Empty shelves are just one of the symptoms. The real pain will come from companies having to deal with increased taxes (that's what tariffs are) for Chinese components, decreased exports (counter tariffs, anti US sentiments), etc. and then their follow up to that would be using tools like layoffs, price increases, etc. Some of those companies might have to close doors and go bankrupt. If that happens a lot you get the ripple effect on banks via foreclosures of businesses and mortgages (like sixteen years ago).
There are of course quite a few large US businesses being affected directly by this stuff. I imagine that they are not happy with this. And that level of unhappiness will translate into shifts in political donations. Which, I'm sure is something that will get more apparent as next year's mid term elections get closer. That's a stick that can be (and probably already is) wielded that might produce results soonish.
At least, I imagine the CEOs of GM, Ford, Boeing, etc. might have a thing or two to say about seeing China disappear as a market where they can do business to sell stuff or to source key components that they require for their own products. China was not being subtle rejecting delivery of a couple of new Boeing planes. And reductions in container traffic from China (which are the life blood of the US economy) are of course a very visible thing. And since container deliveries are critical for supply chains of most manufacturing that actually still happens in the US, that could get ugly really quickly.
Worst case all this triggers a recession. Those are rarely predicted accurately until after they've happened. But the signs aren't great and wall street is definitely nervous. A few stocks crashing because investors start panic selling could do the job. We're not there yet, but it got close a few weeks ago.
Recession is probably the best case scenario. If only we get through this with just a recession!
The world's economic inter-dependence is one of the things that have kept World War 3 at bay for decades. Nobody's going to start a hot war with their neighbor when they rely on each other through trading. Russia shows what happens when you economically isolate a country with sanctions and force them to rely on themselves economically: It reduces one of the downsides of warfighting. Do we really want an isolated, independent and self-sufficient China?
>Nobody's going to start a hot war with their neighbor when they rely on each other through trading.
World War 1 begs to differ, hell even the Russian invasion of Crimea back in 2014 begs to differ. Economic interdependence dosen't stop authoritarians, it only threatens democracies with a larger margin for dissent.
WWI started in countries (Balkans) with the least economic interdependence, then pulled in more Western European countries through defense alliances. While technically someone could have put the brakes on, it was an autopilot sort of thing. The lesson of WWI is that if you're going to enter into defense agreements that obligate you, be careful to whom you're wedding yourself. In particular, don't wed yourself to someone who has much less to lose than you do.
One of the lessons from the prelude to WWII is to be careful about trade imbalances, as they can breed instability and radicalism. During the 1920s the US enjoyed huge trade surpluses with Europe, which caused all manner of monetary and labor dislocation in Europe. Worse, the US wasn't content with this surplus, so similar to modern China they erected additional barriers to imports to try to have their cake and eat it, too. These effects were amplified by the gold standard, which accelerated deflation and unemployment in Europe, and accelerated (stock market) inflation in the US. And of course all these ill effects were amplified again for Germany.
Toward the end of the 1920s and during the 1930s, the whole system was disassembled as every country, understandably, retreated to lick its wounds. Economic interdependence is critical to maintaining global security, but that interdependence itself isn't self-sustaining. It can fall apart if dislocations aren't managed well across the system. For example, the lessons from the 1990s and early 2000s is, "just go back to college or trade school" is an absolutely horrible approach to dealing with labor dislocation. Significant changes in labor structure need to happen inter-generationally, not intra-generationally.
From the Russian perspective, the US promised not to expand NATO eastwards in return for allowing German unification. While Russia was weak, NATO ignored the promise, but miscalculated after Russia strengthened.
Ultimately, you need to understand the Russia reasons, and they had been threatening war since 2008 when Bush announced Ukraine could become a NATO member.
If you rely on Western sources to interpreted Eastern motives, you end up with rubbish like "they hate us for our freedoms".
It is a willful distortion of the so-called 2+4 Treaty from 1990, in which the two German states and the four occupying powers negotiated the terms of reunification. Ultimately, they agreed that only West German military forces would enter East Germany until the withdrawal of Soviet troops, which was to be completed by the end of 1994 at the latest. This is stipulated in Article 4 and Article 5 of the treaty: https://web.archive.org/web/20050222182358/https://usa.usemb...
Great point. Also "because of our love of jesus christ" has been thrown at me a few times when I'm trying to provide more nuanced arguments for why people in other countries might not favor us.
It's also just not the general lesson from history either. Plus you have to recall that in many cases war is about resource acquisition as much as anything else, and sometimes wars are popularized as ideological crusades when they are masquerading as resource disputes in order to motivate a populace.
Something that has become apparent to me is that in our years of somewhat peaceful economic growth, we seem to have forgotten that there are haves and have-nots and that the economic system that was created to hopefully replace war with peaceful competition only works so much as the large powers decide that it works well enough. Those who are have-nots tend to not have the proportional military leverage to do something about their position.
Our rejection of colonialism, mercantilism, and imperialism in favor of a "rules based international order" has blinded us a bit through abstraction and legalese to the reality of how the world works and the limits of resource availability given the size of the planet and the population numbers.
> As such it should be the priority of all democracies to extinguish authoritarians whenever possible.
I used to think this as well, but I recently re-read George Washington's 1796 Farewell Address [1] and it aided me in coming to the conclusion that such a moral crusade is neither wise, nor moral, and least of all practical.
There will always be some nations that have governments, authoritarian in our eyes or otherwise, that we disagree with from a political perspective. But we simply do not have the time, resources, or motivation to do something about all of them, and even as we try to do something about one or more of them we wind up with others popping up. Instead we should seek to treat fairly where possible, and treat not at all where necessary due to immoral behavior and stop trying to control the entire world. That doesn't mean we should never intervene or do anything, as in the case of Nazi Germany or perhaps other atrocities, but a national policy of extinguishing authoritarians seems to me to be one that isn't in our best interest.
I'm not pitching this as a moral crusade, but as a practical one. Authoritarianism is a cancer that invariably spreads and disrupts the global system.
It is simply in our best interest to starve cancer whenever we find it and excise it if possible.
If the goal of buying Russian hydrocarbons was to increase the economic stability of Russia and to foster capitalistic market systems in the country to prevent the rise of authoritarianism then the second they invaded Georgia should have resulted in the cutting of those economic ties.
If the goal of opening trade up to China was to prevent a Chinese-Soviet alliance and to weaken the USSR then the second the USSR fell we should have pivoted to defeating Chinese authoritarianism instead of strengthening economic ties to them which has ultimately provided fuel for an authoritarian economic machine that has grown to surpass the capacity of the US and made the US dependent on it.
We didn't do those things and now we're facing existential economic and military threats.
Are you ready to sign up and go fight in Ukraine or elsewhere and die to stop authoritarianism as a matter of practicality?
It's not a very fair question to ask, I know, but I think we really need to make sure we are honest about what we're asking people to do.
Cutting economic ties in these specific cases isn't enough to actually stop the bloodshed and bring about stability.
There are practical limits to our willpower and resources and we can't just stamp out every dictatorship in the world, remember Iraq and Afghanistan? I fully support our actions in Ukraine, by the way, and in terms of picking fights that's probably one of our better ones to help stop authoritarianism.
> Are you ready to sign up and go fight in Ukraine or elsewhere and die to stop authoritarianism as a matter of practicality?
Not necessarily, as I’m not directly threatened, but I’m more than happy to carve out a piece of my paycheck to give Ukrainians any and every piece of equipment they need to do it for me.
Ok but that's not enough to fight all of these authoritarian regimes that spring up. We don't have enough people, resources, or willpower to defeat all authoritarian regimes militarily forever. We have to be prudent, and sometimes we just have to live with such regimes.
This is circular reasoning. You are pretty much saying democracies should be aggressors first. If you swap `authoritarian` and `democracy` in your statement, it will also ring true.
However, the parent poster paints a different picture. If people in Moscow were economically threatened by reduced trade caused by an invasion, the elite appetite for such a move would be reduced.
"In the early 2000s, however, German politicians had developed a contrary, more liberal theory — that more economic interdependence between Russia and western Europe would create peace in the long run. As trade increased, democracy would inevitably prevail."
>Do we really want an isolated, independent and self-sufficient China?
China being cut off from ~15%? of their market does not mean China isolation, it means US rewriting Child labor laws to fill Walmart shelves.
There's a difference between preventing war and preventing a wider world war. Trade links persisting even when countries are opposed to each other contributes to a certain level of global order between the biggest powers.
We do not and cannot so trivially assign a reason for the lasting peace since WWII. There are many theories in international relations that propose a cause, and none are currently accepted as being solely correct
I think the more pointed question is: will USA aggression be unchecked if the economies disconnected?
China hasn't invaded anyone. USA is conducting an active genocide in Gaza and the Iraq War wasn't that long ago. I could name so many other incidents of unbridled aggression it boggles the mind.
> The real pain will come from companies having to deal with increased taxes (that's what tariffs are) for Chinese components
In a sane world, that's what targeted tariffs are. You don't want to tariffs across the whole board because you might affect exporting manufactures whose prices will go through the roof and might experience disruption. It is kind of what is happening with auto tariffs now that there is a huge blow back but one wonder how many industries out there can't voice their concerns or are not aware of this.
Any assumption that there is targeting or any sort of planning by the chaos goblins we currently have running this administration is long on hope and short on reality.
> There are of course quite a few large US businesses being affected directly by this stuff. I imagine that they are not happy with this. And that level of unhappiness will translate into shifts in political donations. Which, I'm sure is something that will get more apparent as next year's mid term elections get closer.
Maybe. It is possible, though, that we are now in a situation like in the third Nolan Batman movie where Tom hardy puts his hand on the rich guy’s neck and says “do you feel in charge?”
I'm already seeing this in the life-sciences. Illumina, who used to own the game of DNA sequencing, has been laying people off left and right. All my contacts within the company are laid off.
