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Roku RP app issue; sound stutters after 1 hour and eventu... - Relayer - Jul 12, 2018 - 8:12am
 
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Would you drive this car for dating with ur girl? - islander - Jul 11, 2018 - 11:07am
 
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Index » Regional/Local » USA/Canada » Trade War Page: 1, 2  Next
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aflanigan

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Posted: Jul 13, 2018 - 6:48am

 Lazy8 wrote:
 
My disagreement with Krugman on this point isn't that the trade war Trump started is good, but that there is such a thing (as Krugman alleges) as a good trade war.


 
Not sure I'm seeing where in the cited op eds Krugman says what you claim in so many words.
Lazy8

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Location: The Gallatin Valley of Montana
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Posted: Jul 12, 2018 - 8:25am

 aflanigan wrote:
I assume you are being tongue in cheek here.

If he has substantive issues with the recent Krugman post he could probably email him directly to rebut, or send an email to the Times. 

Didn't really see much substance in the initial post, just ad hominem and partisan bickering.
 
My disagreement with Krugman on this point isn't that the trade war Trump started is good, but that there is such a thing (as Krugman alleges) as a good trade war.

aflanigan

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Posted: Jul 12, 2018 - 6:58am

 westslope wrote:



You are brave Lazy8 to take on Krugman on trade issues.   Please note that there is no equivalence between Trump's trade war and the tariff action directed at China that Krugman was calling for.



 
I assume you are being tongue in cheek here.

If he has substantive issues with the recent Krugman post he could probably email him directly to rebut, or send an email to the Times. 

Didn't really see much substance in the initial post, just ad hominem and partisan bickering.


islander

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Posted: Jul 11, 2018 - 12:23pm

 NoEnzLefttoSplit wrote:

I must correct myself.  Germany has consistently run a trade deficit with China

 
And you call yourself an economist {#Snooty}
westslope

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Location: BC sage brush steppe


Posted: Jul 11, 2018 - 12:11pm

 NoEnzLefttoSplit wrote:

wtf? 

 
Come on now.  You are a smart, educated, insightful Norwegian.  You are not an easy to manipulate populist in the mold of Trump voters are you?  
  
First, explain what professional economists think of this balance of payments score card approach to economic policy.   If you can.

Then, explain how the global economy has shifted in the post-war period making the goods trade balance a very incomplete part of the whole picture. 
 
Then, come up with a few explanations as to why US balance of trade in both goods and services has deteriorated since the US policy-induced Great Financial Crisis.   That story also partially explains why the US dollar is high in relative terms.  
 
After that, we will talk.  
 
Hade bra.  -Erik


NoEnzLefttoSplit

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Posted: Jul 11, 2018 - 12:00pm

 black321 wrote:

I'm not really disagreeing with much of what you say...in fact the first point is relevant because so much of what the US consumes is mass-produced goods - consumption is 2/3 of the GDP...back to my point why labor is so important.  But taking this back to my original point, Chinese tariffs and xrate manipulations are not the primary reason we have a trade imbalance with China, which seems to be the focus of the administration, and a point ignored in much of the recent discussion over trade.

Your second point is also valid.  As China begrudgingly grows its middle class, it must manage its slower growth as manufacturing inevitably shifts to lower cost markets.  And perhaps tech/automation could be a further stake in China's manufacturing.  With labor costs minimized, there's more incentive to move production back to domestic markets. 

As to the third point...maybe that's the real goal of the administration?  Trash the $ by creating an adversarial and unstable environment, thereby forcing the global community to move to a different standard currency, or basket currency which Russia and China seem to endorse.  But what would that do to our financial markets and economy?  

 
I must correct myself.  Germany has consistently run a trade deficit with China
NoEnzLefttoSplit

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Posted: Jul 11, 2018 - 11:58am

 westslope wrote:


Come on, even if you are not an economist (rather obvious I would say), you can do better than that.  

 
wtf? 
westslope

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Location: BC sage brush steppe


Posted: Jul 11, 2018 - 11:57am

 NoEnzLefttoSplit wrote:

Well, fair enough, USD 18 billion is not huge compared to the others but it is still a sizeable deficit.

 

Come on, even if you are not an economist (rather obvious I would say), you can do better than that.  
NoEnzLefttoSplit

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Posted: Jul 11, 2018 - 11:55am

 westslope wrote:

Canada?    Are you sure?  Are you really sure?

