How much of our land does China own? Look that up...
Trump Tariffs (merged threads)
- Thread starter Blimey
- Start date
spat
.700 Nitro Express
We have heavily leveraged our position as the world's reserve currency.
As long as it remains the reserve, we can basically get away with anything.
But, if the rest of the world gets fed up enough to end that relationship, then there's nothing we can do to avoid a collapse that would make 1929 look like a minor hiccup.
That's like saying, "look up how much your neighbor owns". What your neighbor does or does not own, does not impact what you own.. and it doesn't change what or how much the US government assets are.
Entirely true.
Most of the tariffs are dumb, but the ones that stand out the most are for things we don't even produce. Things like bananas. We don't grow them here because of climate. There is no rational reason to put tariffs on products we are unable to produce ourselves.
spat
.700 Nitro Express
The way the tarrifs are structured isn't based on a trade imbalance for a single commodity.
They are based on trade imbalance for the whole country.
Obviously if we are importing major quantities of *any* commodity from you we are unlikely to be exporting much of that commodity.
I doubt we sell much oil to Saudi Arabia, even though we do export plenty of oil.
What the tarrif plan says is that if you sell us stuff, you have to buy other stuff to balance it out.
If you want to sell us bananas, you need to buy *something* from us to balance it out. You could buy solar panels, or fighter jets, or anything else you need to balance the ledger.
Since the US government is the only entity on the planet that can create genuine US dollars, that means your dollar denominated imports and exports already balance perfectly. If you sell us bananas, you are importing an equal dollar value of *something* from *someone* to get those dollars.
The tarrif scheme says that you need to get that something from us.
Trade imbalances aren't inherently bad.
I have a trade imbalance with Ford motor company. I use that vehicle to make a lot more money that it costs me to have it, yet a trade imbalance between me and them does indeed exist. The idea that you have to have roughly equal value in currency with all trade partners is ridiculous.
spat
.700 Nitro Express
You're not wrong.
In theory it doesn't matter if our hypothetical banana exporter is buying anything from us, because he must be using the dollars we give him for the bananas to buy stuff from *someone* and eventually that flows back to us, because we are the source of all dollars.
But, that doesn't work properly when you have bad actors like China on the stage.
Because China pulls a lot of dirty tricks that are outside of legitimate trade (like wholesale theft of IP, counterfeiting, slavery, etc...).
So, the banana exporter is likely unloading their dollars in a chain that ends in China and not us.
I really think the tariffs *everywhere* are actually targeted at China.