> At least, I imagine the CEOs of GM, Ford, Boeing, etc. might have a thing or two to say about seeing China disappear as a market where they can do business to sell stuff....
They largely weren't doing this anyway due to Chinese economic policy. For example:
> Ford's market share in China has declined significantly.In 2024, Ford's market share was 1.6%, down from a peak of 4.7% in 2015. Over the past three years, Ford's average market share in China has been a modest 1.8%.
Ford is a bad example because the Chinese never really liked American cars. Before the EV boom they preferred BBA (Mercedes Benz, BMW, Audi). Right now it's homegrown brands.
Pharmaceuticals would be a slightly better example.
While this is true, this changed around 2009. What happened? The Chinese government started heavily subsidizing domestic automakers [0]while continuing the joint venture requirements for foreign automakers, which started in 1979 [1]. These joint venture requirements have been a source of significant intellectual property theft [2]. All foreign automakers operating in China, not just U.S. ones, have either faced bankruptcy or a significant downturn in market share in China over the past 15 years.
Coincidentally around the same time that the US bailed out its own automakers. The US also heavily subsidizes it's own auto industry, see the billions loaned to Rivian to build their new plant.
> There are of course quite a few large US businesses being affected directly by this stuff. I imagine that they are not happy with this. And that level of unhappiness will translate into shifts in political donations. Which, I'm sure is something that will get more apparent as next year's mid term elections get closer. That's a stick that can be (and probably already is) wielded that might produce results soonish.
I sincerely hope you’re right, but all initial evidence is the oligarchs kissing the ring, not pulling the strings. Maybe when it becomes obvious that they’re not getting anything for all that abasement they change tacks, but nothing in the Trump era has suggested to me that these folks have the tiger by anything but the tail.
One thing that’s been interesting (in a Ralp-Wiggins-esque “I’m in danger!” type way) to watch over the last few years is all the “end of history” types re-learning that Mao was right and that economic might only translates into real power when you use it to buy guns. Europe spent a decade trying to tie Russia into the global economy only to find all that cheap energy meant that when Russia walked into the Ukraine, they were on the wrong side of the ledger to throw their weight around. In the US, our oligarchs didn’t realize how much they were relying on the fact that US government officials believed the same lies about the power of capital that they did, and were caught entirely off guard when Trump walked in, picked up the gun on the table, pointed it at them, and said “I’ll take your wallet, please.”
There’s a whole generation of neoliberals learning Littlefinger’s lesson these days: https://www.youtube.com/watch?v=ifaRhL95HUM - it’s a shame the rest of us are stuck on this ride with them.
To be fair, life's better when you don't have to rely on the guns. If you're willing to work together to make the pie bigger for everyone, peacefully, you get further.
Which is why you have to occasionally knock the people willing to exploit the peaceful order, off.
Completely agree. But I think something lost in this is how much violence the "end of history" state of affairs increasingly relied on to keep that "peaceful" context in place - among the reasons Russia walked into the Ukraine was that Russia considered the Ukraine to be its buffer against NATO, which it viewed as genuinely an existential threat. The Middle East has been in a state of war for 20 years now, the US drug wars in Central and South America have had absolutely disastrous consequences, and the level of environmental destruction we've outsourced to other parts of the world would preclude a lot of our current economic practices if we tried to do them at home. Even in the US, the Mangione killing highlighted this - UHC was the absolute top in denying health care claims, an activity with actual deaths associated with it. Just because the power centers aren't threatened doesn't mean there's not violence present in the system. In the west, we've relied a lot on the fact that the majority of the people with guns have typically been further out in the periphery than us, and all those guns have been pointed at other people on our behalf - our peace is not everyone's peace.
I don’t know that it takes guns. If we moved to, say, ranked-choice voting and a multi-party system, the more extreme elements of our country would probably be sidelined.
And if they feel sufficiently shut out of the political process they'll rely on their guns. If you think the US is immune from insurgent dynamics, please read more widely. I think you'd find it particularly worthwhile to look into the collapse of Yugoslavia, which also had a federal system.
Well, we did have a civil war some time ago! But given the gross imbalance of military capability between the state and the citizen, I’m not worried today about a successful violent overthrow of the USA.
That was equally true in Yugoslavia, and indeed in Afghanistan. I think it's extremely naive to assume the US is immune from this. When I told people 10-15 years ago that I thought the US was ripe for and vulnerable to autocratic political leadership nobody took it seriously either, yet here we are.
You need to present it as a choice: you either bring about ranked-choice voting and a wider range of political parties so that issues can be dealt with peacefully, or, face real consequences for attempts to block the efforts at peace.
is it not obvious the oligarchs control the globalist politicians and not the nationalists?
Is it controversial to say that if you really wanted to "fight the oligarchy", your policy positions would be pretty similar to the America first agenda (sans social issues)?
I think it's impossible to understand the relationships here without really grokking that the MAGA set is both incompetent and incoherent. The movement is properly seen as an angry tantrum - a reaction to the state of the world, not a coherent ideology and plan for improving it. The coherent ideology and plan for improving it involves actually investing in domestic manufacturing, a strong push for labor rights and unions to make sure people are getting paid, a commitment to antitrust action, and, yes, protectionism of domestic industry (as a fun bonus, compare that to Biden's economic policies), but that's not what we've got here - we've got rage and anger and personal vendettas and wishful thinking as policy.
This is what I mean when I say the oligarchs have the tiger by the tail - from the time of the Moral Majority through the evangelicals of Bush's era through the Tea Party through MAGA, the business wing of the republican party has been cultivating the populist wing as an electoral strategy. They've managed to muddy the water with enough "government bad, immigrant criminals, trans athletes" rhetoric that what you've got now is a party and a movement that can _feel_ that there's something wrong - stagnant wages, inaccessible health care, deaths of despair, and Jeff Bezos - but the right wing message machine still has enough of a hand on the wheel that they can't actually get their way to things like labor rights and social security and all the other stuff we came up with last time this kind of thing happened.
Then you get Donald Trump, who well and truly does not give a shit about anything at all, and so he's absolutely fine to grab the wheel here and yank it hard into populism land, and now the oligarchs have a problem, because they've got a mafia boss at the head of an angry mob, and no part of that has any coherent ideology except Trump's crystal clear vision of people paying him a lot of money and treating him like a king, and now you've got tantrum as policy and no actual adults left in the room.
So, yes, America First and the MAGA movement are, depending on the day and time, anti-oligarch, but they're anti-oligarch like a dog is anti-car - there's not really a _plan_ there, just a lot of noise and motion and probably some teeth marks, but I don't really think it's gonna work out great for the dog either.
I am very much on the fence on this one. I can tell you, without a shadow of a doubt, based on having been in manufacturing across various industries for over thirty years, that the US and Europe have been on a path to loose nearly all manufacturing capacity within ten years, maybe twenty at best.
How do we compare the pain (and yes, some destruction) that we have to endure today against the devastation that is clearly in the horizon for both regions within a decade or two?
To be sure, what's going on today should have been done twenty to thirty years ago. Doing this today is far more difficult and painful.
I think Kevin O'Leary put it best: What we want a reasonably free markets. It isn't just about tariffs. It's about regulatory lockout, intellectual property and more.
For example, India imposes as much as a 110% tariff on US cars and trucks. The list of such actions --which also included non-tariff rules-based restrictions-- is long. From China imposing up to 25% on our cars, autos, chemicals and food to the EU, Canada, Mexico and others following suit. Brazil collected over $800 million in retaliatory tariffs blocking US pharmaceuticals, autos and textiles.
In other words, the relationship with hundreds of countries has been very one-sided for a long time. US industry needs to export to thrive, but if countries like Turkey impose 140% tariffs on our autos and trucks, markets are de-facto shut down.
How long can any country survive this kind of inequity?
So, yeah, this is a rough moment. I hope it is for the best. Everyone benefits from a more open and balanced market.
And then, of course, there's one of the elephants in the room: Intellectual property theft.
Whatever your hopes and dreams around domestic manufacturing, blanket tariffs capriciously imposed at random are unlikely to get any dream closer to reality, except perhaps the dream of total devastation of all manufacturing.
Let's look at what an actual domestic manufacturer has to say about tariffs[1]?
Oh, looks bad! Turns out, manufacturers import stuff, add value to it, and sell it for more money!
Hopefully we'll get more cast iron plants in Cape Cod. I'm off to the mill!
> Whatever your hopes and dreams around domestic manufacturing
This isn't about my hopes and dreams, it's about reality. I gave up years ago. I manufacture in China and other places. My take, after suffering the consequences for years, was simple: If my own government does not help me with such things as IP protection, control of currency manipulation, etc., screw it, I'll look after myself and my family. No choice.
So, I sold my manufacturing equipment and got the fuck out. We work with two factories in China and, well, I don't give a shit any more. Sounds horrible, I know, but, as the movie line goes "Mongo small fish in pond of life". This is something for the next generation to figure out...or not...and suffer whatever the consequences might be.
What is always notable is that almost nobody commenting on these kinds of threads know what the fuck they are talking about. A bunch of software engineers playing business person. Not a clue. Go talk to real manufacturing entrepreneurs and see what they say. Until then, you are not at all equipped to understand what's in front of us at all.
But, are you looking at what's going on, with the on-again / off-again tariffs announced on discord or whatever, and thinking, "oh, lordy, I can finally rebuild my dream factory in Missoula!" are you?
If I had a specific domestic product to protect and foster, I imagine I'd probably be somewhat more nuanced than whatever this process has been.
Over my life, I've seen car assembly leave the Los Angeles area, I've worked in machine tool manufacturing plants, I've seen modest electronic manufacturing companies fail in Massachusetts, I've seen C Beams glitter off the shoulder of Orion, etc. Now I work a bland service sector job managing kafka clusters.
