President Donald Trump's trade war with China did not achieve the objective of boosting manufacturing in the U.S., the Wall Street Jornal reports. What Happened: Manufacturing activity in the U.S. has not reversed despite billions of dollars in tariffs to discourage importing Chinese manufactured goods. The trade deficit with China reduced in 2019. Still, the overall trade balance has soared to a record $84 billion in August as U.S. importers shifted to imports from Vietnam, Mexico, and other countries. Since the pandemic, China's trade deficit is back to where it was at the start of the Trump administration. The goal of reshoring factory production to the U.S. is unfulfilled as job growth in manufacturing slowed since July 2018, while the manufacturing activity peaked in December 2018. Why It Matters: Trump's trade advisers say that the tariffs of $370 billion on Chinese goods have succeeded in forcing China to agree to phase one trade deal in January and will end China's unfair practices over time. Industry analysis by the Federal Reserve shows that tariffs helped boost employment by 0.3% by protecting domestic industries exposed to cheaper Chinese imports. Those gains were more than offset by higher costs of Chinese imports due to tariffs, cutting manufacturing employment by 1.1% in the U.S. The retaliatory tariffs by China on the U.S. exports reduced domestic factory jobs by 0.7%. According to Peterson Institute for International Economics trade expert Chad Bown, President Trump is not the first to use tariffs to protect industries, but this is the biggest use of tariffs since the Great Depression.
Yes...another promise that he made to win the 2016 election...that promise did not come true. Since the pandemic, China's trade deficit is back to where it was at the start of the Trump administration. The above is what many do not realize. All that talk about tariffs did not pay off for Americans at the end of the day. wrbtrader
i am in an industry that should have seen significant benefits from re-shoring. However, instead, we found that customers were okay with just paying the tarrifs. Resetting supply chains is not a trivial feat. Once its done, its done (like China sourcing soybeans from Russia). WINNING!
And then there is also the costs of farm welfare bailouts ... that mostly went to Big Farma ADM, Conagra (good name ), Tyson etc
Say Goodbye To Millions Of Jobs As Events Unfold "...What has happened in the manufacturing is part of a larger paradox at the heart of America's economy, while we are creating wealth faster than ever before in history, at the same time, millions of people are being left behind. The median worker in the US is poorer now than in the mid-1990s. Not everyone is suffering, skilled workers, for example, are earning more than ever. So are the very rich, those who own the capital that can be put to work in the world's increasingly person-free farms, mines, and factories. But those who used to make middle-class wages are increasingly slipping into lower-paying, service-sector jobs. Automation Is Replacing Off-shoring! China's largest private employer, Foxconn, which manufactures the iPhone and many other consumer electronics have installed over a million manufacturing robots. This new wave of technology is leading to more and more automation and is rapidly replacing off-shoring as the least expensive way to produce products. China has been losing jobs to countries with even lower wages. Eventually, "you run out of places to chase the (cheap) labor," says Rodney Brooks, an Australian roboticist. This is where automation and robots enter the picture. Years ago, thanks to some very clever engineering, a robot named Baxter cost about $22,000. Today the price is falling and Baxter is getting better. In the US, a person working full-time at what is considered a low wage would still cost an employer around $25,000 a year. The biggest difference is that robots like Baxter will work 24/7 where its human counterpart does not. Brooks indicates that, in many cases, these robots are not yet capable enough to replace a human worker. The robot is not a one-to-one replacement,” says Brooks. “We see it as a tool for ordinary workers to do better. His vision includes bringing manufacturing back to the US by replacing with automation some of the repetitive tasks that are currently shipped to China and other emerging markets. Not only are we looking at robots taking jobs from people but as robots become more advanced and sophisticated, experts and academics have increasingly explored the questions of what ethics might govern robots' behavior, and whether robots might be able to claim any kind of social, cultural, ethical or legal rights. It is possible that a robot brain will soon exist, others predict robot intelligence breakthroughs by 2050. We must also question the use of robots for military combat, especially when such robots are given some degree of autonomous functions. There are also concerns about technology which might allow some armed robots to be controlled mainly by other robots. The use of robots in military combat raises ethical concerns, the US Navy has funded a report looking into this. The possibility of robot autonomy and potential repercussions has been addressed in fiction and is likely to become a growing issue. Even as you read this, huge companies such as Amazon are focused on moving to create robots with the goal of reducing its human workforce. Self-driving cars and delivery trucks as well as drones all have the potential to eliminate work that in the past only people could do. One thing is certain, robots are taking our jobs and learning new tricks far faster than us humans. Automation and improvements in robots is a job killer. When you consider how fast the cost of replacing often unreliable human workers is dropping one must take a dim view of the employment picture going forward." https://www.zerohedge.com/personal-finance/say-goodbye-millions-jobs-events-unfold wrbtrader
Unfortunately, I think the Chinese will continue to outsmart North America even after a new administration takes office. wrbtrader
There were, and are, better ways to deal with China. But it requires brains and strategic thinking, which are sadly missing anywhere in D.C. Giving one person so much control over economic policy that gets intertwined with politics every four years is not going to help us complete with a managed economy that thinks in terms of decades or longer.