[NA] Practical tariff impact

I think it is unwise to underestimate effect of the difference in their governance format and their historical willingness to do exactly that if leaderships decides it is in their long term best interests. (I’m probably wrong, definitely would be the first time).

Oh, I don’t underestimate that at all. China’s biggest problem will be the long tail of the single child policy.

There’s a lot of disgruntled men in that country that are having a hard time finding a spouse and that will continue for another half-century. There’s not much disgruntled men are good for except as cannon fodder. That group is likely China’s largest threat to deal with.
 
I don’t see China buying Yen and the EU can’t absorb all of China’s need for convertible currency.

In a perverse sort of way, the tariff decisions may be a play to force other countries to choose to align with the US or align with China in a new bi-polar world.

The problem China faces (economically) is they have so much tied up in US treasury notes that America going bankrupt hurts us but destroys China.
Really doubt that any tariffs was needed to force the world to align against China. China was doing a great job of that on their own by their actions in the Spratly Islands (territorial encroachment), their treatment of minorities, their support for Russia in Ukraine, their control of foreign firms requiring technology transfer to do business in China, their lack of rule of law meaning they can lock up anyone they want anytime, and so on.

Interestingly to me, it seems most of your present events in the USA make it more and more like China in those areas that China used to lead in the wrong way before.

Just today China threaten any nations that makes deals to align with USA on trade against China. Sure, call America a bully and then try to bully others yourself. There is no winner in this game right now.
 
Really doubt that any tariffs was needed to force the world to align against China. China was doing a great job of that on their own by their actions in the Spratly Islands (territorial encroachment), their treatment of minorities, their support for Russia in Ukraine, their control of foreign firms requiring technology transfer to do business in China, their lack of rule of law meaning they can lock up anyone they want anytime, and so on.

Interestingly to me, it seems most of your present events in the USA make it more and more like China in those areas that China used to lead in the wrong way before.
Ugh. Before I got to your last sentence I was thinking "OMG this is what the US is doing right now!"

Territorial encroachment? See comments about Greenland, Canada, Panama
Treatment of minorities? Our entire history is pretty bad with that, but recent years have been especially bad.
Support for Russia in Ukraine? Yeah, we seem to have swapped sides on this one, with aid to Ukraine being cut
Technology transfer? Finally, one that we don't do to my knowledge.
Lock up anyone anytime? Whoo boy, we're 4 of 5. :(

There is no winner in this game right now.
And it doesn't look like any country will be winning. Certainly there are some individual people who will be enriched, but at what cost to the nation as a whole?
 
Just going to say this, I truly believe that a strong industrial production capacity was the key to the outcome of wwii, and it is essential for national defense, but with the latest national figures for the United States showing (I think) 4% unemployment, where are the workers to man the factories going to come from if the factories could magically appear in six months?
 
I don’t see China buying Yen and the EU can’t absorb all of China’s need for convertible currency.

In a perverse sort of way, the tariff decisions may be a play to force other countries to choose to align with the US or align with China in a new bi-polar world.

The problem China faces (economically) is they have so much tied up in US treasury notes that America going bankrupt hurts us but destroys China.

China has been divesting for a number of years. I believe they are down to 800B.
And China's hard currency reserves pale in comparison to all the Sovreign wealth funds, hedge funds...

Tim
 
Just going to say this, I truly believe that a strong industrial production capacity was the key to the outcome of wwii, and it is essential for national defense, but with the latest national figures for the United States showing (I think) 4% unemployment, where are the workers to man the factories going to come from if the factories could magically appear in six months?

All the illegal immigrants who failed to self deport?

Tim (I could not resist)
 
Just going to say this, I truly believe that a strong industrial production capacity was the key to the outcome of wwii, and it is essential for national defense, but with the latest national figures for the United States showing (I think) 4% unemployment, where are the workers to man the factories going to come from if the factories could magically appear in six months?
Well, we could make all the womenfolk work! :rolleyes:

Oh, wait.
 
where are the workers to man the factories going to come from if the factories could magically appear in six months?
If 2017 and covid were any indications here more automation and AI would be used for those new requirements. And from what I've told it scales up quickly with minimal "training" needed. I know several business owners during covid who would have gladly gone to automation if it were possible. Unions may not like it but its definitely the trend across many industries.
 
