Kraken wrote: ↑Tue Jun 19, 2018 1:38 pm
Fitzy wrote: ↑Tue Jun 19, 2018 8:12 am
Hypothetically assuming you are correct about the leverage, wouldn’t that be based on the effect of the tariffs on each countries population? So wouldn’t the Chinese have more leverage because increased prices will cause more dissatisfaction here than in China? Each job loss here will be reported heavily and felt heavily, whereas in China I would think they will be ignored or the people can be forceably reassigned. Or are you suggesting that China is more open to public pressure than reported?
Add to that, that Trump isn’t just fighting with China, he tossed in most of the rest of the wealthy countries, so we have the effects of multiple tariffs, across multiple sectors, hitting multiple people.
I’m just not seeing where this leverage is coming from.
Devil's advocate: China has a smaller economy than the US and exports more to the US than the US exports to China. Therefore the tariffs affect a bigger share of China's economy than ours, leaving aside the effect on consumer prices.
Trade is multilateral, and China is not starting fights all over the world. In the medium to long term, they can find other customers for their goods, especially if the US continues to alienate its most important trading partners. In the short term, though losing US exports will hurt China more, and Xi can't tolerate much of that in light of an already-slowing economy. So: short-term advantage goes to the US, insofar as anybody benefits from trade wars.
I don’t know the answer, but how much of the trade being hit with tariffs is actually US companies? Or, how much will American companies absorb the loss in order to maintain marketshare while waiting out the trade war. If they would do so. If they are willing to try to wait out, does that change the short-term outlook? With Trump going after China and the EU it seems they could develop a warmer relationship, but maybe they are incompatible for further development. The TPP was supposed to help keep China in check, but we walked away from that.
It wouldn’t surprise me if both sides announce an agreement to end the new tariffs, Trump declares victory even though the original issues that led to the tariffs were never addressed. Nothing like solving a crisis you make to get the base fired up.
Rip wrote: ↑Tue Jun 19, 2018 11:13 am
No, in the end they don't give a shit about the people.
Yeah, that was basically what I was arguing, that they can absorb far more damage to their people than we would tolerate here which would seem to eliminate our leverage.
noxiousdog wrote: ↑Tue Jun 19, 2018 10:43 am
The DOW has fallen 700 points in two days and it's being blamed (rightly or wrongly) on tariff worries. I don't think we're going to have to worry about the toilet paper metaphor for pushback.
Meh, the DOW is a short-term pain, loss of $.99 toilet paper is forever!
No, I think you’re right, if I’m reading correctly. I gave too much power to the people, but corporations will react much quicker if profits and their stock drop quickly.