The Foreign Trade Thread

#1,577
#1,577
utvolpj said:
UT gave me an economics degree too. I don't trust it
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Economics is a social science... not infallible any more than the study of psychology is. However, it really isn't open to debate that tariffs are passed on to customers... Only someone who is either ignorant or dishonest would argue otherwise.
 
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#1,579
#1,579
BowlBrother85 said:
Economics is a social science... not infallible any more than the study of psychology is. However, it really isn't open to debate that tariffs are passed on to customers... Only someone who is either ignorant or dishonest would argue otherwise.
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When a tariff is targeted toward one supplier (China), then theoretically competing sources would keep the price stable. China has to lower their price so that that it plus the tariff equals what, for example, Vietnam or Mexico or whichever country sells the same goods for.
 
#1,581
#1,581
Thunder Good-Oil said:
When a tariff is targeted toward one supplier (China), then theoretically competing sources would keep the price stable. China has to lower their price so that that it plus the tariff equals what, for example, Vietnam or Mexico or whichever country sells the same goods for.
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That is correct to an extent. Whenever a tariff is imposed, how the burden is shared along the supply chain - from the manufacturer and exporter in China, to the importer and consumer in the U.S. - is a variable dependent upon the product. How that burden is spread does depend on how prices and quantities in the market adjust in response. In the event that China is merely one of several supplying countries, prices would not change much and the burden would mostly be absorbed by the Chinese producers. However, you can't ignore what a major trading partner that China is... there is not competition for every product.
 
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#1,582
#1,582
BowlBrother85 said:
That is correct to an extent. Whenever a tariff is imposed, how the burden is shared along the supply chain - from the manufacturer and exporter in China, to the importer and consumer in the U.S. - is a variable dependent upon the product. How that burden is spread does depend on how prices and quantities in the market adjust in response. In the event that China is merely one of several supplying countries, prices would not change much and the burden would mostly be absorbed by the Chinese producers. However, you can't ignore what a major trading partner that China is... there is not competition for every product.
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Miscalculations by specific companies. Apple hitched their wagon to China and it's become a problem for them. I believe that the logistics for Android are far more dispersed and that competition should keep Apple's pricing somewhat in check.

The bottom line is that too many have become too dependent on the cheap manufacturing coming out of China. It's kind of ironic that the pushback is coming from the evil capitalists on the right while the left enjoys the cheap production out of China with their poor human rights and environmental track record.
 
#1,584
#1,584
Thunder Good-Oil said:
Miscalculations by specific companies. Apple hitched their wagon to China and it's become a problem for them. I believe that the logistics for Android are far more dispersed and that competition should keep Apple's pricing somewhat in check.

The bottom line is that too many have become too dependent on the cheap manufacturing coming out of China. It's kind of ironic that the pushback is coming from the evil capitalists on the right while the left enjoys the cheap production out of China with their poor human rights and environmental track record.
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This isn't as much a partisan issue as you seem to think. There is a consensus among economists that Trump's protectionist policies will have a negative effect on economic growth and welfare.
 
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#1,585
#1,585
BowlBrother85 said:
This isn't as much a partisan issue as you seem to think. There is a consensus among economists that Trump's protectionist policies will have a negative effect on economic growth and welfare.
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Welfare? That's short sighted by these economists that you speak of. Allowing China to continue their cheating unabated would tip the entire world in the wrong direction.

Of course there will be short term negative effects, but are these really "protectionist policies"? Trump is pushing for fair trade. Tariffs targeting very specific issues isn't a bad approach.
 
#1,586
#1,586
BowlBrother85 said:
The University of Tennessee (Knoxville) Bachelor's of Business Administration ... Class of 1996 (the spring semester). I was a dual major in Finance and Economics. And it's not a theory. Tariffs on imports are passed on to the customer. That is a fact.
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#1,587
#1,587
Thunder Good-Oil said:
Welfare? That's short sighted by these economists that you speak of. Allowing China to continue their cheating unabated would tip the entire world in the wrong direction.

Of course there will be short term negative effects, but are these really "protectionist policies"? Trump is pushing for fair trade. Tariffs targeting very specific issues isn't a bad approach.
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Government-levied tariffs are the chief protectionist measure.
 
#1,589
#1,589
German economy: GDP shrinks in the second quarter as trade slows - CNN
GDP for the three months ended June contracted 0.1% compared to the previous quarter, in line with analyst expectations. That's down from 0.4% growth in the first three months of the year.
"Today's GDP report definitely marks the end of a golden decade for the German economy," said Carsten Brzeski, chief economist in Germany at the Dutch bank ING.
The world's fourth largest economy, and Europe's biggest, has been hit by what analysts have described as a "perfect storm" of negative factors.
 
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