US: ?
China: ?
Emerging: ?
International Developed: ?
GO!
America, obviously
Short term … America
Long term… probably… uh, not America.
Long term China wins its a no brainer. Never understood why US schools insist on pushing kids to take a useless language like Spanish when the kids would be far better off learning mandarin or latin (if they are interested in medicine or law)
No, the right answer is America, both in the near-term and long-term. The key to a trade war is the ability of your people to be able to pay more for goods and services. America is far wealthier than any other country that has enough trade sway to matter.
China’s people can’t afford a trade war.
im with stl.
US: Slight win, they’ll get better deals from the ones who bend over. and if they dont, they will manufacture and innovate.
China: Screwed, they lose demand from us
Emerging: ****ed, they lose demand from china
International Developed: Win, they’ll get better deals with the ones who leave us.
Seems like this is a relative question. The US relatively does better than the poorer countries reliant on our consumption. But probably USA absolutely does worse off. But that’s just my guess
Yes… good point. I was wondering, how do you determine who “wins” the trade war? GDP, trade balance, consumer buying power, general economic health…
I don´t think that you can speak of “win” in the context of war, even if it´s a “trade war”. Everybody will lose, that´s obvious to me.
A good example are Obama´s tariffs on Chinese tires in 2009. China responded with tariffs on US chicken. Consequences: China lost 2/3 of its tire exports, but in the US prices rise and the consumers pay appr. 1 bln USD more for their tires (+ job cuts etc.). US chicken exports to China decrease by 90%, a sales loss by another 1 bln USD.
Now tell me who has won!?!?!
I interpreted “win” as who suffers the least damage. And I think United States has a rare combination of wealth and natural resources, which people like China do not seem to have
Totally agree! But do you think a single factory worker cares about the wealth of the society and, despite trade wars, a prospering economy if he loses his job?
I agree. But I have no reason to believe this isn’t universally true of all workers in country’s impacted. Unless you want to suggest perhaps different ways of governing will result in different outcomes for this outrage, I just assume this variable away since it seems to be a wash across those impacted (or even worse for those who countries are more badly impacted). There may be something to how those workers can express their rage that I overlooked, now that you mention it. I just don’t understand the political systems in question well enough
STL is correct. China would collapse under it’s own bureaucracy and debt load without exports and ongoing investment. China’s path to growth is still tenuous with per capita GDP of about $10k and 5% of the nation’s population living on less than $2 per day.
Given the industrial slow down, the sheer number of EM countries that would eagerly step in to take production market share from China allows them to be easily replaced whereas you can’t just replace the world’s largest source of demand. China also knows that this is a Pandora’s box scenario where once capacity and the supply chain pivots with FDI to a new country, they will remain structurally disadvantaged.
Yeah except this is the first time I’m hearing about it so obviously most American’s didn’t lose. But to your point, China lost 2/3 of its exports. Talking about $1B higher cost for tires in the $47B US market is literally a 2% price increase. Big whoop. You just made our point, China loses, America gets the terms it wants at minor impact.
China formed less than 2% of US chicken sales pre trade crisis. It’s this huge asymmetry that allows the US to win.
This is like saying nobody wins a war if someone dies on either side. It sounds cute, but if the asymmetries are large, someone absolutely wins.
So if I get AIDS and you only get syphillis, you won. Yay?
I don’t believe this at all. My brothers kids (under 6) can all speak Mandarin (neither parent is Chinese). I think it’s the biggest waste of time.
Nearly all innovation comes from the west despite the US giving the east a 2,000 year head start on civilization for a reason. We went through this with the Russians once already. Building in excessive structure and rigidity at an early age has profound and lasting impacts on innovation. I was bigly into music through college and I had two groups of friends in that area. The music majors with all of the technical proficiency and the song writers with all of the creativity. The music majors themselves were the first to point this out, saying that the demands of their major (which on observation was far greater than any STEM field at least at this school) had killed the joy they had for writing.
Our school system is far from perfect, but this idealization of the Chinese / Russian command model optimized solely for testing isn’t justified in my mind. Not to mention the fact that people always like to talk about China and its education system like its one homogenous place rather than a continent sized country that cherry picks its sampling of students that are presented to the world. The abject poverty of many of the rural regions makes the comparison inaccurate.
http://www.cnn.com/2015/08/05/china/us-defeat-china-math-olympiad/
Also, in the event of a trade war, you’d have to ask what level of education would persist in a negative growth regime without open access to the west and how many of those individuals would chose to stay in China in that environment.
How is that not obvious?
If you’re my harmful competition yes, I would win. Syphilis is easily and immediately curable.
“An eye for an eye leaves the whole world blind.”
“Yeah, but in the land of the blind, the man with one eye is king.”
Ask most residents of small town Ohio and Kentucky if they feel they won in the prior regime. For years the concept of capital controls was anathema in economics and the IMF / World Bank were very opposed to the policy as unequivocally negative. Post China’s rise they are now considered by both agencies a useful tool to protect and manage growth in EM countries. The point here is that conventional economic knowledge is often wrong and turned on its head. I think the idea of completely unfettered trade will be tossed aside as was the concept of unchecked capitalism. Both capitalism and trade are great ideas, but each can be taken too far with unintended consequences.
If you look at the steel industry, it was crushed by dumping from Chinese steel output 2013-2016 before trade cases went into effect in early 2016. A year later, growth has resumed and X is talking about 10,000 US jobs returning over the next few years. China has to play by the rules.
haha good point. but i was thinking more on the lines of a price war. where a person cuts the price to gain market share and starve out competitors.
fake news. trump doesnt have any of his own policies.
he only talks about this
and this
Blah blah blah nationalistic garbage as usual. This is like some recurring loop on AF and the usual suspects come out with the same trope because their ego is hurt.
The ‘East’ innovated when they were the dominant centre of wealth and the ‘West’ did so when they stole that wealth. The money is flowing ‘East’ again and it is inevitable that innovation will follow. All metrics support this : patents filed per capita are increasing, cities in the ‘emerging’ world have now appeared in desirable destinations for start ups and so on. Convergence will occur and finally as their economies (mostly China and India) overtake the USA they will leave the USA in the dust.
Ohai is also spot on : a trade war is in no ones benefit, it will effectively set the clock to zero that would help our boys over at ZH reach their long denied climax buuuut resetting back to zero will be a net -ve for USA who will have none of the artificial advantages that prevented competition in their short span as head of unipolar world.
The youth in the ‘West’ would rather head to a club snort cocaine pop MDMA and try and hook up with randos while youth in the ‘East’ need to work their ass of to get ahead. Lol, I know who my moneys on.
PS : BS claim that learning Mandarin is useless is laughable, There are dudes who are earning 120k a year working as ‘conduits’ [basically glorified translators] so there is a nice sweet spot b/w finance and plumbing.