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Comment by gip | Hacker News Reader

Totally agree that Trump is trading long-term dominance for short-term gains.

I think that in a few months, we will see the U.S. economy doing very well and somehow rebuilding its industrial base. In the long term, U.S. influence and wealth will make up a much smaller share of the world’s wealth than it does today.

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He does not rule out recession. Why do you think the US economy will be doing very well because of his policies?

https://www.independent.co.uk/news/world/americas/us-politic...

I do think there will be a recession yes. But within 6 to 18 months, the recession could be over with and growth will come back as the US rebuilds some of its industrial base. US imports and exports will decrease over time.

Note: it is my prediction at 70% (e.g. I think there is 70% that it will happen).

It could be over, but it won't be over, because he can't be trusted, changes position on important issues every night, and this does not create environment welcoming to investors. Nobody sane will commit to longterm investment. No investment, no growth.

> US imports and exports will decrease over time.

So prices will rise and and government expenditures will fall. Where exactly will that growth come from?

I think companies who want to access the large U.S. internal market will have an incentive to have factories in the U.S. That will likely fuel growth. The growth will be coupled with less imports and exports given nationalism and tariffs.

And if it is what the Americans want why not. But as the U.S. take this new direction, let's make sure former allies are treated with respect and given proper notice of the changes so that they can adapt their economies and defense postures.

Could work. Or they could just decide to invest elsewhere.

I guess if the economy is in a recession and people spending less it is not the best place to invest. Unless it is for cheap labor but then you'll have problems with export tariffs.

If they invest elsewhere, they will have limited access to the U.S. market—that is Trump’s policy it seems.

If the U.S. has one thing going for it, it’s the strength of its market, characterized by high consumer spending and strong potential for growth. Contrast this with the Japanese consumer market, for instance: in real terms, salaries have not increased over the past 10 years, and consumer spending is below what it was a decade ago. (Note: I love Japan, but this is the reality.) European market is between these extremes I believe. The U.S. market may be significantly more attractive to most companies.

If the high tarriff environment sticks around, including reciprocal tarriffs, the issue is either you produce in the US and have good access to the US and poor access everywhere else, or you produce outside the US and have poor access to the US, and good access to much of everywhere else (depending on things).

The US is a big and important market, and for some things, it would be better to forgo competitiveness in the rest of world market; but for others, rest of world adds up to be more important.

Same line of thinking was used during the Great Depression of 1929, protectionist measures only made everything worse, deepening and extending the recession.

It won't work...

It usually takes five to ten years to move a factory from one country to another, and it costs an enormous amount of money that mostly will not drive new profit. Costs in the US will be higher also. There is more to consider in moving a factory to the US than market access.

There isnt the slack in the US labor force to rebuild the manufacturing base. Not without significant inflationary pressure. Especially with the hostility towards migaration.

Who will be building, and manning all that newly developed industrial base? You cannot create enough labour in 18 months, it's a very hard fact of reality.

Your labour market has been running at full employment for a while, 4-5% unemployment, there's no leftover hands to help with building up multiple industrial bases. Unless you want massive inflation when all these openings for the rebuilding of USA's industrial base, and need to pay a lot to absorb as much labour as possible to actually happen.

Not even considering in how much risk the investors of this new industrial base will be having to hedge against, who knows when Trump will increase tariffs on their inputs until everything rebuilds internally, financial hedging, oversupplying their warehouses to prepare for shocks, etc. are all quite expensive. Who will pay for it?

I'm only partly serious, but AI is about to make quite a bit of people redundant.

So far we’ve only traded our long term dominance. I’m yet to see any short term gains or even prospects of those.

Unbelievable amount of damage done in just a month.

I don't even see the short term gain.

I keep expecting him to rally his support base and attempt to overturn the 22nd amendment. Short-term "winning" might be exactly what he needs to rally them.

Honestly I expected it on his last term.

Get out of an unwinnable war with minimal losses and re-group for the war that will really matter. China.

One would think it would be a bit beneficial to have some allies in that war...

Yeah, would have been really useful for the US to at least convince China's northern neighbor to constantly do mobilization exercises [1] on their shared border to keep the PLA off-balance and draw combat power away from important theaters. Instead, we've pissed away the Sino-Soviet Split and enabled Eurasia to operate with secure interior lines. This can be chalked up entirely to really arrogant and foolish neocon decision-making with regards to Russia 2003-2007.

[1] https://www.chathamhouse.org/2018/09/russias-vostok-exercise...

Russia is now so weak as to pose no threat to China.

With ramped up warhead production and a battle-tested army? Yeah, so very weak.

It's interesting you bring up the Sino-Soviet split.

I would argue that Trump has inflicted the same thing on NATO. Atlantic relations are at an all time low. Putin will be delighted.

There’s close to zero chance the US would win a war with China in the event that it attacks Taiwan. Either china wins quickly, or it takes out all the assets which make it strategic in any case.

Why would the US or the west or China wants to start a war? Over what? They don't have any disputes about land or people. Just some irritations about whatever. But certainly not recipe for war. Even Taiwan is not a reason for the US to start a real war against China. Proxy war by supporting Taiwan sure. But thats it.

Oh, the US are gonna help Taiwan? I would've thought you might think of it as unwinnable too.

Oh, that's why Trump is trying to speed up TSMC to build chips on US soil! Now everything makes sense! Surely, TSMC will just do it! And the Chinese will wait for the transition period to finish before they attack the island!

This is absolutely intended to be sarcastic and demonstrate the absurdity that someone who cuts ties with allies would ever do anything to help the next one. And if that next one is threatened with war, it would ever feel comfortable to effectively destroy their only bargaining chip for assured US military help afterwards.

Man, all I know is this year isn't going to end well. For anyone.

Long term the Taiwan situation absolutely is unwinnable, and their current government is completely dependent on the US when it comes to staying in power. There is a strong pro-unification party ready to take over the moment US support is put on hold. Wonder if we'll see this card played when negotiating with TSMC...

Overspending for decades. Rationalization requires economic pain. Big surprise: restraint lacks the support pissing money every which way enjoys.

They are planning a $4.5 trillion tax cut for the rich.

Not seeing much restraint there.

Assuming that does happen, it won’t be “in a few months”. At best, this is a timeline measured in years if not decades.

No one is going to invest in building the US industrial base unless there's stability.

In fairness, he's getting kind of old.

> Totally agree that Trump is trading long-term dominance for short-term gains.

I'd say the other way round - rebuilding everything that was outsourced will take a long time, so hard times are ahead. In the long term, I hope the USA will be less dependent on China.

But at the same time the way it was done completely destroyed the credibility of the USA as a reliable partner, both in trade as well as military relations. Countries will organize new treaties, and the USA will be a powerful player but with far less influence than before.

There has to be cheaper, faster and easier ways to bring coal mines and steel plants back to USA?

For the coal mines, maybe you could fund them through some museum budget?

More like trading long-term dominance for short-term losses.

US economy definitely won't be doing well.

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