The infrastructure elsewhere was developed by thoughtful and focused government effort to foster the industry domestically. I don't see what's going on now, in any way, focused or thoughtful. I don't see a plan, just arson.
So, I won't speak for you, but I can't imagine anyone looking at the current US Governments' policies and thinking "I'm going to pull assets from elsewhere and build there because that looks really stable and thoughtful and they've got my back."
While there are more peaceful ways of rebalancing trade, unilateral tariffs would be able to rebalance things on the long term. The problem is that alot of people in HN think in terms in export-driven economy, when in reality the majority of USA's economy is consumption, it's the largest consumer in the world. Loosing access to foreign markets dosen't mean as much to USA as it does to the rest of the world loosing access to USA.
Long term, manufacturers will come back or be created to grab all those customers. But for the rest of the world, it's much harder for suppliers who lost a massive chunk of their customers to suddenly find new customers beyond what's already existing. Creating demand is notoriously harder than increasing supply. And it dosen't help that the majority of other major economies are also export-based, so unless if some are willing to run deficits (and they won't), there's literally nowhere else to go other than a global recession. Developing countries are far too poor and would essentially be turned into captive markets bereft of industrialization.
I don't agree with the implementation of Trump's policies, but this is going right back to Keynes' concerns about limitations of global trade balancing, it's a long time coming, and much of the blame does come back to the surplus economies that doubled down on manufacturing rather than transitioning to consumer based economies.
Balance trade? Trade isn't a single ledger that needs to be in balance.
If you read that article about Haas automation, they say that they import cast iron and PCBs, presumably they import some chips and use some domestic chips, they put these all together and sell machine tools (big machines used to make machines, the exact sort of thing that trump et all are banging on about needing to be made in the usa, which last I checked, Oxnard california counts as "USA").
Nobody in the USA makes cast iron in the volume needed by haas; nobody in the USA makes PCBs at the price point needed by haas. Nobody's going to be able to start domestic production of either now, because they'd need to import all the materials from elsewhere to make the cast iron foundry, and nobody's going to take the chance that their multi million dollar investment isn't going to be ruined by trump changing his mind in a month.
So whatever you think you're arguing for, the world's way more complex than you think it is. And this execution of whatever the plans are, has been so far beyond inept as to land in a different scale altogether.
>Balance trade? Trade isn't a single ledger that needs to be in balance.
By definition, global exports must be matched with global imports to sum to zero, unless if you are trading with aliens. This is basic double-entry accounting and mainstream economics.
>Nobody in the USA makes cast iron in the volume needed by haas; nobody in the USA makes PCBs at the price point needed by haas. Nobody's going to be able to start domestic production of either now
On the long term, factories can be built, workers can be trained. If the price point of manufacturing is more profitable domestically than through outsourcing via tariffs, then investment will naturally flow to account for those opportunities.
But like I said, what you fail to see is that firms like Haas Automation are not reflective of the larger US economy, the majority of the US economy is supported by consumption, not manufacturing, and actually it's the top 10% that accounts for almost 50% of domestic consumption, meaning a whopping 10% of US consumers account for 15% of global consumption. Counter-Tariffs aren't going to mean as much to Investment Bankers, Lawyers, Doctors, Senior SWE etc. People will come to and build production if China is not available because they will want to grab the lucrative opportunities of the largest consumer base in the world.
On the other hand for surplus exporters, bereft of such a consumer base, unless if they find a way to make up for that consumer base (which is very difficult), all those factories are going to close down very quickly, and mass unemployment ensues. It's not just China, it's possibly Vietnam, most of SEA, Germany, Japan, etc. And that matters for the negotiating table, hence why many did not pursue counter-tariffs. But they've been doubling down on manufacturing rather than shoring up domestic consumption, the US reaction is by definition the Beggar-Thy-Neighbour as a consequence of their greedy actions.
The larger argument really is for a more balanced global trade, where countries current account balances would be near 0. It's true that US consumption rate will probably need to go down for it, but that also means that the rest of the world would be increasing their consumption (and their living standards) rather than suppressing domestic demand for the sake of manufacturing fetishism. It would be an all around more resilient to trade shocks than the status quo today.
Do you have balanced trade with your gas station? With your dentist? The double entry book keeping has to balance after all. Oh, you use money, and each party has their own ledger. Maybe your dentist is taking advantage of you, but it isn't because they never exchange your gasoline for polishing your molars.
Let's go back to a real world example -- a successful machine tool manufacturer in the united states, theoretically the very thing we want (which in fact, I totally agree with -- such companies are important in a huge number of ways).
They import raw or partially finished materials (cast iron, blank or partially assembled PCBs); haas does a bunch of work on these materials, puts it all together and sells the finished product for more than all the raw materials cost to lots of other (typically different) people.
Now, because of blanket tariffs -- on things the US has no interest, capacity, or foundation to build, like cast iron. Nobody's going to make a PCB assembly company or cast iron foundry in the USA to meet this need, it'd take years, the products would be way too expensive, and the only possible market is ... haas automation? Never going to happen. Instead, haas will just raise prices and lose market.
The blanket tariff negotiation (I tariff all your stuff, or else!) is "Do what I want or I'll kill your daughter, eat your dog, and burn your farm!" -- but in this case, because trump's said the same thing to everyone, he's actually saying "Do what I want or I'll kill my daughter, eat my dog, and burn my farm!"
>Do you have balanced trade with your gas station? With your dentist? The double entry book keeping has to balance after all. Oh, you use money, and each party has their own ledger. Maybe your dentist is taking advantage of you, but it isn't because they never exchange your gasoline for polishing your molars.
I'm talking about global trade balance, your example is examining trade relations from a individual perspective that ignores the activities of other actors, when you need to be looking at the global sum of all exports and imports of all the actors involved. Namely put, in a closed economy, the sum of all the credits and debits between you, the gas station, dentist, etc will sum to zero. The economy of Earth in a similar manner is a closed system, we're not trading with aliens here. This is mainstream economics, you're going to woo-land if you're trying to deny this.
>and the only possible market is ... haas automation? Never going to happen. Instead, haas will just raise prices and lose market.
If the only possible market is Haas Automation then it's economically insignificant and not reflective of larger structural changes in the US economy. But that's a highly dubious assumption. Like I said, the US economy dosen't run on exports, the vast majority is consumption. The incentives are there to raise up entire supply chain given the massive profits involved here.
The thing about the blanket tariff negotiation tactic is that on the flipside, it is true that many of these nations very much were pursuing their own forms of economic nationalism with heavy protectionism and tariffs. For as much as American economists like to say that deficits don't matter, China, Vietnam, Germany, Japan all seem quite intent on maintaining a persistent surplus, whether through buying bonds to weaken their currency, heavy subsidies, or demand suppression at home to bring down wages. It's a bit absurd to expect American to uphold the principles of free trade while simultaneously turning a blind eye to the mercantalism of other nations. What Trump is doing is highly destructive, and there are better ways to negotiate, but it's a problem really that these surplus nations have created from the last few decades. And it's a problem not just for America, but for much of the developing world that will find to increasingly hard to climb up the value chain so long as China is dominating global exports.
No doubt there will be a recession, but on the long term, it will work. But for other countries, the situation will much worse because you cannot increase demand in the same way you can raise supply chains. That's why it's more likely that negotiated settlement similar to the Plaza Accords will occur, really in the question of whether we all seriously adhere to the principles of a free trade, or we collapse in a mercantalist free for all. In the world of a former, trade balances would close to zero because of the self-balancing currency effects of imbalances.
If you actually read the literature before Trump, this is something that has been talked about by Keynes, by Bernanke, by Stiglitz, by Katherine Tao, even admitted to a certain extent by Krugman. The hysterics of modern politics is that notion that "trade deficits aren't necessairly bad" has shifted to "trade deficits are never bad", when there are specific conditions when trade deficits are symptomatic of larger problems, and those conditions may be apparent right now for USA.
> I am very much on the fence on this one. I can tell you, without a shadow of a doubt, based on having been in manufacturing across various industries for over thirty years, that the US and Europe have been on a path to loose nearly all manufacturing capacity within ten years, maybe twenty at best.
I've now been around long enough to remember people saying this 10-20 years ago. Seems to be plenty of manufacturing still happening.
So, not inflation adjusted. Also doesn't capture the mix of what's being produced, i.e., a shift towards only manufacturing high value items versus being more broadly diversified and manufacturing things along a range of price points. In other words, a complete hollowing out of our manufacturing base.
Your same link shows $1.38T in 1997. Which is $2.77T today. In other words, DOWN in inflation adjusted terms from nearly 30 years ago.
"Data are in current U.S. dollars." Plus, the growth has been large enough to outpace inflation except for the last couple years.
The percent of GDP has been dropping but that is just that GDP has been growing faster. Which means that the US has been doing more valuable things than making stuff.
Paul Krugman made this point in a podcast with Ezra Klein. People remember a time when manufacturing was 30% of the economy, but that will never return, because the economy grew far more than our appetites for stuff. His estimate was that even if it worked and jobs returned, you'd be talking about going from 10% of GDP to 12 or 13%.
All dollar values on that chart are adjusted for inflation.
> Also doesn't capture the mix of what's being produced, i.e., a shift towards only manufacturing high value items versus being more broadly diversified and manufacturing things along a range of price points.
The chart does not capture the trend you speak of, assuming it exists.
> In other words, a complete hollowing out of our manufacturing base.
That’s not how I would put it, if you want to look at it through that lens, it’s your right.
I would say we manufacture things higher up the value chain and use the dollars we earn from making that stuff to import cheaper foreign commodities instead of manufacturing them here and using dollars to buy American made clothes and shoes and other commodity items at a much higher price than we can buy them from other countries.
We also export services and receive dollars in return, this is much more lucrative that manufacturing imo.
