Trump's trade war with China

[Marco]

Perhaps a better idea, since this is I am assuming a ham-fisted attempt to bring industry back to the US, is to have no tariffs on imported components, but to have these high tariffs on completed items.

From a pure mercantile perspective you do indeed want high import duties on stuff high in the value chain and high export duties on stuff low on the value chain ... but if everyone does that international trade goes to hell. In this day and age the best Mercantile states are sneaky, suppress wages through fiscal and monetary policy, use renewable energy subsidies to give energy intensive industry roundabout subsidies etc. Although China occasionally does use less savory methods as well, as in the rare earths dispute.

I think every nation should have the right to try to drive its trade towards balance though. Buffet's import certificates are probably one of the fairest ways for the USA and least likely to lead to a trade war.

[CJay]

EU and/or their Vassal States steals about 26% to 64% from me when I import something significant.

Very interesting. Please tell how you came-up with such numbers, preferably by example. Also name product(s) which have 26% to 64% EU import duties.

Hint: http://madb.europa.eu/madb/euTariffs.htm

[edit] Just checked with purchase dept: electronic components import tax from China = 0%   

It's the usual fruitcake lies about the EU that's spun out every time one of the hard right/left politicians gets worried their lack of competence might be exposed or cost them their tax because it's less damaging to blame the EU than admit they screwed up or had their snout so deep in the trough it'd need a crane and a jackhammer to get them out.

[jpanhalt]

I would define an unfinished product as an item unusable as a home, commercial, or industrial appliance without combination of other parts in a factory environment to produce a finished product.

Catch clauses like requiring operational components to be added, instead of just a superficial change could be another idea.

Apparently you did not get my point with the example.  Consider a car shipped without windshield wipers?   A car shipped without tires? Seats?  Spark plugs? ECM?  All of which are required for operation, and the list is almost endless (limited by the number of parts in a car).  Don't assume for one second manufacturers won't try to abuse it.   As I said, a legally defensible definition.  Common sense doesn't count.

[station240]

It's not just components, buried in the industrial stuff are things like.
All possible types of PCB making machines, including laser cutters

85151100 Electric soldering irons and guns
85151900 Electric brazing or soldering machines and apparatus, other than soldering irons and guns

85351000 Fuses, for a voltage exceeding 1,000 V
85361000 Fuses, for a voltage not exceeding 1,000 V
85362000 Automatic circuit breakers, for a voltage not exceeding 1,000 V
85364100 Relays for switching, protecting or making connections to or in electrical circuits, for a voltage not exceeding 60 V
85364900 Relays for switching, protecting or making connections to or in electrical circuits, for a voltage exceeding 60 but not exceeding 1,000 V
85366940 Connectors: coaxial, cylindrical multicontact, rack and panel, printed circuit, ribbon or flat cable, for a voltage not exceeding 1,000 V
85369040 Electrical terminals, electrical splicers and electrical couplings, wafer probers, for a voltage not exceeding 1,000 V

enameled copper wire, and no doubt a ton more stuff.

It's not just the tariffs, that will make things cost more, it's the huge mess implementing it. I'd expect companies to pass on the cost of implementing all this.

[hermit]

It's a stupid idea that will have severe knock on effects but it'll make Trumplethinskin look like he's doing something worthwhile for the people who can't connect the dots between the price of their next TV, car, laptop, iPad etc. etc. and the tariffs.

Not surprisingly from what I've read the retaliatory tariffs are such that it will be hard for some basic Trump supporters to ignore.  Soybean farmers are pretty much having to decide what and how much to plant right now.  Timing is everything.

[james_s]

The situation we have now is the result of a decades-long shift and anything done to try to correct it rapidly is likely to have catastrophic results. Ultimately if we want to bring manufacturing back to the US, we are going to have to get used to having less stuff and paying a lot more for it. Personally I'm ok with that, I hate the disposable society created by dirt cheap goods that everyone just throws away on a whim but you can't make a change like that quickly.

I'm just old enough to remember when something like a TV set was a major investment, I clearly remember my grandparents buying a shiny new 25" console TV that cost over $600 at a time when my grandpa probably didn't earn that much in a month from his job at the paper mill. Meanwhile my family got by with what was then considered a nice though not extravagant 19" TV and used an antenna to get a signal. The TVs are just one example of many things which were a substantial investment, people kept them for a long time, 20 years or more and when they broke down you paid someone to repair it. Unless you were rich you only had one TV in the house, or maybe the old B&W set in the bedroom. Growing up I knew *one* rich kid who's dad had a big screen TV. Now you can go to Costco or Walmart and buy a slick brand new HD 40+ inch TV for just a few hundred bucks, what was once a high end luxury item only the rich could afford is now within reach of a teenager earning minimum wage.

I think a lot of people lose sight of how insanely cheap toys and gadgets are these days, you can't have crazy cheap stuff *and* living wage jobs building that stuff, the math just doesn't work out.

