So the senate pass a bill to put tariff on Chinese goods.....

[Chibibar]

http://www.nytimes.com/2011/10/12/b...ill-aimed-at-chinas-currency-policy.html?_r=1

It still has to pass the house.

What I don't understand is why? This is a very dangerous ground the U.S. is treading on. China owns a large majority of the U.S. debt. Currently China produce many goods that U.S. use. This will just raise prices on goods that China produce but won't guarantee manufacturing items back home.

China also owns 90% of the market on rare earth.

Why doesn't U.S. pursue other type of goods? Do they really need try to compete against China in terms of manufacturing? (which would be difficult mainly China have few laws in terms of safety and worker's safety vs U.S. hence it is cheaper to ship raw materials, produce in China, and ship back finish product than to produce back home.

 

[GasBandit]

Some say that it's a myth that the US's economy depends on china - and that's it's actually the other way around.

I myself can't say this is the case for sure, but *something* has to be done about China's eating-of-and-als0-having-of cake-ness.

 

[Chibibar]

Some say that it's a myth that the US's economy depends on china - and that's it's actually the other way around.

I myself can't say this is the case for sure, but *something* has to be done about China's eating-of-and-als0-having-of cake-ness.

I saw that article before, I think it is more of a mutual thing consider we can grow more food and raw material than China. China is good at turning raw materials into goods (cheaper than U.S.) but a rise in cost of Chinese good can hurt the regular folks who are buying them (clothing and such)

Even high tech stuff like iPad. It cost average of 700 already. Can you imagine with a 25% (minimal according to my article) tariff on it? There is no way Apple is going to eat that cost. It is going to be pass on to the customer. So we can easily looking around 900-1000 dollars (assuming wholesale cost is 500 ish)

 

[GasBandit]

Somehow I am not feeling a lot of sympathy for the "iPad prices" argument, but chances are prices at Wal-Mart might also go up on the nation's low income families, which is a concern. But what the article is saying is that while china is currently the lowest cost, it isn't by very much. Other nations like Vietnam are supposedly chomping at the bit to provide the US market with cheap goods - maybe not quite as cheap as china, but still a hell of a lot cheaper than we could make ourselves in the US... and also unimpeded by 25% tariffs.

 

[strawman]

This is typical "shot across the bow" type stuff for legislators. It won't go anywhere.

It's similar to the latest Simpson's voice actor salary discussions. Each side says, "You suck!" and eventually both sides agree to change in small, mostly insignificant, ways.

In this case they are publicly provoking China to react. Right now they are reacting to the news, and tomorrow our newspapers will be filled with stories about China denouncing America's foreign policy, and how we unfairly tax imports and throw our economic weight around in order to dampen their thriving economy, etc, etc, etc.

It'll all be very public, and it will fizzle just as quickly in a week or three depending on how long each side wants to drag the other through the mud.

 

[Chibibar]

Somehow I am not feeling a lot of sympathy for the "iPad prices" argument, but chances are prices at Wal-Mart might also go up on the nation's low income families, which is a concern. But what the article is saying is that while china is currently the lowest cost, it isn't by very much. Other nations like Vietnam are supposedly chomping at the bit to provide the US market with cheap goods - maybe not quite as cheap as china, but still a hell of a lot cheaper than we could make ourselves in the US... and also unimpeded by 25% tariffs.

Well. The iPad is just on the "luxury" items that people love to buy. But you are right, the people who shop at Wal-Mart (I do too cause some items are just affordable) would be hurt by this.

This is typical "shot across the bow" type stuff for legislators. It won't go anywhere.

It's similar to the latest Simpson's voice actor salary discussions. Each side says, "You suck!" and eventually both sides agree to change in small, mostly insignificant, ways.

In this case they are publicly provoking China to react. Right now they are reacting to the news, and tomorrow our newspapers will be filled with stories about China denouncing America's foreign policy, and how we unfairly tax imports and throw our economic weight around in order to dampen their thriving economy, etc, etc, etc.