Not sure how this comforts anyone. We need labor, there aren't enough spa management and pet groomer positions to build an economy upon. What good does it do for anyone that we manufacture more, if there aren't enough good-paying jobs to go around to support a broad consumer base for those same products you say are being manufactured without (much) labor?
Why would any foreign nation even want to manufacture goods to ship here, if there's nothing much to buy with our currency? If our currency does devalue, we run the risk of not being able to import what we need, and not being able to afford to tool up to manufacture it domestically. And yet trends are clear that in many industrial sectors US manufacturing has already fallen to what might as well be zero.
You're expecting that in the coming months the demand for master plumbers will double or something? Or are you saying that the existing demand is already so high that it can do more than provide some fraction of one percent of the jobs that our nation of 300-million-ish needs to have a strong economy?
I think we both agree that one of us has unrealistic impressions of the big picture here. When we regularly here of layoffs that affect hundreds and thousands of jobs, welders and electricians can't absorb those unemployed to any great degree. Nor all of the trades put together.
But why do you expect manufacturing to do that? It's just not as labor intensive as it used to be, and if there's a recession demand for manufactured goods falls, resulting in layoffs.
We need jobs for everyone for various reasons. However we do not need factory jobs for everyone. The manufacture more with less people means those other people can move on to other jobs. They can start another factory to make goods.
There are plenty of jobs. Every person who isn't manufacturing is a person who can do something else. A modern car uses a lot more engineers. While we don't need many spa mangers, it is nice that spas exist and so some of those spa managers are needed.
Why would the US and EU losing manufacturing be bad?
> How long can any country survive this kind of inequity?
What worries me more is that the US has been funding global military security through deficit spending funded by foreign investors (who got their dollars from US trade). We're cutting legs off that stool, so we might see more wars and a declining dollar, never mind fewer cheap imports.
> Why would the US and EU losing manufacturing be bad?
Because if they can't make thing you can win a war - just stop all their trade and then invade. When they are limited to stick and stone while you have guns war is easy to win.
Of course in reality the US and EU are not in danger of losing all manufacturing, and their military leaders are will aware of this and so put extra effort into keeping some important manufacturing in the country. Politicians are generally (but not always!) aware of this and try to be friends with others who can make things you don't make locally.
You lost me at Kevin O’Leary. He’s historically been a dishonest and unethical snake oil salesman and I doubt he’s changed.
One of my career highlights was having him explain how much it will do for my career to do his project at a discount (I was helping a friend as a favor) and I told Kevin that it was just as likely to have the opposite effect.
That's an unreasonable position to take. What matters isn't who says something at all. It's if what the person says is true. And, in Kevin's case, what he is saying is 100% on point and correct.
Aside from personal experience, I have met many entrepreneurs who got shafted by China's approach to business and intellectual property. One of them had to shutter his company barely six months after introducing their first product. The product was successful enough that it got cloned very quickly. They introduced a cloned product at half his price. Orders evaporated. He had to let go of his employees and close the business.
Whether you like it or not, what O'Leary says in his videos is 100% accurate and true. Your experience with him is absolutely irrelevant and not worth discussing.
> In other words, the relationship with hundreds of countries has been very one-sided for a long time. US industry needs to export to thrive, but if countries like Turkey impose 140% tariffs on our autos and trucks, markets are de-facto shut down.
These comparisons (and conclusions of one-sidedness) always leave the greatest benefit the US has enjoyed: access to a massive labor force willing to do work most Americans aren't[1] at wages lower than are Legal in the US.
Thankfully one does not have to be a credentialed anything to be right. All you need is to present evidence for anyone to reproduce your claim. A ten year old kid not even out of elementary school could be absolutely correct if the evidence supports what is being claimed.
My only complaint with China's intellectual property theft is that they don't share.
It's my genuine belief that the vast majority of intellectual property ownership is purely to draw a moat around a country's oligarchs. Copyright does not protect creators and patents do not protect inventors[0].
Trump's thinking is:
- America used to have lots of tariffs in the 70s, and lots of jobs in the 70s,
- But we got rid of the tariffs and the jobs moved,
- So if I put the tariffs back the jobs will come back!
Problem is, we're not in the same market we were in the 70s, and all those tariffs risk turning us into Brazil. More specifically the reason why the intellectual property system we have is fucked is because it's designed to let corporations move jobs to foreign countries while still maintaining maximum control over the end result. It's designed to facilitate neocolonialism.
The "open and balanced" global market you're decrying was, until recently, heavily tilted to favor American ownership over everything. China and Mexico are there to castrate the unions: if you don't work for peanuts, we move the work to another country that will, and we don't worry about any of the business risk that entails because WIPO and Berne ensure none of the goods the other country makes get to compete with us unless we put our stamp on it.
You know what would really break this system? If China, Canada, or some other country were to junk WIPO and DMCA 1201 and start up a national lab to develop and distribute jailbreaks for shitty disposable American tech. Practically speaking, America can't stop knowledge from entering the country, and it would spur a huge explosion of new American businesses to fix the shit our own oligarchs broke.
In a world where you can't rely on intellectual property bullshit, outsourcing becomes a crapshoot, and it makes a lot more sense to pay workers what they're worth and focus on automation instead.
[0] Yes, they can and have been used by creators in the past, but that's not what the system does today.
> the elephants in the room: Intellectual property theft.
Yup. China has been systematically stealing the IP of anything made in their country since forever. Companies kept falling for it because the potential market looked so big. Now BYD makes cars as good as Tesla and it's all #ShockedPikachuFace
Doesn't Tesla have an open patent philosophy? I've heard Musk say that if someone builds a better electric car and it causes the end of Tesla, he's fine with that.
He has said that, but I haven't seen any legal paperwork to back it up.
Not that is matters. Cars, including electric cars have been around for 100 years. There are very little important patents he could have. Sure there is a lot you can patent, but the vast majority is details that are trivial for any competent engineer to work around just using known prior art.
The important patents are likely in batteries which Tesla doesn't develop. Or chargers, but again the important details come with the battery.
TESLA might have some patents on the NACS connector and similar things. Those are easy to work around, but you wouldn't want to.
People seem to think, including very disturbingly our secretary of the Treasury, the companies maintain huge warehouses of back stock.
That hasn't been the case since the mid-90s when the PC revolution started pushing out supply chain management software. If I recall correctly, Walmart was the innovator in this space in one of their key ways to gain economic advantage over other retailers was low back stock demand tracking
On top of that the '90s was when free trade agreements came into Vogue and the supply lines and outsourcing of manufacturing cranked up into high gear.
So as we saw with covid, any disruption to this a highly extended optimized supply chain results in massive disruption.
I can't see how any massive new tariffs isn't going to essentially be a covid level or worse disruption to this entire supply chain
> That hasn't been the case since the mid-90s when the PC revolution started pushing out supply chain management software.
I worked on PC software for optimizing warehouse inventory in the mid-1980s. The system was designed by an applied mathematician and used by large national companies. Customers made substantial savings - double digit percentages of inventory cost.
When you trim to the bone it's not entirely dissimilar to the kind of savings that can be achieved in other ways.
In the 1970's, when Nixon launched his recession after an equivalent lead-up, I worked at the University for one semester in a work-study job. They only paid minimum wage, and these were easy jobs like library assistants where you were expected to be able to study about half the time.
But you were working for the State just like all other State employees.
You know, the maintenance people, the professors, highway patrol, capitol admin staff, etc. Career employees.
Like everyone else, you had to wait two weeks after starting work before you would receive your first paycheck.
About halfway through the semester it got so bad they decided to hold paychecks for two more weeks.
:\
You mean everybody who worked for the State just didn't get anything for two weeks until it picked back up again?
Yup.
At the end of the semester I was made whole because my checks still kept coming in for a couple more weeks after I was no longer employed there.
"Just like" the career employees who would be collecting for a couple extra weeks themselves decades later after they retire.
Well, it was a recession, what do you want, prosperity? That ship sailed a long time ago :\
Yeah, it goes back to at least the 1950s. Different companies adopted it at different times, but by the 1980s most already had. Note that Just in time is not a single metric, with one correct level of inventory. Adopting it in 1950 doesn't mean the company isn't still finding more places to adopt it.
FTA: Maybe not empty but less choice and alternatives not necessarily what you're looking for.
“I don’t see a complete emptiness on store shelves or online when we’re buying. But if you’re out looking for a blue shirt, you might find 11 purple ones and one blue in a size that’s not yours. So we’ll start seeing less choice on those shelves simply because we’re not getting the variety of goods coming in here based on the additional costs in place. And for that one blue shirt that’s still left, you’ll see a price hike,” Seroka said.
It takes exactly 1 "bare shelves" post on social media to kick off panic buying which cascades.
In fact it doesn't take much of a change in regular buying habits to cause that it it's all aligned in the same direction.
i.e. a chunk of the toilet paper "shortage" can just be every customer suddenly buying one more pack that day "just to be on the safe side". Your local supermarket isn't expecting that, so the shelves still clear out that day - then the last person snaps a pic for social media....
Yeah, my Great Aunt and her friends would coordinate their purchase of sugar for making preserves each year w/ the local grocer --- while each of them could have bought all they needed at once, his stocking couldn't accommodate that, so everyone would let him know when they would start, and stop, buying a 5 lb. bag each week for each year's preserves.
It's that one person on the highway driving just a little too fast and a little too close to the person in front of them, then they tap on their brakes and it starts the chain reaction of 3 hours of bumper to bumper rush hour traffic.
This guy is not pricing in panic and irrational behavior. People do the dumbest shit when supplies start getting low and the news is non-stop talking about shortages.
Markets don't work that way. Supply is tuned to demand. When the supply is artificially constrained while the demand remains constant, it further strains already limited supplies, leading to empty shelves and rising prices. This is a fundamental principle of market economics. It's important to understand how these dynamics operate to grasp the broader implications of reduced imports from China.
