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Old 08-02-2019, 11:26 AM
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Why were tariffs on Chinese goods into the USA so low?


It seems a nobrainer now. But why were Chinese manufactured goods being imported into the USA with such low tariffs. They were literally dumping their goods in your land and no one thought to raise tariffs.

Whose or what policy decided to turn a blind eye to this for all these decades?
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Old 08-02-2019, 11:32 AM
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Because Americans by and large don't like spending more on stuff.

https://www.reuters.com/article/us-u...-idUSKCN1SR1UI
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Old 08-02-2019, 12:00 PM
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Chinese manufacturers weren't dumping goods. They were selling them to people who wanted to buy them. And people like low prices. Tariffs raise prices. So the government has kept tariffs low.
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Old 08-02-2019, 01:03 PM
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Both the US and China are members of the World Trade Organization, which has the reduction of tariffs and the encouragement of free trade among nations as its main purposes.
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Old 08-02-2019, 01:12 PM
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And most economists agree that the benefit of having cheaper goods due to free trade generally outweighs any harm it might cause to specific businesses. The thing is it's difficult for people to see this because the benefits are spread out across the entire population, while the harm is usually highly concentrated among relatively few people, i.e. when a factory closes.
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Old 08-02-2019, 01:14 PM
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And most economists agree that the benefit of having cheaper goods due to free trade generally outweighs any harm it might cause to specific businesses. The thing is it's difficult for people to see this because the benefits are spread out across the entire population, while the harm is usually highly concentrated among relatively few people, i.e. when a factory closes.
Free trade is good. However, it needs to be both ways. China systematically denies us access to their market, hence us playing a bit of hardball.
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Old 08-02-2019, 02:18 PM
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Turn a blind eye to what? It's bad to sell things to people who want them now? I just don't get this attitude.
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Old 08-02-2019, 03:05 PM
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Turn a blind eye to what?
To the fact that China does NOT allow the same level of free trade/low tariffs for US imports into their country.
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Old 08-02-2019, 03:11 PM
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Yes cheaper goods at the cost of destroying local industries. Besides most of the goods were sub par quality.

The tariff income would have swelled the central bank reserves and the government could then decide how to spend it in the economy.

Not forgetting that China was taxing US imports all the time.

Were you guys taken for mugs for a very long time?
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Old 08-02-2019, 03:24 PM
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To the fact that China does NOT allow the same level of free trade/low tariffs for US imports into their country.
So? Which is it? Is free trade good or bad? You can't say "protectionism is bad, so we're going to engage in protectionism". I mean, you can say it, but it isn't very logical.
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Old 08-02-2019, 03:28 PM
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Free trade is good. However, it needs to be both ways. China systematically denies us access to their market, hence us playing a bit of hardball.
Do you have any cite that shows the trade imbalance is mainly caused by unfair trade practices by China rather than market forces?
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Old 08-02-2019, 03:32 PM
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To the fact that China does NOT allow the same level of free trade/low tariffs for US imports into their country.
Can you name some of those US goods that are prevented from being imported?
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Old 08-02-2019, 04:01 PM
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So? Which is it? Is free trade good or bad? You can't say "protectionism is bad, so we're going to engage in protectionism". I mean, you can say it, but it isn't very logical.
Yep, just like speeding is bad but police also speed to catch the bad guys.

Should we eliminate that also because it violates some naively simplistic notion of "logical"?
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Old 08-02-2019, 04:05 PM
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Yep, just like speeding is bad but police also speed to catch the bad guys.
It sounds like you're saying the USA is allowed to do "bad" things because it has special authorities other countries don't have? Why?
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Old 08-02-2019, 04:10 PM
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Yes cheaper goods at the cost of destroying local industries. Besides most of the goods were sub par quality.
The goods were exactly as good a quality as the importers were willing to pay for (which in turn reflects what the consumer is willing to pay.

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Originally Posted by Nansbread1 View Post
The tariff income would have swelled the central bank reserves and the government could then decide how to spend it in the economy.
High tariffs tend to reduce imports; that means you DON'T have high tariff income long-term, as the buyers choose to purchase from other sources instead (or not purchase at all [cf. Smoot-Hawley tariffs, widely blamed for exacerbating the Great Depression]).