Just going to say this, I truly believe that a strong industrial production capacity was the key to the outcome of wwii, and it is essential for national defense, but with the latest national figures for the United States showing (I think) 4% unemployment, where are the workers to man the factories going to come from if the factories could magically appear in six months?
If 2017 and covid were any indications here more automation and AI would be used for those new requirements. And from what I've told it scales up quickly with minimal "training" needed. I know several business owners during covid who would have gladly gone to automation if it were possible. Unions may not like it but its definitely the trend across many industries.

Yes and yes.

The idea is not jobs. It is production. Nobody wants factories full of old ladies sewing Nike swooshes on running shoes, and men losing arms grinding and welding. I think the aim is to be more like Germany, with predominantly skilled workers running highly automated factories. Like what Musk did at Tesla and SpaceX.

Hard to argue with that as a goal. The issue is the method.
 
Yes and yes.

The idea is not jobs. It is production. Nobody wants factories full of old ladies sewing Nike swooshes on running shoes, and men losing arms grinding and welding. I think the aim is to be more like Germany, with predominantly skilled workers running highly automated factories. Like what Musk did at Tesla and SpaceX.

Hard to argue with that as a goal. The issue is the method.

How can anyone tell that’s the goal when they apply tariffs on everything.

Realize that those imports support a lot of jobs in transportation as well.
 
Just going to say this, I truly believe that a strong industrial production capacity was the key to the outcome of wwii, and it is essential for national defense
I'll say this. Something that seems to get lost in all this is that interconnectedness and codependent reliance on other nations is ALSO essential for national defense. This is one of the goals of the soft diplomacy that is currently being dismantled. But it's also one of the benefits of free trade. Nations that depend on one another are vastly less likely to go to war with one another. China knows this and, as the manufacturing center of the world, can get away with spending half (as a percentage of GDP) of what the US does on defense because it knows that there isn't a country in the world that can afford to invade and take out, well, the manufacturing center of the world. Trade is critical to national security.
 
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Nations that depend on one another are vastly less likely to go to war with one another. ...

possibly true if nations have the same value systems.

It's a mistake to think that the mainland china government, north korea, South Korea, Japan, England, Canada, etc etc etc all have the same value system and objectives.
 
possibly true if nations have the same value systems.

It's a mistake to think that the mainland china government, north korea, South Korea, Japan, England, Canada, etc etc etc all have the same value system and objectives.
Not true at all. Quite the opposite. Trade dependency is one of the things that can increase security even if the trade partner has different values and objectives. The trading partner could have a completely different view on wealth distribution or religion, but if there is a mutual dependency on trade, that makes conflict vastly less likely. Look at mainland china government, South Korea, Japan, England, Canada, etc etc etc. They have very different values and objectives, yet have had decade after decade without major military conflict because they are active trading partners. From your list, what's the one that doesn't actively trade: North Korea. Which is the one that is a wildcard and/or threat? north korea.

But, no, trade isn't the only thing that matters. Just pointing out that it does matter a lot and people tend to undervalue it.
 
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Not true at all. Quite the opposite. Trade dependency is one of the things that can increase security even if the trade partner has different values and objectives. The trading partner could have a completely different view on wealth distribution or religion, but if there is a mutual dependency on trade, that make conflict vastly less likely. Look at mainland china government, South Korea, Japan, England, Canada, etc etc etc. They have very different values and objectives, yet have had decade after decade without major military conflict because they are active trading partners. From your list, what's the one that doesn't actively trade: North Korea. Which is the one that is a wildcard and/or threat? north korea.

But, no, trade isn't the only thing that matter. Just pointing out that it does matter a lot and people tend to undervalue it.
I'm not sure if you consider that a good thing, but I don't.

Trade might allow you to avoid conflict, but there are things far worse than conflict. Like normalizing your trading partners behavior because it's economically convenient.

It's why KSA's monarchy can order US residents to be chopped up with bone saws in a Turkish embassy and still earn a fist bump from our president. Or they can use our weapons to indiscriminately bomb civilians in Yemen. Sure, we avoid a little scuffle with them because of oil, but only because it suits our interests. Some conflicts are worth having to course-correct your trading partner.

