U.S. China Trade War Kicks Up Another Notch - What Happened To FREE MARKET Capitalism.?

a reply to: Flyingclaydisk

Not at all. That's what they do.

a reply to: IgnoranceIsntBlisss

Well, in all fairness, that's kind of two different things. Although they are indirectly related as a result of economies of scale. How they are able attain these economies of scale is really the issue, but perhaps that's what you meant.

a reply to: TheBandit795

Not exactly, but the actual process would go far off-topic.

You're talking about the retirement of bonds, which isn't just as simple as the Fed printing up some money.

In any case, you won't find me defending anything to do with the Fed for longer than a NY second, so rather than get into the semantics of the process I'll just yield.

originally posted by: carewemust
Friday, April 6, 2018

I don't know how bad this is on a scale of 1 to 10, but the Trade-Tariff threats exchanged between the U.S. and China have ratcheted up another notch today.

China’s commerce ministry on Friday said it would fight the U.S. at “any cost” after President Donald Trump threatened to impose tariffs on an additional $100 billion in Chinese imports.

Trump asked the U.S. Trade Representative (USTR) to consider lobbing additional tariffs against China in light of the country’s “illicit trade practices” that have “destroyed thousands of American factories and millions of American jobs.”

On Tuesday the Trump administration announced a tariff on 1,300 products from China, including medical, aerospace and information technology accounting for nearly $50 billion in annual imports.

Prior to that, additional tariffs were placed on Chinese steel and aluminum.

The Chinese government fired back with $3 billion in tariffs of its own, targeting American goods.

Source: www.foxnews.com...

Here is what I don't understand.. In a free-market society, consumers buy what they want. If it costs less, and gets the job done, that's the product we purchase.

If that more appealing product comes from China, Viet Nam, Canada, or wherever.. we don't care. That's what global free-market capitalism is all about.

So why punish another country because they produce low priced products that consumers, businesses, and factories in America CHOOSE to purchase? The U.S. government charging the Chinese (or anyone) a penalty for supplying what Americans are asking for, will raise the cost of that product for Americans, which is cruel.

Reminds me of the of that horrible ObamaCare fine/tax for not having government-approved health insurance. The U.S. government says, "Do it our way, or pay a big $$$ penalty!"

U.S. companies can do what's necessary internally, to produce the same product at an even lower cost, if they want a larger U.S. market share. Right?

-CareWeMust

Nope...China would just produce those things cheaper still...What is now on our side is that Trump has diminished many of the regulations that prevent business from succeeding here in the US...

And free, unfettered trade is not the American way...We want 'fair' trade...When china sells us 800 billion worth of goods but will only allow 150 billion worth of goods to be sold in their country, it's time to balance the trade...That's what this is all about...And I'm all for it...

a reply to: Flyingclaydisk

My example goes way beyond economies of scale. It costs US $3 to ship an empty envelope versus they can completely ship a product and cover all mfg + ebay selling etc + handling etc fees for $1 TOTAL.

Economies of scale would only account for the cost for them to make it versus US to make it.

But the cost for a regular person to go and mail an empty envelope, either way, thats a whole nother discussion where we're getting completely railroaded (which involves the UN surprisingly).

What and what quantity goods are produced in China for American corporations? Even Ivanka has her clothing line produced in China.

www.cnbc.com...

Perhaps Trump should practice what he preaches. Guess where Trumps line of products is made? Or does the Trump family get a pass on "made in america" because you know He's Trump! Trump can outsource and still MAGA...lol

www.alternet.org...

www.washingtonexaminer.com...

a reply to: IgnoranceIsntBlisss

No, economies of scale apply to shipping of products too, and actually this is a huge deal.