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Originally Posted by Nansbread1 View Post
Not forgetting that China was taxing US imports all the time.
China was taxing US imports at the most-favored-nation rate as required by WTO rules, which is the same rate at which the US was taxing Chinese imports. Do you have a cite of a disparity in taxation?
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Old 08-02-2019, 04:17 PM
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Yep, just like speeding is bad but police also speed to catch the bad guys.

Should we eliminate that also because it violates some naively simplistic notion of "logical"?
Yes! Now you're getting it. If speeding is bad, it's bad. Cops aren't specially trained stunt drivers. They're regular dudes with a regular license who decided they can just drive whatever speed they want without consequence, while doling out the consequences to others who do the exact same thing. It isn't justifiable.

I was expecting something about violence. Yes, unprovoked violence is bad, but violence in self defense is good. This isn't logically inconsistent, because violence in self defense is not unprovoked or directed against the innocent.

But the tariff situation isn't a case of lashing out at China in some form of economic self defense. It's a case of shooting yourself in the foot in response to someone else stepping on your foot. That'll show them!

A free, voluntary transaction has two good things: The customer walks away with something he finds more valuable than the money he paid, and the seller walks away with more money than he valued the object he sold. Both sides benefit! This is called consumer surplus and producer surplus.

If China wants to eliminate its consumer surplus by charging Chinese consumers more than they would pay in a free market, that sucks for them. It doesn't make sense for us to eliminate our own consumer surplus in response. It's like breaking your own window because you didn't like that your neighbor broke his window.

If selling things to China didn't benefit Americans, we wouldn't do it. Whatever they do on their end of the transaction isn't going to change that fact. And if buying things from China didn't benefit Americans, we wouldn't do it. So why eliminate the benefit we get from the goods China sells us? Because they stupidly eliminated the benefits they receive from the goods we sell them? It makes no sense.
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Old 08-02-2019, 04:23 PM
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Whose or what policy decided to turn a blind eye to this for all these decades?
Since it has gone on for "all these decades," the answer is obviously, both Democrats and Republicans had "blind eye" policies.
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Old 08-02-2019, 04:49 PM
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Do you have any cite that shows the trade imbalance is mainly caused by unfair trade practices by China rather than market forces?
I'm not talking about the balance of trade, I'm talking specifically about how they exclude our products from the market completely unless we partner with a local company. You can sit down today and write a piece of software and distribute it freely in the USA. You can do the same thing from China, nobody cares where software comes from here. But in China they care and you can't release things on the market without partnering with a local company and getting government approval.

Given that the highest value exports we do are IP you can see how that might be an issue.
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Old 08-02-2019, 07:34 PM
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Yes cheaper goods at the cost of destroying local industries. Besides most of the goods were sub par quality.
If the goods were of sub-par quality, why would people buy them?

Each consumer gets to weigh cost against quality. If most consumers favour lower quality over cost, why should the federal government intervene in the consumer market and essentially say they're making the wrong choice, and should pay more?

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The tariff income would have swelled the central bank reserves and the government could then decide how to spend it in the economy.
Since tariffs are paid by the importers and consumers, not the Chinese, you're again saying that you think the federal government makes better spending choices for the American consumer, than do the American consumers themselves.

Plus, the US tariffs don't occur in an economic vacuum. The Chinese have responded by increasing tariffs on targetted US products, like soybeans. That means the federal government has had to start giving subsidies to soybean farmers. I think in the last fiscal year it was about $12 billion. So, increasing tariffs has resulted in increased US government spending. Who's the mug here?
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Old 08-02-2019, 08:06 PM
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Yes cheaper goods at the cost of destroying local industries. Besides most of the goods were sub par quality.
Some of the goods made in China are high-end and first-rate quality. Like my iPhone for instance. This and this article talk about why the iPhone is assembled in China and why they're not going to be assembled in the US. The second article talks about how fast Chinese factories can scale up production. One example is a last-minute change to the design of the iPhone when Steve Jobs decided that he wanted a glass screen on the front of the device. After the cut glass for the screens was delivered to the factory in the middle of the night, "A foreman immediately roused 8,000 workers inside the companyís dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day."

