China Halts Critical Exports as Trade War Intensifies | Hacker News Reader

China Halts Critical Exports as Trade War Intensifies

nytimes.com

16 pointsinverted_flag18 comments

Why do both China and the US consider it to be a punishment of the counterparty to limit Chinese exports to the US?

"How dare you make it hard for us to sell stuff to you, we'll show you by making it even harder for ourselves to sell you stuff" feels weird.

I get details matter and make the difference, so my question is: what are those details?

> my question is: what are those details?

Raw materials versus finished products.

While some details may matter (like strategic industries), they may also not matter because the bigger picture is which country will dominate global politics in the 21st century. China is on the rise while the US decided to get on the struggle bus

China is absolutely guaranteed to be the global hegemon going forward. The last week sealed it.

China has major liquidity and economic issues, as well as a demographics bomb, and their biggest market for the manufacturing that drives their economy just said "no thank you". They are not situated to replace the US. When the US is done gun-footing itself, we will still be in a better position going forward than China, although I agree we are probably going to have to accept a loss of hegemony.

China is the largest manufacturing hub on the planet and exports globally. At 14% or so the US is certainly their largest direct customer.

China has essentially stated it believes it can belt tighten and go forward with the rest of the world as customers longer than the US can go forward without direct imports from China, should the US eventually get its manufacturing back on track, so be it.

What does belt tightening look like? How many more highways to nowhere can they build to pump their GDP? Can they accept a 10% drop in exports? I doubt many could, especially the country most reliant on exports.

You underestimate the importance of imports as a lubricant to the service economy. Sure you don't need the next new gadget, but many service jobs depend on your wanting it.

Maybe! I don't think a few jobs in advertising are going to make or break things. It is also going to be easier for us to spin up factories to make microwaves than it will be for China to spin up a consumer economy to buy them. They also may blow it by trying to invade Taiwan, the US doesn't have an outstanding X-Factor like that, we already elected him.

Isn't creating demands the US strength over China? Now you are saying it is not important for the US but important for China? Either way NYT recently did a good piece on the "China Shock" and the main takeaway is that people couldn't react to changes that happened too fast but they finally did. Now suddenly they are pushed to go the other way overnight.

What part isn't clear? China needs our market more than we need their factories. It's going to be bad for both countries, but my thesis is that it will be worse for them, and the US will come out of it still well positioned economically.

I'm not sure what the New York Times has to do with anything, they're constantly spouting opinions that don't pan out.

Your conclusion isn't logical. US per capita income is far higher meaning its economy is far more leveraged. To put it simply Costco employees need to push through way more goods per person, Google employees way more ads per person to sustain their much higher income. On the other hand, Chinese unskilled migrant export factory workers, while low wage, have a rural home to go back to and their standard of living won't change that much, while their skilled technicians can not be replaced en mass anywhere in the world. There's no way you can win a contest of pain against China. Think of the comparison as throwing sand into gears that are running at different speeds. You do far more damage to the one running at high speed.

The reason I brought up the NYT article is to say that even if you think change is important doing it rapidly is going to put the people that the policy is supposed to help through the wringer.

We already agree it's putting people through the wringer, I said as much. We're going to have to agree to disagree here. The Chinese government may be willing to go to the mat, but 1.3 Billion people will have something to say when their economy slows down. So will 300M Americans, but hey, that's what elections and protests are for. We all know how protests in China go.

Because it is a punishment for both sides.

Trade is not zero sum: both sides of a deal typically get something they want.

Conversely: cessation of trade prevents both sides getting what they want.

In this case the US wants to have their cake and eat it too: they require Chinese imports to continue, but they want to turn the faucet down to a trickle.

China needs the faucet on at full throughput, there is no practical difference to them between a trickle and “off”, so that’s their poker hand, and they’re playing it.

I think Trump’s team overestimated the importance of the US market to China, and they underestimated the impact on their own economy.

They don’t hold any cards right now, as they like to put it.

It seems like the US decided to have the supply chain conflict now rather than wait for an inevitable geopolitical trigger (say, Taiwan) that would kick it off organically.

Which, yeah that's likely to be lose-lose economically. You'd have to have some other objective for it to make sense (note: I am not claiming it makes sense).

I've heard about a dozen retroactive justifications from various right-wing pundits, all of which are nonsense. Fundamentally it all boils down to "Trump likes tariffs".

It's like the various justifications for the second amendment, all of which are just a fantasy. The real argument is "I like guns", that's it.

If America actually wanted to wean themselves off Chinese industrial output, this would have to be done with highly predictable tariffs ramped up slowly over time with a concurrent program of incentives for local manufacturers.

What they're doing right now is grabbing China's arm, punching themselves in the face with it, and screaming "I hope this hurts your fist!" as a way to avoid a fist-fight in the future they didn't start themselves.

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