[F150]

So the world has started moving away from Globalisation to Protectionism !!
I think the strategy suits USA very much. Eagerly waiting to see how Trump tackles China.

[dark.knight]

Trust America to make anything fashionable, even if its a 180 degree stance. First it was "outsource-save money-bring cash into the nation via capitalists", now it is "protect-create jobs-spend more-keep it in the nation".

At the end of the day, both ideologies are idiotic, to say the least. A fine balance is what is required, the nation doesn't hold its breath when making fun of China and its "sweatshops" and child labour and poor quality workmanship, all true to an extent but its that same America that created this monster by outsourcing every single production from toothpicks to phones and shoes to China. Car companies are easy to strangle, if Trump wants a challenge he should :

- Move Nike out of China (1000$ shoes anyone?)
- Move Apple out of China (10,000$ phones, anyone?)
- Move all major label clothing brands out of China & Bangladesh.
- Move all BPO+call centre+I.T jobs from Bangalore into 'Murica, yeah those are the real big paychecks.

Personally I'll be happy if the 4th move happens, technology is overrated anyway.

[Nissan1180]

Originally Posted by dark.knight

- Move Nike out of China (1000$ shoes anyone?)
- Move Apple out of China (10,000$ phones, anyone?)
- Move all major label clothing brands out of China & Bangladesh.
- Move all BPO+call centre+I.T jobs from Bangalore into 'Murica, yeah those are the real big paychecks.

I don't think that shoes made in America would cost that much. Much of the work is Automated. Not sure about phones but to the best of my understanding the cost of an iPhone is marked up by 300 ℅ with respect to the manufacturing cost including materials, human resources.
The problem is that American corporations are now addicted to these margins and they will not be able to adjust to a local setup.
I like the idea that the new administration came up with to retain jobs, but it can only be useful if they manage to relieve themselves of their addiction to China.

[dark.knight]

Originally Posted by Nissan1180

I like the idea that the new administration came up with to retain jobs, but it can only be useful if they manage to relieve themselves of their addiction to China.

That is my point, they are addicted to China (margins). Though I exaggerated the costs, the resources needed to build, run and maintain a manufacturing facility in America (with insurance, safety costs, a very risky legal environment and union strength) will end up being substantially higher than that in China or India. Now Apple is trying to setup a factory in Bangalore, a city that has borne the brunt of America's tech assault and now is so developed that technology is in every square inch of the city with people swiping away on their phones, even if basic water & electric power availability is decreasing by the day and pollution is increasing by the day.

I've overseen more than a couple of agreements with 'Murican companies, the terms sound more like bonded labour than anything else. Secure from their end but in case the other party needs to pull out, not much that can be done.

As for the man himself :

https://www.youtube.com/watch?v=HekJtr8hyX4

[BeantownThinker]

Originally Posted by Enobarbus

India imposes nearly 320% tax on all cars imported as CBU's and there are substantial tariffs on CKD units as well. Similar taxes are imposed on many other products as well.

The scene with US is that it a US Headquartered company manufacturing outside US to sell the products inside US.

In the case of CKDs and CBUs it is a foreign based company manufacturing outside India to get inside India. So India is right in imposing a higher tax on such products which bring negligible value to the Indian economy.

[Nikhilb2008]

That was very smart of Ford.... small car sales are slowing drastically for now.. Sales of trucks and SUVs are going through the roof.

And generally, everyone is expecting sales to slow down in 2017. The Mexico plant of Ford was supposed to be for small cars. Ford played it very smartly and cancelled that project and are adding 700 jobs in their existing plant somewhere in the US. They get brownie points for adding jobs, they save a ton of money by not locking up capital in a project that may not be successful.

[nakul0888]

I am extremely skeptic of this whole protectionism and tariff idea.
At the face value it looks very rosy. But when you take a look at the arguments for free trade you realize its not exactly a black and white issue.

Here are reasons for free trade i read from a website dailywire.

