Slump in China's Yuan will offset US tariffs

Then they can use their Trump card and sell the debt of ours they own. Then we all lose, hurray! Its not like increase Tariffs and nationalism was without its repercussions in the 20th Century, WW2 was pretty costly and WW3 would be even more. Trump is playing chicken with the largest two economies in history, possibly harming billions of people in order to eek out a better deal which doesn't even understand the nature of the previous one. This is all part of the dog and pony show that is Trump's economic policy, which is to seek out short term gain in order to secure a better political position for elections and then once again leave the mess all this risk taking begets to the Democrats.

 

I realize China buys US Government bonds and treasuries, but whom will buy the Debt that China owns? You think it hurts the US? Investors probably would discount them to buy them. We do not lose a dime by China selling.

Another point I wonder of.

Democrats love high taxes imposed on Americans.

Why do they support China in holding down taxes against China?

 

The cause was the internet stocks bubble, lax lending requirements, and the resulting housing bubble.

The cause for the 2009 great recession wasn't jobs growth.

This is getting like the post-WII jobs boom.

MAGA and thanks President Trump.

 

And the only reason they're able to torpedo us, is because the made manufacturing in the US obsolete by playing by a different set of rules. Slave Labor and cheap working conditions make for an easy way to destroy others manufacturing. UNLESS a country makes it illegal to ship jobs out of said country. But then you'd be Totalitarian...like China=)

 

In 2005, you could say that the subprime markets in America were working out. GDP growth, good job market, skyrocketing market, etc. I see no reason how this deregulation and tariff led trade policy will lead to sustained growth or avoiding the massive economic crisis which is on the horizon. All of them are engineered to boost short term growth, which will mostly benefit the ultra wealthy. Trying to revive basic American manufacturing via bullying will not work, our wages will ensure cost to consumer will not be competitive with other emerging markets or even China's goods which will be still lower after their devaluation. Which gives them more debt and makes the whole economic system even more risky than it already is.

Enjoy the good times you say? Perhaps if I was one of the 1%, who obtained 80% of the wealth created in 2017. This will probably be worse in 2018, and we will once again likely be using public debt to bail out the financial system if it crashes. Its amazing that working class people who support Trump get conned into this nonsense, and they will suffer the most in the next recession as all that new industry gets wiped out. No doubt you fools wont take credit for its collapse either, facts dont matter anymore to the Right, only winning power does.

 

Yawn, every economist knows, they can't, they will get pennies on the dollar if they flood the market with illiquid debt and they will lose trillions and they will lose the uber-safe stream of interest revenue paid in hard currency that they badly need. And someone else will buy the debt for pennies, including the US Government, businesses and individuals. How would that be a bad thing? Jeez

 

China is oppressive, but not totalitarian yet. Though we are empowering them to go that direction with these actions. And the destruction of much of our manufacturing was intentionally done by the Neo liberals. It was intended to make prices much cheaper, which after decades of wage stagnation in the US, led to a drop in consumption which could be made up for if a) products are made super cheap over seas, and b) banking deregulation led to more credit for consumers than ever before to stimulate more consumption. What resulted was insane growth via the transition from an industrial led economy, to a consumer led economy which made up for its deficits via the vacuum cleaner of profits that is Wall Street. Trump doesnt understand why they did this, and simply wants to take us back by bullying the world into submission in order to placate a dying rural America. It is a smart way to win rural votes, but bad for them and the rest of the world in the long run. As these short term gains in manufacturing will not be sustainable once these tariffs go. Which they likely will as soon as Trump is out.

 

If we seek to crash their economy, they would do this, and China is sitting on at least 34 trillion in debt with growth slowing as they become more authoritarian and nationalist. We are playing an incredibly dangerous game of chicken here.

 

Conservatives used to understand that tariffs harm both the economy and diplomatic order of the world. Now they want to play super hard ball and alienate our allies and adversaries even more so. This economic nationalism treates the globe as if there is only a certain amount of wealth to be gained and it has to be done at the expense of other countries. And Democrats like high taxes on the super wealthy and corporations, not the poor and middle class.

 

Economists understand this far better than Democrats do and Republicans attempt to keep up with the economists. China is not who will pay the tariffs. Their factories, their suppliers of goods and services will bear those in their costs. If they have high profit margins, China may bite the bullet and pay the tariffs.

Tariffs are taxes.

As I say, Democrats love taxing Americans but fear taxing others in their nations and personally that gives Democrats one heck of a dilemma. They must now fight more taxes. And that is not in their nature.

Actually as to the lower classes in this country. We all buy from the wealthy. Ask any shopper in the malls. The poor would not be exempt from taxes were we on the FAIR tax program which also happens to pay the poor to help them survive. Democrats loathe that since it removes captive controls by them on the economy of this nation.