I think the above quote is accounting for both constrained supply and reduced demand from rising prices. Vendors consolidate their product lines to remove redundant (ish) offerings due to reduced demand and the new difficulties in managing supply chains. I.e. a shirt may only come in 3 colors instead of 10, and it may be harder to get the popular color because vendors are less likely to keep a large stock in warehouses.
It doesn't violate market dynamics that I can see, though I'm far from an expert.
One possible complication is that there’s quite a lot of waste that’s tolerated in pursuit of fashion and variety. (For example, Ross Dress For Less specializes in liquidating excess inventory.)
So I wonder how that plays out? My guess is that retailers take fewer risks when ordering, sticking with products that they know they can sell, even if prices are higher.
There's a lot of levers and people to squeeze along the way:
Currency Manipulation to relatively increase Chinese manufacturing income
Relocating manufacturing based on tariffs
Retail margin
US based design & engineering of products
Advertising and other marketing activities
Depending on the product some will be passed onto consumers. But for something like Nike's it's probably more like fewer shoe designers, Footlockers, less advertising, smaller contracts to athletes, more manufacturing in non-China countries, and so on. Everyone is going to take a bit of a bit and it's probably not going to be super noticable to any one part.
No reason to expect empty shelves. Higher prices for stuff that can't be moved out of China. Sure. But it's a tariff, not an embargo.
Relocation of mfg - years long process won't help the shelves or the prices.
Retail margin - yeah... retail will balance price hikes to avoid hitting profits with not pricing too high to further reduce demand. This is just one of the reasons prices will go up. It will reduce the demand to less efficient and profitable levels, but won't increase the supply. Shelves will be sparsely filled with more expensive items.
US based engineering and design -- analogous to mfg. Not a near term solution.
Advertising -- it doesn't matter how much you tell people to go buy shit if they don't have money and/or the prices are too high.
Why are you still apologizing for Trump's absolutely incompetent policies?
In addition tik-tok/insta are having post after post warning people that the shelves are going to be empty which tends to feedback into itself.
If you were going to buy 1 of X normally if you think X may be out for sometime you may end up buying 2-4 of X which will run the shelves out very quickly when 10-15% of purchasers do that unexpectedly. Other people see the shelves emptying and buy more too.
Going to be messy.
All I have to say is imagine if Biden did this, what the news would be saying.
> If you were going to buy 1 of X normally if you think X may be out for sometime you may end up buying 2-4 of X which will run the shelves out very quickly when 10-15% of purchasers do that unexpectedly.
There are enough people who buy 0 of X normally, but if they think there might be stockouts, will visit every store in their area and buy 100 of X so they can scalp them and make a buck off their neighbors.
> All I have to say is imagine if Biden did this, what the news would be saying.
Give it a few years. They'll say he did it.
"Why do you think Barack Obama wasn't in the Oval Office on 9/11?" "That, I don't know. Would like to get to the bottom of that." https://www.youtube.com/watch?v=vPfRGJRMbN8
At least for the 2024 election, I find it difficult to believe one could come to any other conclusion with all the rampant sane-washing that NYT, WaPo, etc. engaged in
Aggregate media bias across TV/Radio/Newspapers is interesting because both the direction and scale matters. Of course bias is only part of the story, do an objectively terrible job and you get more negative stories overall.
As a concrete example a great deal of left leaning media was very critical of Biden running for reelection and especially waiting that long to pull out. You almost never see that kind of thing from right leaning media outlets.
So, yes overall media bias favors Trump not because more outlets favor him but because the ones that do heavily favor him. Far left media is simply a more niche market than far right media. Mother Jones for example is well known but only pulls in ~16 million$ / year and even they where critical of Biden.
NYT, WaPo, MSNBC, CNN, ABC, NBC, CBS are not niche. They all ran cover for Biden until the debate made it too obvious. They were not "very critical".
They are, however, extremely critical of anything Trump does.
I wouldn’t say extremely critical of Trump. He brings half of it on himself. Simply reporting what he says and does that makes him look incompetent is not being particularly critical.
Not when you look at objective metrics of bias such as sentiment analysis or track time spent on positive vs neutral vs negative coverage of various issues. Of course that’s in relation to US political parties, pick a different ‘center’ and you can get any answer you want for how the media is biased overall.
Objectively FOX isn’t pure propaganda they do include some coverage critical of R politicians and policies. It’s just far less than say CNN spends on coverage critical of D politicians and policies.
I can cite multiple studies showing the left bias in the media. I think it's pretty widely held to be true. I'm actually kind of taken aback that anyone would take the other side of that argument.
I’m not arguing about the existence of bias or the numbers of L/R leaning media.
There’s simply more left leaning Americans vs the stance of the Republican Party who’s specifically engineered their message to appeal to voters with more political power. Ex: Losing the popular vote when winning the presidential election only happens to Republicans.
However, simply counting the number of companies leaning left or right doesn’t tell you much. A local newspaper with 5k readers just doesn’t move the needle. Neither does an outlet that’s 0.1% left or right leaning.
So the only accurate measurement is level of lean * number of viewers, and when you do that calculation (as I have) you find the overall media landscape leans Republican.
There’s a few investigations into why Talk Radio became such a Republican dominated market, but I don’t have a good link. They also ignored how NPR fills a similar niche and leans left. But overall I setup a spreadsheet and ran the numbers on viewership vs scores on sites like:
Honestly I doubt that shelves will be empty. Retailers are ordering less stuff from China because they’re predicting that demand will go down when the price is higher. If retailers were marking stuff up roughly 100% and take the same markup (in absolute terms), everything from China will go up about 70%, and people will simply not be able to afford to buy as much stuff.
No, we really don’t. We don’t need a bot bringing marginally positive value for a single person and shitting the bed, cluttering everything with stupid useless noise and bringing negative value for everyone else. "Be more like Reddit" is really not something HN should aspire to. If you like Reddit, it’s ok to be both there and here.
years of trash flooding reddit comments obviously. Hes got a good point. Not all additional information is good. In fact the majority of data is garbage. Its hard enough to sift through the existing mound and i've tried to scale back my contribution to the noise (its hard).
Not really, and I also use it, when I want the sort of things that I can find there. It’s just that most of the time I don’t. I am not really anti-Reddit, but I am very anti-noisy bots.
Paper is one of the things one should be least worried about.
We source chips from Canada because it's marginally cheaper to source it from there. It's not like the US doesn't have a ton of sources of wood pulp. Canada just has bigger cheaper sources (comparing like for like quality).
We also burn a lot of "less than ideal for paper" chips for energy rather than feed them into a paper mill, also for marginal cost per result reasons.
Wood chips suitable for paper pulp are also hugely elastic in the same way that recycled metal is. Huge volume is either directed into the supply chain or not based on marginal price. The people making every wood product are choosing what do with their waste based on chip prices and energy prices. Even your local tree service is choosing what to chip and where to dump based on economic conditions and balancing act between relative prices.
If you wanna be worried about something be worried about stuff we don't make much of in the US. Super high volume commodity widgets made from metal, all manner of electronics, etc, basically the kind of stuff where our only domestic capacity is super high dollar stuff to serve defense and aerospace.
It's probably true, because I think wood pulp for paper doesn't have rigid requirements on type of wood, or size, or strength. There are also alternative materials if we had to, like hemp. There's probably a dozen others; I wouldn't be surprised if grass trimmings could be turned into toilet paper.
The threat to lumber for building is a much greater concern because there aren't ready and price-comparable alternatives.
As we learned from COVID-19, manufacturers really don't like building new factories or even changing the tooling to support a different kind of product (such as commercial vs household toilet paper) for a short-lived surge in demand.
An antifragile solution would be learning to use a bidet.
let's not forget, "In 2024, China supplied approximately 13.4% of the total goods imported by the United States, with a total value of $438.9 billion. " '
And those are heavily concentrated in certain industries like basic electronics, toys, etc.
in anycase, it'll be interesting to see how it plays out.
This assumes domestic production does not ramp up to meet demand. Yes, prices will increase (pushing down demand).
I work for an org that does packaging (boxes, pallets, etc) for a whole bunch of manufacturing, ag, and retail firms (Tesla, Thyssenkrup, Target, etc.) and we are booming right now.
The "empty shelves" discourse is alarmist and honestly kind of annoying.
Almost all of the food on the shelves is locally produced or, in the very least, not produced in China. Some foods may disappear or become more expensive but there'll really be no disruption in food supply.
This will however affect markets dominated by Chinese goods, particularly clothing. Even here the effects will be somewhat mitigated by existing strategies to avoid China tariffs eg selling through Vietnam.
Certain businesses will be hit hard. And that's really the biggest problem: cascading effects leading to an inevitable recession. Already, truckers who ship goods from ports are sitting around idle. We've cut tens of thousands from the government. More layoffs are to come.
I both agree and have been worried that this is overly reductive.
As far as I can tell, literally nothing that I buy regularly is directly sourced from China. Or anywhere other than the US & neighboring countries. The vast majority of my groceries are locally sourced. And the vast majority of the rest come from expected regions, for instance San Marzano tomatoes from Italy. I do not regularly buy clothes, children's supplies, electronics, etc. Sure, I'll buy them once in a while but not with any regularity. My understanding is that the classic paper products famous from COVID shortages are made in the US.
So with that in mind what you say is 100% true, at least for me. But I'm not so sure. Who makes the containers that my local milk is put into? Who makes the cans that my canned goods are using? What meta-products are being consumed by the local industries, such as the ones making my TP? I have a feeling the answer is scarier than it'd seem on the surface. But I don't know.
Most fertilizer and fuel used in US agriculture is domestically produced. We do import some fertilizer from China. For fertilizers manufactured using natural gas as a feed stock, the US is well positioned to expand production because we have cheaper and more abundant supplies.
