Trump's sharp tariff hikes could speed up China's shift to new markets and offshore factories
Trump's sharp tariff hikes could speed up China's shift to new markets and offshore factories
U.S. President-elect Donald Trump has threatened to sharply raise tariffs on all Chinese imports and close some loopholes Chinese exporters currently use to sell their products more cheaply in the U.S.
Summary
Trump’s proposed tariff hikes on Chinese imports, potentially reaching 60%, could accelerate China’s shift to alternative markets and offshore production.
Exporters in Yiwu, a hub for small goods, report declining U.S. sales and are increasingly targeting regions like Southeast Asia, the Middle East, and Africa.
Trump also plans to close tariff loopholes, such as the $800 duty-free exemption, which would heavily impact low-cost exporters and American consumers.
Many Chinese manufacturers are relocating production to countries like Vietnam and Mexico to evade tariffs, but further restrictions could disrupt these strategies.
You're viewing a single thread.
Yep. A 10% tariff will mean that every other country has 10% more purchasing power compared to the US. It's basically shooting your own economy's competitiveness in the foot.
It's not meant to make the US competitive, it's to make it isolated. Like I'm all for domestic manufacturing, but their goal here is to knock the US down a few pegs in every metric.
Yesterday I saw on Fox News someone saying that we could save $1t by eliminating the department of education... But nothing about how much it would cost us in competitive advantage against other countries.
“we could save $1t by eliminating the department of education”
[x] doubt
If we were spending that much on education, we wouldn't even be talking about this.
Usually they say "save x amount" but neglect to say over what time period we would save it. 10 years is common but not universal. It's more about "sticker shock" than the actual truth
Even 100B/y would be shocking.
Why?
We should be spending an incredible amount on education. The entirety of our advancement as a species relies, fully, on our ability to train and educate our generations. A country's advantage on the global stage, it's ability to make good decisions, it's stability, quality of life....etc All hinge on education.
The "return on investment" is massive.
Just to mainain requires incredible effort, nevermind get better.
I could not agree more, it might be the thing I'm most angry at. Our education system has been purposely fucked for decades and it's the biggest tragedy I've seen.
What I'm saying is, it would surprise me very much if we actually even spent 100B a year on education, the previous comments estimate on how the 1T amount was broken down for "savings."
Like I’m all for domestic manufacturing
How do you propose we achieve a healthy domestic manufacturing sector? It's not possible for US Companies to compete on price when they pay higher wages and deal with a dramatically more expensive regulatory burden relative to global competitors who are farcically still labeled as "developing" so they can skirt WTO rules.
To pick an example and lay it out plainly it's not possible for Ford / GM / Chrysler to make and sell vehicles for $30,000 USD while paying their workers $40USD per hour and conforming to US Labor and Environmental laws. This is also why vehicles built in the EU are so fucking expensive for Europeans to purchase.
Auto manufacturing is a single example but the same things holds true for nearly all manufacturing sectors and its why so much production shifted to other areas of the world.
If we want to continue this "race to the bottom" on consumer prices then we must accept the consequences of doing so. If we want to have healthy domestic manufacturing sectors that keep people employed while paying them living wages and protecting both them and the environment then we must accept the consequences of doing so.
Yesterday I saw on Fox News someone saying that we could save $1t by eliminating the department of education
It would save the Federal Government a trillion dollars and likely costs the States in aggregate at least a trillion. We wouldn't really "save" anything, just cost shift it back to the States themselves. Which may, or may not, be a fair trade off. Both Red and Blue states seemingly want more control of their education systems and arguably we should give it back to them...as long as they themselves are willing to pay for it.
Not really, Demographics is the fundamental reason why you are seeing tariff’s come back in vogue. People under 45 are the main consumers of goods as they are establishing households, raising kids etc etc. The population of Millennials and Gen Z across the globe is not large enough and is not forming households fast enough to consume and/or support the production capacity that we are capable of.
This is why China is seeking to export their way out of their current economic crisis. The population of Chinese 40 and younger is much smaller and shrinking at the fastest rate in history, even faster than Japans population in the 90’s. They don’t have enough consumers to buy the things they are making. They need foreign markets to maintain their industrial base and export their way out of the financial crisis they are facing.
Europe also has varying degree’s of the same issue. The Millennial and Gen Z populations are much smaller than older populations meaning that they also can not consume the products they are making.
The US and North America as a whole is the only major “rich” market that has a large Gen Z and Millennial population that can replace the boomers. The US (and most of the world by extension) has seen the risks of putting all of your production in one basket (China) during covid and is seeking to build out it’s industrial base in North America to home shore much of it’s production and logistical chain. The Inflation reduction act was pivotal to starting this process. It’s expensive and will take a few decades to complete. However North America can’t build out its industrial base if China and to a much lesser extent Europe dump products on our markets. Hence tariff’s and trade disputes.
I don’t think Trump is going to put sky high tariffs on Mexico, Canada, they are critical trade partners and are essential to building out our industrial capacity in North America. But I do think he is looking for concessions from them. During Trumps first term he renegotiated NAFTA, essentially putting same agreement in place with a few small tweaks and called it his own. I think he will do the same here.
Europe is a different story, the US doesn’t need them to build out our industrial base. The US wants to protect Boeing and a few key industries so I expect there to be some conflict and even a trade war to get them.
China is a different story, I don’t think anyone from either party want to do business with them. The US through two separate administrations has been kneecapping their economy since the end of the Obama era. High tariff’s from the US and Europe will essentially strangle their economy and put the final nail in their coffin. They would never make the leap to an advanced economy or get out of their current financial crisis.
At the same time I think high tariff’s on China would also increase the chances that we will see some kind of direct conflict over Taiwan in the next ten years. If China see’s that their economy and production capacity is going to nose dive over the next decade then the calculus for making a attempt at reunification becomes much different.
In the near term, prices are going up. Consumers who voted Trump looking for cheap gas and eggs are going to get fucked.
Some of this is likely to be grandstanding, no?
Either way, even if he goes through with this, it's not like this will have any noticeable impact on his support.
Some of this is likely to be grandstanding, no?
Who the hell knows with Trump.
He makes so many random and often contradictory statements, it's hard to predict what he will actually do, and what he won't.