It'll all be very public, and it will fizzle just as quickly in a week or three depending on how long each side wants to drag the other through the mud.

I hope so. Chinese people then to be egotistical toward other country and have a long memory if they are slighted. (look at Taiwan as an example)

 

[Terrik]

Xinhua got the ball rolling already

 

[Chibibar]

Xinhua got the ball rolling already

Good article.

I do think about the economic model. Even if you force your price to be low (in this case currency manipulation by making the whole nation price to be low) can only do for a certain time before it REALLY hurts your own country. So far China seems to prosper on that. I am sure there are some manipulation, but that is China's worry.

While U.S. may start going to other country, they might not have the production capacity as China and thus price will rise too in order to produce more factory to meet demands OR the scarcity of product will cause the rise in products.

It is interesting to see the U.S. is trying to put a bandaid on a wound (our economic) with different bills and laws. To me, it is a bad idea to mess with the economic system. It will all come crashing down (like it did with housing) to me, the system is trying to correct itself, but the government won't allow it

 

[strawman]

If China would let their currency float, just as everyone else in the world does, then the playing field would be even.

The fact that they are propping up their currency artificially by tying it to US currency is what's causing the problem, and making it difficult for other countries to compete with China for US business. Further, it makes it very hard for the US to sell anything to China - China wants to export labor, they don't want to import anything.

 

[sixpackshaker]

Just put a $1 minimum wage on all goods coming to America...

 

[Terrik]

-China wants to export labor, they don't want to import anything.

Well for now. Even they know that won't last forever.

 

[AshburnerX]

China also owns 90% of the market on rare earth.

I believe there is legislation in the works that would make re-opening the Rare Earth mineral mine in the US an eventuality and it's all thanks to Chinese posturing. Basically, China got greedy and has been threatening to scale back Rare Earth exports/raise prices for policy changes. Corporations aren't going to have any of that bullshit so they are greasing the wheels in Washington to make domestic minerals a possibility again.

Once the US mine opens, Chinese prices will drop and exports will be up if only because they now have to compete with a domestic supply.

 

[Terrik]

Yeah, China kinda nuked an anthill when they cut rare earth minerals to Japan during that whole ship captain incident and it made a lot of nations take notice. They've been overplaying their hand.

 

[Chibibar]

I believe there is legislation in the works that would make re-opening the Rare Earth mineral mine in the US an eventuality and it's all thanks to Chinese posturing. Basically, China got greedy and has been threatening to scale back Rare Earth exports/raise prices for policy changes. Corporations aren't going to have any of that bullshit so they are greasing the wheels in Washington to make domestic minerals a possibility again.

Once the US mine opens, Chinese prices will drop and exports will be up if only because they now have to compete with a domestic supply.

I have been thinking about that, but rare earth is toxic and dangerous. People in the U.S. takes shortcut in COAL mine, I am afraid when it comes to rare earth. We have laws and regulation and companies "ignore" them. If it is really push for safety, I don't think it will be cheaper than China.

 

[AshburnerX]

I have been thinking about that, but rare earth is toxic and dangerous. People in the U.S. takes shortcut in COAL mine, I am afraid when it comes to rare earth. We have laws and regulation and companies "ignore" them. If it is really push for safety, I don't think it will be cheaper than China.

You'd be surprised. China charges obscene prices compared to what it actually costs them to dig up the minerals, so while it IS cheaper to buy them than mine them up ourselves, it's not by much. Besides, if the prospect is to go without the minerals because China arbitrarily decides not to export for political reasons, the choice is obvious.

 

[Chibibar]

You'd be surprised. China charges obscene prices compared to what it actually costs them to dig up the minerals, so while it IS cheaper to buy them than mine them up ourselves, it's not by much. Besides, if the prospect is to go without the minerals because China arbitrarily decides not to export for political reasons, the choice is obvious.

You got a point It is an interesting situation that the U.S. doing consider right now we are really in economic slump.