WarRI1 wrote:We have given China the financial means to challenge us, so we now have two strong enemies instead of one. Stupid, stupid, stupid.
It is a bit of a simplistic and binary assessment. And this is the problem when it comes to dealing with China, they are easy to vilify and politicians will gladly foster that concern and ride on it, like Trump did.
The fact is that the Western economies have profited massively from China as well. What the negative trade deficit tends to hide is the massive growth in domestic consumption and the growth of the associated local supply and retail chain.
When you pay $1 for an item made in China, only a tiny fraction of that money actually goes to the manufacturer in China, and the rest of it goes to the various companies and intermediaries which take care of the shipping, distributing and selling to the consumer. Most of those companies are not Chinese.
While it is true that China has profited enormously from that trade and taken advantage of the West's appetite for cheap Chinese goods, it is way too simplistic to assume that imposing trade tariffs would allow beneficial results at home...
Even if you assume that China will not retaliate (which they obviously will do), at best, you are only encouraging sourcing companies and manufacturers to move to the second cheapest location, such as other countries in Asia or Central America.
You may make some domestic products more profitable, but only by raising the price of the imported ones, thus creating inflation and decreasing your consumer's purchasing power. Inflation can be extremely dangerous in an economy, like that of the US, which is based a lot more on domestic consumption and services than manufacturing...
Western countries have had to deal with that conundrum for many years now. Do we try and remain competitive with cheap Asian producers on the manufacturing scene,or do we accept that our economies have moved on to consumption, services and higher technologies and try to do our best to transition the blue-collar workforce to new industries that are growing, or do we try to close our doors to the competition so that we can dig our own coal and manufacture our own toasters, while putting our entire economic model at risk?
I'll tell you what China is doing: They are looking at the future and at their own post-industrialized economy already and investing big in the technologies and industries of tomorrow while the US is doing its best to close its doors to the World and stunt technological growth so they don't have to worry about dealing with unemployed black-faced miners.
You can say what you want about Beijing's oppressive regime, and I dislike their way as much as the other westerner, but they are dastardly intelligent about the way they are steering their country and preparing it for the future and ensuring their ineluctable global dominance. Having a de facto leader for life also ensures that this vision will be perpetrated on the long term.
On the other side of the Pacific, you have an outstandingly moronic leader who seems unable to comprehend those simple facts and who is, through his short-sighted populist measures, precipitating the decline of the US on the global economic scene, along with its intellectual and diplomatic dominance.
It's sad to watch, really.
Not that I am against some balancing measures when it comes to China. the topic of intellectual property and company ownership has been mentioned and is vastly biased towards China in their quest to obtain as much technological know-how from the West as they could while retaining control of their industry. There is no doubt that Western companies are still benefiting from even partial access to the Chinese market, but there is room for reciprocity. That is something that should be changed through intelligent negotiation and a bit of diplomatic arm-twisting if required.
That said, I don't see anything in Trump's measure that would do anything about that, unless I missed it.
In short the US, through Trump's harebrained grandstanding, is guaranteeing itself a harder access to the Chinese market, the very one which will soon become the biggest in the World... Why people think he has the intellectual ability to understand the intricacies of global trade, much less negotiating deals around them, is a complete mystery to me. There is a reason other, more pragmatic Western leaders have been very cautious about starting trade skirmishes with China; they are smart enough to see both sides of the coin.
Sorry, that was a bit long in the tooth.