[nctnico]

Did I miss an episode of 'our cartoon president'?

@james_s: bringing manufacturing back to 'the west' is a pipe dream. And even if manufacturing gets back automatisation doesn't require labour anyway so it is not generating any jobs. American made consumer products aren't very popular outside the US anyway due to quality and/or the way they look so that doesn't help much either. Actually the problem is broader than that. A lot of American companies trying to do business abroad fail because they don't understand people have different cultures and need to be approached differently. Dell and Apple got some serious penalties for not adhering to European warranty laws. Just this morning I had a run in with Americans being blissfully unaware of foreign etiquette. An American couple was talking very loud in the train while everybody else was talking quietly in order not to disturb the other passengers.

[BillB]

Did I miss an episode of 'our cartoon president'?

@james_s: bringing manufacturing back to 'the west' is a pipe dream. And even if manufacturing gets back automatisation doesn't require labour anyway so it is not generating any jobs. American made consumer products aren't very popular outside the US anyway due to quality and/or the way they look so that doesn't help much either...

I do agree that the US will never be a manufacturing powerhouse like it once was.  The US was uniquely positioned in the postwar environment to take advantage of vacuum created by the destruction of Europe's factories.  As the cost of labor rises, manufacturing will move.  When China gets too expensive, then Korea, then Malaysia, etc, it will move to Africa. 

I also agree about automation.  We'll have Flippy the burger-flipping robot before we have burger flippers making $15/hr.

I don't necessarily agree about the popularity of US made products.  We still export a decent amount of higher quality stuff.  But yes, Americans will need to get used to the idea that we aren't the only country/culture on the planet.

[mtdoc]

bringing manufacturing back to 'the west' is a pipe dream.

Unfortunately, you're probably right that, to use an Americanism, "The horse has left the barn" on most of those US manufacturing jobs.

In the end, Ross Perot really was right, although the "Giant Sucking Sound" was mostly heard to the East not the South.

[james_s]

Automation is going to be a real problem too as it displaces more and more people and I'm not really sure what to do about that. Some will say that it creates a different type of job, the people designing, installing and maintaining the automation and that's true, however those jobs are far fewer in number, far higher in required skill and the total labor cost is reduced because that's the point of having automation. At some point we are going to work a huge portion of the country out of jobs and then what? Eventually mass unemployment and a huge wealth gap could cause the whole nation to collapse, it has happened to others in the past. Technology was supposed to give us increased leisure time but it has generally failed to live up to that promise, people tend to have less time for leisure than ever before. If a person's productivity improves they don't earn more money, it just enables some other people to get laid off.

[coppice]

bringing manufacturing back to 'the west' is a pipe dream.

Manufacturing could certainly move back to the west. What can't move back is the jobs. When work moved to Asia it was a choice - do the work by machines, or do the work by Asian manual labour? Keeping the existing high labour cost plants was not an option. Asian manual labour required less up front investment than automation, so it usually won. If Asians get too expensive, and maybe Africans too, the work will be done by machines, and those machines will be in whichever places offer their owners the sweetest tax breaks and finance deals. We already see places in America scrambling to get large plants located in their municipality, which will offer very little employment. These sweet deals mean they won't pump much tax revenue into the local economy, so they really won't add anything to the local economy. They will be on US soil, though. Hurray for America!

[CopperCone]

quality is gonna go up because you can't get garbage as low a quality in the USA or anywhere else in the world if you tried 

Hopefully it will be too shameful to produce product of the same 'caliber' as china in the USA

[nctnico]

Automation is going to be a real problem too as it displaces more and more people and I'm not really sure what to do about that. Some will say that it creates a different type of job, the people designing, installing and maintaining the automation and that's true, however those jobs are far fewer in number, far higher in required skill and the total labor cost is reduced because that's the point of having automation. At some point we are going to work a huge portion of the country out of jobs and then what?

And then people realised they should have paid attention in school, kept the school system in order and make sure everyone gets a good education. The road to prosperity is paved with good education. If you don't then a country will stay or slide back into the stone age.
Getting manufacturing back is NOT the answer. It is education. The only problem is that that only helps future generations and not the current voters.

[TimNJ]

Automation is going to be a real problem too as it displaces more and more people and I'm not really sure what to do about that. Some will say that it creates a different type of job, the people designing, installing and maintaining the automation and that's true, however those jobs are far fewer in number, far higher in required skill and the total labor cost is reduced because that's the point of having automation. At some point we are going to work a huge portion of the country out of jobs and then what?

And then people realised they should have paid attention in school, kept the school system in order and make sure everyone gets a good education. The road to prosperity is paved with good education. If you don't then a country will stay or slide back into the stone age.
Getting manufacturing back is NOT the answer. It is education. The only problem is that that only helps future generations and not the current voters.

