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Comment by rurp | Hacker News Reader

I had the same thought as your last point. Regardless of what happens with SWIFT now China will keep pushing hard to reduce it's US dependencies and is clearly well on their way.

Keeping your powder dry isn't so useful when it's evaporating in front of you.

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China has one dependency they cannot get rid of - Americans buy tons of their stuff, and if they get rid of that, China has a big problem.

Not just Americans. If all 30 NATO nations threatened to halt trade, China would be in a tough position.

Convincing Americans to stop buy their wares is a huge task. Any political group that halts those wares from coming in would face huge upheaval. People are much more interested in their day to day comfort than something halfway across the globe (from a US perspective).

I agree completely. However, there are many situations where it can be reduced. For instance, I've heard chatter about people wondering about Apple's exposure to China[0] should China back Russia in the Ukraine conflict. At some point, it would be within Apple's best interest to look at reducing their dependency on a possible opponent.

[0] - Obviously we can pick any number of company and country matchups for this discussion, but China is obviously the relevant discussion point to this topic, and Apple is a huge American company, so the example is much less esoteric than others. I'm not picking on Apple here at all.

iWatches might just got sanctioned because of their glass comes from Russian company with state links. They chose to save on Corning's glass, with dire consequences for themselves.

Always nice when a company with 70% margin chooses to save a few pennies

Exactly. Like all things Apple, I have no problem with them choosing money over something else. ( May be I do but it is up to them to decide )

I have problem with them constantly lying ( or spinning ) all the the glass they use are from US Corning.

A huge task indeed but perhaps less than people think.

Chinese imports are heavily overrepresented in certain sectors (Tech for instance) but the US imports far less than most other countries. It's one of the peculiarities of the global economy.

Tech is really important. But there is also all the little things that you just interact with on daily life. Things like cutlery, soap dispensers, and so much more. Sure the US could make all this stuff but the country deeply relies on the cost imbalance to maintain the standard of living they have had for decades. Thats most people's entire lives.

I am reminded of this Purism phone that you can buy as a US made or China made version. https://shop.puri.sm/shop/librem-5/ China: 799$ (now 1200$ due to rising supply chain costs) USA: 2000$

I guess we are lucky in that most of our food and infrastructure related items seems to be local.

That specific example is not as revealing as it might seem, because in addition to a difference in supply costs, there's a difference in how much a hypothetical person who doesn't care about money but cares about it being made in the US will pay on top of supply cost differences.

Yeah I guess you are right, its just that there is not many examples I can provide because they just don't exist at all. Could Apple with their supply chain experience and clout get that 2000$ price down? Yeah probably. But it helps to illustrate my main point: The West has essentially been cheating by exploiting the purchasing power differential for decades and eventually it may finally collapse on them.

In an idealized situation, every company in the world will all move to a country to make an extra $0.01/unit, if they can all make it and make it reliably.

Almost all of the lumber purchased in America is grown in China, and Chinese concrete and steel are increasingly more common, despite political half-measures intended to change that.

This is hilariously completely the opposite of true. China is a net importer of American lumber, almost no Chinese lumber is exported, especially to the USA.

Almost no concrete is ever shipped more than 150 miles or so, concrete is almost always extremely locally produced.

Only steel has any appreciable trade volume with China.

I'm just curious if this is true if you back china into a corner. I'd imagine they'd take over taiwan and south korea? Is our tech sector really immune from this kind of major conflict?

How much flash RAM etc do we produce locally etc?

Hypothetical military campaigns against Taiwan or South Korea would be much more difficult than what's going on in Ukraine right now. Russia can drive tanks into Ukraine from three sides. Taiwan and Korea would require naval battles in oceans full of submarines.

Large-scale amphibious assaults were incredibly precarious in the era before AWACS and spy satellites. Now they're probably impossible against a modern adversary.

Also - as someone else mentioned - China doesn't want to be a pariah state.

