U.S. and China agree to slash reciprocal tariffs in major step toward easing trade war

[Ikari]

Then why go through all this, Metric Mouse?

We should play to our strengths, not try to compete with the cheapest manufacturing labor.

That's what we should be doing. When we decided to push the dollar as the default currency for international trade, we were sold the idea that we would move away from manufacturing and instead upskill our labor into more technologically forward endeavors and production. Go to college, get a good job, etc. That's what we should do, we should lean hard into science, engineering, and other more advanced technology, development, and innovation. It's not time to go backwards, it's time to actually fulfill that bill of goods we were previously sold.

 

[SuperDS77]

If you seriously want to revive American manufacturing, then you need to subsidize American industries with federal money, exactly like the Chinese are doing. You can't just raise tariffs and then hope for the best. That's not gonna work. You'll end up trashing the quality of life for working class Americans, in exchange for nothing at all.

Wouldn't lowering (or eliminating) corporate tax rates have a similar outcome? It may, at least, offset some of the impact of tarriffs.

 

[SuperDS77]

What about the other side of the equation of less tariffs being applied to American goods?

 

[Irredentist]

You can have imports while maintaining a healthy trade balance. A trade imbalance simply means you're buying more than you're selling.

But it's okay to buy more than we sell. We don't need our trade to be balanced. There are plenty of ways to make money, other than by exporting manufactured goods.

 

[Ikari]

Wouldn't lowering (or eliminating) corporate tax rates have a similar outcome? It may, at least, offset some of the impact of tarriffs.

Well Trump seems to think he can EO magic price decreases, so why doesn't he just EO corporations to lower prices?

lol

 

[Ikari]

What about the other side of the equation of less tariffs being applied to American goods?

Yes, Americans will pay more for products, Chinese consumers will pay less.

 

[Chomsky]

There isn’t a rabbit hole. If anything, this is a matter of people not feeling like they have to state the obvious. Trading with China is bad because it isn’t a level playing field. The global market is not even close to competitive because of how much the Chinese government owns and subsidizes their industries. Domestic producers are either undermined by cheap Chinese imports to the point of near extinction or bought by Chinese companies.

Consequently, our economy has become so dependent on Chinese imports and manufacturing that it cannot function without those things. The pandemic exposed just how dependent we’ve become on them. That a foreign country has that much leverage is an economic, national security, and strategic catastrophe. And the only way to recover from that is to try to induce a revival in American manufacturing by making Chinese products more expensive.

Besides the niches that are of strategic national interest (health, defense, IP property), I have yet to see it demonstrated that free trade hurts Americans.

We American citizens enjoy one of the highest qualities of life on the planet, brought to us by free trade.

Besides the niches I referenced in my first sentence, to which we are willing to pay a premium, attempting to bring general manufacturing of various & sundry items back to America is a fool's errand. It will never happen. Attempts at the tax levels required to precipitate that would only impoverishing the American people.

 

[watsup]

90 day pause. leaves tariffs on Chinese exports at 30% / US exports are 10%.. read the entire link for details

U.S. and China agree to slash tariffs for 90 days as trade talks continue

The world’s two biggest economies agreed to a temporary rollback of most of their recent levies after negotiating in Switzerland over the weekend.

www.nbcnews.com

HONG KONG — The United States and China said Monday that they had agreed to a 90-day pause on most of the tariffs they have imposed on each other since last month, sending stocks soaring amid hopes of an easing trade war between the world's two largest economies.

Bessent rejected the suggestion that it might have been better to start with negotiations rather than announcing a series of tariffs that caused global financial turmoil, saying the U.S. had already tried to rebalance trade by working within the system and that “business as usual” would not have worked.

In an interview Monday morning on CNBC, Bessent said that the two countries now have "a mechanism to avoid the upward tariff pressure."

Thirty percent is way too much. There will still be Trump-caused inflation that will hurt those at lower economic levels the most. The guy is a flaming idiot.

 

[CaughtInThe]

No one group that I've ever seen is as gullible and short sighted as MAGA.

They're like Amway's targets.

 

[SuperDS77]

Yes, Americans will pay more for products, Chinese consumers will pay less.

Chinese consumers will have the opportunity to buy more also.,

 

[Irredentist]

Wouldn't lowering (or eliminating) corporate tax rates have a similar outcome? It may, at least, offset some of the impact of tarriffs.

Possibly, but that's not gonna do anything about the exponentially higher cost of labor in America, or the higher cost of materials, or the higher cost of building factories. All of these factors compound each other to make domestic manufacturing unfeasible for most products, other than strategic industries.

 

[Napoleon]

If you seriously want to revive American manufacturing, then you need to subsidize American industries with federal money, exactly like the Chinese are doing. You can't just raise tariffs and then hope for the best. That's not gonna work. You'll end up trashing the quality of life for working class Americans, in exchange for nothing at all.

If we’re being honest about the problem statement, the problem is that the American manufacturing industry was murdered by unions and labor laws. That’s why we’re dependent on China, Southeast Asia, and India - because Americans demand that somebody be exploited so the widgets they want to buy are dirt cheap. That’s really why they’re howling now about tariffs and why we’re in this predicament in the first place.