Are you talking about higher education here? Suppose all of the people who didn't pursue a college degree (and perhaps work on an assembly line somewhere) went to college instead. The net result of automation is going to be less jobs. Period. How does education help solve that problem? Sure, it might help YOU increase your odds of getting a job, but someone's gotta be unemployed...right?

Don't get me wrong, I think society would benefit enormously if a greater percentage of people were educated, but just don't see how education is the answer in this case.

[BillB]

At some point we are going to work a huge portion of the country out of jobs and then what?

Soylent Green.

The road to prosperity is paved with good education.

The world needs ditch diggers, too!

[nctnico]

And then people realised they should have paid attention in school, kept the school system in order and make sure everyone gets a good education. The road to prosperity is paved with good education. If you don't then a country will stay or slide back into the stone age.
Getting manufacturing back is NOT the answer. It is education. The only problem is that that only helps future generations and not the current voters.

Are you talking about higher education here? Suppose all of the people who didn't pursue a college degree.

I'm not talking about a college degree but at least finishing high school and learn a skill. Sure there will always be garbage to pick up and sewers to be cleaned  so those jobs will be around forever.

[BrianHG]

I'm not talking about a college degree but at least finishing high school and learn a skill. Sure there will always be garbage to pick up and sewers to be cleaned  so those jobs will be around forever.

At the pace of technology & robotics, not within our children's grandchildren's time.
Same goes for the ditch diggers comment above...

[coppice]

I'm not talking about a college degree but at least finishing high school and learn a skill. Sure there will always be garbage to pick up and sewers to be cleaned  so those jobs will be around forever.

At the pace of technology & robotics, not within our children's children time.
Same goes for the ditch diggers comment above...

Large numbers of ditches have been dug automatically for years.

[james_s]

Education is great, but the more people have college degrees, the less each of those degrees is worth and the more it costs to go to college due to high demand. It's the same with skilled trades, the way unions are able to keep wages up is through exclusion keeping a limit on the number of people practicing those trades. Any way you look at it, automation means fewer jobs, yet everybody is expected to work in order to support themselves. How do we fix this? What happens when there are simply not enough jobs required by society to support all of the members of working age who need to work? Sure we'll always need janitors and tradesmen, but how many, and for what wages? I'm not necessarily anti-automation but I think we do need to recognize the overall cost to society, some day it's going to catch up with us if we automate a large enough portion of the population out of their jobs.

[blueskull]

Education is great, but the more people have college degrees, the less each of those degrees is worth and the more it costs to go to college due to high demand.

I don't think so. Look at Sweden, I know a few YouTubers and celebrities from there, such as Simone Giertz (leave PDP alone, he's not in the scope of this thread). They have really good education and the result is a very smart society.
The same can be said for other Scandinavian countries.
This is particularly true for YouTube. While the Russians are crushing spray cans, the Scandinavians (in this case, the very dangerous Finnish) are designing and machining tools to do scientific experiments.
I also like Japan quite well. Part of the reason they can keep the innovation going is by education. Japan is the first eastern Asian country to mandate education on women and to completely eliminate illiteracy.

I do agree with you that not everyone needs a BS degree, but some sort of higher education, such as technical degrees, are needed at least.

[hermit]

Edit.  Bails out.

[nctnico]

Any way you look at it, automation means fewer jobs, yet everybody is expected to work in order to support themselves. How do we fix this? What happens when there are simply not enough jobs required by society to support all of the members of working age who need to work? Sure we'll always need janitors and tradesmen, but how many, and for what wages? I'm not necessarily anti-automation but I think we do need to recognize the overall cost to society, some day it's going to catch up with us if we automate a large enough portion of the population out of their jobs.

Actually it is far less of a problem than you'd think. Nowadays people have less kids and many people currently in their 40's and 70's are the result of the post WW2 baby boom. So for now lots of jobs are needed but in a not so distant future there will be less people to do the same amount of work.

[rfeecs]

"US is losing it's manufacturing"  Actually, we are manufacturing more than ever.  Record manufacturing GDP.
Wow, look at the chart, US is losing it's agriculture, what to do?
I wonder what all those people are doing working in "Other"?

[Brumby]

Wow, look at the chart, US is losing it's agriculture, what to do?

That chart doesn't say to me that the USA is losing its agriculture - it says its losing employment in agriculture.  With machinery that can run autonomously in tilling, harvesting and such there are increasing opportunities for a single person to program their farm.

But, to be clear, my point is that you need to be careful to extract correct information out of any statistical construct.

[Marco]

I don't think so. Look at Sweden, I know a few YouTubers and celebrities from there, such as Simone Giertz (leave PDP alone, he's not in the scope of this thread). They have really good education and the result is a very smart society.
The same can be said for other Scandinavian countries.

On the other hand, Sweden and especially Finland suffer from brain drain. As does most of Europe.

Ideally a nation has good education, strong ethnic based national identity and a language which makes learning English difficult. Finland has the first and the latter, but just like the rest of Europe the second was demolished after WW2 ... and it's just too cold.