For example, the cost difference to send an empty container ship from China to the US versus the cost of a fully loaded one is negligible (for all intents and purposes). That's not to say the cost is negligible (it's not), but the cost difference is negligible. In other words, it costs just as much. So, if you put one container full of products on that ship it costs whatever the shipping cost of the ship is amortized over the contents of the container. That shipping cost, per unit, is going to be STAGGERING on a per unit basis for this shipment. However, put 3,000 containers on that same ship, all full to the bursting point with products, and now that per unit cost for shipping drops by orders of magnitude, down to just pennies per unit. Remember, the cost of the ship, fuel, labor, insurance, etc. is the same, regardless of whether it's full or empty.

So, you very much do have significant economies of scale when it comes to shipping.

ETA...when you mail a letter it's a completely different scenario. Sure that one letter is going to cost you $3, but if you mailed a whole container load of those envelopes, say 2,000,000 of them, it won't cost anywhere near that per unit. Why? Because it's going to get loaded on a ship with 3,000 other containers full of 2,000,000 envelopes each. Works the same way for going by air, just a different (more expensive) mode of transport. AND, if you're trying to compare shipping by air against by sea, you're comparing apples to hammers.

a reply to: Flyingclaydisk

The ships / containers / planes still have to make a return trip to be able to bring back more stuff. If less stuff is going back then there's spare room so it should be cheaper to ride the coat tails back.

This goes way beyond economies of scale.

Sure, for one guy to get a container and ship 4000 sacks of widgets versus a guy that wants to ship one sack of widgets there is economies of scale.

But on a National Level, the price to mail an empty envelope via regular mail... it costing a Chinese person 'ONE CENT' to mail an empty envelope versus a US person having to pay THREE DOLLARS to mail the same envelope back... economies of scale just isnt hardly the place to look for the lop side.

originally posted by: carewemust

originally posted by: TerryMcGuire

The U.S. government says, "Do it our way, or pay a big $$$ penalty!"

Isn't that what the president is saying to China?

Yes.. The President is saying to China, raise your prices, or we'll penalize you for sending things here that are too cheap. Is that how you read it?

Sort of. My reading though is more simple. Trump is a my way or the highway man. He is saying to China do what I want or I will toss a tantrum regardless of how it effects on others.

a reply to: IgnoranceIsntBlisss

Well, that's all fine and good...IF you're willing to wait a month or longer to get your envelope there.

I'm afraid you're not understanding the concept very well.

I am not suggesting cost differences are ONLY a result of shipping economies of scale, but rather just part of the reasons.

Additionally, your analogy is not accurate also. The return cost is built into the initial shipping costs (the return trip with whatever meager exports is essentially free). Exports going to China are generally not manufactured goods, but rather raw materials and those don't go by container ship, they go by bulk carrier vessels.

ETA...In any case the competitive edge of Chinese export goods is significantly enhanced through economies of scale in shipping. To think otherwise would be a mistake. You're also overlooking the inefficiencies of the USPS and the overland costs to get to a US port in your envelope example. Not to mention the fact that most mail (envelopes) go to China via air, not by sea...back to the apples and hammers comparison.

a reply to: TerryMcGuire

False. Trump is saying stop subsidizing your companies, taking a short term loss with the long term goal of driving away US competition, or we will retaliate by imposing tariffs to offset your subsidization. It's about leveling the playing field so that US companies and jobs are not lost forever.

a reply to: Flyingclaydisk

10-20 days usually.

I shipped a package by container once (back when USPS offered that service) and it took over a month.

originally posted by: ufoorbhunter

originally posted by: Mandroid7
Yeah, this really pisses me off.

I'm a little old, but I would gladly enlist and grab some of the best shooters in my state to handle these country wrecking sleeze balls.

I'm old mate and been in engineering in UK all my life. I'd happily press the button to nuke China if I could, they destroyed my countries engineering they don't play it fair. Nuke em, I don't honestly see any benefit around my parts to having China exist at all.

You are a complete moron, brainwashed by your own government. Anyone who wishes such a thing obviously has problems!

a reply to: Flyingclaydisk

I also costs over $2 to ship one ounce domestic. Over $2 to ship a one ounce parcel from here to the next county over in your own state.