In other words, the threat model people should be worrying about isn't "bare shelves due to no goods from China to stock them" but rather "bare shelves because the entities who make the goods to stock them are missing critical components". And that's much harder for someone to predict what impact it'll have.
I imagine that my daily life is very skewed away from direct impact from a Chinese embargo relative to other US citizens. And even still, I'm pretty sure it's going to be a problem.
Daily life is very skewed away from understanding how everything works. Supply chains, power grids, the Internet, large-scale farming - these are all complete mysteries to most people. They see the results but they have no idea how the sausage is made. (Or shipped.)
It's one reason why this is happening at all. People not only don't know what makes a lightbulb turn on, they can't imagine the complexity of a power grid and how it's stabilised.
They don't have the first idea how a phone works, or how much science, engineering, and fundamental research went into making it work.
When they don't know any of this, they can't imagine any of it having a serious problem.
For your specific example though, I'm not so sure. As a counterexample, I buy my eggs direct from a local farm, not in a store. Neither the ease of availability nor the price of the eggs I buy have changed one iota over the last several months. And yet I see local friends posting pictures of empty egg shelves here and there on Facebook. My takeaway has been that the average person has no idea they can buy goods outside of a grocery store.
So back to your point, I buy most of my tomatoes direct from local farmers. Unless people start buying from *them* it is fine.
HOWEVER, if those local farmers can't get parts for their farm equipment or something like that, I'm just as screwed.
> My takeaway has been that the average person has no idea they can buy goods outside of a grocery store.
I’m sorry, but most people live in cities or towns with their only reasonable access to food being via stores. It is one of the wonderful things that civilization has produced and I’m here for it.
I haven't seen anyone saying that there's going to be no food. All reporting I've seen is that Walmart/Target shelves are going to be empty because of the glut of consumer goods they sell that are manufacture in China, ie, clothing, toys, electronics, etc.
Consider that even for food that is produced locally, there are inputs (tin for cans, electricity, etc.) that is being negatively impacted by the tariff circus, unnecessarily.
I buy dish soap on a regular basis. Not sure where the soap is produced, but I would guess the bottles might be from China -- a lot of packaging is. Sure, there are some US companies that make bottles, but can they expand their capacity? Probably not quickly.
I think there will be a lot of unintuitive effects from things like packaging.
Everyone here is worried about it from the American side, but China has motivation to settle this too, so they can continue to sell their enshitified plastic crap. It's not like most other wealthy countries want it, at least not any more than they are already buying.
Cut the bull. Generally you get what you pay for. China does both. You can get crap for a penny but you can also get high quality stuff which costs more. Both made in China.
First, it has a command economy. It's much more equipped to handle this in keeping factories afloat and people employed and housed.
Second, the US is ~15% of China's exports and a lot of those exports will continue even with tariffs. Some by diversified supply chains (eg "laundering" Chinese made goods through Vietnam) or the Chinese goods are so low cost that the tariffs will be paid (eg a milk carton represents a small percentage of the cost of a carton of milk).
Third, the US will feel the inflationary effects. China will not.
Fourth, if China needs to raise funds they can and will sell US treasuries, spiking yields, hitting the ability of the US to issue further debt as well as borrowing costs for homeowners and businesses.
Lastly, the rest of the world is on China's side. This whole tariff fiasco may be the largest self-own in American history. Additionally, it's undoing generations of American soft power globally.
My only two thoughts there are, China needs to fill that 15% gap, and I don’t know where they’ll do it. China also doesn’t want to sell too many treasuries least it upset their own financial stability in terms of purchasing power for their own citizens.
The economic outlook in China isn’t great right now. The US and China are playing a game a chicken, not sure who blinks first.
That 15% is not going to go away overnight. Some of won’t be sent to the US will be sold to the rest of the world instead. Possibly at a discount, so it is not ideal from the point of view of the Chinese government, but they are still well equipped to weather a temporary dip of 7% in their foreign trade.
Nobody said that it would be painless for China. Just that
1- it will be less painful for China than the US
2- China is more resilient against this particular kind of stress because they have a command economy and have more control on the population.
If the US blinks and caves, it does not matter whether China got a scratch, it’s still going to win the war. And Covid taught us that something would need to be quite dire for China to blink.
Also, it got lost in the noise, but right now there is still a blanket 10% tariff on anything that enters the US, and presumably these 10% can turn to much more when Trumps feels like it. It’s not the US against China, it’s the US against the world.
China holds only a few percent of outstanding US treasuries. Selling those won't spike yields, nor will it be a sufficient revenue source for them to wait out a prolonged trade war.
No. The parent was saying that only a portion of China’s 15% would fall off entirely. Meanwhile we have reports that the ports have become ghost towns due to tariffs. Doesn’t that then imply that China’s exports to the US have effectively halted?
China is selling goods to the US because it's good for China. China not selling goods to the US is, therefore, bad for China. China doesn't care about how it affects the US but it does effect them negatively. They are "holding all the cards" except the one that says "The US must buy things from China" which is the one they care about.
> Second, the US is ~15% of China's exports and a lot of those exports will continue even with tariffs. Some by diversified supply chains (eg "laundering" Chinese made goods through Vietnam)
Sure. 15% of their economy either just disappears, gets dramatically more expensive (laundering goods cost money too) or they have to reduce the prices so they can sell their extra 15% of goods to the people that are already buying them.
Keep in mind that China is also only around 15% of US imports too so if 15% is negligible, it's negligible for the US too.
> or the Chinese goods are so low cost that the tariffs will be paid (eg a milk carton represents a small percentage of the cost of a carton of milk).
The tariffs are a percent. Just because the cost of a single item is low doesn't mean the cost of the tariffs paid by the company is going to be low. Low cost goods are profitable because they sell in bulk. It's going to hit their bottom line in the same way it hits everyone else. You've obviously not given much thought into that point.
> Third, the US will feel the inflationary effects. China will not.
China isn't immune to 15% of their economy disappearing. Selling of an extra 15% of the goods in your warehouse at discounted rates while you scale down your factory production 15% is bad.
> Fourth, if China needs to raise funds they can and will sell US treasuries, spiking yields, hitting the ability of the US to issue further debt as well as borrowing costs for homeowners and businesses.
That's a good way to permanently remove 15% of their economy.
> Lastly, the rest of the world is on China's side. This whole tariff fiasco may be the largest self-own in American history. Additionally, it's undoing generations of American soft power globally.
That's not relevant at all. What's relevant is who the American people are on the side of. I'm not saying Trump has unanimous support or anything but he doesn't care at all what Switzerland thinks of tariffs on the Chinese.
Your #4 doomsday scenario is bad for the EU given the role that the US plays in their defense and as trade partners. WTO countries will be urging both sides to come to an agreement.
> China is selling goods to the US because it's good for China. China not selling goods to the US is, therefore, bad for China
In the case of a hypothetical trade embargo or at least punitive tariffs, who would you rather be: the buyer of insulin or the seller of insulin? The seller can be propped up by the government or loans. The buyer? Well, they need insulin. There's a natural imbalance here.
Us not buying Chinese goods has a ton of downstream effects like what if you need parts to repair trucks and those trucks are then out of service so can't haul stuff around?
> China isn't immune to 15% of their economy disappearing.
It won't disappear. It'll diminish. It'll get diverted through third countries. In some cases, the tariffs will be paid. China will have a reduction in exports. The US will have increased inflation, shortages and supply chain issues.
> That's not relevant at all.
It's 100% relevant. Everything is sentiment based. If the world is on China's side, then they'll look the other way when China buys oil and gas from sanctioned countries, for example.
I see commentary like this frequently in the west, then I read financial analysis like this:
> Goldman Sachs in its latest China forecast, reports China's GDP is about to fall off a cliff: the bank now expects China's Q2 GDP growth to crater to just 0.8% QoQ from 4.9% in Q1.
I'd be fine if cheaply made plastic junk is gone from the shelves. Where are the environmentalists now? The ones who warned us to stop overconsuming? Their tribe conflicts with Trump so their refrain goes mute until a more convenient time.
A Walmart superstore is stacked to the gills with products of all description.
What makes lots of money is not exactly having so many different choices stocked, instead having a good proportion of items "fly off the shelf" can be the focus.
The high-performance store will have numerous shelves completely clear every day, sometimes more than once per day, and they are perfectly geared to accommodate that when it happens without waiting until the more-organized nightly re-stocking.
The store is huge, and if a big shelf stays clear for any length of time it's quite noticeable. But can still represent the tip of the iceberg if that also means that quite a big multiple of inventory is also absent from "behind the curtain" in the warehouses and upstream.
Genuine question but how likely is that to happen?
The media doesn't seem to be doing a good job articulating what the (likely) real world impact is going to be. I keep hearing how other countries are negotiating but when you look into the details, there is nothing of substance actually happening.
I asked a good friend that runs a multi-billion dollar CPG business that relies on China imports. His answer:
> Almost guaranteed.
> There are some categories (toys, pet stuff,computer accessories) where HUGE percentages of goods are made in china. Those shelves will be empty as soon as inventory runs out, which will be soon.
> Shelves would get re-stocked once tariffs are removed and the ships start sailing again.
> If it takes longer than 60 days from now, we're looking at 10s of thousands of bankruptcies. This will make covid look like a weekend at the ritz carlton. Biggest financial crisis since the great depression.
My takeaway: People are not taking this NEARLY seriously enough.
My tinfoil hat interpretation: The US govt knows how serious this is, and they know that if people panic (which honestly, they fucking should) it increases China's leverage substantially.
Thanks! I was super confused, as there are several corporations with generic-sounding names that shorten to GPG.
I agree with your points btw. My friend is a retail director specializing in this area and has been at pains to educate me (and anyone else willing to listen) on the depth and severity of the impending supply dislocation.