Both Donald Trump and Bernie Sanders pledge to shut down trade if elected. The media have assumed that Trump’s appeal to blue collar workers stems from his opposition to illegal immigration, and indeed, immigration in general. But a large swath of his support springs from his protectionist trade policies -- policies also backed by Bernie Sanders. Trump’s been preaching government-imposed protections for American products from foreign competition for years. Here’s Trump in August:

We have to bring back our jobs back from China. As an example, we have to bring manufacturing back. You look at Japan with the boats that come pouring in with cars – you know what we send Japan? We send them beef. We send them wheat, we send them corn…I want American cars. If Japanese companies build here, that’s fine. But you know what? I don’t want to see boats pulling into Los Angeles because I saw boats the other day that were the biggest boats I’d ever seen – loaded up, you wouldn’t even believe the thing could float so many cars…They make cars in Mexico, and they just send them across the border. How does that help us?

Trump speaks like this routinely. So does Bernie Sanders:

"You didn’t need a Ph.D. in economics to understand that American workers should not be forced to compete against people in Mexico making 25 cents an hour…They’re gonna start having to, if I’m president, invest in this country."

And more and more Republicans have begun to buy into all of this. They’ve decried the failure to reach out to disenchanted blue collar voters in the Rust Belt, and they believe that they can pander to those voters by magically bringing back disappeared jobs through tariffs and regulations. They’ve heard the cry of the disenfranchised voters who lost his job but has no advocate, and they’re willing to throw free markets over to gain his vote.



This is foolishness. Here are four reasons.

Tariffs Are An Unfair Tax. Trade has two sides. Always. It is a bargain among consenting individuals. Trump complains about us importing cars. That’s because there are Americans who want to purchase those cars and are willing to do so. Depriving them of their free choice is tyranny. Beyond that, you are sucking money out of those Americans’ pocket by forcing them to pay more money for products just because they’re made in America; you’re just redistributing wealth. And you’re doing it regressively – rich people can usually afford marginally more for a product, but poor people can’t. There is no difference between the government forcing me to pay a farmer more for a product by placing restrictions on imported goods, and the government taking money directly from me and handing subsidies to others. Trade redirects money to the most efficient industries across the world. That makes everyone more efficient, and redirects American resources to industries that are ever more sophisticated.


Tariffs Destroy Jobs. Removing money from profitable industries – people who don’t need tariffs and subsidies – to give to those who are inefficient merely keeps jobs in industries that will collapse as soon as competition is allowed. And if competition is never allowed, product quality declines while price rises, and the economy stagnates, sucking jobs away from industries that could be producing them. Take, for example, Detroit. Bernie Sanders acts as though Detroit collapsed because of evil foreign trade. Here’s what he said in the last Democratic debate: “Do you know that in 1960, Detroit, Michigan was one of the wealthiest cities in America? Flint, Michigan was a prosperous city. Corporate America said why do I want to pay someone in Michigan a living wage when I can pay slave wages in Mexico or China. We are going to shut down and move abroad and bring the products back.”

This is not what happened in Detroit. Detroit collapsed because unions and regulations made Detroit uncompetitive in the global market while other countries recovered from World War II. Subsidies and tariffs made Detroit uncompetitive; when we went free trade, Detroit died. The eroding tax base led to the city's collapse as politicians tried desperately to grab as much cash as possible amidst the flight. The city emptied out of all capital.


Tariffs create zombie industries, just waiting for the head shot. We can complain all we want about the demise of manufacturing jobs – but how many service and information sector jobs are you willing to sacrifice for one manufacturing jobs? And why? In the 1930s, the government thought agricultural jobs were worth the sacrifice, and pushed forward the Smoot-Hawley Tariff. The result: a decade-long depression.

Here’s the truth: most job losses are created by technological innovation, not trade. But good news: that technological innovation also creates jobs! That’s why the unemployment rate in America has been relatively stable for a century, despite the creation of the automobile, the computer, the assembly line, the airplane, and the internet, among other inventions. The notion that something new is happening in the American economy is a lie – it’s been happening all over the world since the Industrial Revolution. And guess what: we’re all better off thanks to such innovation.