China can ship two packages each with items that weigh several ounces, to here, pay all the ebay etc fees, and have the USPS carry thru the domestic shipping system, to your mailbox (with tracking), for exactly $2.

Care to explain how economies of scale answers that challenge?

Apples and hammers indeed.

originally posted by: hopenotfeariswhatweneed

originally posted by: UKTruth

originally posted by: carewemust

originally posted by: dragonridr

originally posted by: carewemust

originally posted by: TerryMcGuire

The U.S. government says, "Do it our way, or pay a big $$$ penalty!"

Isn't that what the president is saying to China?

Yes.. The President is saying to China, raise your prices, or we'll penalize you for sending things here that are too cheap. Is that how you read it?

Heres why look at the numbers.

en.m.wikipedia.org...

Thankyou for that comprehensive chart. It looks like China really ramped up their steel production in 2007. A big global demand for their product must have materialized around that time.

A big global demand for their PRICE materialised at that time, from companies who don't care about quality or customers, only profit.

Only care about profits...... Hmm sounds like capitalism to me, when you have unlimited customers you don't care about quality, this is what happens when capitalism goes unchecked, it's a simple case of power corrupts.

Don't disagree. Pure capitalism is dangerous. The end game of pure capitalism is one person owns everything. We'll never quite get there of course under any capitalist system but left unchecked you end up with the kind of sh*t show we have now where just a few companies control the entire world.

There must always be a balance.

a reply to: OccamsRazor04

Tariffs are just his tool to either slow the trade imbalance or open Chinese markets with fair trade.

Just like threatening to pull out of NAFTA wasn't to raise new tariffs but to negotiate a better deal.

Just like threatening to 86 the trade agreement with South Korea produced massively underreported con cessions from Seoul.


We have enormous leverage with a multi-trillion dollar consumer market. We just never use it because Wall St. only cares about cheap labor and profit margin, not the US industrial base or American workers. And Wall St owns the press (and more than a few politicians).

originally posted by: UKTruth
a reply to: carewemust

Globalism and free market capitalism can never work.
Why? Because conditions in different countries create an unfair economic advantage. Why should China have a pricing advantage just because they treat their people like slaves?
Add in that tariffs are already uneven. There was no 'free' trade to begin with.
Countries like China have been screwing the world over, stealing ideas, using near slave labour and undercutting markets. Corporations are delighted - they can use near slave labour to make even more money and in the process screw over the countries where they actually built their companies.

This is probably the dumbest post on economics I have ever read and it's number of stars is a sign of how many people simply have no clue how economic history and markets have worked.

Globalism and cheap prices are as old as the first large scale trade civilizations.

Funny socialists and "neo conservatives" both seem to hate and misunderstand the market.

a reply to: RadioRobert

Exactly, and for as long as I have been alive no one has had the strength to do anything about it, until now. Trump wants a better trade deal, we deserve it.

originally posted by: RadioRobert
a reply to: OccamsRazor04

Tariffs are just his tool to either slow the trade imbalance or open Chinese markets with fair trade.

Just like threatening to pull out of NAFTA wasn't to raise new tariffs but to negotiate a better deal.

Just like threatening to 86 the trade agreement with South Korea produced massively underreported con cessions from Seoul.


We have enormous leverage with a multi-trillion dollar consumer market. We just never use it because Wall St. only cares about cheap labor and profit margin, not the US industrial base or American workers. And Wall St owns the press (and more than a few politicians).

Uh...no.

These deals should happen slowly.

Why.

The economy stupid to quote another scumbag.

Anyone with a high school economics education understands the global marketplace and the symbiosis from American workers relying on supply chains and exports more than trump and people who support a trade war.

originally posted by: OccamsRazor04
a reply to: RadioRobert

Exactly, and for as long as I have been alive no one has had the strength to do anything about it, until now. Trump wants a better trade deal, we deserve it.

A better trade deal for who?

Certainly not American consumers.