I can't imagine a US factory scaling up that fast.
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Old 08-02-2019, 08:31 PM
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To the surprise of nobody, I'm moving this to GD.
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Old 08-02-2019, 08:42 PM
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I think the Chinese and other countries are getting the blame for America's poor domestic policies. We don't invest in schools, healthcare, unemployment benefits, or anything that improves the quality of life for the average American, and it's somehow the fault of the Chinese. Of course Americans are going to buy foreign products if they can stretch our dollar, and yes, in some cases that has adverse effects on domestic businesses. That's not China's problem to fix; that's our problem, but corporate interests and their proxies in the Republican party aren't interested in fixing it. Proof of this lies in the fact that they went from being the party of free trade to being the party of Trump tariffs, foreign wars, and tax cuts. Don't blame China, Mexico, or anyone else for American stupidity.
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Old 08-02-2019, 09:02 PM
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also, there was the thought that if china became an industrial power and started to let people actually have money it would undermine the communist ideals a bit .......


However, what happened was the Chinese became obsessed/occupied with getting wealthy that they ignored anything else the government was doing to the point that as long as it doesn't affect wealth and income large swaths of Chinese society doesn't care what the party implements ... a lot like our fair country .....
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Old 08-02-2019, 09:31 PM
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they ignored anything else the government was doing to the point that as long as it doesn't affect wealth and income large swaths of Chinese society doesn't care what the party implements ... a lot like our fair country .....
I think you mistake what they want with what they say. Remember, there is no freedom of speech in china. Speak up against the party and you are going to get yourself into trouble. These guys murdered 10,000 students because they were protesting this.
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Old 08-02-2019, 10:09 PM
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Free trade is good. However, it needs to be both ways. China systematically denies us access to their market, hence us playing a bit of hardball.
No it doesnít need to be both ways. Itís better both ways, but one way is better than no way.
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Old 08-02-2019, 10:21 PM
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Originally Posted by Nansbread1 View Post
It seems a nobrainer now. But why were Chinese manufactured goods being imported into the USA with such low tariffs. They were literally dumping their goods in your land and no one thought to raise tariffs.

Whose or what policy decided to turn a blind eye to this for all these decades?
Gee, the Chinese are willing to provide us with stuff much cheaper than we can make it ourselves. What a disaster! Imagine the horror if we got the stuff for free!

It would be better if free trade worked both directions, no doubt. But even unilateral free trade is better than tariffs.

Ask yourself what happens if the Chinese sell us stuff, but don't buy our stuff. What happens? Well, the Chinese build up a glut of foreign currency. What can they do with it? Buy our stuff, buy our services, buy real estate, loan the dollars back to us, or sell them on international money markets to countries which then have to do the same thing. This is not bad.

I remember when Japan was supposedly 'taking over', because they were using the cash from their trade surplus to buy American businesses and real estate. And what happened then? When Japan had its own economic problems it sold off many of its foreign holdings - generally to large losses. So Americans benefitted from high quality, inexpensive Japanese products, then benefited again when the money they used to buy those products came back to the country at a discount.

The only way you can justify tariffs economically is if they are used as leverage to get the other side to drop their own tariffs. If it works. But if it doesn't, you are imposing a pretty big cost on the American economy. And if the other side won't drop their tariffs, you are still better off dropping your own.

Politically, it's a different problem.

Last edited by Sam Stone; 08-02-2019 at 10:23 PM.
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Old 08-02-2019, 11:19 PM
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The only justification for tariffs is to protect industries vital to national security. For instance, there was a few years ago, when I consulted with a steel distributor, exactly one steel plant in the US making the kind of steel they distributed. If they got an order from a defense subcontractor, the steel had to come from that supplier; there was literally no other option. If all steel plants that made "high speed steel" shut down in the US, it would be a major problem for national security.

At some point you need to prop up industries that are vital if you were to get into a conflict that would potentially have you lose access to the products of those industries, and it's more important the more that it relates to either defense production or basic consumables (mostly food).