EDIT: Another example would be tolerating China's re-education camps in Xinjiang, their continual threatening of Taiwan, or their disappearing act for dissidents. We put up with it because what's our alternative? Stop trading completely? That's economically painful. So let's take the wrong path 10/10 times.
 
Not true at all. Quite the opposite. Trade dependency is one of the things that can increase security even if the trade partner has different values and objectives. The trading partner could have a completely different view on wealth distribution or religion, but if there is a mutual dependency on trade, that make conflict vastly less likely. Look at mainland china government, South Korea, Japan, England, Canada, etc etc etc. They have very different values and objectives, yet have had decade after decade without major military conflict because they are active trading partners. From your list, what's the one that doesn't actively trade: North Korea. Which is the one that is a wildcard and/or threat? north korea.

But, no, trade isn't the only thing that matter. Just pointing out that it does matter a lot and people tend to undervalue it.

"because they are active trading partners" - you are claiming motives... that's an amazing ability you think you have.
 
I'm not sure if you consider that a good thing, but I don't.

Trade might allow you to avoid conflict, but there are things far worse than conflict. Like normalizing your trading partners behavior because it's economically convenient.

It's why KSA's monarchy can order US residents to be chopped up with bone saws in a Turkish embassy and still earn a fist bump from our president. Or they can use our weapons to indiscriminately bomb civilians in Yemen. Sure, we avoid a little scuffle with them because of oil, but only because it suits our interests. Some conflicts are worth having to course-correct your trading partner.

EDIT: Another example would be tolerating China's re-education camps in Xinjiang, their continual threatening of Taiwan, or their disappearing act for dissidents. We put up with it because what's our alternative? Stop trading completely? That's economically painful. So let's take the wrong path 10/10 times.
Very good point about KSA. Very different goals and objectives, but not really a military threat. Or, at a minimum, a second or third tier military threat that is kept largely under control precisely because they are so dependent on trade.

Yes, I agree there is good and bad in all this. Just stating that the original claim about domestic manufacturing increasing national security does have the unexpected side effect of also increasing international tension.

"because they are active trading partners" - you are claiming motives... that's an amazing ability you think you have.
Uh, no.
 
Trade is a national interest. But other national interests can be more important to a country. Trading partners go to war all the time when they think the benefits of force outweigh the benefits of trade.

China and Russia, for instance, currently appear to prioritize territorial integrity. Both view the last 100 years of history as having separated areas traditionally considered part of their nations, and are determined to take them back. The leaders of both countries appear to be willing to sacrifice economic goals to achieve their larger territorial goals. Russia has endured massive sanctions to take Crimea and the Donbass. China is clearly preparing to invade Taiwan, despite the obvious negative economic impact that will have.

That is why promoting the growth of democracy is important, and why democratic nations must build strong alliances. Democratic nations very rarely go to war against each other. They are more directly responsive to the wishes of their citizens, and it turns out people generally don't like the outcome of wars. Xi Jinpeng and Putin are insulated from accountability to their citizens by their political systems, and are therefore able to drive popular support through propaganda and direct pressure. That enables them to start and sustain unjust wars.
 
Very good point about KSA. Very different goals and objectives, but not really a military threat. Or, at a minimum, a second or third tier military threat that is kept largely under control precisely because they are so dependent on trade.

KSA is a counterbalance to a larger and more aggressive regional threat.
 
possibly true if nations have the same value systems.

It's a mistake to think that the mainland china government, north korea, South Korea, Japan, England, Canada, etc etc etc all have the same value system and objectives.
Sweden didn't get invaded by the Nazis, probably because they were selling them strategic materials. I doubt that they had the same value system.
 
Many of the recent posts above highlight the original purpose of the European Economic Community - today’s EU: stop centuries of fighting between neighbors. Even former Eastern Bloc countries are in.

As LBJ said, “Better to have your enemies inside the tent ****ing out, than outside ****ing in”

Then again, generically, someone inside the tent ****ing all over everywhere and everyone defeats the purpose…
 
... And yet the average American will usually have much more in common with an Iranian than a Saudi :) (at least in my experience)

But it's not about average people, it's about the policies their political system generates. The average American had a lot in common with the average German in 1940 too.