Or is this Team Trump Nordic speaking?  

 
Well, fair enough, USD 18 billion is not huge compared to the others but it is still a sizeable deficit.
westslope

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Location: BC sage brush steppe


Posted: Jul 11, 2018 - 11:07am

 NoEnzLefttoSplit wrote:

......

The US runs big trade deficits with high-cost countries (Japan, Germany, Canada). ......
 
Canada?    Are you sure?  Are you really sure?

Or is this Team Trump Nordic speaking?  
black321

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Location: A sunset in the desert
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Posted: Jul 11, 2018 - 9:59am

 NoEnzLefttoSplit wrote:

Firstly what you are claiming is only true for mass-produced goods with a high labor content.. clothes, shoes, etc. Moreover, as China develops, labor intensive manufacturing is anyway moving elsewhere (and a good thing too, encouraging development in the poorer nations). The US is not a banana republic, therefore low-cost-labor production is not the sector where a country like the US with such high per capita GDP should be competing on the world stage, but in goods and services with high added value.

Secondly, offshoring to low-cost countries is an issue that applies to every developed economy yet not all of them are running trade deficits with emerging economies like between the US and China. You need to look elsewhere for the reasons behind the US trade deficit. 

My point is that the artificially high USD exchange rate due to the investment influx (safe haven) means that most US products are overpriced in global competition. Take Germany as a comparison. Despite importing similar volumes of consumer goods (per capita) from China as the US, Germany has consistently run a trade surplus due to exports of cars and machine tools. The US competition in this field is overpriced for the quality they offer so you end up with a trade deficit.
 

 
I'm not really disagreeing with much of what you say...in fact the first point is relevant because so much of what the US consumes is mass-produced goods - consumption is 2/3 of the GDP...back to my point why labor is so important.  But taking this back to my original point, Chinese tariffs and xrate manipulations are not the primary reason we have a trade imbalance with China, which seems to be the focus of the administration, and a point ignored in much of the recent discussion over trade.

Your second point is also valid.  As China begrudgingly grows its middle class, it must manage its slower growth as manufacturing inevitably shifts to lower cost markets.  And perhaps tech/automation could be a further stake in China's manufacturing.  With labor costs minimized, there's more incentive to move production back to domestic markets. 

As to the third point...maybe that's the real goal of the administration?  Trash the $ by creating an adversarial and unstable environment, thereby forcing the global community to move to a different standard currency, or basket currency which Russia and China seem to endorse.  But what would that do to our financial markets and economy?  


NoEnzLefttoSplit

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Posted: Jul 11, 2018 - 9:24am

 black321 wrote:

My point was the cost of manufacturing, chiefly labor costs, are strikingly lower in China and other developing countries, relative to domestic cost of production (i realize we have deficits with other developed economies, but other than dairy farmers, that doesnt seem to be where the current admin's focus is - see china).  That's why U.S. manufacturers and retailers shifted to overseas production...not because of tariffs or x rates.    I'm not sure how your reply counters that, or why labor costs are misleading?  Are you arguing manufacturing in China and developing economies are more efficient, innovative?  Efficient perhaps, to the point of lower labor cost.  I just dont see how the manufacturing abroad provides any competitive advantage to domestic beyond cost, with labor being the most significant.  

p.s., as to Japan, Germany and Canada...i dont know for certain, but might wager we haven't significant manufacturing jobs to these countries in the last 30 years.  Perhaps they make a better car or product, but that brings in a different argument. 
 
Firstly what you are claiming is only true for mass-produced goods with a high labor content.. clothes, shoes, etc. Moreover, as China develops, labor intensive manufacturing is anyway moving elsewhere (and a good thing too, encouraging development in the poorer nations). The US is not a banana republic, therefore low-cost-labor production is not the sector where a country like the US with such high per capita GDP should be competing on the world stage, but in goods and services with high added value.

Secondly, offshoring to low-cost countries is an issue that applies to every developed economy yet not all of them are running trade deficits with emerging economies like between the US and China. You need to look elsewhere for the reasons behind the US trade deficit. 

