Honest question about trade with China

[leftWNYbecauseofBS]

So Chinese media has come out and said Trump would be naive to impose the 45% tariffs on products from China that was mentioned during the campaign. Going on to say:

“A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”

Now when it comes to trade I really don't know much but there are some here who may...so I have some questions. Serious, honest questions.


For example, when it comes to things like Apple product sales, what is the worst that can happen? We know that Apple products are 'designed in California' but made in China. So obviously Apple profits would take a hit. But how much focus should Trump have on Apple profits? After all it appears the entire spectrum, all the way to the political left, has issue with potential tax avoidance from companies like Apple. And it's not like anyone at the Apple HQ were large Trump supporters. So what's the possible damage?


A study from MIT claims that the cost of producing an iPhone is around $4 to $10 in China. That's on a product that is sold for almost $900. The same study claims that if assembly was done in the US the cost would only rise by $30 or $40. Claiming that:

That’s partly because labor costs are higher in the U.S., but mostly it’s because additional transportation and logistics expenses would arise from shipping parts, and not just the finished product, to the U.S. This means that assuming all other costs stayed the same, the final price of an iPhone 6s Plus might rise by about 5 percent.

Even if Apple decides to keep production in China at an increased cost, why would this prevent Trump from pulling the trigger on this? Apple posts $30B + per year in net revenue and it's claimed they avoid paying about $3.75B in taxes per year.


As for orders being switched from Boeing to Airbus...OK. This is the same Airbus that has nation's walking away from contracts due to extensive delays. Will China pay more to skip several orders already in line in order to keep on track with their growth needs? What about the airlines and nations that are skipped? Can they be convinced to switch their orders to Boeing?


On students studying in the US...OK. Where are they going to go?




But what I find interesting about the idea of tariffs is what is going on in Vancouver right now. They just passed a $10,000 per year tax on unoccupied homes in the city. The reason is they have had a massive amount of Chinese nationals purchasing homes in Vancouver as a way to shelter their money from the China economy. Of course when they passed this there was not nearly the rhetoric from China on this. Why? Well I can only assume that China knows their residents don't have many other options.

[silentnoise]

So Chinese media has come out and said Trump would be naive to impose the 45% tariffs on products from China that was mentioned during the campaign. Going on to say:

“US.”

But what I find interesting about the idea of tariffs is what is going on in Vancouver right now. They just passed a $10,000 per year tax on unoccupied homes in the city. The reason is they have had a massive amount of Chinese nationals purchasing homes in Vancouver as a way to shelter their money from the China economy. Of course when they passed this there was not nearly the rhetoric from China on this. Why? Well I can only assume that China knows their residents don't have many other options.

I've noticed this happening in Wny too when real estate transactions are made public. I'm really surprised the news has been mum about. There is a ton of money being made.

[leftWNYbecauseofBS]

I've noticed this happening in Wny too when real estate transactions are made public. I'm really surprised the news has been mum about. There is a ton of money being made.

It only becomes a story when there is an actual housing shortage or actual pricing issues like what is found in Vancouver or San Diego.

[300miles]

I'm no expert on trade either, so this is my opinion. Trump has a personal (and unprofessional) grudge with certain companies like Apple, but I don't think the focus should be on Apple. They basically build luxury items produced by a wealthy company to wealthy customers. Apple will figure something out and so would their customers. I'm more concerned with the immense amount of general consumer products that are produced in China and sold here. If there was a trade war, or even just high tariffs, our daily costs would increase significantly for basics like clothes, everyday household items, office & school supplies, etc. And that's just on the consumer end. I'm sure there's tons of products sold to businesses as well that come from China. While it may feel good to say we're "bringing jobs back" by attacking Chinese trade, our current situation with China is something that evolved over 2 decades and can't be undone quickly and easily. The most likely result from Trump accomplishing a smackdown on Chinese trade would be very few immediate job gains, but a huge increase in prices for the average American businesses and consumers. It sounds like a great way to trigger a long recession.

I also find it odd that people here criticize Obama/Hillary for "antagonizing Russia" who is a political and military rival, yet they seem perfectly OK with antagonizing China, a political, military, and economic rival, which could have a much greater impact on the lives of average Americans.

I'm not saying we shouldn't try to bring jobs back to America. I'm saying Trump's solution (if you want to call his tweets a "solution") sounds very short-sighted. And considering his own business with China, it's hypocritical too.

[WNYresident]

If there was a trade war, or even just high tariffs, our daily costs would increase significantly for basics like clothes, everyday household items, office & school supplies, etc. And that's just on the consumer end.

Go read the article




http://www.nytimes.com/2013/12/01/bu...a-premium.html

[leftWNYbecauseofBS]

I'm no expert on trade either, so this is my opinion. Trump has a personal (and unprofessional) grudge with certain companies like Apple, but I don't think the focus should be on Apple.

Never really picked up on a Trump v. Apple grudge match but when it comes to politicians and corporations...unless a company stands on the sidelines I don't think they should be sheltered from ramifications in elections.

They basically build luxury items produced by a wealthy company to wealthy customers. Apple will figure something out and so would their customers.

I know poor people with iPhones. I don't think it's fair to say smartphones are products for wealthy customers.