>China doesn't want to be a pariah state.

Agreed. In particular, they rely on international trade to keep the economic prospects of their young men rosy enough that they won't participate in huge riots that bring down the government, which is the historical fate of most governments of China.

> Large-scale amphibious assaults were incredibly precarious in the era before AWACS and spy satellites. Now they're probably impossible against a modern adversary.

This is quite a bit naive. Do you not think ships are capable of planning their movements around satellites? Do you know how fast a ship can leave a US port and dock up in an Asian port (ships have an unclassified, and a classified speed)? Are there no other methods of camouflage that can be employed to hide from a satellite when it is over you?

You don’t think it’s possible because how it’s done has layers upon layers of classification walls.

> Convincing Americans to stop buy their wares is a huge task.

Its actually super easy, you impose 200% tariff, and people will start buying from Korea, Indonesia, Brasil and India.

You're skipping the step where all of the US retailers must switch to new suppliers at the flip of a switch. How long does that take before their current supplies run out and customers go else where? Looking at the current supply chain conundrum, I'd suggest that would be a larger issue than you're giving it credit.

You can do it gradually (2-3 years). Trump already imposed 25% tariff on China goods, and nothing dramatic happened, and I bet many people switched to goods from other countries. One example: I am into electric guitars, and almost all manufacturers moved from China because of tariff risks.

I still think that the global supply chain debacle was partly due to the Trump tariffs. People were already scrambling to find new suppliers before the pandemic. The situation is a culmination of all of the stuff that happened in just a short time frame.

This disruption actually makes things worse for China, since once/if new supply chain components established outside China, it will be hard for them to get business back.

It has more to do with ship docks being backlogged. Then when a docks storage fills up, they turn the ship away or make it circle.

Yeah, when you control the global economy like the USA does, it’s pretty easy to just make sure there are always starving countries to move your sweatshops to.

Another way to look at this, since you know since the US literally had nothing to do with why it’s starving, is the US is trying to help a smaller country (and gain an ally) by trading with that country.

Whatever you need to tell yourself to sleep at night.

Here you go:

https://en.wikipedia.org/wiki/Poverty_in_Ukraine

Where’s the part where the US caused poverty?

These items were already purchased, so the payment was in the past. OR, they buy the item from the supplier the minute it’s sold, in which case they can just return the items to the supplier.

You would need to do that slowly or you'd really piss off voters. And even if you do it slowly, you'll probably piss them off enough that they'll vote in someone who will erase what you've done.

I think if things will come to 200% tariff, it would mean something serious happened already, and voters will be enraged/educated to some extent already.

But yes, it is multi-factor optimization (voters, economy, geopolitics), though it looks like there is some consensus over certain topics between politicians, e.g. Biden didn't remove Trump tariffs, and didn't stop withdrawal from Afghanistan.

That's a great way of skyrocketing inflation.

A market that can support fair trade, carbon-neutral, organic, and gluten-free markups can support a human-rights /value-subtracted/ tariff: goods produced by slave or child labor or under authoritarian regimes can be assessed a tariff to bring their prices in-line with those produced in better countries.

Stickers marked "Three children assembled this iPhone for you." or "These sneakers were stitched by slave laborers in Xinjiang" might be as effective as the USDA's "Certified Organic" in persuading those with money and a conscience.

Sounds as likely to deter as much as cigarette packages with "Causes cancer, birth defects, etc" warnings. Majority of consumers just don't care about the package, and just care about what's in the packaging.

The sticker is to explain the price increase: why do these sneakers which cost $109 last week cost $179 now? The price increase is the deterrent, not the information.

Companies would be free to market their products as they see fit: “Nike Freedom Airs now made with 33% less slave labor.”, “IPhone 14: Apple’s first Child-Labor-Neutral phone.”

People will throw out whoever in the Whitehouse …

Wouldn't China just ship their wares there, change it to say "Made in (Not China)", and then ship ot to the U.S.?