America Is Not Damaged By “Unfair Trade Practices” Of Other Countries. Both Mitt Romney and Donald Trump have complained in the past about China’s “unfair” trade practices, particularly their devaluation of their currency. But devaluing your currency doesn’t give you any advantage, any more than pretending that Yao Ming is 5’9” gives Nate Robinson an advantage over him. Currency is merely an exchange unit. If China inflates its currency, the American dollar is worth more against it; that means we purchase more Chinese goods.

Well, good for us! That makes it cheaper for our consumers, supposedly. But not for long, since currency is a substitute for goods and labor, and government manipulation doesn’t change that. China’s consistent devaluation has led to economic crisis in the country, more poverty among the people who use their currency (namely, Chinese citizens) and multiple stock market collapses in the last year. Right now, the Chinese government is desperately attempting to stop a devaluation spiral. If devaluation were such a threat to the American economy, why wasn’t Weimar a world power when people were shoveling around cash in wheelbarrows?


How about China refusing to import American products? That’s obviously not good for either us or them, but that doesn’t mean that our attempts to stop their imports would help us. That would be cutting off our nose to spite our face. Jim Geraghty gives a good case example: our 2009 tariffs on Chinese tires, which resulted in – at best -- $48 million in “additional worker income and purchasing power,” at the cost of $1.1 billion in American money spent on more expensive tires, plus another $1 billion in the poultry industry thanks to Chinese retaliatory tariffs.

Trade Is Not A Zero-Sum Game. Trump and others have constantly whined about America’s trade imbalance. This sort of economic silliness has a long history. Adam Smith pointed this out in The Wealth of Nations: “Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity.” As Thomas Sowell writes:

In general, international deficits and surpluses have had virtually no correlation with the performance of most nations’ economies. Germany and France have had international trade surpluses while their unemployment rates were in double digits. Japan’s postwar rise to economic prominence on the world stage included years when it ran deficits, as well as years when it ran surpluses. The United States was the biggest debtor nation in the world during its rise to industrial supremacy, became a creditor as a result of lending money to its European allies during the First World War, and has been both a debtor and a creditor at various times since. Through it all, the American standard of living has remained the highest in the world, unaffected by whether it was a creditor or a debtor nation.


Sowell points out that if the Japanese send us lots of cars and we send them lots of dollars, they will use those dollars to buy American assets. That’s exactly what they’ve done. As Scott Lincicome pointed out at The Federalist, “every dollar traveling overseas to buy imports (in excess of our exports) eventually comes back to the United States in the form of investment, and our “trade deficit” is matched by a “capital account surplus.” In other words, we buy goods and services from foreigners, and they buy an equal amount of our exports plus our financial assets (aka foreign investment in the United States).”

If trade were really about “beating” the other guy, as Trump seems to suggest, perhaps the best solution would be for us to sink all Chinese ships carrying imports. Wouldn’t that help the economy, after all? Countries that effectively do that with high tariffs invariably collapse economically and end up having to inflate their currencies. See, for example, Latin America. Nobody invests in countries with high tariffs; nobody trades with countries with high tariffs. If trade were a zero sum game, wouldn’t it be best to just keep everything in house?

But logic doesn’t matter in this conversation. All that matters is that tariffs and trade barriers represent yet another government policy with clear beneficiaries and diffuse victims. So they’ll be politically popular, even as they drive the American economy into the ground.

[tj123]

Originally Posted by dark.knight

- Move Nike out of China (1000$ shoes anyone?)
- Move Apple out of China (10,000$ phones, anyone?)
- Move all major label clothing brands out of China & Bangladesh.
- Move all BPO+call centre+I.T jobs from Bangalore into 'Murica, yeah those are the real big paychecks.

Already companies like New Balance are assembling shoes in USA, almost all big Japanese, Korean & German car manufactures are assembling or manufacturing (components)/ cars in US. There are lot of products sold in stores where you have US & China made versions, I can tell you the price difference is not that significant...

[Samurai]

Originally Posted by nakul0888

I am extremely skeptic of this whole protectionism and tariff idea.
..
...
Here are reasons for free trade i read from a website dailywire.

