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162 points TaurenHunter | 5 comments | | HN request time: 0.85s | source
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forgotoldacc ◴[] No.43580069[source]
A long time ago, Britain was the dominant economic power in the world.

Britain had a massive trade deficit with India. It imported far more from India than it exported to India.

But what Britain did was import massive amounts from India and made high value goods at home and provided high value services that couldn't be provided elsewhere.

Should it have flipped the other way? In 1800, should Britain have suddenly shifted gears and started massively exporting to India in order to balance the trade?

Sure, India was a colony and not a mere trading partner, so no need to argue about that. But the US is also an empire that has bases around the world and has many countries in an economic chokehold. The situation is similar in a modern context since official colonization is kind of gone. The US takes in lower value products from around the world and sells them back to the original country at a higher price due to some sort of added value.

Should America do the opposite? Should we drop all of our high value scientific and medical research, drop our engineering, and go all in on making t-shirts to balance the trade deficit? Because we very well could do this. We could steal away the fine industry of Cambodia and Bangladesh and have them buy all our t-shirts and balance the deficit pretty quickly. But is that a long term benefit?

Cambodia and Bangladesh are countries that can't really afford to buy massive amounts of American high tech exports or foods. But they're essentially colonies that export goods to other countries, and through accumulating wealth through that development, more people can afford to buy American high tech products. But we're demanding that these countries buy lots of American products now with money that they don't have. The only way to balance that is to make things they can afford. Which means low value items.

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mhogers ◴[] No.43580174[source]
The t-shirt metaphor is completely unjust - there is no value there for national security nor strategic autonomy.

Consider instead:

- Semiconductor low-end fabrication (Taiwan, Korea)

- Basic electronics: circuit boards, USB devices, .. (China)

- Auto parts (Mexico, China, Germany)

- Generic drugs (India, China)

The reality is that the US is not the ultimate global hegemon anymore and therefore offshoring industries cannot simply be viewed through an economic lens.

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1. mk89 ◴[] No.43580342[source]
Come on, did you see the trade for goods and services deficit with EU? It's ludicrous. But hey, the president decided to focus only on goods. Why not on everything? Because it's unjustified. He needs money. A lot. And throwing out accusations at other countries is the only way he can get out of it fine. If he had just set a 10-15% tax on all imports "just because" people would have never approved. Now, on the other hand, look at those unfair European, Canadians, Mexicans, ... penguins :)
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2. exe34 ◴[] No.43581076[source]
I was thinking, the UK and EU should set extra taxes on US tech companies to offset the tariffs. don't even need to fix the amount - just tie it to whatever the tariffs are.
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3. mk89 ◴[] No.43581510[source]
Sure, let's all lose our jobs, who needs them anyways...!

But then finally we proved Trump and all those evil Americans a point! *evil laughter...

We in EU could do that, if we dared investing in tech.

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4. exe34 ◴[] No.43582972{3}[source]
We all work for US tech companies, do we?
5. overfeed ◴[] No.43584716{3}[source]
FWIW: acquiescing and becoming Trump's bitch won't save your jobs either. See Vietnam - they dropped tariffs on the US, and still got hit with the highest American tariffs - even higher than the EU that's threatening to retaliate.