Taxpayers of all classes are relieved of the burden to keep records for the Government and show them to the tax people. We need to free Americans and not Chinese of taxes. Income taxes of course. Sales taxes would replace it for all of us.

 

But we don't. We seek to level the playing field for American companies and improve the horrific, one-sided and unsustainable trade imbalance..... or crash their economy if they refuse... which they won't, they are Chinese, not Muslim fanatics, they are smart, tough negotiators, not suicidal.

PS and again, if they dump the debt we and other countries will buy it pennies on the dollar, China will be the only loser.

 

If you think the Chinese are paying the tariffs then you may want to never repeat this in public.

 

china is waging economic nationalism, aka mercantilism, already

And will continue to do so ifwe dont fight back

 

Republicans were a minute ago just preaching against Protectionism in favor of Free Trade. You are in fact out of alignment with your own ideology's economists, which are the only ones you Supply-Side folks seem to listen to. Trump is revolting against the economists, pretty much none of which think the tariffs are a good idea, in order to get a domestic political victory for his rural voters. That is really what this all is, parity in trade with China is a pipe dream.

Go ask those economists why they don't like tariffs, and while you're a2y it go ask a historian why trade wars are dangerous to the global order.

 

China did what they did with the support of our politicians, the imbalance of trade was by design. But Trumpians don't understand the economy in its current form.

 

sadly under Trump the jobs are leaving the county even faster, and the debt is hitting new highs every day

 

So?

The politicians (predominantly Democrats) who enacted and expanded the mandates wanted this.
The subprime borrowers those politicians were pandering to wanted this.
The contractors who were building and flipping outrageously overpriced homes to those subprime borrowers wanted this.
The real estate companies and agents who were selling those outrageously overpriced homes to those subprime borrowers wanted this.
Anyone and everyone who could buy a vote and make a buck off that insanity wanted this.

But who did and didn't want this is a red herring. The point is the crash would never have happened if politicians in Washington - led by Democrats Jimmy Carter and Bill Clinton - didn't force banks to extend mortgages to people who couldn't repay them.

Of course, we wouldn't have seen such growth if politicians in Washington (led by Jimmy Carter and Bill Clinton) hadn't artificially expanded demand by lowering lending standards. When the government distorts the market - especially on that scale - you increase the risk that something bad is going to happen and people predicted it would happen decades ago.

"Supply side economists driving for unrealistic growth"

 

So, let's see if you will answer. So far, I have posted this on the forum a few times and not a single critic of the tariffs managed to engage.

Here is your two options regarding global trade agreements:

1. We can outsource manufacturing to countries with less human and environmental regulations whom are able to produce goods at lower value. This in turn reduces wage earnings for Americans as manufacturing jobs give way for low paying service industry. As a result, you have people who earn less able to purchase cheaper goods.

Or

2. You institute tariffs offsetting the regulation differences and making it less appealing for manufacturers to outsource. This is done by removing the profit margin increase they see with cheap labor overseas. What you end up with is more high paying jobs in the US and products that cost more.

So, what say you?

 

Somebody doesn't understand what leverage is.

 

So... just to make sure I understand you.

1. You are cool with creating economic balloons so long as you can buy cheap ****.

2. You are good with low paying minimum wage jobs being the norm in lieu of good paying manufacturing... if you can buy cheap ****.

3. You are willing to turn a blind eye to labor atrocities in under developed nations, so you can buy cheap ****.

4. You dont mind the environmental implications of virtually no protections in these under developed nations as long as you can buy cheap ****.

Did I get that about right?

 

Cool story.

I support free and open markets too. But the rules have to be the same.

How about this. Open a business that has to meet labor requirements, pay taxes, payroll, Medicare, SS, comply with environmental regulations, appropriate licenses and fees...

And I'll open a business with zero rules. I'll pay immigrants a penny on the dollar what you are forced to pay, ignore every other requirement you have, and then we will sell the same product to the same consumer. Then, I'll devalue my currency against yours and make my products even less expensive.

You wont be in business very long.

 

Which amounts to 13 trillion dollars.

Quite small compared to normal debt to GDP ratios.

 

No, I am merely explaining the existing order, not saying it is ideal but criticizing the supposed solutions via protectionist policies being advocated here. I think we should be moving more towards a common market where wages and regulations are the same, and I don't think this gets us there. I think we need collaboration and diplomacy, not strong man bullying.

 

Someone is under the delusion that we have all the leverage, this is merely more risk to a system which is overrun by risk thanks to this administration.

 

I do not recall being pro trade wars.

Trump has a major problem referencing China. Seems to me he is directly impacting them.