Those arguments are from an capitalist, so the arguments will be against tariffs.

Let's start from the first principles, shall we?

There are primarily two kinds of economics systems, Capitalism and Socialism. Everything else is a combination of these two.

Pure Socialism is where everybody has same income and wealth. That means equality for everyone, no one will go hungry. This is most fair, but most unnatural.

Pure Capitalism is where everybody earns according to how much their talents are valued by the rest. People are differently talented, and their talents are differently valued. A movie actor adored by millions could be valued million times more than a construction worker. Their income and wealth will reflect that. This is most natural, but most unfair. In this system, most wealth will always move into the hands of a few.

Market economy is purely capitalist in nature. Without any restrictions, free market will attempt to maximize profits at any cost, even at the cost of other humans. Therefore, a government elected by people must always lean towards socialism, in order to strike a balance between what is fair and what is natural.

If you look around the world, it is clear that countries with socialist leaning government, but with market economy, keep most of their citizens happy. This is achieved through corporate taxes, environmental policies, tariffs, customs, etc., which funds welfare programs, public education, basic healthcare, pensions, etc.

It is the duty of a government elected by people, to reduce the inequality caused by free market economy. If the corporate world moans about reduced profits, so be it. It is more important that the poor and the weak don't starve to death, to keep companies profitable.

Until 20th century, most governments in the world leaned towards capitalism rather than socialism, including USA. In 1933 USA was forced to lean towards socialism for survival, it was called the new deal. That created a middle class for the first time. However, in the 80s under Reagan, the government started leaning back towards capitalism, which caused inequality to increase again.

Bernie Sanders ran his campaign on this theme. Looking at the popularity of that message, Trump borrowed Bernie's ideas and achieved US presidency.

It is entirely fair that Trump is threatening companies to bring jobs back to USA, using tariff. It is the job of the government to strike the balance between market economy and social justice.

[nakul0888]

Pure Socialism is where everybody has same income and wealth. That means equality for everyone, no one will go hungry. This is most fair, but most unnatural.

This certainly not most fair. Because you are talking about equality of outcome not equality of opportunity. You do realize that not all people are the same. Some are smarter, some work harder, some has better skills. To achieve this equality of outcome nirvana of socialism you have to penalize the people who work harder than others, who are smarter than others, who provide goods and services that are of more value than others. These people who get rich get there by engaging in mutual voluntary transactions using their aforementioned skillls. They don't loot anybody, they dont steal from anyone, they don't force anyone, they don't violate anybody's rights.
There is nothing fair in taking their hard earned money and redistributing it to others who didnt earn it. You are distributing wealth to people who didn't earn it by trampling on the rights, labour and hard work of people who earned it by rightful means. Its just tyranny disguised as compassion for poor. Socialism is most unnatural all right. Its also utter garbage. Its the main reason why India is still a third world country. We have been at this Income redistribution thing for about 69 years now and its gotten us nowhere.

Pure Capitalism is where everybody earns according to how much their talents are valued by the rest. People are differently talented, and their talents are differently valued. A movie actor adored by millions could be valued million times more than a construction worker. Their income and wealth will reflect that. This is most natural, but most unfair. In this system, most wealth will always move into the hands of a few.

There is nothing unfair in a movie star earning more than a worker. Movie star doesn't go around forcing people at gunpoint to watch his movies. He gets rich because there are enough people who willingly part with their own money to see his movies. No ones rights are being infringed here. The worker isn't being exploited to make movies star rich. The reason he makes less than the movie star is because that's the demand for his services in the free market. And as such there is no unfairness here whatsoever.

Market economy is purely capitalist in nature. Without any restrictions, free market will attempt to maximize profits at any cost, even at the cost of other humans. Therefore, a government elected by people must always lean towards socialism, in order to strike a balance between what is fair and what is natural.

Even at the cost of other humans? How? You mean coercion? Force? environmental degradation? If that is so then that's where the rightful role of government steps in. Protection of individual rights. If a corporation infringes on the right and free will of a worker, the worker should be able to take the business to court and get compensation and justice. You don't need socialism and redistribution for this. Its just government doing the job its supposed to do. Which ours sadly don't.

