyway. They can be an incredibly powerful negotiation tactics when applied surgically to industries where production can't shift or is specialized to the target country. Like sanctions they can push a deal from on or off the table but they work best when the countries/economies are mismatched like Iran vs the US+EU.
When applied like a blanket you just end up taxing imports without a plan and hurting everyone. There was no obvious need to do so here especially as the lopsided trade deficit (which is not explicitly bad) lends so much leverage to China who does have cash on hand to invest in industry to offset losses while the US has a spiking deficit once again like with the last few GOP administrations.
No, it is not in America's best interest to cripple the economies of its trading partners. That's absolutely absurd.
We detached this subthread from https://news.ycombinator.com/item?id=20303294.
Pretty confident Trump’s angle on China is economic, not humanitarian.
I'm not sure the flagging is specific to that post. I think I've noticed a trend in the past few weeks where flagging of downvoted comments is much more common.
It almost makes me miss Slashdot's commenting / meta-moderation system.
However Trump is a nationalist and a unilateralist so he's simply incapable of doing it. Incidentally this is why nationalists are almost universally also climate change deniers - because climate change is a global problem that requires global collaboration and agreement, which Nationalists can't stomach. It's useful to understand the political forces behind a lot of these policies and therefore the connections between them.
Instead of working with allies, the US is lashing out at both China and the tech companies trading with it as a group. This is forcing the tech companies to ally with China and start tech collaboration and transfer projects with them in order to save themselves. The Hygon Dhyana and Zhaoxin projects are examples of this. So instead of the non-Chinese international community being rallied against China, they are being forced in bed with them. Doing so also involves tech companies withdrawing investment and resources from the USA in order to limit their exposure to US trade sanctions.
Long term, it's probably the single biggest and most counter-productive trade and technological development own goal in history. Pulling out of the Iran deal might beat it though. The way it's pushed Europe into collaborating with Iran on financial and trade links, sidelining the US payments systems, while also giving Iran the freedom to breach enrichment limits is definitely up there.
The real issue is there is a risk that economically speaking America is less free than China. For all that what China does with intellectual property is illegal under American law, it is very free. The US would for sure like them to be a little less free with IP. America's policies over interest rates also look decidedly like the sort of thing that a centrally planned economy would try and execute; it handicaps building savings which might give China an advantage if they are more middle-class-savings-tolerant.
That is balanced by the strictly superior American rule of law, for all its warts. But America has given themselves some interesting competitive handicaps.
POSTSCRIPT https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven... For reference, China has a ratio of 4:1 private to public income vs America with a 2.6:1 ratio. Technically, China might be running a smaller government. Or lying, it is hard to know.
POSTPOSTSCRIPT Hong Kong and Taiwan are nearly 9:1. Capitalist paradise is in Asia. Nothing lower down the list looks appealing to me.
The rule of law is looking pretty tattered and worn in the US of A right now. What with the President committing obstruction of justice in plain view and his AG declaring that a sitting President may not be indicted for any crime.
Not to mention the grotesque violations of human rights that are happening at the network of concentration camps the current administration has repurposed.
A hundred thousand illegal immigrants per month are being caught crossing into the US through the southern border.
No other liberal democracy - from Canada to Finland to Japan to Australia - would tolerate such a flood of illegal immigration. Not even remotely close. Canada freaks out when a couple thousand illegal immigrants cross into its territory from the US in a given month.
Holding illegal immigrants in detention facilities, because there is nowhere else to put them until they can be processed, is not the same thing as a concentration camp. Claiming that they're the same thing is a gross abuse of the term and its history.
Why can't America try paying the cost of its actions for once, instead of pushing those costs on innocent families and children fleeing famine and violence?
Fault Trump with everything that's his fault, but suggesting that this is a precursor to mass graves and genocide is just hyperbole.
In my personal experience, "concentration camp" has been applied specifically to mean the camps operated by the German government in the 1930's and 40's, camps which intentionally tortured and murdered millions of innocent Jews, and certain other "undesirables" and enemies of the Nazi regime.
When I hear that term, I personally think of emaciated prisoners wearing striped uniforms, packed into cramped wooden shelves. I think of hopeless people peering out from behind barbed wire fences suffering under a regime of forced labor and starvation. I think of horrific death chambers filled with poison gas and choking, dying human beings and towering piles of dead bodies.
I personally can't get those images out of my head when I hear the term "concentration camp" and I would guess most other people in the US conjure up the same images specifically tied to Nazi Germany when they hear that term.
But NPR has an interesting article about the meaning and historical usage of "concentration camp." The subject arose when someone used the term to describe the sites where Japanese Americans were forcibly relocated during WWII.
https://www.npr.org/sections/publiceditor/2012/02/10/1466917...
