We don't generally allow politics on the forums. With the obvious exception of The Political Machine. The Political Machine - The Power of the Presidency Can Be Yours! Forums
But the world trade situation is probably something worth discussing provided people can avoid assuming "the other" are stupid or evil or greedy or whatever.
Now, I'm a child of Michigan USA. Detroit area. That means cars. And I can say, regardless of political association, the topic of unfair trade has been discussed endlessly here.
I won't get into the issues with the UAW and Unions and whatnot. But I will say that the global trade situation is more nuanced than most know.
To side-step the USA vs. China stuff, I want to instead talk about UK.
Last UK blast furnaces days from closure as Chinese owners cut off crucial supplies | Money News | Sky News
The United Kingdom is about to close its last steel plant. I.e. for the first time since the Bronze Age, the land of England will stop being able to make metal. That's a bit hyperbolic but the point is the same. Losing the ability to make certain basic civilizational goods is a problem.
If we lived in a world that would never have any supply disruptions and could avoid having any wars, then it would be perfectly fine for the US, UK, the EU, etc. to just switch to a pure information economy of services and leave the production of physical goods to other countries. But we don't live in that world.
When COVID hit, Americans discovered that most antibiotics and N95 masks were made elsewhere and no longer readily available. This is a problem when there is a disruption.
I don't know what nations should do. I do know that it is probably a very bad thing if the UK, for instance, can't produce steel anymore. Similarly, I think it's bad for the world in general if a single country produces virtually all the manufactured goods (whether that be the USA, China, or whatever).
Just my 2 cents.
If you need to keep some manufacturing around for national security reasons you could and do subsidize them.
That's actually the argumentation behind a lot of the food importation restrictions that are in place between Canada and the US, dairy product for example, or with any other country for that matter. It would not be wise to outsource part of your basic food production, so you have to protect it or else you surrender your sovereignty to someone else. As you said, Covid did teach everyone about the importance of having local supply of some critical stuff.
I guess, the whole issue is about just how much local production you need to protect per sectors based on your available raw resources, etc. Just how reliable are your trade partners in the long term is also a big deal in all of this.
Mine, too. I do think that ideologies and politics from the macro to the micro cause immeasurable and unnecessary suffering.
It certainly appears that redundancy is necessary, though...in this and other things, and thank goodness (and good planning) it was there!
Glad to be able to read your thoughts here in forums again, Brad.
Messing around with trade/tariff restrictions means stock exchange/investment uncertainty.
What America has done in one day wiped $45,000 AUD off my superannuation. Money I had worked for for half a century.
My choices will be simple. I need to die earlier than expected.
I am finding the back and forth on tariffs pretty annoying.
Fmr. Treasury Secretary Yellen: Patterns suggest loss of confidence in U.S. economic policy
I think the World is.
Life might be a 'box of chocolates' but it's not someone's Monopoly game ...
I think the World is.Life might be a 'box of chocolates' but it's not someone's Monopoly game ...
I totally agree. I am fed up with this "shoot from the hip style" of governing!
First, the bold font is mine. I agree with it entirely. I also agree with the need for redundancy in production to prevent that Monopoly mindset.
The largest minus in redundancy is heat and chemical pollution which are destroying the only planet we have.
There clearly is no simple solution to any of this, and we will not be the ones to solve it by ourselves here, but if I've learned anything in 77 years, extreme views and actions will not produce anything but more extremism and ascending hostilities, both on the micro and macro scales.
Here's hoping the Messiah comes, or returns, whichever you believe in...but I suspect we're all going to have to learn to work together on this and learn that the middle road and moderation in all things are the better, if far more difficult path, are the way to go while waiting for Him.
Just my geriatric $0.02. Thanks for your patience with an old guy.
This is so true and tragic. For a long stretch it seemed like we were making progress, but at the moment the world seems to be backing away from the lessons of the world wars. I hope it is short-lived.
These kinds of large broad-based tariffs raise prices on everyone. So, people living paycheck to paycheck, retired people, and disabled people feel it the most. The back forth now it's on now it's off doesn't help because the overall message is the tariffs are not going away. This is just a temporary reprieve in payment for your support.
Protectionism at this scale raises prices too greatly and will not be offset by new investment. Currency valuations are the economic mechanism by which trade should rebalance itself. The old adage we are sending them pictures of dead presidents in exchange for trade goods comes to mind. The value of dollars will decrease relative to the foreign currency.
Strategic direct subsidy of key resources and products would be better. The goal isn't economic growth. It is instead strength, self-sufficiency, and reduced cost.
I also am a firm believer in development. I would like to see us develop hydrogen for energy. It is feasible today.