It is the duty of a government elected by people, to reduce the inequality caused by free market economy. If the corporate world moans about reduced profits, so be it. It is more important that the poor and the weak don't starve to death, to keep companies profitable.

All this talk of Income inequality baffles me. Whats the big deal about having Income inequality? My family earns a lot less than some of the bhpians here. I couldnt care one bit about that. They are not responsible for my well being. They didn't take anything from me. If I vote to tax them more, so that I get free college and healthcare that is not in anyway making things fair, THAT IS CALLED STEALING. That is exactly what it is.

That said I am all for a basic social net so that a citizen's quality of life doesn't fall below a bare minimum standard. But thats it. That doesn't mean free college, free medical care, free housing, free electricity, free this , free that at the cost of others. If you go down that road you get venezuela.

Until 20th century, most governments in the world leaned towards capitalism rather than socialism, including USA. In 1933 USA was forced to lean towards socialism for survival, it was called the new deal. That created a middle class for the first time. However, in the 80s under Reagan, the government started leaning back towards capitalism, which caused inequality to increase again.

As far as I know Reagan is the most popular president in U.S. Under his term the economy grew substantially faster than his leftist predecessor and everyone was more well off. Sure the rich got richer at faster rate leading to " income inequality". But so what? Income inequality means nothing. Its only an issue if you want to make it one. There is always going to be an income inequality.

[Samurai]

Nakul, you just repeated what I said with more examples, but from a pure capitalist point of view.

I am not pulling the age card on you, but I see you are less than half my age and a commerce student. You are at a stage where one is either pure capitalist or pure socialist, depending on your line of study. A humanities student will lean mostly towards socialism, and a commerce student will lean mostly towards capitalism. In fact, your course materials pushes you that way. My son is about to pick commerce, so I expect him to start defending capitalism soon. Science students generally won't have any opinion on this, but will start leaning towards capitalism once they get a job. That was me. However, I started moving to the center in my late 30s as I learned more about humanities because of my interest in history. Now I am for a fine balance between them. Someday this might happen to you. Give couple decades or so.

The greatest capitalists like Bill Gates and Warren Buffett are literally giving away most of their wealth to charity. More are joining them. There is no capitalistic explanation for it. Only humanities will explain it. Therefore, one should understand both commerce and humanities before passing judgment on government regulations.

Originally Posted by nakul0888

As far as I know Reagan is the most popular president in U.S. Under his term the economy grew substantially faster than his leftist predecessor and everyone was more well off. Sure the rich got richer at faster rate leading to " income inequality". But so what? Income inequality means nothing. Its only an issue if you want to make it one. There is always going to be an income inequality.

You are reading the wrong history, the one written by the capitalistic point of view.

Here is a history book recommendation for you, and Matt Damon wasn't kidding about how one would feel after reading it...

https://www.youtube.com/watch?v=_2cSB70ZjuM

[Zed]

Originally Posted by Samurai

residency.

It is entirely fair that Trump is threatening companies to bring jobs back to USA, using tariff. It is the job of the government to strike the balance between market economy and social justice.

Do you believe, based on the president elects track record, that social justice is even remotely part of his agenda? I agree with you that striking a balance is important and I can only hope the administration will include decison and policy-makers with the expertise to work towards balance and social justice

[srishiva]

BMW said they are staying put with their plans to open a plant in Mexico. Now these companies have been manufacturing in europe and importing them to U.S previously.

It should be very good for their margins. Not sure what the tariff was when they were done in Europe.

[jraj]

Not sure what kind of impact this will have on Ford's plans to make India as the Ecosport hub.The plan was to export 2018 ecosport from Chennai to the US market.

Interesting times ahead.

http://www.usatoday.com/story/money/...ndia/93859452/

[Samurai]

Originally Posted by Zed

Do you believe, based on the president elects track record, that social justice is even remotely part of his agenda?

Can anyone predict what Trump does in the future? He is a fantastic salesman with very poor record in delivering the promise. So I have no idea what he will really do.