05-25-2021, 11:13 AM
(05-25-2021, 10:55 AM)Wes Mantooth Wrote: Can someone educate me on the long term effects of this?
Hand up, I have not done an ounce of research on this. I've heard bits and pieces through the news over the years, and only understand it at the service level.
If the end-goal is to move production away from China then I'll glady pay more for goods in the short term. Is this is a feasible approach (using tariffs to drive production either back home or elsewhere)?
Also, I see the numbers cited are that we're paying 93% of the cost while they're (China) paying 7%. Can this be explained by the amount we import from them vs. the amount we export to them? Because then that would make perfect sense then. (We're putting pressure on US companies to move production)
Fwiw, I understand moving any and all production back to the US is a pipe dream. But I'd really love to see a lot of American companies explore other manufacting options in southeast Asia. Korea, Vietnam, India, ect.
There's so, so much bad that comes with doing business with China. I don't think I really need to point out all of the examples.
The short answer is no, tariffs do not really work in bringing back jobs it is more of a political move than an effective tool for job creation. They can be used to fight predatory pricing by other countries looking to destabilize economies but the end result isn't really more jobs. Even beyond just the global nature of today's economy, moving it away from China sounds good but the reality is so many of the rare earth metals and raw materials in a wide variety of the goods we consume come from China as they are simply the world leaders in a lot of those items. Even if you moved the manufacturing of the final products away from them to other countries or even here, in the end, you'd still almost have to play with China to get raw materials at the scale we need.
No, that is a straight pass-through back to consumers. Essentially the tariff cost is getting passed back to consumers by raising the price of the good. The general idea of tariffs is that they raise the price of the foreign product enough that the consumer buys the cheaper, and normally local, alternative. The issue often is that there aren't local options to choose from instead, or the foreign option even after the tariff price increase is still lower than the local option. In both cases, the foreign manufacture simply passes the cost back to the consumer while not "eating" it so they actually take little to no penalty from it but the consumer does.
I agree China is abhorrent in terms of its human rights violations and other issues. The reality though is China's dominant role in a global economy will not be unseated through tariffs. China is about the only thing that can derail China as their geographical advantage in terms of raw materials, along with their state forced slave wages to make them a "necessary evil" to most of the world hence why there has been little actually done about their human rights issues. There is a belief that Africa could potentially provide an alternative but because of the fractured nature of the content with a lot of destabilized governments, it is hard to put too much of your eggs in that basket. Interestingly enough, China recognizing that potential has actually invested a lot in "owning" Africa in an attempt to preemptively cut off future competition.