It's already happening for certain products, but we don't see it yet. The shelves lag a couple months behind the actual purchases. For example, you are Walmart and buy a bulk order of something from China. The order processes a couple days later, then it sits and waits to be shipped for days lets say. It gets in the ship and takes 2-3 weeks to get here. Then it takes a couple days to be unloaded. Then it needs to get trucked to the main distribution center. Then it's packaged/processed and shipped to intermediate warehouses. Then from there, shipped to the store, sits for a few days-week then gets put on shelves.
Even worse is that depending on the product, you might not even be able to place an order from the importer because they are completely unable to actually price the things with all of the uncertainty right now. A friend of mine is a hearing device retailer/distributor. He tried to order way more than he usually does a month ago to get ahead of this. The order was denied because they said they have no idea how to price any of it. So he's just going to have to wait an indeterminate amount of time which then makes it impossible for him to plan. He has to jack up his prices to cover future potential price increases and to be able to keep the lights on if they run out of stock.
I'm in the same boat as you, trying to figure out the impacts of all this. We're hearing reports that the ports are empty, and we know the CEOs of Walmart, Target, and Home Depot recently visited Trump to warn him of empty store shelves. The fact that these key ports are seeing reduced shipments corroborates their warning.
Meanwhile, Kevin Hassett, Director of the National Economic Council, said just yesterday that he doesn't believe any shelves will be empty due to retailers planning ahead for the supply disruption—directly contradicting what the CEOs of those retailers had warned Trump just a few days earlier.
I have serious concerns about the competency of this administration. The CEOs of major retailers have a vested interest in understanding supply and demand and have intimate knowledge of supply chains and retail channels. If they say shelves are going to be empty, then you can take it to the bank that shelves are going to be empty.
Everything is pointing to shelves being empty. What happens after the shelves start going empty is what has me concerned. It could be a minor issue, or it could lead to mass panic. My concern is that I have no confidence in this administration's ability to resolve any issues that may arise due to their actions. They're making the mess and are expecting us to clean it up after them.
the question is which shelves. Not ALL shelves. only 13% of our stuff comes from China. they might run out of toys and electric shavers but there will still be a lot left to buy.
As I've said elsewhere, that's not how markets work. Supply is balanced with demand. Disrupting supply while keeping demand constant will result in an increase in prices and less stock available to purchase. Add in irrational hoarding when people see fewer things available, and we could have a real problem on our hands. This isn't even addressing the fact that not everything coming from China are items available for immediate sale; many are components used in other products. If shelves don't go empty, it's likely to be the result of the price of everything increasing to quell demand.
You didn't cite a source there, but aside from finished products, American companies that make things domestically source many materials from China. I remember a few years ago a news story about a company that makes crab pots being impacted because the steel wire they use was imported from China. There are a lot of secondary impacts.
As long as it isn't food. Heard a quote once (Last of US maybe?): humanity is always about 3 missed meals away from riots." In reality its probably more like 6-10, but the details aren't important. It doesn't seem like there will be food scarcity, but perhaps there could be. I'm sure there will be less food diversity, which stinks, but that is a different conversation. People will still eat.
As for toys, most kids don't play with a plastic toy for more than like, 3-10 hours of its existence and then it rots on a shelf or in a drawer until is eventually ends up in a landfill. I'm not going to miss that. I'm sure that someone will point out important things that china makes dirt cheap and I'm sure they'll be right. I personally don't care if clothing options are limited or plastic toys are scarce. The US will not implode.
It really seems like china has more to lose than we do, but because they're a communist country they can just deploy troops to quell uprisings. Tiananmen Square comes to mind. So we play this game of chicken and the media screams that they sky is falling.
Of course the Walmarts and Amazons of the world care, most of what they sell is plastic shit and clothes. I have little sympathy for them.
I'm not saying things aren't a mess and that some shelves won't go empty.
However, it is worth noting that CEOs also have a vested interest in trying to reduce tariffs. And they would absolutely fearmonger if they thought it would help them.
Even if the future of the tariffs themselves were at all predictable many outlets are allergic to any connecting of dots. I saw an article from The Hill just yesterday that took the line that the RTO mandate for federal workers was an actual attempt to "improve productivity" at face value without an ounce of push back in an article about how poorly the RTO is going.
The big outlets are terrified to get on this admin's bad side because their current business wants to do a lot of mergers which have to be approved and the administration can tie those up for years on a whim so they're already lying down.
More concerning: I don't think the administration really knows what will happen and I lack confidence in their ability to appropriately handle any fallout.
The specifics of predictions may change, but the supply chain shock doesn’t just evaporate. Trump could transform into a 100% rational, economically wise leader today and the impacts of the past few months’ insanity would still be felt for years. Those bullets are already in flight and can’t be recalled.
Or he doesn't lower them randomly, but in response to other countries lowering their own tariffs and other protectionist measures against the US, resulting in the more "balanced" trade which, whether we agree with it or not, has been the goal all along.
But yes, whatever the reason, the situation could change too quickly for safe predictions. In 2020, the US economy had recovered from the massive disruptions of the Covid lockdowns by Q4. There were shortages of toilet paper and eggs for a while, then there were surpluses and sales for a while, and then it smoothed out.
> but in response to other countries lowering their own tariffs and other protectionist measures against the US, resulting in the more "balanced" trade which, whether we agree with it or not, has been the goal all along.
That is just one of the many, often conflicting, goals cited by the administration, and doesn’t make sense on its face: the reason we have a trade deficit with most countries has nothing to do with them tariffing our goods or taking other protectionist measures.
> in response to other countries lowering their own tariffs and other protectionist measures against the US, resulting in the more "balanced" trade which, whether we agree with it or not, has been the goal all along.
If that is the goal, then it’s a terrible way of doing it. And also inflationary.
The smart ones will head to the hardware store instead of rushing to the paper: bidet-washing-tube will makes you free of toilet paper for life.
Cost: 10-30$
Installation: 20min with basic tools on your existing toilet.
Usage: tons and tons of online tutorials because 1/3 of the world already use that daily. But you can also figure it out yourself easely, it’s way easier than managing node_modules on a shared project.
Even cheaper alternative: a simple plastic bottle half-full and half bend. Many cheap labours in my city (Paris, fr) use one at work (cook, night cleaners, construction…). While the bourgeoisie fight for pooping clean during a world crisis, their Pakistani labor do they shit as usual. We should be inspired.
As someone who has used both, I much prefer attachments. Something like https://bidetking.com/products/gobidet-gb-2003c-chrome isn't the usual flimy plastic garbage you get off amazon but lets you clean yourself without shoving your hand in your ass on a fully separate unit that takes up half the bathroom.
You can get a Toto Washlet attachment for ~$300 (who knows what it costs now after tariffs) that as far as I can tell is almost exactly the same model used in Japan. Heated seat, remote control, dryer, etc.
If you can’t use one of above methods for reason, there’s some « seats attachment » to transform your toilet in a (cheap) Japanese style. Here’s a 79€ one [0] but there’s many alternative brands with less marketing bundled in the price.
Since we got a bidet we use more toilet paper for drying than we used to use for wiping. Perhaps the full-size ones work better, but the fans for add-on bidets are worthless.
If it's famine you're worried about, I think we'll be ok as long as the govt doesn't try to set prices/mandate supply [1] (which isn't out of the question I suppose.)
If it's war due to decreased economic interdependence, well yes that would be much worse.
I would imagine the reaction from the white house will be to attack businesses for failing to order product for political reasons, traitors trying to help China avoid paying Tarrifs.
And I imagine this strategy will be more effective than one would first think, since it's nuts. I imagine it will change business behavior, maybe even to the point that business act against their own economic interests, the question is how much? The crazy thing is that will the Trump effect last long enough to negatively impact the next president or the Democratic congress assuming they win in 2026? The presidents numbers wouldn't suggest that it could go that long, but the world is upside down right now.
It's a good thing the United States doesn't depend on China for toilet paper, then.
> The United States primarily sources its toilet paper domestically, with about 90% being manufactured within the country.However, a significant portion of imports come from
Canada and Mexico.
In fact, the United States does not depend on China for any essential consumer goods from what I can find.
> The top 10 softwood lumber producers in the US have a combined capacity of 24.1 billion board feet, representing 50% of the US industry, according to Forisk.
> The U.S. imports a significant portion of its softwood lumber from Canada, with roughly 30% of its softwood lumber needs being met by Canadian exports.Specifically, in 2023, Canada exported 28.1 million cubic meters of softwood lumber to the U.S. This accounts for a large percentage of the total softwood lumber imported by the U.S., with Canada being the primary supplier.
> The United States can potentially supply up to 95% of its own softwood lumber consumption through domestic production.While the U.S. is a net importer of lumber, its domestic industry has the capacity to meet most of its needs.
Retail shelves are a easy personally viewable measure, but a ramping logistics disruption & price increase on all sorts of processes we rely on daily may also be going on in parallel with more empty shelves. Parts for factories, cars, appliances, power stations etc...
Trump will back down and lift the teriffs the second there are widespread consequences. He’ll give some excuse, and his supporters will eat it up.
That or he’ll make so many deals with CEOs for political support and financial contributions that we won’t even notice that a few smaller companies went out of business or pulled out of the US.
It may not matter. The ships that were supposed to be here, aren't. Even if the tariffs were lifted today, it would still take weeks for new orders to be shipped and delivered to the US. We're very much in the FO part of FAFO
Unfortunately, that has only fueled this madness. Because there is a lead time for shipments, things didn't instantly go bad when the tariffs were announced, so many people mistakenly seem to believe there's no problem. A lot of people apparently need instant feedback to understand cause and effect.
Which is quite surprising, because we went through several stress tests for globalised logistics in recent years with Covid, the Red Sea situation, and the Ukraine invasion. You’d think people would remember what happened 3 years ago.
Read any of the "let's talk to a panel of people who voted for Trump and see how they feel now" articles that NYT, etc put out and you might be shocked at how short memories can be, and how little critical thinking many people are able to apply to the information available to them.
