Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
Best Of MacroBest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd
Search
Shrewd'm.com Merry shrewd investors
Search
Best Of MacroBest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd


The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
Answer this questionContinue to Shrewd'mThis note won't appear again
Personal Finance / Macroeconomic Trends & Risks
Unthreaded | Threaded | Whole Thread (74) |
Author: albaby1 SILVER
SHREWD
  😊 😞

Number: of 4460 
Subject: Re: Trade deal with China reached
Date: 05/13/25 5:18 PM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 9
If the rest of the world is totally dependent on a Chinese monopoly...why *would* they need to fire a shot?

Because the world isn't totally dependent on a Chinese monopoly. There are lots of things that we import from China because it is cheaper and easier to do so. And there are lots of things that would be incredibly painful to deal with if China decided to stop making/exporting them to us, and we would have a rough go of it for a few years if they decided to play that card. But if they did play that card, we would take the pain and then manage. It would take a few years to spin up the things domestically that are currently being done in China - but if they cut off our supply of anything really critical, we'd be able to spin up an alternative source (either here or abroad) pretty quickly, and certainly fast enough that we wouldn't face any existential crisis over it. The ability to inflict a lot of economic pain on another country is not the same as controlling that other country.

That's right. And in the case of energy independence, Obama fought it tooth and nail before deciding producing energy was a good thing. The government actively tried to slow down the energy production expansion by denying leases on public lands and spiking things like the Keystone Pipeline (which would have ironically really benefited Canada).

And that wasn't effective, either. The shale boom happened, mostly unabated. Modest governmental efforts will only have marginal effects. If you don't get a major exercise in governmental power (like an actual bill out of Congress banning fracking, in this example), then minor governmental measures won't result in much change from where the private parties will go.

Right now, the economics make it vastly more efficient to produce certain industrial goods abroad. Our industrial output in the U.S. is as high as ever, but almost anything that is more efficiently produced using labor-intensive processes (or parts that come from labor-intensive processes) is being produced mostly in SE Asia. The U.S. can't change that with modest measures.

Depends on what "massive" means. Currently Trump believes that unfettered access to the US market is enough of one. YMMV.

Sure. If you imposed an embargo on China, the U.S. would stop importing stuff from China. Like I said, I'm not claiming this can't be done - just that the price of doing it is a muscular government intervention in the free markets that's far closer to the Sanders side of the political spectrum than the GOP would ever be comfortable with.

Yes, I know, the GOP has decided to pretend for a while that "tariffs" aren't the sort of high-tax, government picking winners-and-losers intervention that they have historically attacked up and down. It's not big government to have massive taxes on goods? I don't think many in the GOP have really changed their attitude on that. My guess is that Bessent had persuaded them that Navarro isn't really driving the trade bus, and that the tariffs would not stay at embargo-like levels for very long. So they were able to avoid publicly crossing Trump while anticipating that we weren't going to have a "massive" governmental intervention in the market. Recent events seem to bear out the wisdom of that.
Post New | Post Reply | Report Post | Recommend It!
Print the post
Members reply directly to albaby1 here — and replies get answered. Reading is free; so is joining the conversation. Join Shrewd'm »
This community has written 84,309 posts about US Policy. The article-length ones it recommended most:
It's going to get worse · 33 recs · 2025
G’day Donny · 30 recs · 2026
Old Related Story · 28 recs · 2026
HCR is a national treasure · 27 recs · 2025
Fascism in America · 27 recs · 2025
Unthreaded | Threaded | Whole Thread (74) |


Announcements
Macroeconomic Trends & Risks FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Best Of Macro | Best Of | Favourites & Replies | All Boards | Followed Shrewds | Open Questions | Moving a community