But if there's no military use and people can survive without them, there's no good reason to try to protect their industries. And protecting domestic industry is the only really good reason for enacting tariffs, which is why it's called protectionism. Sometimes it's called for, but unless there's a good reason, most trade that powers the modern economy should have as few barriers as possible.
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Old 08-02-2019, 11:32 PM
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The only justification for tariffs is to protect industries vital to national security. For instance, there was a few years ago, when I consulted with a steel distributor, exactly one steel plant in the US making the kind of steel they distributed. If they got an order from a defense subcontractor, the steel had to come from that supplier; there was literally no other option. If all steel plants that made "high speed steel" shut down in the US, it would be a major problem for national security.

At some point you need to prop up industries that are vital if you were to get into a conflict that would potentially have you lose access to the products of those industries, and it's more important the more that it relates to either defense production or basic consumables (mostly food).

But if there's no military use and people can survive without them, there's no good reason to try to protect their industries. And protecting domestic industry is the only really good reason for enacting tariffs, which is why it's called protectionism. Sometimes it's called for, but unless there's a good reason, most trade that powers the modern economy should have as few barriers as possible.
This shows a myopic focus on physical goods versus intellectual property. It's on the IP side where we are being raked over the coals constantly. Our companies literally can't do business in china while they can do business here. That's not a good situation.
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Old 08-03-2019, 03:23 AM
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This shows a myopic focus on physical goods versus intellectual property. It's on the IP side where we are being raked over the coals constantly. Our companies literally can't do business in china while they can do business here. That's not a good situation.
The "myopic focus" is on the thread topic. It's talking about physical goods.

Also, while I would be the first to criticize Chinese IP laws, local business rules and freedom of speech, it is incorrect to say companies "literally" can't do business in China. Many big brands like Budweiser and Volkswagen make more money from China now than any other market.
If you had said something like can't directly do business, I would have been more or less on board.
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Old 08-03-2019, 05:48 AM
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Y...
The tariff income would have swelled the central bank reserves ..
Where do you suppose this money would come from? Who do you think pays it?
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Old 08-03-2019, 06:03 AM
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It's not inconsistent to support low tariffs but to engage in tariffs if you feel the other country is engaging in unequal trade practices. If you follow the logic of low tariffs no matter what, then the US shouldn't have engaged in World War 2 because killing is bad.

Whether this particular trade war is wise is another story. However, my deepest criticism of it so far is that the administration is trying to prop up farmers who are hurt by the trade war, which is just shoveling money at them to keep their votes. We have enough agriculture subsidies as it is. I support ag subsidizes in theory, since food security is the most important aspect of national security, but we currently make more than enough food to feed the US and all of our allies, so I don't think we need any ag subsidies at all, let alone additional ones that come about from trade wars.
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Old 08-03-2019, 06:27 AM
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They were literally dumping their goods
To reiterate Little Nemoís point, the Chinese are not dumping goods.
There are specific WTO definitions of what comprises dumping, and they relate to cost of production and domestic prices.

Putative tariffs are allowed to be imposed on dumped goods and all US manufacturers would be all over any suspected case like seagulls over chips.
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Old 08-03-2019, 06:59 AM
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Yes cheaper goods at the cost of destroying local industries.
US manufacturing output is higher than it's ever been (discounting the slight dip in Q1). US exports are higher than they've ever been.
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Old 08-04-2019, 12:36 PM
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It sounds like you're saying the USA is allowed to do "bad" things because it has special authorities other countries don't have? Why?
No, I wasn't making a point about the USA or any other country or the rightness or wrongness of any specific tariff.

My point was about DrCube's position that good and bad in general are not relative to context and goal, whether we are talking about tariffs or speeding or anything else.

I disagree that it is very meaningful to state that action X is "bad" in all contexts and with respect to all goals. Very little in the real world is that way.
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Old 08-04-2019, 12:45 PM
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They're regular dudes with a regular license who decided they can just drive whatever speed they want without consequence, while doling out the consequences to others who do the exact same thing. It isn't justifiable.
1 - They do have some training abut how to do it safely to mitigate some of the risk
2 - They do have lights and sirens to mitigate some of the risk
3 - They do have an entire network of support that can help to mitigate risk in more extreme situations (e.g. blocking off intersections and roads)
4 - They do have rules about when and to what degree it's justified based on the context and goal


There are examples of situations in which the risk to the public due to some driver (e.g. drunk and speeding, wrong way on freeway, etc.) far outweighs the additional risk of having police speed or break other laws in an attempt to stop them.
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