Power generation can be developed using offshore generators that use tidal currents for the needed mechanical energy. The tides are completely reliable and predictable. The electricity could then be used inland for hydrogen generation and collection in targeted water basins (man-made and natural). The natural gas pipeline infrastructure already exists to transport hydrogen everywhere in the US.
I also would like to see an end to government retribution to critics of the government.
It's going to happen.......
Today's announcement. According to the White House, 'China now faces a tariff of up to 245% on imports to the United States as a result of its retaliatory actions.'
And, China's official policy is they are not afraid of a trade war.
The tit for tat will likely continue.
The latest higher tariffs will cause higher inflation and slower growth.
Fed Chair Jerome Powell addressed Economic Club of Chicago today.
The full speech from Wall Street Journal
Say good-bye to all the small businesses that were using China for their products and cannot find another source.
I thought I would share some insight into trade, fiscal policy, and monetary policy dynamics. The free hand of supply and demand will always win out in the end. I will give an overview of why this is the reality.
Let's say there are two countries, the US and China. The US produces apples and oranges and uses dollars. China produces apples and oranges and uses the yen.
The current value of the dollar and yen are 1 dollar equals 1 yen. China has many oranges but not quite enough apples. The US has lots of apples but craves many more oranges. The trade between the two countries will be made in dollars and yen. Let's see what happens.
The current world price is apples and oranges are each worth 1 dollar and 1 yen.
China wants 500 thousand apples. The US wants 1 million oranges. The US sends China 1 million dollars for 1 million oranges and China sends the US 500 thousand yen for 500 thousand apples.
But China does not want 1 million dollars because it has to pay its companies in yen, and the US has the same problem it does not want yen since it pays its companies in dollars.
So, if the US and China then swap currencies 1 million dollars is worth 500 thousand yen making the new currency equilibrium 2 dollars are equal to 1 yen. This trading dynamic is back in balance with no trade deficit due to currency valuation. This is a simple example of how the free hand of supply and demand for oranges, apples, dollars and yen achieve balance all on their own.
However, for years China has been buying US debt with its excess dollars. So, in this regard there is no trade imbalance. China has been buying some US goods and the rest spent buying US debt with all the dollars the US has been spending in China. However, even though in terms of physical goods alone there has been a substantial trade imbalance, China solved its problem of too many dollars (pictures of dead presidents) by buying the US debt.
Yet this result is largely of the US's making because it has been running large budget deficits for years. Afterall, what is China to do with all the excess dollars it received over the years? It both facilitated the US demand for Chinese goods and preserved the value of its monetary holdings by buying US debt which pays interest.
The supply of US debt would decrease if the US would once again balance its budget. During the Clinton administration there was a great deal more cooperation between Democrats and Republicans and that made a balanced budget happen.
If the US were to do this again, it would cause the dollar to weaken relative to the yen since China would accumulate more dollars, and with there being no more US bonds for China to purchase the dollar would weaken relative to the yen.
So, what would happen if the Fed were to lower interest rates right now. It could increase the money supply by buying US debt. That would increase US debt prices and lower interest rates. Doing this during times of inflation increase inflation further it would also increase the value of US debt that China holds (its war chest to survive the trade war).
The tariffs are not a free market activity. They will cause severe disruptions to trade, investment and inflation. The free markets will apply its own pressures on supply and demand in all the markets for goods services (GNP), prices, interest rates, investments and jobs.
My two cents.
I think losing our ability to manufacture, mine, build, and produce energy in the long run would be devastating for America. A great example of this is Germany which relied on cheap Russian natural gas. When the Ukraine war forced them to give up that source it devastated their economy and they're still trying to recover.
China is not our friend and they have not been on track to become one. Look at how they suppressed Hong Kong, consistently threaten Taiwan, and are in process of erasing the Uyghur population.
We are letting them control things like the production of rare earth minerals. The UK may soon close its last steel making plant. We should never have given these and other important industries up. By doing so we compromise our future for short term gains today. You can't start a modern iron mine without steel. You can't grow food without steel. You can't do anything thing without oil or gas. Even nuclear can currently only replace our electricity needs do too its limitations. Renewable energy doesn't provide enough energy for a modern industrial society to produce and upkeep it.
So I understand why Trump has placed the tariffs, but I think this was a poor attempt at trying to solve this problem. To me these tariffs represent an increase to the price of a foreign good to make American made products. They will inevitably make products we buy more expensive as that's literally their purpose. So if I was in charge I would tackle why American made products are so expensive, and then tariff where I'm unable to cut regulation to lower costs.
Kite and Key has excellent well researched and presented videos on many topics, but I'd like to share these.
