Will the components still come from China?
What do you think?
Of course they will 🤣
Anti-climate tariffs
Tariffs make us all poorer in the long run. Did we learn nothing in the 20th century?
It is impossible to compete when the playing field is not level. If state subsidies, energy production, co2 impact (not bullshit certificates and offsetting) could be equalized, then tariffs wouldn’t be so badly needed.
I too would like to have no VAT, import tax etc, and for everyone to get along nicely. The reality is, that we live in a highly competitive world where major powers are fighting for control over critical industries and raw resources.
So let them compete, isn’t that the idea? Countries and economies can compete with each other just like companies do. China can subsidize their EVs, America can subsidize its defense industry and corn, Europe can subsidize cheese and wine or whatever it is they make, each country specializes and offers the best product at the cheapest prices for consumers. Or make WTO have more ‘stick’ and less carrot so we can make countries stop subsidizing their own industries.
Either way, a return to trade tariffs and isolationism doesn’t sound great to me. It sounds like everything getting more expensive and less efficient (and therefore, more environmentally wasteful). It also sounds like countries being less dependent on each other, which means less reason to not go to war. We live in a very rare, peaceful time in human history. International trade (and massive technological/scientific breakthroughs) are a major part of that.
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There are two factors at play here which have to meet in the middle: where is the most efficient place to produce the product and what is the most efficient way to ship the product? The answer to the first question is: wherever has local access to the resources (people, iron ore, etc) and energy required and has the scale required to efficiently build those products. The more cars your country produces, the bigger your factories are going to be, and the more efficiently you can make cars. The answer to the second is by sea. Always by sea. Boats are vastly more efficient than rail, truck, anything.
Container ships are reallyyyy big and reallyyy slow so they experience relatively low drag
Drag on a plane is high, they have two massive jet engines that try to push them through the air burning literal tons of fuel to do so. Obviously not the best if you want to be efficient.
Drag on a train scales with the weight of the train. A long heavy train will have more rolling resistance that sucks away energy from it. You can’t scale this down without going through and making your wheels harder so they deform less, but you already have steel wheels on steel rails so you’re not going to get much better.
Drag on a ship scales with the surface area of the ship that is touching the water, putting more weight on a ship causes a bit more of the surface to touch the water, but not very much. Moving an empty ship is going to use a surprisingly large amount of fuel because the drag is pretty similar, but your fuel consumption isn’t going to go up linearly with load like it would for a train.
Consider something like a Maersk Triple E, it carries over 18,000 20 foot containers. It can get them up to 23 knots (26 mph) but generally runs at 16 knots for efficiency and does this with just 80,000 HP of engine capacity. Those 18,000 containers would turn into a train 68 miles long! With 140,000 tons available for cargo, that’s just 0.57 HP/ton at full speed, and significantly less at the lower cruising speed(where the ship is built to be efficient). Trains will generally run around 1 HP/ton so this big ass cargo ship is using half to a third as much power to move its cargo.
The downside of this is that it takes 6-8 weeks for a ship to go from China to California, but the upside is that it did that with a crew of just 13 and just had a big diesel running in its happy spot the whole time.
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And you don’t think it will make people poorer to let China do the Amazon thing for everything?
I’m not convinced this is true. At least in part.
I get the theory. But recent history seems to tell a different story. Lots of people are unemployed or working crappier jobs than what (usually) their father did in the same hometown. GDP might be higher but I’m not convinced large amounts of people are better off.
But the really issue is paychecks going to land and housing. If that got drastically fixed I think the world would be different.
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I agree with everything you said.
But what I am saying is there are towns that were industrial powerhouses that now is full of unemployment. Things like microwaves and TV are going to be cheaper now whether they were made in country or out. I’m not saying that everything needs to be made in the country I’m just saying you aren’t going to convert an entire workforce to do finance. I’m not convinced completely free any open trade is right.
There are some people out there that are best off doing factory work, or whatever, and then could be better for the country to have workers being paid 1100 (100 more than in other countries) but that person has in income of 1100 and isn’t taking let’s say 500 from the government.
From a business point of view going from wages of 1100 to 1000 is better. But from a country point of view 100 saved to wages isn’t worth the 1000 in salary and GDP loss and the extra cost of the 500.
One of the lessons we are learning the hardest way possible is that moving all your industrial base over seas to a country with autocratic tendencies makes you dependent on them, while also removing skill and knoedge from your country resulting in long term risk and damage.
Capital moves easily, supply lines do not. The 0 covid policy showed that this dependence on only china is dangerous for companies. And since companies are generally risk averse they will start spreading across more countries.