You talk about “trashing the quality of life”but that quality of life is built on foreign slave labor. Whether it’s by tariffs or “fair” and humane working conditions - Americans need to get used to the idea of paying what that costs if we’re ever going to get our economic independence and resiliency back.

 

[ALiberalModerate]

If this were true, you *would* know where to begin. You need to read a bit more on trade deficits.

There is nothing wrong with a trade deficit. We are a country that has ran trade deficits on goods for decades, yet we have an economy that is the envy of the world. Moreover, on services, where there is a much, much higher margin than in goods, we have a trade surplus.

Take the following example. An outdoor goods company outsources the production of its tents, hiking poles, and outwear to China. It has exact standards on how it's goods are produced, and it has made various manufacturers in China compete on the production of those goods. As a result, those manufacturers have an average of 5% markup on those goods. That outdoor goods company imports them and puts anywhere from 30% to 300% markup on them. Thus the outdoor goods company captures much more economic benefit from those goods than the Chinese companies that made them. Moreover, to keep the Chinese manufacturing companies competitive, the Chinese government has to pursue economic policies that artificially lower wages there. In contrast, Americans have seen their wages increase for decades to the point where the average American earns more than the average Western European, the average Canadian, the average Japanese citizen, and the average Aussie.

While there is an argument for near-shoring critical technology, there is no economic issues at all with running a general trade deficit. Would you rather be a software engineer at Apple, or someone sorting plastic soldiers into bags that will be sold for 2 dollars each in the west?

 

[SuperDS77]

Well Trump seems to think he can EO magic price decreases, so why doesn't he just EO corporations to lower prices?

lol

So you support lowering corporate taxes since they increase the cost of doing business in the USA? I agree!

 

[Airyaman]

What about the other side of the equation of less tariffs being applied to American goods?

British and Chinese citizens say "thanks!".

 

[Ikari]

So you support lowering corporate taxes since they increase the cost of doing business in the USA? I agree!

But the whole point of the tariffs...well part of the point we were being sold on....was all the money we're going to make. How are we going to make money by offsetting any gains from tariffs by lowering corporate taxes?

lol

 

[Simon W. Moon]

We’re talking about China here. Hellooooo.
We’ve been f****d around by China long enough. Just like the border, he’s doing something about it.

THANK GOD!

If not for Trump doing something, who else would have shot the US in the foot?

 

[Plasmaball]

We’re talking about China here. Hellooooo.
We’ve been f****d around by China long enough. Just like the border, he’s doing something about it.

He's not doing anything but costing me money

 

[SuperDS77]

But the whole point of the tariffs...well part of the point we were being sold on....was all the money we're going to make. How are we going to make money by offsetting any gains from tariffs by lowering corporate taxes?

lol

Increasing economic output and lowering prices thereby creating an improved standard of living.

 

[Chomsky]

GDP is a metric for economic performance. A trade deficit means we're buying more than we sell. In your example, you'd be buying more groceries (or whatever) than you make selling your labor.

That's not to say that sometimes it doesn't make sense to go into debt for long term growth (as is still often the case with higher education). That's a debate actually worth having. But to claim that the trade deficit is like buying from a grocery store

or that it's simply a 30% tax on Americans is just simply wrong and doesn't really advance the debate.

Which more often than not indicates exploitation - a narrow export sector with very little domestic benefit, where the people who benefit (or are hurt by tariffs) are largely foreign corporations or the very powerful.

It might be fair to attempt to argue "tariffs serve a strategic purpose" or some other argument.

But tariffs are indeed a tax born by the citizens of the host country. Those taxes are paid domestically by the purchaser, upon receipt of the goods in Customs.

 

[Simon W. Moon]

So you support lowering corporate taxes since they increase the cost of doing business in the USA? I agree!

Have you ever noticed that lowering costs is not identical to lowering prices?​

 

[Ikari]

Increasing economic output and lowering prices thereby creating an improved standard of living.

But if you're just balancing out what could be gains, how are we improving anything? It sounds more like maintaining a status quo.

lol

 

[Irredentist]

If we’re being honest about the problem statement, the problem is that the American manufacturing industry was murdered by unions and labor laws. That’s why we’re dependent on China, Southeast Asia, and India - because Americans demand that somebody be exploited so the widgets they want to buy are dirt cheap. That’s really why they’re howling now about tariffs and why we’re in this predicament in the first place.

You talk about “trashing the quality of life”but that quality of life is built on foreign slave labor. Whether it’s by tariffs or “fair” and humane working conditions - Americans need to get used to the idea of paying what that costs.

Actually, Americans DON'T need to get used to that. We're perfectly fine relying on foreign workers being paid pennies to produce cheap goods that we buy at Amazon and Walmart. Americans prefer it that way, and so do I.

 

[Felis Leo]

Good news. Hopefully this shifts some production away from China.

Who would be stupid enough to invest in building new factories and production facilities in this environment? You do not know how much your basic building materials are going to cost from one week to the next. Or perhaps you build out your billion-dollar manufacturing plant only for the President to kiss and make up with a rival country and sign a new trade agreement where your competitors can manufacture the same product for half the cost, leaving you with a production facility that is makes products too costly for Americans to buy.

 

[SuperDS77]

Have you ever noticed that lowering costs is not identical to lowering prices?​

Yes. Have you noticed that increased competition keeps prices low?