No, it isn't. Concentration camps have existed throughout history and they haven't always been associated with genocide. But, you know, they do have a connotation of being associated with violations of human rights which is exactly what people are alleging about these detention sites.
The fact that it's not literally the holocaust doesn't mean it's not a concentration camp.
It still is, because a "concentration camp" even in that sense still isn't just any camp where people are concentrated. It implies internment without charges, which is exactly what isn't happening here -- there is every expectation that there will be a proceeding to determine their immigration status, resulting in either release or deportation and not indefinite internment in violation of habeas corpus.
> But, you know, they do have a connotation of being associated with violations of human rights which is exactly what people are alleging about these detention sites.
Then make that claim and not the other one. If they have no access to soap then assert that as the thing that needs to be fixed -- because at least that can be fixed. How do you make a detention facility not a "concentration camp" under a definition of "concentration camp" that just means any detention facility?
You might just have to accept that in order to enforce some laws you're going to have to put people in mass detention and you may as well own that instead of trying to get people to not call it what it is because the term for it makes you uncomfortable.
The 1951 Convention on the Status of Refugees grants refugees very specific rights that are absolutely being violated by this policy, and the term "concentration camp" has been used in many other cases other than WWII concentration camps to mean exactly the thing the U.S. is doing to refugees on the southern border. I definitely consider them concentration camps, while as yet not being death camps. There already should be holy hell to pay for having done yet again what we promised never to do the last time we had concentration camps, for Japanese-American citizens.
https://www.sltrib.com/opinion/editorial/2019/06/22/tribune-...
The word nation is not found in either the Declaration of Independence, or the Constitution. I consider nationalism, nationalistic movements, to be anti-freedom, they engender only division, hatred, enemy seeking, scapegoating, and laws to protect and enhance such things. Who is free in the U.S.? Perhaps citizens? There is even a movement that only natural born citizens are real citizens, and naturalized citizens are second class and could have citizenship stripped from them after the fact if they violate certain laws. It's not enough to imprison them, they have to be stripped of citizenship, in this view.
What about all persons within the U.S. are they free? The constitution applies mostly to persons, not just citizens. Most all individual rights and protections apply to persons; citizens get some extra privileges like holding federal public office. And yet a great many Americans are very confused about this, thinking constitutional law, rights and protections only apply to citizens.
Therefore I put nationalism as my specific enemy of the American dream, and of freedom. Patriotism is quite nice, in particular as it relates to America as an asylum for most of its history. But when patriotism is infected with nationalism, it becomes jingoism, and that's dangerous. Eventually no one is free.
Yes, we do still have freedom of speech and association.
But the govt is attacking freedom of religion through "religious freedom" laws that allow discrimination against people who don't follow Christian behavior, in the opinion of any random Christian.
The president attacks the free press, labeling them traitors and "enemy of the people."
When part of the 1st amendment is under attack, all of it is.
The president says if you plead the 5th, you must be guilty.
The president wants to delay the census until he gets the answer that he wants from the supreme court.
When some of the Bill of Rights, and the Constitution in general, are under attack, then all of it is.
We are at risk of losing what was thought rock solid, and so we are that much less free. We may still be better off than some, but we are slowly losing that.
https://en.m.wikipedia.org/wiki/First_Amendment_to_the_Unite...
It’s an artifact of the original founding of the country where there were checks and balances put in place to deny direct democratic rule.
It’s been slowly rolled back over many years, but until we get rid of the electoral college, it always has the possibility of ignoring the will of the people.
This is technically correct. Less accurate, but implied, is that a majority of voters wanted a different president. That may be the case, but the evidence is not sufficient to confirm or reject it.
First off is that turnout is very low relative to the number of eligible voters. Secondly is that the electoral college and states' decision to only do "all-or-nothing" apportionment means that it's a totally rational decision to stay home if your state is not close, since your vote has no chance of affecting the election besides the value of signalling that opposition to the consensus exists.
If Lessig's scheme [1] works out to break the winner-take-all apportionment, we could at least start to see some meaningful turnouts because the battle for a single electoral vote can be a close contest. More likely to succeed by less interesting (because your vote does not contribute to a single outcome but just to the collective) we have the interstate compact [2], which this year has made good progress towards achieving a majority.
[2] https://en.wikipedia.org/wiki/National_Popular_Vote_Intersta...
I'm a firm believer US ballots are way too broad and have people direct electing (almost always first past the post) way too many positions, especially esoteric and irreverent ones like justices, sheriffs, school boards, etc. For representative democracy to legitimately work we need people electing representatives to appoint and delegate the responsibilities of government on their behalf, because of those that actually do vote (only about 60% of voting age peoples do) 99% don't actually vet individual candidates for every one of the 12+ direct elections they are participating in on the ballot every year.
