re: Example of China's trade practices.... the takeover of Solar

Here’s one.

1. I want to sell farm equipment in China
2. Chinese government pays farmers a subsidy to buy farm equipment
3. Your equipment doesn’t qualify for the subsidy unless you build a factory there.
4. Part of the factory “audit” is an extensive review of your equipment by government agents.
5. Your subsidy is approved just as ten blatant Chinese knockoffs of your equipment hit the market for half the price.

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What do you think should be done about trade practices like that?

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you mean having China subsidize these goods so that their taxpayers make solar panels cheaper for our citizens?

what's not to like?

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you mean having China subsidize these goods so that their taxpayers make solar panels cheaper for our citizens?

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You don't understand economics.

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what's not to like?

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Everything. Overproduction and overconsumption causes incredible deadweight loss throughout every layer of the economy. Any manipulation of the market by a government undercuts the efficient allocation of resources and undermines the invisible hand. You might as well ask "what's not to like about rent control?" I bet you think it's the rich subsiding housing prices making houses and apartments cheaper for the middle and lower class.

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China is literally taking more money out of its consumers' pockets (via taxation) so that our consumers can have more money in theirs (by lowering the price, via subsidies paid for by the aforementioned taxes)

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And it does so inefficiently. Shifting consumer surplus and producer surplus away from the equilibrium price has an associated deadweight loss.

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the consumer is the one who is hurt.

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Yet we suddenly don't care about this with the looming trade war and tariff nonsense

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You don't understand economics.

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nothing i said above is incorrect

and i didn't come up with it. that's not my point. Milton Friedman explained that concept to me years ago. are you saying HE doesn't understand economics?

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Any manipulation of the market by a government undercuts the efficient allocation of resources and undermines the invisible hand.

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not in the US market. we are still run by the "invisible hand" because our actors are only influenced by the changing price (Due to Chinese subsidy). now if you're trying to argue that in the worldwide economy it's not efficient then you're right, but China bears the brunt of both ends of that inefficiency and the US gains on both ends (lower tax burden and lower costs)

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Do you see that continuing with the new 30% tariffs? I don't

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Probably not, unless they are offset by an increase in tax rebates (in the short term) or an increase in domestic competition (in the longer term).

But that's if the tariffs end up being more than just a negotiating tool. Remember, when you go to the table to negotiate you start high and work toward a middle and that's something that hasn't really been done with US trade to any meaningful extent in a long, long time.

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Yet we suddenly don't care about this with the looming trade war and tariff nonsense

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You think all the people who have lost good manufacturing jobs didn’t care the last 30 years? You think entrepreneurs who poured their own money into starting a business didn’t care when their intellectual property rights were stolen and then had cheap knockoffs flood the markets and put them out of business? I assure you that lots of people care.

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You think all the people who have lost good manufacturing jobs didn’t care the last 30 years? You think entrepreneurs who poured their own money into starting a business didn’t care when their intellectual property rights were stolen and then had cheap knockoffs flood the markets and put them out of business? I assure you that lots of people care.

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Not the consumer, who you seem to be concerned with until you aren't

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nothing i said above is incorrect

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It is.

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and i didn't come up with it. that's not my point. Milton Friedman explained that concept to me years ago. are you saying HE doesn't understand economics?

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I have seen Friedman's arguments on subsidies of foreign producers he made in the 70s. They are all on YouTube. He describes it as philanthropy. He's incorrect.

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not in the US market.

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In the US market, yes. As long as China can provide us another good we demand more efficiently, then it's inseparable. For every steel factory they keep open above what the market demands so they can overproduce, that's two electronic components they could open instead. Milton Friedman suggested we should write a thank you letter for China overproducing steel. I would rather write a thank you letter if they shut them down and instead produced something the market actually could generate more efficiently.

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we are still run by the "invisible hand" because our actors are only influenced by the changing price (Due to Chinese subsidy).

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But they aren't. Again, if China could produce something else more efficiently instead of steel, and their shipping containers send over something other than steel, then the invisible hand is undermined. To not understand this means you fundamentally don't understand trade.

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now if you're trying to argue that in the worldwide economy it's not efficient then you're right

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I am. China doesn't need to waste their land, labor, and capital producing something below cost. This benefits no one.

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but China bears the brunt of both ends of that inefficiency

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They don't bear any of it as long if they manipulate the market to the point where they can gain enough control of the global market to generate value in other ways.

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US gains on both ends (lower tax burden and lower costs)

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Higher overall costs. The increased consumer surplus in one area is more than offset by the loss in consumer surplus in every other area. If you don't believe this or understand this, then ask yourself why you don't want China producing even more factories producing steel. If you were steel czar and could control China solely for the US's interests, and your super power was to set the production quota for China, what would you do? They currently produce over 800 million tons of steel per year. Why not 5 billion? Sure, they'd have to close a ton of electronics factories, hire away some workers that produce all your other goods, limiting supplies and driving up the cost, but since in your world, the US actors are only influence by the "changing price" of steel and not other goods, who cares?

I mean they are currently ending their overproduction policies as they realize the leap forward went too far and they are biting themselves in the foot, but I bet you honestly believe that if China quadrupled their steel production, the only impact on US consumers would be lower steel prices. The electronics in the car Chevy sells you wouldn't change, only the steel, right?

Or maybe you do get it. Maybe you think to yourself that at some point the US consumer does lose out. That of course if China overproduce THAT much the US consumer loses out. And you'd be right. Overproduction is bad, even for the consumer, at the very first ounce that's overproduced.