A tariff on Chinese imports could defend the American economy

http://www.washingtontimes.com/news...-why-chinas-market-chaos-threatens-us-/print/
An economist's rationale for tariffs to stem the chaos caused by China's messes. Don't get tripped up by the mention of Trump.

 

I agree, but I believe that it may be entirely too late for that. That kind of tariff needed to happen back in 2002 or 2003 rather than 2016. Any time is a good time to start, but I'm not sure it's going to have the intended effect at this point and success in helping to stabilize the local economy as much as it would have if it were implemented and retained for a solid decade before all of this happened to get us to where we are at today.

 

A protectionist economists rational.
A strong dollar gives the yanks great purchasing power, it's done just fine for the British. It's so unbelievably cheap to live in (most of) America with it's strong USD and fairly low taxation levels.
America is a value added exporter, there are things the USA sells the world that other places have a hard time competing with.
The USD is high because international demand for it is high, as much as we bitch and grip about the US administration is does pretty damn well for itself. It still has the strongest consumer market and capital markets on the planet.

 

These things never end up being a one-way dynamic. One side seeks restitution, the other side reacts. That's what trade wars are all about. It would be interesting to see how China reacts. The fact that they still hold a whole lot of US Treasuries shouldn't be overlooked.

 

Yes, I think the fears are that if a large tariff is put on China, they will react and make trade difficult. They will retailiate about putting more tariffs on the goods they send to us or in other ways that could make life difficult for those of us in the Western world who depend sadly, on some of their goods.

 

Yep, was going to say the same thing. There are neat economic ´toys´ to play with, but these things do not happen in a vacuum. In the real world, you can´t just show the first effect of something like increasing a tariff, because it would almost certainly be met with a secondary effect when China raises tariffs on us. And then you have the tertiary effect where our global competitors swoop in and can compete cheaper than we can. All of sudden Aerobus is able to sell more planes to China while Boeing has to lay off people. And those people are no longer paying taxes, which hurts our economy.

I know you said to forget about Trump.. but this is exactly what is wrong with basically every argument Trump makes. In every situation EVERY SITUATION he only calculates the immediate, primary effect of his actions and sees it as favorable without ever thinking about the repercussions that come with it.

 

This is the elephant in the room when it comes to US - China relations. But this fact can change quickly, and China has already sold-off a large amount of the US debt it holds. If that pattern continues, I expect the US government to become very hostile to China in economic matters.

 

What would happen if China would start dumping dollars as retaliation though? They have trillions of dollars as reserves, they could cause chaos on the FOREX markets. I suppose a drop in the dollar's value wouldn't be entirely bad as the United States' exports would probably get a big boost as well.

 

I guess I benefited from our current circumstance just the other day. Bought Osram Xenon bulbs out of China and paid $40 for them. Those same bulbs cost $120-140 from anywhere else. They are authentic, German made Osrams too.

So how can we balance this price issue?