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I don't know diddly squat about the Great Depression. The Smoot Hawley Act may or may not have been one of the root causes. But it sure as hell made it worse:
Good article. If you "don't know diddly squat" (double negative?) it means you know a lot more than most of the other posters here. I was surprised to learn our global exports plummeted by 2/3 after Smoot Hawley was enacted. Nothing even close to that will happen today. Exports of goods accounted for 8.2% of GDP last year. Exports of services were another 4.0%. Together they added up to $2.5 trillion - which is a big chunk of the US economy (12.2%).
Even so, our global exports are way too low. Most of the other industrialized countries export between 15-50% of GDP. IMO too many US companies are spoiled because they have our huge domestic market to sell into. With notable exceptions like Boeing and agriculture, they don't bother to do the yeoman's work of finding new customers overseas and tailoring products for those markets. If we ever want to get serious about shrinking our trade deficit, we need to do more than just lowering foreign barriers to our goods and services. We also need to adopt the "export or perish" mentality that has driven our foreign competitors for decades.
Trump is using the tarrifs to fuck with the Chinese(a worthwhile, and necessary process).
The Chinese having been fucking us, trade wise, since the 80's. We let them do so in the beginning because it was necessary to show just how fucked up a communism/socialism compared to private enterprise is in practice.
The Chinese have discovered a 3rd way, which is authoritarianism coupled with psuedo private enterprise. They are using the psuedo part to steal from us. I know, as I have seen it first hand.
There are 2 choices for the chinese.
1) Don't make a trade deal, and suffer from the investment outflow to the US as people(the people who own and control companies) repatriate their manufacturing base somewhere else(substantially to the US), and the US government harvest the reasonable tax rate on those imports(The tarriffs are about equal to what the tax rate ought to be). As pointed out, consumers and business pay the tax(tarriff), just like an other government harvesting exercise.
2) Make a trade deal. Their economy expands. They sell their cheap shit to the US. We keep our just profits. Those profits are taxed.
I'd point out that China's only market for cheap shit is the US. If they can't sell it to us, they are fucked.
Alternatively, the good shit we sell them is fungible(grain, planes, etc.) Their tarriffs on our goods are essentially meaningless. It isn't like they won't buy soybeans from somewhere. When those soybeans get diverted, the old buyers of those soybeans will simply come to us. By putting tariffs on our stuff, they are fucking themselves.
In essence, Trump weighed the alternatives and decided that getting fair trade was better than getting cheap fidget spinners. I agree, and I shop at harbor freight a lot.
Even so, our global exports are way too low. Most of the other industrialized countries export between 15-50% of GDP. IMO too many US companies are spoiled because they have our huge domestic market to sell into. With notable exceptions like Boeing and agriculture, they don't bother to do the yeoman's work of finding new customers overseas and tailoring products for those markets. If we ever want to get serious about shrinking our trade deficit, we need to do more than just lowering foreign barriers to our goods and services. We also need to adopt the "export or perish" mentality that has driven our foreign competitors for decades.
LustyLad, Good to see you weighing in. I figured I probably hadn't gotten too far off base in this thread because if I had you would have come in and bitch slapped me. You've forgotten more about economics than the rest of us, collectively, will ever know.
A second reason for our low exports is tax policy, which is something Trump and Republicans went a long way towards correcting with the 2017 cuts in the corporate tax rate. Developing countries like Vietnam, Thailand and China in many cases allow exporters to pay reduced or "0" taxes, both income taxes and other types of taxes. I suspect it may be against WTO rules for developed countries to exempt exporters from income tax, but the Europeans have huge value added taxes (VAT's) and, compared to what we used to have, much lower corporate income taxes. There's no VAT levied on European exports, they're exempt from that.
Not only did this give foreign competitors an advantage, it encouraged U.S. companies to set up shop in foreign countries to avoid extortionate taxation in the USA.
Again, the cut in the average U.S. corporate income tax rate from 40% (including state tax) to 26% did a lot to alleviate this, and in the long term should favorably effect exports.
I'd much prefer the "carrot" approach over the "stick" approach. For example, Harley Davidson can't make money on exports because of European tariffs that were imposed in response to the USA's new tariffs on steel and aluminum. So they're compelled to expand overseas. Instead of putting rules in effect to prevent Harley from moving overseas, drop the steel tariffs.
It doesn't make a lot of sense for China to compete with Boeing in aviation. Similarly it doesn't make sense for the USA to compete with China in textiles and low-end electronic manufacturing services. There are huge investments in property, plant and equipment and supply chains, and it makes no sense to duplicate them because of tariffs. I hope the USA and China come to an agreement.
There's been huge inflation in costs in China, chiefly labor. The U.S. is now very competitive. Let's not reinvent the wheel. Let companies and industries in each country do what they're best at.
I'd point out that China's only market for cheap shit is the US. If they can't sell it to us, they are fucked.
Alternatively, the good shit we sell them is fungible(grain, planes, etc.) Their tarriffs on our goods are essentially meaningless. It isn't like they won't buy soybeans from somewhere. When those soybeans get diverted, the old buyers of those soybeans will simply come to us. By putting tariffs on our stuff, they are fucking themselves.
In essence, Trump weighed the alternatives and decided that getting fair trade was better than getting cheap fidget spinners. I agree, and I shop at harbor freight a lot.
China's total exports in 2018 were $2.5 trillion. Their total exports to the USA were 481 billion. So about 19% of their exports are to the USA, a little lower than the USA's share of world GDP (about 21%). China's GDP (2018) is $13.5 trillion, so US exports represent 3.6% of their GDP.
We probably don't have as much leverage over them as you think.
Soybean farmers are hurting. They've been getting government support to help make up for what they've lost.
