Quote:
Originally Posted by Manic!
Cheap Chinese goods. You think trump supporters are going to be happy when the prices go up at their local dollar store?
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The US market is WAY too big before those taxes (reflected on WHOLESALE pricing) hit consumer/retail pricing. China could literally go bankrupt before US prices show any significant movement.
TBH, I have to applaud Trump to playing all his cards right.
First, announce all sort of incentives to US corporations.
Second, light some spark with China on trade war.
Third, kinda relax on the whole ZTE issue knowing Congress would veto the crap out of him (think if his original intention was to actually kill ZTE, how can he get full bipartisan support on this? Play dumb and get the Congress to "fight" him)
Fourth, have the FED to announce that they are willing to go ABOVE target inflation rate as full capacity employment rate (a place where US economy is at now) would allow this to happen.
Finally, go full on trade war with China (everyone else are really just collateral damage... because they know how diversified China is on the worldwide scale. So, the only way to put serious pressure on China is to block everyone)
This is what I am seeing now. Not sure if these were all part of the plan... if they really were... I'm shocked.
China is really fucked now. They either bow to the demands of US, or face pressure from everywhere:
Demand? no one else can effectively replace US consumption.
Supply? with China becoming expensive to produce, companies who are sensitive to costs would start moving elsewhere. US doesn't care if they don't move back to US... at least the other economies would far more easily accept their demand. Once they are gone China would lose all the supply chain advantage it had accumulated over these years.
Debt servicing cost: FED rates affect everywhere. No way around it.
Inflation: again, FED rates at play.
China can no longer have the cake and eat it too. They want everywhere to "freetrade" with them while putting incredibly high barriers to access their market.
Similar thing goes with NAFTA. The idea of free trade is that each party takes the production that they are most effective of. In the perfect world, it's in the benefit of everyone.
Fuck the dairy supply management, our many oligopolies/monopolies in our economy. Why do we have to effectively subsidize CDN farmers for their incompetence? We get lower quality at higher prices and benefit what? A very small percentage of Canadians. I'm a Canadian too. Why don't other Canadian benefit me as well? They are not less capable or more vulnerable than I am in any shape or form. Then if I don't get it, neither should they.