“At this point, it’s looking as if Trump’s tough talk on China trade will turn out to be as empty as his tough talk on, say drug prices. Faced with the prospect of actually going toe to toe with powerful interests – as opposed to doing harm to desperate immigrants, poor people who need health care, etc. – Trump keeps backing down, ignominiously. But what happened to all that bluster about trade wars being “good, and easy to win”?
I can think of four reasons Trump ran away:
1. Someone actually managed to explain the economics to him, and he realized that the trade war wasn’t actually a good idea
2. He just lost his nerve, as he consistently does when confronting people who aren’t powerless
3. He was bribed, with China offering sweet deals to his personal business interests
4. The Chinese also have some kind of tape
It tells you a lot about the state of American leadership that (1) is highly implausible, while 2-4 all seem quite possible. And this means that what I’m about to say may amount to overthinking the issue.”
Source: Opinion | Why a Trade War With China Isn’t ‘Easy to Win’ (Slightly Wonkish) – The New York Times
David Lindsay: Yes, thank you Paul Krugman. I agree with this piece. Here are two NYT comments which I recommended.
Prof. K. writes: “China would be hurt worse than the U.S. in an all-out trade war.”
For 20+ years China has been moving throughout the world buying up resources, outbidding Western post-colonial interests in doing so, and lending money to 3rd world countries. Thus China breaks its dependence on foreign raw materials. Likewise, they are now flooding those markets with good, cheap products, not just those we buy at Walmart and Amazon, but appliances, all-Chinese smartphones & computers, and lots of things we taught them how to make. Thus they break their dependence on foreign profiting on Chinese manufacture (Prof. K’s Apple example) and their dependence on US/Euro markets.
Maybe someone explained to Trump that this trade war IS easy to win – if you are China. So we tariff-boycott Chinese goods? OK, they lose the US market while we suffer a self-induced inflation. But China continues to sell to the rest of the world at even deeper discounts while Apple et al. try to figure out where to build new plants. Thus they lock in new markets, while we, Through the Looking Glass, run as fast as we can just to stay in place.
We need China and her Asian neighbors more than they need us.
Unlike Europeans Americans don’t travel often to other countries. We don’t speak the languages of the countries around us because we’re so large. We don’t have much incentive to visit France, Great Britain, Spain, Greece, Germany, the Baltic countries. We haven’t had our entire economy and infrastructure ruined by repeated wars. We are a very isolationist nation and ignorant of how other nations solve their social problems. We don’t even want to admit that other nations might do better at solving certain problems than we.
We are a very superstitious nation. We are not especially tolerant of others whether or not they are immigrants. We talk a good line about how sacred life is yet the only life we truly support is prenatal, the rich, and those who are celebrities. The average American is totally disregarded when it comes to most things. We treat our pets better than we treat people.
We’re exceptional all right: in the degree of our cruelty, our willingness to execute innocent people and guilty people, our disinterest in creating and continuing programs that can truly help people when they need it.
America is no longer a middle class country. It’s a country run by and for the uber rich.