The Iranian revolution produced a messianic theocracy determined to redress their historical grievances. Those include the Shah, the formation of Israel, the death of Ali at the battle of Karbala in the 7th century, and the conquest of the Persian empire by Alexander the Great. Needless to say, they have issues.

The KSA, for all their faults, are mostly internally focused. They just want to be left alone to pump oil, drive Bentleys, and oppress their women.
 
The KSA, for all their faults, are mostly internally focused. They just want to be left alone to pump oil, drive Bentleys, and oppress their women.
And keep immigrant slaves in their homes and abuse them, sometimes killing them with impunity. Whilst also treating any non-saudi (or visiting wealthy expat) like a 10th class citizen. And also imprisoning, torturing (or chopping up) dissidents.
Apparently royal family members also like to occasionally pursue hobbies like funding September 11th or ISIS.

But they will never be on the "axis of evil" for $ reasons :)

They just want to ... [and] oppress their women.
And yet it didn't stop them from unanimously winning the chair position for UN Women's Rights Commission last month.

But it's not about average people, it's about the policies their political system generates.
You're absolutely right about that. And that's the unfortunate and arbitrary dynamic I think that poem sought to capture.
Hopefully some day the Iranians can run the Ayatollah and his IRGC out of town -- cuz the whole country gets a bad reputation largely b/c of those ****ing clowns.
 
What's interesting to me in this discussion is how much of it is about small potatoes. I mean it's a lot of "my view", "my experience" and so on. The economy is a larger beast then any one person or company.

What I do know is that USA was at 4% unemployment and that's consider full employment. I also know that as senior management that my job (lol small view) isn't to do the work but to enable others to do it, and that is what I am suppose to bring value to. To me (again lol), this means I don't see how USA intents to staff it's newly open factories with such low employment. And I know some people would say automation but honestly there's a reason why no one is fully automated. And it also strike me as interesting that bringing the jobs back is the only concerns. There's that constant refrain in this thread about how big corp is taking all the money (which they are to some extent), but no one seems to have thought about how having others do stuff you don't want to or don't have the people to, means achieving more overall. With 4% unemployment bringing all that factory jobs back will maybe create new jobs, but at the expense of other industries? Wages will go up but then so will prices. Overall wealth creation will not be greater if we assume 1 human's worth of work is equal in all industry. All the tariffs would have done is eliminated the work of humans outside the USA and that contribution to the wealth of the USA. I'll wait and see what happens but I suspect it's going to be a negative out come.

I also read this and thought it was interesting: https://arstechnica.com/tech-policy...trumps-tariffs-wont-bring-manufacturing-back/
Regarding the article, there's a lot of good info there. The one thing that will somewhat nullify about 75% of the reasons why it shouldn't be done is: time. We don't have the equipment, we don't have mold makers, we don't have people with the training, etc. can all be addressed given a long enough time span. Bringing in machines, having mold makers pop up to fill that gap, building additional power plants, having a workforce trained to build semiconductors, etc. are all things than can be done inside a decade. So those points are certainly obstacles to address in the long-term, but bringing back some factories in the first few years doesn't generally require a complete overhaul of the American infrastructure. Trying to strip EVERYTHING that we have produced in China or other LCCs would certainly be a calamity. The question then becomes: how long are we willing do endure the tariffs and how steadfast will the commitment to onshoring chosen industries be? As mentioned in the article, companies aren't willing to pony up hundreds of millions in capital investment if the POTUS is changing his mind every other week on what tariff rates will be or whether they exist at all.
 
Regarding the article, there's a lot of good info there. The one thing that will somewhat nullify about 75% of the reasons why it shouldn't be done is: time. We don't have the equipment, we don't have mold makers, we don't have people with the training, etc. can all be addressed given a long enough time span. Bringing in machines, having mold makers pop up to fill that gap, building additional power plants, having a workforce trained to build semiconductors, etc. are all things than can be done inside a decade. So those points are certainly obstacles to address in the long-term, but bringing back some factories in the first few years doesn't generally require a complete overhaul of the American infrastructure. Trying to strip EVERYTHING that we have produced in China or other LCCs would certainly be a calamity. The question then becomes: how long are we willing do endure the tariffs and how steadfast will the commitment to onshoring chosen industries be? As mentioned in the article, companies aren't willing to pony up hundreds of millions in capital investment if the POTUS is changing his mind every other week on what tariff rates will be or whether they exist at all.