I'm more concerned with the immense amount of general consumer products that are produced in China and sold here. If there was a trade war, or even just high tariffs, our daily costs would increase significantly for basics like clothes, everyday household items, office & school supplies, etc. And that's just on the consumer end. I'm sure there's tons of products sold to businesses as well that come from China. While it may feel good to say we're "bringing jobs back" by attacking Chinese trade, our current situation with China is something that evolved over 2 decades and can't be undone quickly and easily. The most likely result from Trump accomplishing a smackdown on Chinese trade would be very few immediate job gains, but a huge increase in prices for the average American businesses and consumers. It sounds like a great way to trigger a long recession.

I think there is a pretty wide spectrum between a full out trade war and full out isolationism.

I think over the last 2 decades both Democrats and Republicans have allowed international corporations to define trade policy that benefits, almostly entirely, international corporations. I agree 100% that any effort to untangle things quickly and easily would be a huge mistake. That said, I think there is plenty of room for improvement.

Just as you mention Apple and its customers being able to figure something out...I think there is the ability to have trade between the US and China improve without causing a long recession.

I also find it odd that people here criticize Obama/Hillary for "antagonizing Russia" who is a political and military rival, yet they seem perfectly OK with antagonizing China, a political, military, and economic rival, which could have a much greater impact on the lives of average Americans.

I'm not saying we shouldn't try to bring jobs back to America. I'm saying Trump's solution (if you want to call his tweets a "solution") sounds very short-sighted. And considering his own business with China, it's hypocritical too.

So speaking to the challenge of an imbalanced trade situation for the US consumer and worker is equal to antagonizing China? China may be barking right now but the one who is holding the leash are American corporations.

[300miles]

Never really picked up on a Trump v. Apple grudge match but when it comes to politicians and corporations...unless a company stands on the sidelines I don't think they should be sheltered from ramifications in elections.

He specifically went after a few companies like Apple and Ford for doing what all other companies do, including his own Trump company. He called for a consumer boycott of Apple. That's how Trump works when he gets a grudge. I'm sure there's some personal reason why he went after Ford too.

I know poor people with iPhones. I don't think it's fair to say smartphones are products for wealthy customers.

True. A lot of people buy things they really can't afford to keep up with the Jones'. But my point was that it's a luxury product and not a basic necessity. There's no "need" to buy a $800 iphone when a $100 android accomplishes basically the same thing.

I think there is a pretty wide spectrum between a full out trade war and full out isolationism.

Everything else depends entirely on what Trump does or doesn't do. It only took a couple days after the election for him to start backtracking on some of his more ridiculous promises, so I don't doubt that more level-headed advisors tell him to dial back his other threats like this one.

[WNYresident]

For example, when it comes to things like Apple product sales, what is the worst that can happen? We know that Apple products are 'designed in California' but made in China. So obviously Apple profits would take a hit. But how much focus should Trump have on Apple profits? After all it appears the entire spectrum, all the way to the political left, has issue with potential tax avoidance from companies like Apple. And it's not like anyone at the Apple HQ were large Trump supporters. So what's the possible damage?

A little extra cost to purchase an Apple product and/or extra to purchase an apple product but they start manufacturing the product in the states. Who would you rather have work? People in China or people in the USA. Don't most people who purchase a phone just include a monthly cost on their cell phone? So if it's $40 spread over 2 years no biggie.

People are hammering Trump about using the tax laws to save on paying taxes. Are people hammering Apple for saving 3.75 Billion?


When the Chinese students study in the US do they tend to stay here afterwards or go back to China?

By people buying homes and leaving them unoccupied doesn't that lower Vancouver's cost? No trash pickup, less kids in the public school systems and so on?

[4248]

As far as Ford - everything is a word game - they said they weren't cutting the number of employees. They said they werent closing US plants. They are expanding and hiring workers in mexico .

Now lets break that down for the average working guy = We arent closing US plants and we are updating some.

Updating is "automating" automating is installing robotics and air driven machines to replace humans. So eventually less manpower will be needed.

Anther thing they are doing in America is "Cutting entire shifts" - http://www.detroitnews.com/story/bus...lant/26250677/
So each remaining shift has the same number of employees.

So they dont consider this a "Reduction" why because they offer them employment if they are willing to relocate and take a pay cut.

The Dearborn automaker on Thursday said it will indefinitely lay off 673 hourly employees and 27 salaried employees on the "C Crew" at its Wayne plant starting June 22.

"Ford will be working to redeploy affected hourly employees and they will be considered first for southeast Michigan opportunities as they become available," the automaker said in a statement. The first will be deployed as summer vacation fill-ins.

They have been doing this for years now and nobody raises a fuss - when I say that I mean the UAW and their PAC Funds have agreements to maintain a minimum level of funding. So the mainly Dem Candidates still receive their campaign money - so they don't care about the working man that lost his job.

That is just the tip of the iceberg - so much has been quietly agreed to right under our noses and the Unions have helped sell out future employees.

[Save Us]

Trump was right to call this relationship into question. It's not balanced or fair. They historically have dumped products like steel, devalued their currency, and have no qualms about selling us half a trillion more than they buy.

They certainly have no problem doing these things. Why do we have such a problem us examining it? Oh BTW their consuming middle class is bigger than ours, and may not even need us as much for their markets and that was their goal from the get go. They also are aware we can't pay back that 1.5 trillion either. If we devalue our currency it makes that debt cheaper to pay back, and makes our goods more affordable.