Trading wars impact


#1096

We all know about that already :rofl:


#1097

You failed at the only thing you really wanted to be: a womanizer. :smile:


#1098

You can tell the way I use my voice that I’m a woman’s man.

Also, I don’t like Mondays.


#1099

I like ‘how deep is your love’ :slight_smile:


#1100

OK Back to the original programming. Saw a post on Quora that says all my points better than I ever did. So I am stealing his IP and posting his stuff here. :smile:

Is the trade war more easily won by China or the USA?

The US cannot win this trade war. It’s not possible. Nope.

It’s not because one country is better or worse than the other.

It’s not based on who has a bigger economy (the US), who is more reliant on exports (China), who has a stronger military (the US), who has more allies (the US).

The US cannot win based on the definition of winning - reduce the trade deficit. Its. Not. Possible.

But first, we need to agree on a basic set of facts. If you don’t agree with these facts, you don’t have to bother reading the rest of the answer.

  1. The trade deficit is not $506 billion. That’s the total import. The trade deficit is closer to $350 billion, depending on if you use year-average or year-end exchange rates.

  2. This number is calculated using the “Customs Value” in other words, what the buyer pays the seller.

  3. This deficit is not the result of 3,500,000 companies each contributing $1,000,000 in goods sold into the US, but rather follows a power-law distribution in which the top 5 categories of goods accounts for more than 50% of the value, and the top 2–3 companies in each category account for more than 50% of that category. So we’re literally talking about 10–20 companies that account for ~30% of the imports, or nearly half of the deficit.

a. This point might be difficult to believe, but I assure you it’s true. Here are the industries:
Explore all $506 billion in goods that the US imported from China in 2017

b. It takes some small bit of research to identify those companies, but I don’t have the time. I will only mention a few that I’ve personally invested in sometime in the past, and therefore know for certain they are amongst the top contributors:
Apple, IBM, Cisco, Goodyear, and Caterpillar.
If you want to know the other 10–15 companies, you’ll have to do your own research, but basically these 15 or so companies are responsible for 50% of the trade deficit.


#1101

More stealing:

OK so onto the answer.

Customs Value is key because the “price that buyer pays the seller” for goods coming out of China is essentially 100% of the final cost of goods sold. This is because China ships finished products, including packaging since their economy specializes in supply chain aggregation and assembly.
Why is that important? Please see this outdated, but still basically accurate break down for the company, nay a single product responsible for over 12% of the entire annual trade deficit:

What this means is that even though the iPhone costs ~$650 for Apple to buy from Foxconn, Foxconn only makes ~3.6% of that amount. Apple first of all makes $350 gross profit, and multitude of other suppliers make the rest.

The accounting here is that China imports the camera from Sony, the chip and screen from Samsung, etc, assembles it, and then sells it to Apple for $650. If you could convince Tim Cook to move all manufacturing of iPhones back to America tomorrow (not damn likely) then the trade deficit with China will reduce by about $50 billion, but the trade deficit with Japan and Korea will increase by $25 billion, and with other parts of the world by $23.5 billion. Woohoo!

But wait - this might end up cost more money per unit to manufacture, especially at first. So what happens then? Remember what’s not shown on the diagram is the 35% going to Apple as profit. So that will reduce dramatically as volume reduces. And your damn iPhones (aka communism-phones) will get way more expensive, and harder to buy.

The exact same thing applies to Cisco. And IBM. And so on.

Move all of these company’s manufacturing back from China and yes, the trade deficit with China reduces by 100%; but the overall trade deficit for the US is going to reduce by about 5% - which is the average Chinese value add.

In fact, you can reduce the trade deficit between US and China by 50–70% just by accounting for it differently (correctly). Problem solved.

What about Goodyear? and textiles?
Great question! Again, the labor is a small portion. Most of the money goes to raw materials, energy, and transportation.

Rubber - US is the #4 exporter of rubber to China. So if demand for tires decreases due to rising prices…oops.

Textiles - this is even worse. Most clothes are made from cotton - I hope we can all agree on that. The world’s biggest exporter of cotton to China is…drumroll…The United States. So if the demand for clothes falls because it costs more money, the United States loses money - oops I did it again!

So no, the US cannot win a trade war with China because the US is the main beneficiary of the current global hegemony. The more they win the war, the more they lose the war.

This is a contest of basically who can punch themselves in the face the hardest - how can you “win” a war like that?


#1102

Pride was 2 weekends ago. One of the normal checkout people at the grocery store stopped by in his pride outfit. It involved a bikini top, and he’s fairly fat. He was being loud and clearly wanted people to stare. He made an asshole comment about if it was too gay, since I was obviously avoiding looking. I wasn’t sure if it’d have been more offensive to tell him that I’m actually a fatist and no one wants to see someone that fat. It was easier to let him think that I had a problem with him being gay.


#1103

Dang it. I am fat. Guess @marcus335 and I can’t get along :smile:


#1104

You are in the wrong country Marcus…


#1105

I was at the post office the other day. A white lady was being kind of obnoxious and we got into an argument. At some point she got really pissed and asked, “where are you from”? I looked at her in disbelief and responded, “San Francisco”. But she said, “no, where are you really from”? I was thinking, excuse me, would you really ask that question if I were white?

I’m sure some posters on this forum would want to dismiss this incident was non-racist related. But does this kind of insinuation similar to what someone did on this thread?


#1106

Need to compare against comparable groups controlled by age, education, years of experience and same line of work. If you compare Asian engineers vs white retail worker, the result is way different than comparing Asian IT manager vs white IT manager.


#1107

Fatist hasn’t been outlawed yet. They could add body shape to the protected discrimination list someday. If you tell him you are a fatist, he might feel worse since he has no legal protection on that comment


#1108

Great ! Kudos to you :smiley:


#1109

You’re funny. Exactly this reason.


#1110

Is it a compliment or what?


#1111

I always presume you’re a man, sometimes I wonder.


#1112

No idea what you are talking about


#1113

I am deeply disappointed to see that the word “chinks” was used in this thread.
When he used that term he should have realized that others with Asian background could have been insulted by that as well.
Some people may take it lightly but I don’t.
I recently posted my answer to his posting hoping that could help him.
I am removing it now.


#1114

He meant this,meaning weekness, not the way many claim here.


#1115

Fwiw, many years ago, when I was new to America, I used the adage “chink in the armor” to describe a flaw in the code’s design in a popular mailing list. The adage was something I had used multiple times before. It was only after coming across an article on how that adage is not appropriate anymore, that I cringed about my use of it.