That's a good point. Focus on trend rather than end state, because the end state may never arrive. Reverse the tide of the last 2 decades and provide incentive to start moving production back onshore. Trust the markets over time to sort out which types of production in the US make more sense under the new trade conditions.

I had a talk with a close friend last night. He has deep experience in a particular federal agency. The view in the federal government right now is that everything is about China. They are our peer competitor for the next two generations, like the Soviets were in the 50's through 80's.

He says the tariffs are all about China. If we goad them into a trade war and it tanks their growth, it sets back their economic trajectory for overtaking us by about 2 decades. All the other countries are just camouflage for that main objective.
 
He says the tariffs are all about China. If we goad them into a trade war and it tanks their growth, it sets back their economic trajectory for overtaking us by about 2 decades. All the other countries are just camouflage for that main objective.

If that is actually true; the approach taken is about a bad as I can foresee. The President has ****ed off friends and allies, has lost the trust of many other countries, has destroyed most of the "soft power" in the third world, has taken away the "moral high ground" in many cases, has endangered the US status as a "global reserve currency".... For many adherents of the administration, that "might be the point" since these are things mostly attributed to the "elites". They also have a common belief it is better to be feared than be loved. However, countries that are feared also fall faster than those that are loved. Those who stand alone, inevitably fall alone.

China also has a massive demographic problem, that will start to show up in roughly ten years. When Gen X starts to "retire". Basically from 2035 onward, the pace of the population decline in China accelerates; this is roughly 65 years after the one child rule was implemented.

Tim
 
People do realize they can just as easily do a 3 child policy.

Not sure why so many tries to make sense of what damage been done so far as something other than ill thought out knee jerks.
 
People do realize they can just as easily do a 3 child policy.

Not sure why so many tries to make sense of what damage been done so far as something other than ill thought out knee jerks.

China has effectively tried to do so. The result was a hashtag #lastgeneration trending by young women in the country.

Tim
 
He says the tariffs are all about China. If we goad them into a trade war and it tanks their growth, it sets back their economic trajectory for overtaking us by about 2 decades. All the other countries are just camouflage for that main objective.
That smells like a Pyrrhic victory at best.
 
And still not correct. Boeing doesn't need a PMA because their type certificates and production certificates give them the ability to take any part from anywhere and make it a Boeing part. Or a Cessna part. Or a Bell part. Been that way for decades. Its the same reason an OEM modification needs no additional "approvals" to install on the aircraft.
Not quite. 2018 boeing parts were kind of taken out of PMA - world and brought under boeing production certificate. I'm gonna bet a warm diet walmart cola that the FAA still requires the same process, just done by boeing.

BUT......


Do a word search for PMA

Why not? An A&P can legally install a bearing from Bob's House of Bearings on a TC aircraft as an alteration. If the bearing install falls under a major alteration that he determines, then he needs approved data. No different than installing a Cobra marine radio in an aircraft. So I don't see your issue. As for VARMA its useless in my book without any FAA guidance issued. Besides an A&P could install any part under VARMA as an alteration as well.

This is an absurd example. You're saying 'if you can get someone to approve it, then its approved!' Whats gonna be more realistic, paying a DER for a stamp of approval or buying a PMA part? IA's cannot create approved or acceptable data, on the FAA (aka DER) can do that. Also VARMA is for minor alterations. So the above example is still absurd.
 
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China has effectively tried to do so. The result was a hashtag #lastgeneration trending by young women in the country.

Tim
The one child policy in China was a fail. My wife, born during the one child era had 1 brother and 2 sisters. Her parents did pay a fine, 10 woven baskets (being poor in China is still a thing). Unless you were a CCP party member, it was not taken seriously.

The real driver of the one child policy was simple poverty.
 