My point is that the artificially high USD exchange rate due to the investment influx (safe haven) means that most US products are overpriced in global competition. Take Germany as a comparison. Despite importing similar volumes of consumer goods (per capita) from China as the US, Germany has consistently run a trade surplus due to exports of cars and machine tools. The US competition in this field is overpriced for the quality they offer so you end up with a trade deficit.
 
black321

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Posted: Jul 11, 2018 - 9:02am

 NoEnzLefttoSplit wrote:

Maybe because it is misleading?  Labor is only one part of a very large package. Expertise, operating efficiency, innovative strength, etc. are also key inputs and in terms of competitive strength, frequently outweigh the cost of an hour's labor.

The US runs big trade deficits with high-cost countries (Japan, Germany, Canada). And in those countries that qualify as low cost countries, the imports are frequently produced by companies owned and operated by US interests, which repatriate the profits accordingly (or not, if they are clever).

If you ask me, (ok, you didn't, but well) the US is hoist by its own petard.  Because of its (very much intended) military dominance, its currency is viewed as a safe haven and the corresponding investment inflows keep the exchange rate artificially high. Were it not for that, the dollar would be much weaker and US goods much more competitive.  

A case of wanting to have your pie and eat it too.

 
My point was the cost of manufacturing, chiefly labor costs, are strikingly lower in China and other developing countries, relative to domestic cost of production (i realize we have deficits with other developed economies, but other than dairy farmers, that doesnt seem to be where the current admin's focus is - see china).  That's why U.S. manufacturers and retailers shifted to overseas production...not because of tariffs or x rates.    I'm not sure how your reply counters that, or why labor costs are misleading?  Are you arguing manufacturing in China and developing economies are more efficient, innovative?  Efficient perhaps, to the point of lower labor cost.  I just dont see how the manufacturing abroad provides any competitive advantage to domestic beyond cost, with labor being the most significant.  

p.s., as to Japan, Germany and Canada...i dont know for certain, but might wager we haven't significant manufacturing jobs to these countries in the last 30 years.  Perhaps they make a better car or product, but that brings in a different argument. 

NoEnzLefttoSplit

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Posted: Jul 11, 2018 - 7:08am

 black321 wrote:
Re. trade deficits..tariffs have something to do with it, x rates a little more...but the biggest reason is cheap manufacturing, ie, labor.  This is the reason our retailers and manufacturers have chosen to source more goods from overseas.  Why is this is key point being overlooked, by both the right and left?   

 
Maybe because it is misleading?  Labor is only one part of a very large package. Expertise, operating efficiency, innovative strength, etc. are also key inputs and in terms of competitive strength, frequently outweigh the cost of an hour's labor.

The US runs big trade deficits with high-cost countries (Japan, Germany, Canada). And in those countries that qualify as low cost countries, the imports are frequently produced by companies owned and operated by US interests, which repatriate the profits accordingly (or not, if they are clever).

If you ask me, (ok, you didn't, but well) the US is hoist by its own petard.  Because of its (very much intended) military dominance, its currency is viewed as a safe haven and the corresponding investment inflows keep the exchange rate artificially high. Were it not for that, the dollar would be much weaker and US goods much more competitive.  

A case of wanting to have your pie and eat it too.


black321

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Location: A sunset in the desert
Gender: Male


Posted: Jul 11, 2018 - 6:14am

Re. trade deficits..tariffs have something to do with it, x rates a little more...but the biggest reason is cheap manufacturing, ie, labor.  This is the reason our retailers and manufacturers have chosen to source more goods from overseas.  Why is this is key point being overlooked, by both the right and left?   
Lazy8

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Location: The Gallatin Valley of Montana
Gender: Male


Posted: Jul 10, 2018 - 11:22pm

 westslope wrote:

From the article:

But if sweet reason won’t work, what’s the alternative? In 1971 the United States dealt with a similar but much less severe problem of foreign undervaluation by imposing a temporary 10 percent surcharge on imports, which was removed a few months later after Germany, Japan and other nations raised the dollar value of their currencies. At this point, it’s hard to see China changing its policies unless faced with the threat of similar action — except that this time the surcharge would have to be much larger, say 25 percent.

I don’t propose this turn to policy hardball lightly. But Chinese currency policy is adding materially to the world’s economic problems at a time when those problems are already very severe. It’s time to take a stand.


