Mercedes-Benz Forum banner

881 - 895 of 895 Posts

·
Registered
Joined
·
4,260 Posts
Now, for the trade "war" with China....

It seems to me that the point of the tariffs is to let China know that we welcome trade, but it's got to be considerably more fair to the United States (the trade deficit really is way out of balance). China has major barriers to non-Chinese firms operating in the country; we have far, far fewer restrictions than they do. It's got to be a 50/50 venture with a Chinese company (often owned by high government officials or their pals). There's got to be technology transfer to the Chinese company. They have barriers to imports...and they have sweatshop-labour conditions and wages.

Seems to be working very well for the Chinese. Look at all the foreign investment in their country because the big-wigs are chasing the lowest-cost labour and manufacturing. Just look at it. GM now builds factories in China to sell cars to the Chinese, much like how Harley-Davidson built that motorcycle factory in India in 2011 to A.) get the low-cost labour, and B.) get around India's 100% tariff on imported bikes (India is quite a large market for motorcycles). Japan has long had barriers to American goods. Not that it likely matters much, since Japanese goods are generally of such high quality, but the barriers are still there. In all three cases, that was done to protect and defend local industry.

So, maybe tariffs might cause some short-term inconvenience, but they do appear to work! At least, they're working for China, Japan, and India. So, given those countries' successes with tariffs and similar barriers, why not us as well?
 

·
Moderately subtle
Joined
·
12,046 Posts
The "approach" can't work and isn't working. It is a clandestine tax increase paid by the consumer (ie - us). It cannot win.
Yeah, China cheats. They steal intellectual property and then manufacture it with what is essentially indentured servants. Some action should be taken by every country against that, but taxing the consumers isn't it. Despite the hilarity and downright outlandishness of a president ordering companies to look elsewhere, something he has nowhere near authority to do, the first time a country stole my IP, I'd do just that.
 

·
Registered
Joined
·
4,260 Posts
So, why is it apparently working so well for China, India, Japan, etc., as I've pointed out? It sure does look like it's working for them.
 

·
Registered
Joined
·
61,947 Posts
The Customs and Tariff Bureau of Japan's Ministry of Finance administers tariffs. The average applied tariff rate in Japan is one of the lowest in the world.
Japan: Simple average applied Most Favored Nation (MFN) tariff

  • Total -- 4.0%
  • Agriculture products -- 13.1%
  • Non-agriculture -- 2.5%
  • Japan: Average industry sector MFN applied duties (selected industries)
  • Non-electrical machinery -- 0.0%
  • Electrical machinery -- 0.2%
  • Transport equipment -- 0.0%
  • Manufactures, n.e.s. -- 1.1%
  • Clothing -- 9.2%
  • Chemicals -- 2.3%

 

·
Registered
Joined
·
4,260 Posts

·
Registered
Joined
·
9,101 Posts
So, why is it apparently working so well for China, India, Japan, etc., as I've pointed out? It sure does look like it's working for them.

What makes you believe their tariffs and other protectionist policies are the reason their economy has grown so consistently well for the past few decades?

Maybe it's due to the fact that they started out as a centrally planned Communist economy that was mostly supported by primitive agriculture and gradually evolved into a hybrid communist/socialist/capitalist economy based mostly on industry and supported by a billion highly motivated and educated workers who are content to live on wages that are a fraction of what Americans and Europeans demand.
 

·
Registered
Joined
·
9,101 Posts
India had enormous import tariffs and truly oppressive business regulations since independence after WWII, and their economy was relatively flat for 4 decades (around 3% annual growth, compared to China and South Korea at 10%, which all started at the same level in 1950).

In 1990, India slashed tariffs and cut regulations, which resulted in growth rates 2-3 times previous rates in the 90's and into the 21st century.
 

·
Registered
Joined
·
4,260 Posts
In 1990, IT firms began discovering the low-cost workforce, many of whom happen to speak English. The result was a huge increase in not just H1-B visas, but also offshore outsourcing. The offshore outsourcing in IT is a very large force driving the Indian economy. That's one.

Another is the building of factories in India. That's done for two reasons:

1.) low wages and few environmental regulations (if you bribe the right officials), and
2.) to get past Indian import tariffs and any other trade barriers.

That factory that Harley-Davidson built in India wasn't just for the low wages. It was also to get around the 100% import tariff that the Indian government imposes on foreign bikes. What's that tariff for? To protect their own companies who also make motorcycles, from foreign competition. When you have a potential customer base of over a billion people, which India has, you're going to want to sell your stuff to them, and you want to be price-competitive. What do you do then? You build a factory in that country to get around that 100% tariff. That means Indians are getting jobs, and the American company (in this case, Harley-Davidson) is paying taxes to the Indian government. I'm not seeing how that's somehow not a success story for India's tariffs.

I've already gone over the benefits that China is getting from their trade barriers, on multiple occasions.
 
881 - 895 of 895 Posts
Top