Quote:
Originally Posted by 2StgTurbine
For those that think America will "out last" China during a trade war because our economy is bigger, you are failing to account for the difference in what Americans & Chinese consider acceptable living standards.
The upper middle class in China thinks it is normal to pay $5,000 for the chance to get a licensee plate that will then allow them to spend $80,000 on an entry level econo-o-box car. Mean while in the US, consumers will start a twitter campaign against Wholefoods if the price of milk goes up 25 cents. Most Americans have zero savings & won't stand for the slightest downgrade in their living standards.
When China raises its tariffs on soybeans, the Chinese eat more rice instead. But when Chinese stop buying our soybeans, American farmers have to consider a million dollar crop loss. The Chinese are being forced to find an alternative to soybeans. They have lived most of their lives on subsistence farming. Their Chinese dream is owning a bike. They grew up in a society that taught them that life was hard and don't expect anything.
American farmers can take a loss for a couple of years, but they will start complaining to Congress if this trade war threatens their retirement plans. I see the American middle class breaking way before the billions of Chinese who are OK with their government openly spying on them & putting a million people in "re-education" camps.
Don't forget that the Chinese government supported the entire Chinese steel industry for a decade in order to push the US out of the market. I don't see Congress ever spending that kind of money.
What am I missing here. The Chinese import soybean meal to use as feed for their livestock so they can use domestic agriculture to feed their people. There is no "substitute" for soybeans in China. Due to the tariffs they are now importing soybean meal from Brazil (which had a bumper crop last year). Brazil used to export soybeans to Europe but now the U.S.is back filling the shortage to Europe. This shuffle in suppliers disrupts the market and hence the one time subsidy to U.S.Farmers. The worldwide demand for soybeans is constant (or increasing) and the only thing that changes is who supplies which market. All it will take is a bad year in one grower' s area and the price will rise accordingly. Farming has always been a crapshoot with weather and changing markets.
This will all sort itself out.
04-28-2024
