Wednesday, August 21, 2019

Quora: Is Trump correct to say the longer the trade war goes on, the weaker China gets?

Mike Madore Answered

If you take the time of following this simple reasoning, you will be stunned when you realize what is really happening.

If China builds a bicycle to export to the US, it is because their cheaper labor cost makes it economically feasible. And if the US president impose a tariff on those bicycles, an importer, who is a business man doing business in the US, will have to pay the original price to the Chinese manufacturer, and also the Tariff to the US government, and those tariffs will then be included in the purchase prices to the American consumers. So what is true is that the Chinese are not paying those tariffs, the Us consumers is who is paying those tariffs.

It also is that the Chinese are not much concern about buying manufactured goods from the US, and it is because cheaper labor in China, makes manufacturing all their goods cheaper in their own country.

It also is that the Chinese manufacturer might find a partner in France who is in the export business, and ship him those same bicycles with a tag on them that says “Made In France”, and voila, these same Chinese bicycles are back entering in the US as French Manufactured goods, and the tariffs imposed by the US president becomes a laughing matter.

But what they needed to import was farm product from the US, and we are all aware that American farmers are now paying an awful price after having lost the Chinese market, and it is going to be much too easy for the Chinese to buy their farm products from other countries in the world, and I am sure that these other countries will not miss the opportunity to secure and keep their Chinese customers.

So what is true is that the longer the trade war goes on, it is the US who is being driven to become weaker, and the damage after Trump, might not even be repairable,

After all, if you got a bad deal from a place you do business with, like where you buy your car, is there a strong chance you might never go back there to buy another car.

So you might now understand that it is absolutely stunning to hear Trump, repeatedly claim that the Chinese are pouring billions of dollars into the US.

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