black321 wrote: 
Firstly what you are claiming is only true for mass-produced goods with a high labor content.. clothes, shoes, etc. Moreover, as China develops, labor intensive manufacturing is anyway moving elsewhere (and a good thing too, encouraging development in the poorer nations). The US is not a banana republic, therefore low-cost-labor production is not the sector where a country like the US with such high per capita GDP should be competing on the world stage, but in goods and services with high added value.

Secondly, offshoring to low-cost countries is an issue that applies to every developed economy yet not all of them are running trade deficits with emerging economies like between the US and China. You need to look elsewhere for the reasons behind the US trade deficit. 

My point is that the artificially high USD exchange rate due to the investment influx (safe haven) means that most US products are overpriced in global competition. Take Germany as a comparison. Despite importing similar volumes of consumer goods (per capita) from China as the US, Germany has consistently run a trade surplus due to exports of cars and machine tools. The US competition in this field is overpriced for the quality they offer so you end up with a trade deficit.
 

 NoEnzLefttoSplit wrote: 
My point was the cost of manufacturing, chiefly labor costs, are strikingly lower in China and other developing countries, relative to domestic cost of production (i realize we have deficits with other developed economies, but other than dairy farmers, that doesnt seem to be where the current admin's focus is - see china).  That's why U.S. manufacturers and retailers shifted to overseas production...not because of tariffs or x rates.    I'm not sure how your reply counters that, or why labor costs are misleading?  Are you arguing manufacturing in China and developing economies are more efficient, innovative?  Efficient perhaps, to the point of lower labor cost.  I just dont see how the manufacturing abroad provides any competitive advantage to domestic beyond cost, with labor being the most significant.  

p.s., as to Japan, Germany and Canada...i dont know for certain, but might wager we haven't significant manufacturing jobs to these countries in the last 30 years.  Perhaps they make a better car or product, but that brings in a different argument. 

 black321 wrote: 
Maybe because it is misleading?  Labor is only one part of a very large package. Expertise, operating efficiency, innovative strength, etc. are also key inputs and in terms of competitive strength, frequently outweigh the cost of an hour's labor.

The US runs big trade deficits with high-cost countries (Japan, Germany, Canada). And in those countries that qualify as low cost countries, the imports are frequently produced by companies owned and operated by US interests, which repatriate the profits accordingly (or not, if they are clever).

If you ask me, (ok, you didn't, but well) the US is hoist by its own petard.  Because of its (very much intended) military dominance, its currency is viewed as a safe haven and the corresponding investment inflows keep the exchange rate artificially high. Were it not for that, the dollar would be much weaker and US goods much more competitive.  

A case of wanting to have your pie and eat it too.

Re. trade deficits..tariffs have something to do with it, x rates a little more...but the biggest reason is cheap manufacturing, ie, labor.  This is the reason our retailers and manufacturers have chosen to source more goods from overseas.  Why is this is key point being overlooked, by both the right and left?   

 westslope wrote:

 haresfur wrote: 
I thought the anti globalists were alt right ?  Ya know, nationalist, tribalist and all that stuff ...

 haresfur wrote: 
Yes, that is amusing.  It really speaks to Trump's great ability to polarize. 

On the other hand, I recall the intense Canadian opposition to the FTA first signed with the USA and then to NAFTA signed with Mexico.   Canadian voters over the years have decidedly shifted in favour of freer trade.  Even if the so-called left New Democratic Party (NDP) had formed the federal government in the last election, the NDP would have continued to actively pursue freer trade agreements.

I suspect that among other things, some unionized private sector workers have benefited from freer trade/gained experience working under freer trade.   The trade deals will over time create their own vested interests.

AMLO — the president-elect of Mexico — has declared that in response to Trump hostility to Mexico and NAFTA, that he would encourage more investment by Canadian mining firms and look into more Mexicans working temporarily in Canada.  

The social democracies of northern Europe have been rooting for freer trade for quite some time now.  I reckon that freer trade will become increasingly acceptable and desirable from the perspective of left-wing Latin American politicians.   The environmental, labour and human rights clauses will help win them over.  

 haresfur wrote: 
What about the left-wing pro-globalization crowd?

 Lazy8 wrote: 
From the article:

But if sweet reason won’t work, what’s the alternative? In 1971 the United States dealt with a similar but much less severe problem of foreign undervaluation by imposing a temporary 10 percent surcharge on imports, which was removed a few months later after Germany, Japan and other nations raised the dollar value of their currencies. At this point, it’s hard to see China changing its policies unless faced with the threat of similar action — except that this time the surcharge would have to be much larger, say 25 percent.

I don’t propose this turn to policy hardball lightly. But Chinese currency policy is adding materially to the world’s economic problems at a time when those problems are already very severe. It’s time to take a stand.


Please note that since 2010, that the renminbi has appreciated in value. So maybe the threats worked?

You are brave Lazy8 to take on Krugman on trade issues.   Please note that there is no equivalence between Trump's trade war and the tariff action directed at China that Krugman was calling for.

 haresfur wrote:

 haresfur wrote:
 
Step 1: Remove fingers from ears.

The trouble with trade wars is that you don't really know if you've won or lost. There is no clear end. Governments will always try to bend agreements to their advantage and have a legitimate interest in areas like carbon emissions that are poorly managed through the market. But any interventions should be nudges rather than hammers. Large policy changes are disruptive.

I am amused at the silence coming from the left-wing anti-globalization crowd.

 westslope wrote:

NYT

How to Lose a Trade War