Even when I try to do that, information on these esoteric position candidates is so sparse and I'm so hugely unqualified to judge what makes a good district magistrate or police chief its mostly a waste of time - I end up going off very limited information on anyone running, often people running without opponents, for positions whose function I cannot fully understand because specialization for my locality on whatever they do isn't readily available.
That is a fully intentional design, though. Both parties have it in their self interest to bloat the ballot with tons of esoteric positions so voters feel choice paralysis and fatigue and just start voting party line en masse without actually auditing the people they are actually electing.
Its a mockery of democracy and republicanism, though. I should be voting for a professional representative to make these decisions on my behalf in forum, and if I did only have a, preferably, singular elected role I vote for with multiple winners where I just need to judge all the candidates for that one function whom I could then rank at the ballot people would be much less privy to falling under the total influence of party lines when voting. Which, being against the interest of the ruling duopoly, would never practically happen anywhere except where the demographics are so skewed in favor of one or the other they are nigh guaranteed to win anyway.
By definition a party loyalist is not a deliberative person, as described in Federalist 68. And further, party loyalists are the people most centrally located in bitter partisanship, the very thing that lends itself to "cabal, intrigue, and corruption" referred to as things most to be avoided, in Federalist 68.
We have all permitted this perversion of something that, despite its also racist past, could actually be useful but is instead detrimental. The Electoral College could play a role if we were serious, but Americans right now take their TV shows more seriously.
Bicameral parliamentary systems are even less prone to this since the prime minister is elected by the ruling coalition. But they have other problems.
2. All systems will be gamed.
3. The people are not the players, they are the chips.
Its all hyperbole overshadowing the root problem - first past the post non-proportional elections are hugely undemocratic. You need proportional legislatures where you have both multiple winners per race for better proportional distribution and alternate votes to first past the post regardless of what they are - STV, ranked choice, IRV, etc. Anything is better than what we have now.
What we really need is approval voting / range voting. First past the post creates polarization because it causes there to be two parties and requires every issue to be bifurcated into on of those two boxes, and if your preferences don't all perfectly align with party lines then welcome to hell.
But the problem with proportional representation systems is that they would require flipping over the table in the US. Senators are from specific states, Congressmen are from specific districts, and that part of the system isn't the broken part, it's actually helpful -- if your state or district has a specific problem then you have a specific person who actually cares about it because your vote matters more to them than the vote of someone else in some other place.
But apply range voting to the same districts and states and you don't end up with a two party system, because two very similar candidates no longer split the vote with each other. Then anybody who can represent a given district or state better than the incumbent can win the election regardless of party affiliation, and you're no longer stuck choosing between two party platforms because now there are twelve.
What we really need is for everyone to vote.
Or, for nobody to vote, which would trigger chaos. As Mel Brooks said, "Out of chaos, comes order."
If the people who currently vote are a representative sample of all people eligible to vote, this would change nothing at all.
They're not, so what would end up happening is that both parties would spend more time pandering to the people who currently could vote but don't, the additional votes would end up split evenly between the two parties and the difference from the status quo would be modest at best.
First past the post creates a polarized two party system independent of what percentage of the population votes.
> Or, for nobody to vote, which would trigger chaos.
That would never happen because the fewer people who vote the more incentive there is for anyone go to vote, because your vote counts more when other people don't.
It's more effective in general to cast a protest vote for a third party you know won't win than to stay home -- especially since they often need a certain percentage of the vote for ballot access or public financing. And if enough people do that then the third party actually wins. Then ideally they can do away with first past the post.
This is squarely in the territory of religion.
People in dense urban areas should not have a dictatorial say in what those who live in rural areas do.
If democracies like the USA (Canada has a similar problem) simply counted the votes, the majority of the country would be happier with the outcome. From a pragmatic standpoint, this is a good thing.
"U.S. Cities are Home to 62.7 Percent of the U.S. Population, but Comprise Just 3.5 Percent of Land Area"
https://www.census.gov/newsroom/press-releases/2015/cb15-33....
The developed world is becoming more urban because we do not need that many people in the rural industries any more. It's that simple. Fighting for their 'rights' just makes the country non-competitive. We need to actively incentivize and assist those in rural areas find a way of life where the economy is actually happening.
As it is I could have a substantial unequal share in representative interest moving to a sparsely populated state than I would living in a major metro area. There is absolutely no way to consider that as anything other than a mockery of democracy.
I'm for free societies, but free societies must defend themselves from societies organized to kill free societies. The semiconductor is real. Giving away this will pay poor dividends.
> Hold it back
It's technology. Talking about technology is speech. You can have free speech or technology export restrictions but not both.
Why do people keep suggesting ways to keep America ""free"" that make it substantially less free? Especially since 9/11.
Further, the main difference between tools and technology, is story.