I don't know how this work. I assume tariffs work on direct import from China. China can try to ship through different country with relabeling, which makes it more complicated on large scale, and that country will want cut, but it also can be tracked and penalized.

" If all 30 NATO nations threatened to halt trade"

That would be effectivly the same as launching nuclear missiles? Mutual destruction economically.

Why do you think that? For the major countries of NATO, China is one of many trading partners. China is only about 16% of US trade. Would it hurt? Sure. But nowhere near as much as having nearly 90% of your major trading partners disappear.

NATO coordinated economic action is extremely asymmetric. Compare these two lists:

https://en.wikipedia.org/wiki/List_of_the_largest_trading_pa...

> That would be effectivly the same as launching nuclear missiles? Mutual destruction economically.

No. Nuclear war potentially would kill many millions of people. Let's keep matters in perspective.

This is the difference between China and Russia.

The CCP is in power because it has promised Chinese citizens wealth. China actually really doesn't want to be a pariah.

I disagree. I think Putin actually aspires to be more like China. I think the difference between Russia and China today stems from the Soviet Union’s priorities of national independence and socialist ideals. China has played a long-term global strategy that Putin, or virtually any other country’s leaders for that matter, is bound to be jealous of. Ideology can never account for these discrepancies in potential.

and why would that happen? 1. it's utterly, completely out of scope of NATO's purpose 2. Europe does not share America's attitude towards China

So why do we do this already? The longer we way, the more money and influence they get. I don’t buy Chinese goods anymore. If I can’t confirm it didn’t come from China, I don’t buy. If we had govs onboard, and another supplier of chips, this would be easier than you think.

Reducing dependencies on rivals is a good idea. China is doing it because they know what they would do if they hold the dependency of a rival (like the US) firmly in hand. The US should take very serious heed of this because if we are too dependant on China for something critical it will eventually come to bite us. The supply troubles caused by the pandemic are a tiny foreshadowing of what will happen if we ever find ourselves too dependent on something important from a country like China.

This is far too logical for the United States to implement. People want cheap stuff and companies want cheap manufacturing. It took the great political shock of an unstable outsider getting elected as President of the United States who was not afraid to counter the globalists and a pandemic to alert the citizens of glaring shortages of manufacturing capacity to finally bring this issue into discussion. However, it appears this realization will not be enough to alter course and begin manufacturing more products at higher cost in the United States.

What realistic measures beyond tariffs can accomplish a shift toward a reduction of US dependency on China? A dependency which creates more risk for not only the US but the world as a whole due to the obvious potential for conflicts that will arise when China uses their manufacturing prowess to apply the screws to the many nations that depend on it.

US (and maybe Canada too?) fostering IT infrastructure plants in Central America. The whole "huge migrant forces leaving Central America for the US" (to the extent that it's a factor) could be stemmed with more infrastructure jobs there. The IT infrastructure we need to maintain independence from larger potential adversaries. Intel and others have some chip manufacturing in some Central American locations - increase that. Increase chip and other IT related manufacturing plants closer to our hemisphere. Lift up these economies closer to home - reduce shipping/transit costs.

Tax policies that favor more IT manufacturing in Central America may already be in place. If not, put in place. If there, tweak some levers to increase activity to closer to our borders and further away from countries that are gaining too much control over strategic resources.

Not sure there is enough talent in many of those countries to staff IT related manufacturing.

Migrating investment to Latin and South America is certainly a better direction from the perspective of businesses under an environment where investment in China is discouraged as they gain the protection afforded by the Monroe Doctrine. However, it still does not adequately address the weak manufacturing industry within the United States and it’s ability to produce necessary goods when global trade is impacted by a shock event like a pandemic or war.

How much do you think the GDP of China would be impacted if there was nothing left of NATO to buy their wares?

We're all dependent on each other. This retreat into isolationism just presents an illusion of non-dependency.

We need to start thinking more collectively

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