In the long run it's more cost-effective to buy quality merchandise that lasts longer, and buying products manufactured in the USA creates jobs for more people.
And make sure that our workers are provided with ironclad medical and life insurances, especially against lung cancer.
China's total exports in 2018 were $2.5 trillion. Their total exports to the USA were 481 billion. So about 19% of their exports are to the USA, a little lower than the USA's share of world GDP (about 21%). China's GDP (2018) is $13.5 trillion, so US exports represent 3.6% of their GDP.
We probably don't have as much leverage over them as you think.
Soybean farmers are hurting. They've been getting government support to help make up for what they've lost.
Soybean farmers are not hurting because of tariffs. The amount of soybeans on the market is the same. The demand for soybeans is the same. The only difference is where those soybeans end up. This same process is why oil prices are the same for despots and good rulers. It is nearly impossible to enforce a price diffence unless there is a monopoly.
The tariff story is much like the Trump colluding with Russian story. If you repeat a delusion enough times, it becomes true, at least for the true believers.
I have friends that claim this year's snow storm was caused by global warming. When we discussed this, I showed them a picture of 10 ft drifts in my hometown from late April in 1980, they demured. The next day, they were spouting the same drivil that I had just disproven to their unwashed plebes. See how that works?
By your standards, they have no leverage over us. They purchase almost nothing from the U.S. I would also point out that much of what China sells is indirectly heading for the US, which isn't accounted in your "statistics".
Soybean farmers are not hurting because of tariffs. The amount of soybeans on the market is the same. The demand for soybeans is the same. The only difference is where those soybeans end up. This same process is why oil prices are the same for despots and good rulers. It is nearly impossible to enforce a price diffence unless there is a monopoly.
Here are the first 3 articles I get when I google "Soybeans Tariffs." They all show soybean farmers are hurting because of tariffs.
By your standards, they have no leverage over us. They purchase almost nothing from the U.S. I would also point out that much of what China sells is indirectly heading for the US, which isn't accounted in your "statistics".
You're correct that my export numbers are only for direct exports to China. I suspect the numbers quoted by the press, 550 billion, would include Chinese content in exports from other countries to the USA.
You'll also be 100% justified in saying I suffer from TDS if Trump does end up negotiating an agreement with China and then drops the tariffs before they really start to fuck things up. That could happen. It would have been so much easier and less dangerous though if he'd hooked up with the Europeans, Canada and Australia and put pressure on China to do the things they should, like protecting intellectual property and improving access and treatment of foreign companies. My hunch is he's really going to muck things up with tariffs, and basically give back all the benefits he and the Republicans created with the tax cuts. And this is going to bite around the time of the 2020 elections.
You're correct that my export numbers are only for direct exports to China. I suspect the numbers quoted by the press, 550 billion, would include Chinese content in exports from other countries to the USA.
You'll also be 100% justified in saying I suffer from TDS if Trump does end up negotiating an agreement with China and then drops the tariffs before they really start to fuck things up. That could happen. It would have been so much easier and less dangerous though if he'd hooked up with the Europeans, Canada and Australia and put pressure on China to do the things they should, like protecting intellectual property and improving access and treatment of foreign companies. My hunch is he's really going to muck things up with tariffs, and basically give back all the benefits he and the Republicans created with the tax cuts. And this is going to bite around the time of the 2020 elections.
Being written in leftwing news sources does not make something true. Look up the word propaganda.
The fundamental problem with the media openingly hating Trump is that all information the publish must be assumed to be biased.
Keharr, Forbes isn’t left wing. As you asked, I looked up “propaganda.” Trump’s tweets and pronouncements are propaganda. Reporting by the left wing media is better described as “biased.”
Being written in leftwing news sources does not make something true. Look up the word propaganda.
The fundamental problem with the media openingly hating Trump is that all information the publish must be assumed to be biased.
Last year I was in the market for a new clothes washer. After about 15 years, my LG washer broke down. I would have preferred another LG washer but since LG washers are made in China and Trump imposed a tariff on them, I had the choice of purchasing an LG for considerably more money than those made by competitors or purchasing a washer made by a company which I thought to be of lower quality.
People buying soybeans have a similar decision to make, although quality probably does not come into play -- purchase a higher priced product from the U.S. or save money and buy the same product for less money from a different country.
Keharr, Forbes isn’t left wing. As you asked, I looked up “propaganda.” Trump’s tweets and pronouncements are propaganda. Reporting by the left wing media is better described as “biased.”
And if you read the guts of the Forbes article, it basically says that Soybean Farmers are not necessarily suffering as a result specifically of tariffs as Keharr had said, which wasn't what you were trying to refute when you posted the Forbes link?
The Forbes link largely says that both the US and Brazil increased soybean production at this point beyond worldwide need. Of course it all can't then be sold at premium prices.
Soybean farmers are not hurting because of tariffs. The amount of soybeans on the market is the same. The demand for soybeans is the same. The only difference is where those soybeans end up. This same process is why oil prices are the same for despots and good rulers. It is nearly impossible to enforce a price diffence unless there is a monopoly.
The tariff story is much like the Trump colluding with Russian story. If you repeat a delusion enough times, it becomes true, at least for the true believers.
I have friends that claim this year's snow storm was caused by global warming. When we discussed this, I showed them a picture of 10 ft drifts in my hometown from late April in 1980, they demured. The next day, they were spouting the same drivil that I had just disproven to their unwashed plebes. See how that works?
By your standards, they have no leverage over us. They purchase almost nothing from the U.S. I would also point out that much of what China sells is indirectly heading for the US, which isn't accounted in your "statistics".
looks like your fri3nds are suffering from the badder-meinhof syndrome.