Please note that since 2010, that the renminbi has appreciated in value. So maybe the threats worked?

You are brave Lazy8 to take on Krugman on trade issues.   Please note that there is no equivalence between Trump's trade war and the tariff action directed at China that Krugman was calling for.

 
Governments revaluing exchange rates are only acknowledging reality, not shaping it—or they wind up being on the losing end of exchanges like the one that made George Soros rich.
 
And no, Krugman is a soft target. For any given pontification of his it's a trivial matter to find a ready-made rebuttal...by Krugman.

kurtster

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Posted: Jul 10, 2018 - 11:03pm

 haresfur wrote:

I am amused at the silence coming from the left-wing anti-globalization crowd.

 
I thought the anti globalists were alt right ?  Ya know, nationalist, tribalist and all that stuff ...

westslope

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Location: BC sage brush steppe


Posted: Jul 10, 2018 - 6:05pm

 haresfur wrote:
.....

I am amused at the silence coming from the left-wing anti-globalization crowd.

 
Yes, that is amusing.  It really speaks to Trump's great ability to polarize. 

On the other hand, I recall the intense Canadian opposition to the FTA first signed with the USA and then to NAFTA signed with Mexico.   Canadian voters over the years have decidedly shifted in favour of freer trade.  Even if the so-called left New Democratic Party (NDP) had formed the federal government in the last election, the NDP would have continued to actively pursue freer trade agreements.

I suspect that among other things, some unionized private sector workers have benefited from freer trade/gained experience working under freer trade.   The trade deals will over time create their own vested interests.

AMLO — the president-elect of Mexico — has declared that in response to Trump hostility to Mexico and NAFTA, that he would encourage more investment by Canadian mining firms and look into more Mexicans working temporarily in Canada.  

The social democracies of northern Europe have been rooting for freer trade for quite some time now.  I reckon that freer trade will become increasingly acceptable and desirable from the perspective of left-wing Latin American politicians.   The environmental, labour and human rights clauses will help win them over.  
Red_Dragon

Red_Dragon Avatar



Posted: Jul 10, 2018 - 6:01pm

 haresfur wrote:
The trouble with trade wars is that you don't really know if you've won or lost. There is no clear end. Governments will always try to bend agreements to their advantage and have a legitimate interest in areas like carbon emissions that are poorly managed through the market. But any interventions should be nudges rather than hammers. Large policy changes are disruptive.

I am amused at the silence coming from the left-wing anti-globalization crowd.

 
What about the left-wing pro-globalization crowd?
westslope

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Location: BC sage brush steppe


Posted: Jul 10, 2018 - 5:54pm

 Lazy8 wrote:
 .....
 
If you have the stomach to read more Krugman, here's a piece from 2010 where he argued for 25% import tariffs on Chinese goods, arguing that they wouldn't dare retaliate because all they could do is dump US Treasuries.
 
Krugman's problem with the Trump trade policy isn't that it's stupid and based on a zero-sum fallacy—he's argued for stupid, similarly misguided policies in the past—but that it's Trump's policy. He's all for trade wars...when Democrats get to wage them. Of course he's a globalist when Democrats are in power and pushing trade deals.
 
But at all times he's a partisan hack, willing to say anything that disparages the opposition. Whatever is currently happening is just as he foresaw, and anyone who dares disagree—whichever side of the issue he's on at the moment—is an economic ignoramus.
 
Trade wars are indeed stupid. All of them, including the ones Krugman supports. Supported. Whatever.


 
From the article:

But if sweet reason won’t work, what’s the alternative? In 1971 the United States dealt with a similar but much less severe problem of foreign undervaluation by imposing a temporary 10 percent surcharge on imports, which was removed a few months later after Germany, Japan and other nations raised the dollar value of their currencies. At this point, it’s hard to see China changing its policies unless faced with the threat of similar action — except that this time the surcharge would have to be much larger, say 25 percent.

I don’t propose this turn to policy hardball lightly. But Chinese currency policy is adding materially to the world’s economic problems at a time when those problems are already very severe. It’s time to take a stand.


Please note that since 2010, that the renminbi has appreciated in value. So maybe the threats worked?

You are brave Lazy8 to take on Krugman on trade issues.   Please note that there is no equivalence between Trump's trade war and the tariff action directed at China that Krugman was calling for.


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