You guys are talking about UBI like it's just a theory. AFAIK, it's been around for 30+ years in at least a couple of countries and it works just fine for them. I went to school with a guy from UAE, and they have it. There is one minor catch, though. The people who are actually citizens of the country, because they don't have to, don't work. Pretty much at all. So all of their labor is done with imported non-citizens. Economic slave labor if you want to call it that? The income comes from the tax on the oil flowing through their ports and refineries. So yeah, if you're a country that can afford to pay a certain number of citizens to sit around while you sell off natural resources or rent real-estate, and don't mind imported labor who will be absolutely paid lousy and by the hour, it'll work fine. It's actually a pretty similar model to colonialism, in a way. Worked out great for the British and others for a long time. Pretty sure they taught class based society to some of their colonies, and that to a degree or another it stuck.

Anyone that thinks it would work as some form of utopian "everyone will just help out because they want to" system either has no understanding of the history of humans on earth, or somehow believes this can all change if someone sings the right magical folk tune to them. Now, if you really don't believe it, and are just saying you believe it because you're completely good with a government coming in to force people to work, well, then you're reading right along with the folks who put together an excellent road map for creating a totalitarian regime, similar to the ones that have been collectively responsible for more death and suffering than all other governments, across all of history, combined. But sure, it might work.

I would tease my M series BMW driving friend, who was otherwise a smart guy but claimed to be a "globalist" that he must not like either vegetables or gasoline. Because slice it any way you want, there's not enough of either to go around to bring the world to anywhere near our standard of living. Today you could add electricity to that. So if that's the plan, figure out in advance which 3 days of the month you want vegetables for you and the kids. I'm not saying that's good, I'm saying it's the reality.
 
You guys are talking about UBI like it's just a theory. AFAIK, it's been around for 30+ years in at least a couple of countries and it works just fine for them.
At least according to the Wikipedia page on the subject, no country has UBI today. There have been (and are) experiments. Alaska has "partial basic income" but it's nowhere near enough to really call it UBI.

Anyone that thinks it would work as some form of utopian "everyone will just help out because they want to" system either has no understanding of the history of humans on earth, or somehow believes this can all change if someone sings the right magical folk tune to them.
I don't think everyone will help out. People are lazy. Smart, driven people can make extra money if they want. And if someone doesn't want to, they don't have to. QOL won't be great but they'll survive... And we won't need any more bureaucracy around welfare/SNAP/etc because everyone gets it and there's no paperwork to demonstrate a need, no staff trying to help you get off it, etc.

I would tease my M series BMW driving friend, who was otherwise a smart guy but claimed to be a "globalist" that he must not like either vegetables or gasoline. Because slice it any way you want, there's not enough of either to go around to bring the world to anywhere near our standard of living. Today you could add electricity to that. So if that's the plan, figure out in advance which 3 days of the month you want vegetables for you and the kids. I'm not saying that's good, I'm saying it's the reality.
I'm not at all saying this would be done around the world... Just here, as one solution to all of the jobs that are going to go away with more AI and automation.
 
China also has a massive demographic problem, that will start to show up in roughly ten years. When Gen X starts to "retire". Basically from 2035 onward, the pace of the population decline in China accelerates; this is roughly 65 years after the one child rule was implemented.
I question whether there was a "one child policy". All my friends and colleagues there, the oldest I know being in their 50s, have siblings. I'm told it was only "enforced" in some places.
The one child policy in China was a fail. My wife, born during the one child era had 1 brother and 2 sisters. Her parents did pay a fine, 10 woven baskets (being poor in China is still a thing). Unless you were a CCP party member, it was not taken seriously.
Yes, being poor there seems to be still a thing, based on things I have seen. The best explanation I've heard was that the "one child policy" only applied to some places, but not the cities. I recognize my "sample" probably isn't representative of the population, being mostly scientists.
 
People do realize they can just as easily do a 3 child policy.

That does not solve for 50 years of female ratio is way skewed and women are the key ingredient to reproduction.
 
@pfarber @Cap'n Jack

China has been poor for hundreds of years. Yet, only after the one child policy was implemented did the birth rate drop significantly. Was it applied unevenly? Very likely.
Did it have an effect on birth rates? Extremely likely; it could be via social engineering, incremental cost such as the basket fine... The birth rate dropped significantly in China in the early 70s when this was passed and has plateaued pretty to a low number for a few decades before dropping even lower in the last decade.

Tim
 
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