The flexport CEO, in the video shared in this discussion, predicts a back down on the basis that 80% of small business that rely on Chinese imports going bust if they continue.
Even if they attempt to switch suppliers to avoid tariffs they'll be at the back of the line behind the bigger fish.
In a Toy Association survey of 410 toy manufacturers with annual sales of less than $100 million, more than 60 percent said they had canceled orders, and around 50 percent said they would go out of business within weeks or months if the tariffs remained.
…
She had placed a large order of scooters to arrive for the summer. But the importer rerouted the shipment to Canada because it did not want to pay the tariff.
Tariffs are just a policy tool we can use. Every major economic power uses them to some extent, including the European Union.
Trump’s tariffs I think are bad because he is “going after everyone” versus Biden’s approach which was to build a coalition of friendly nations and revamp supply chains to reduce dependency on China who is adamant about being a foe to the United States, European Union, and others. Tariffs are not a bad tool to leverage here against China, but the way this administration is going about it seems like a less prudent approach.
To the OP’s point - I completely agree. If Americans can’t go a day without a flood of cheap, disposable junk (yes this is different than your iPhone or other advanced electronics), our civilization is going to face serious challenges on the global stage and further reductions in quality of life and access to resources.
What so many seem to forget is that there actually isn’t enough to go around. And we have to enact policies and utilize military force to protect our nation(s). Ideally we can do this in a peaceful way that brings everyone up as much as possible but this is only going to occur so long as the great nations of the world see eye to eye on that. We can and should enlarge the pie. But it requires everyone agreeing to doing so. That consensus is failing.
Many seem to think “China will just sell their stuff to the EU and the EU will get cheaper prices!” But that just places the EU in the same intolerable position the United States is finding itself. You must manufacture goods and provide services. You must have industries capable of creating products at all levels. Allowing too much of that manufacturing power to reside in one country, and one that does not like your liberal values, is beyond foolish.
The fact that Americans can’t go a day without TikTok or cheap Temu junk, or stomach paying more for your iPhone and keeping it a little longer should be viewed as seriously and deathly concerning. And going without such things or paying more for them isn’t even in the conversation of national sacrifice or “hard times”.
To add, it seems to me that “we don’t have the ability to build that here” when it comes to something like an iPhone is a serious problem. We have hollowed out our manufacturing capacity.
The idea that China only makes "cheap, disposable junk" and this faux-tough guy "we gotta man up and suffer through" pose is a big part of the problem.
At this point I wonder if it's some sort of engagement farming thing. Surely someone who posts the same stupid stuff every time and gets yelled at it has a reason for doing it? Right?
Despite the ongoing problem of LLMs passing as human (and before that, https://xkcd.com/1019/ etc.), it is entirely possible they're 100% sincere.
First, remember that a lot of people voted for Trump despite all thay he said in the election and all that he did last time around. What he says must resonate with a lot of people, or that would not have happened.
Second, anecdotally, there's someone I used to know back in the UK who was absolutely convinced that Brexit would be a success, to the extent that at one point me simply saying "no" to some claim he made resulted in him shouting "that proves we should do it!" (or similar, it's hard to quote exactly from memory, especially 9 years later). Cambridge graduate, did the maths olympiad in their youth, still acted that way.
And third, it's very easy to get anchored on something that was once true, and not update as the world moves on. When I was a kid, "made in China" or "made in Taiwan" was not a sign of quality, but "made in Japan" was; but one of the films of my youth was Back To The Future, and one if the few things you can allow even fiction to inform you of are cultural beliefs, like 1955 Doc Brown being written to expect "made in Japan" to justify component failure.
Well yes, as I mentioned in my post China does make more than cheap junk. And our inability to make those advanced electronics is a specific problem I called out.
With respect to the “man up” piece of it - well if you can’t go without TikTok and Temu junk you have a big problem.
Both items: inability to manufacture advanced electronics, and inability to not go without cheap junk are separate but related problems.
While I think the Trump admin is weak and will capitulate on tariffs, and that’s aside from the asinine way in which we are treating our allies with respect to the same, him and others are very much right to point out the underlying concern. Tariffs can help to address those concerns, but they are just one tool amongst many.
>Well yes, as I mentioned in my post China does make more than cheap junk.
And yet you don't see the contradiction in characterizing people's fears as being unable to "go without TikTok and Temu junk" rather than being rightfully afraid of the recession and mass economic hardship this will trigger costing many people their jobs and savings. This is going to severely damage our economy for absolutely no reason with no plan whatsoever. People are entirely correct to be worried.
>While I think the Trump admin is weak
Again with the tough-guy nonsense. It's not about "weak" or "strong" it's that this whole endeavor is beyond idiotic. If the goal is rebuild American manufacturing capacity this just isn't a way to achieve that.
> And yet you don't see the contradiction in characterizing people's fears as being unable to "go without TikTok and Temu junk" rather than being rightfully afraid of the recession and mass economic hardship this will trigger costing many people their jobs and savings. This is going to severely damage our economy for absolutely no reason with no plan whatsoever. People are entirely correct to be worried.
Sure people can be worried. In fact, it's America's great national pastime. But I don't think I made the claim that the Trump administration is going about the decoupling with China in the best possible way, only that the goal is one that's worthwhile precisely because the pain you are describing.
No longer importing plastic junk, again this is separate from manufacturing advanced electronics which are also an important concern, and the effects of which are so devastating that we will trigger as you put it a recession, mass economic hardship, and will cost many people their jobs and savings, seems to place our country in an intolerable situation and a reliance on such imports, which if you read the news from the Right People, China seems to experience no economic hardship from such a decoupling meaning we are simply at the mercy of their benevolence. That's a scary thought, and it seems to me we're just going to experience this pain either way, we may as well do it on our terms, generally speaking.
With respect to TikTok you can just delete it. There's no pain experienced there. I'm close-minded on that specific issue. Social media in general is bad anyway, TikTok is just currently the worst and one we can most easily ban today.
The inability to manufacture advanced electronics at scale in the United States is a self-evident problem. I personally don't care about the arguments suggesting why such things can't be built here, because those just further illustrate the problem.
> Again with the tough-guy nonsense. It's not about "weak" or "strong"
Well I don't really care much about this tough guy stuff you are talking about, but as an aside it is rather important politically, especially when we're dealing with a despotic regime in China that must save face, both culturally and by virtue of dictatorship. I mostly just care about policy and the results of the policy.
When I say Trump is weak, I don't mean he is weak in the sense of being a macho guy - frankly there's nothing less I care about in the world aside from TikTok videos - what I mean is he doesn't have the stomach to go through with the plan because of the potential economic repercussions in the short and medium term. In fact, his inability to be stalwart on this issue is precisely the greatest problem now in our foreign policy agenda (or what remains of it) because now all we've done is screwed a bunch of things up and pissed off the allies we need to actually achieve the goal. The worst of all worlds, so to speak.
> it's that this whole endeavor is beyond idiotic. If the goal is rebuild American manufacturing capacity this just isn't a way to achieve that.
The endeavor has merits and likely those are well worth pursuing. I wouldn't disagree that the way in which we are going about things is not the best way, and I think I mentioned that before. I preferred the Biden administration's approach in general, though I don't think they acted with enough urgency.
Cost increases from onshoring are more than wage increases from onshoring.
There is no problem with trade deficits. Countries accumulating USD means they have to lend it back at cheaper and cheaper rates.
The real problem is the federal deficit. In 2024 the USA had to borrow $2 trillion to keep the lights on, while foreign countries only had $1 trillion from net trade deficit to lend.
By analogy, the problem isn't that the USA is buying discount goods, it's that it's funding its lifestyle with a credit card. Paying more for the goods and still using a credit card doesn't solve this problem. It makes it worse
If the goal is to plug the budget issue, you want imports to continue so that you can extract more tax from the citizens.
Even then, quality of life is less impacted if you just raise general taxes like a VAT or sales tax. That way consumers still get the best bang for their buck.
This is disingenuous even by your usual standards. “cheap Chinese crap for Christmas” was just one example of things that tariffs will make it harder to get, by no means the only one.
It’s not the 90s anymore. Lots of Chinese goods are neither cheap nor crap, nor producible elsewhere.
I’m specifically responding to a post that links an article about christmas toy shortages. I know China makes some incredible technology. But it also makes a lot of cheap crap nobody needs. Can we at least agree on banning that?
No (why? what's the actual problem with having cheap crap nobody needs?). But I'd at least agree with something like a carbon tax to target the environmental externalities of the type of commerce you're talking about.
Unfortunately the tariffs hit cheap places like Vietnam just as much or more. (while Vietnam is not perfect I still have hope that supporting them will reform them for the better. Until Xi took power in China I had the same hope for them though. Only time will tell)
Things that wouldn't otherwise be a problem will become a problem. Potentially that includes bottles, tins, plastic food packaging, niche carboard boxes.
Imports from China are ~40% of all US imports. Even a 10% drop would be difficult, and at current levels it's going to be more than that.
That's by value. I reckon since Chinese imported goods tend to be cheaper they probably make up a greater number than the value percentage would indicate.
So I suspect 40% figure is how many items in a typical household are from China.
Edit: in case that's not clear, here's an example:
I have one item from the USA that costs $80. I have four items from China that cost $5 each.
My imports from China are 20% of my spending. My imports from China are 80% of my goods.
It is clear what you are saying. It still doesn't make any sense.
If I buy a bottle of wine, a chicken, a cake, and a pint of blueberries, is it correct to say that my diet is 99% fruits? There are more than a 100 of blueberries in the pint after all.
The weird thing is that toilet paper isn’t even a necessity. It’s a convenience. One could do just as well with a damp washcloth. Sure, you have to wash it afterwards, but it’s not that bad.
Or one could use a bidet, but I think most of these are imported from China. Oops.
