The trade war with China

#1

China has been using “unfair trade practices” for decades. This includes copyright infringement, theft of trade secrets, and currency manipulation. These all benefit the growth of their economy and (theoretically) come at some cost to us.

The WTO is suppose to establish fair trade rules, but it has no teeth. There is no legal way to force China to agree to stop doing these things. So if it is to change, it must be done through diplomatic or military pressure. Well, we’re not just going to bomb them. So tariffs it is.

Tariffs hurt both China and the US. The US gains tax revenue, but it is true that most of this burden is placed on consumers through higher costs. But the tariffs are doing much more economic damage than they generate revenue. It discourages growth and investment in China and drives companies (and especially manufacturing) out of the country.

The trade war is not just a bone-headed Trump policy. There is an economic justification for it. But some items should be considered. The deadweight loss of the trade war lands on us too. Will our gains from China starting to “play by the rules” be worth it? For us? For the world? And is the tradewar moral? It seems hard to justify without a (strong) belief in nationalism.

Thoughts on these questions? Do you think it should go on? Will it?

#2

Brief meanderings of thought:
A society is supported by unspoken agreements or ‘social contracts’ (here contains some elaboration on this idea) that individuals will (not always, but generally) act to benefit society, and in return society will benefit them. A selfish person with an understanding of the situation may realize that because our societies are so vast, contribution on a personal level is unnecessary. This person transforms from a ‘symbiote’ to a parasite, and is now advantaged over every other contributing member of society. Generally the more extreme examples of this are countered with laws, and the most egregious violations result in a (sometimes temporary) separation from society. Enter the extremely wealthy person; this person is powerful enough that they can rebuff societal attempts at punishment for this parasitic relationship. Often it is only the most egregious crimes that can have the same effect on the extremely wealthy person, and even then it’s not guaranteed (the fact that Nestle even still exists is a testament to this).

Note: I do not believe that billionaires are in any way a net benefit to society, despite whatever jobs they supply, inventions they fund, or charities they donate to.

A parallel can be drawn between this model and world economics/trade, where we look at countries as “individuals”. This makes me think that China will not stop what it is doing without a war or revolution.

#3

Interesting way to describe things.

The goal of tariffs and the trade war in general are to coerce China to play by our rules. They can be assumed to be a selfish actor, but also to respond to incentives. Trump would like to make it more costly to use (at least some) “unfair” practices than it is to comply.

:thinking: Do you mean that the existence of billionaires is general a net negative for society? To say so you’d have to define what it would mean to have a society without billionaires.

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