Why mining is important
Energy:
How we get our energy
One of the several large challenges facing renewables
Red tape:
High cost of regulation
A common theme that you'll find in these is that regulation is preventing us from building important infrastructure, mines, and industry. There are regulations that are necessary, we don't want more superfund sites filled with toxic waste. We have to understand though that no regulation is without cost. Just because we choose not to dump waste into a river, China, India, Mexico, ect. may not share our reverence for the environment. So we can look the other way and let them damage their environments or treat their workers poorly or we can punish the companies and countries through options like tariffs, but understand that that will come with a cost to us.
Finally Trump is pursuing the easy option. Congress gave the power to the President to impose tariffs. This should be their duty, but they're working hard to reduce their own power as fast as they are able.
How the president became a king
Legislative branch decline
Death of pennies. An example of how our current government works
Changing the regulations is hard. It requires the will to stand up to interest groups who will inevitably pull funding and fund opponents. It requires both parties to work together. It requires smart planning and effort. All of these are severely lacking in Congress and it doesn't look like it will change unless we the people recognize this is a problem and demand a return to the Constitutional powers for each branch of government.
Alright, I know I've asked a lot of you to go watch an hour worth of videos. I do think it's important to have a big picture view. Without that we can't argue for meaningful reforms that will improve our lives and that of the next generation.
I highly recommend other videos from Kite and Key and CPG Grey. Kite and Key posts their sources on their website.
All of my links are fixed
"A great example of this is Germany which relied on cheap Russian natural gas. When the Ukraine war forced them to give up that source it devastated their economy and they're still trying to recover. "Nope, sorry. Still going relatively strong because we set up alternative sources very fast. The reason why for example the automobile companies struggle ist that they are still living in the vintage oil-age and have no decent electric cars.
https://fortune.com/europe/2025/01/28/germany-stuck-deep-economic-crisis-major-industry-lobby-bdi-predicts-longest-downturn-since-1990-reunification/
https://cepr.org/voxeu/columns/recent-weakness-german-manufacturing-sector
https://m.youtube.com/watch?v=ZOetQ_mmLuo
Lack of plentiful and reliable energy is one of the top issues facing Germany. Renewables are unable to provide reliable energy needed to power heavy industry.
It is the same problem it has always been, the hourly wage in China just isn't very much and the working conditions aren't very strict on the employers. For example, the average factory worker makes about 4 dollars an hour in China whereas in the US they make about 17 dollars per hour. These corporations migrating to China simply want cheap labor.
Other then that I do agree with your post
The problem involves currency manipulation, as well huge Western and European purchasing appetites.
I do agree that cheap labor can be an issue. The question is why is that labor cheap and is it worth it for us to implement one of our other options such as tarrifs so that America is a more attractive option for setting up business.
The video on mining touches on this subject a little when it discusses how children are forced to work in the Congo mines, or that cheap Chinese labor is used for their mines.
I would like to point out though that the cost of labor is not only in the wage however. This article by Reason magazine explains that the cost of regulation can be substantial as well. Especially for manufacturing jobs. These costs can reach and often exceed $24,800 per employee per year.
https://reason.com/2025/04/07/the-trump-administration-should-focus-on-deregulation-not-tariffs/
On top of that American workers often receive benefits such as healthcare, membership in unions, worker protections, and days off.
Just to give one example my coworker was ranting about a Republican congress man who wanted to defund the Occupational Safety and Health Administration and give it to the states. I decided to read why this congress man was upset with OSHA and found that OSHA was working on a rule that at 90 F employers would need to implement some benefits for their workers such as a cold water station and cool place to take breaks at. At 90 F employers would be required to give breaks of 15 minutes every 2 hours.
https://www.osha.gov/sites/default/files/publications/heat-rulemaking-factsheet.pdf
This means that labor would become 12.5% more expensive in hot areas. This congressman was from Arizona where a cool day is 90 F. Having worked on roofs in 100 F I know how much is sucks to work in these conditions, but I can also recognize that this proposed rule would increase costs for construction. A rule like this could drastically reduce Arizona's competitiveness when it comes to companies moving and doing business in Arizona.
This is all to say I agree with you. I don't like tariffs personally. I'm more free market type. The problem is as soon as you add regulation the market is no longer free so you've got three options. You can remove the regulation which might reduce working standards/environmental standards, you can put your thumb on the scale with tariffs or other market manipulations, or you can do nothing and recognize you are likely to see a reduction of the industry being regulated. We've added so much regulation that the scale is completely in other countries favor.
"Lack of plentiful and reliable energy is one of the top issues facing Germany. Renewables are unable to provide reliable energy needed to power heavy industry."Still nonsense and plain right-wing propaganda that is wide spread. Also NOBODY propagates here, that we can do only with renewables (at the moment).
That certainly is part of what drives the imbalance. The question of how to create an equitable world is very complex and difficult. Throwing tariffs around is like standing up in a room and yelling at everyone. It's gets attention, but it's not a solution. Strongman tactics will not make a better world.
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