On the contrary, I am actively hypothesizing possible reasons for the things we see, while the rest of the forum cannot seem to produce anything beyond "it's stupid". — Tzeentch
I've not seen a working hypothesis from you and how what is happening now supports getting to your theorised end goals. As I said, I expect policy ideas or something tangible. So far, you're not giving much other than restating in various ways it's a long game. I take it that you now subscribe to the theory of the USA pursuing a team USA and team China and wanting to increase US production to ? But there's an inherent contradiction there, when you're undermining trust, you are not creating a team USA. Which actually there already is but we see clear dismantling of it.
Oh boy... TPF looking mighty silly once again. Ya'll gotta stop basing your opinions on regurgitating below-average media slop. — Tzeentch
Read: I disagree with what others say, here's something that does agree with my view. People like you are searching for meaning where there is none. It's the same when interpreting books, where readers read things in it that the author never intended. Trump is
stupid as exemplified in almost everything he does from the way he treats other people, his inability to speak coherently, a modicum of honesty, the number of convictions, etc. etc. What he has, is power, and as a result does not have to bear the consequences of his stupidity.
To the article then. While the article delves into the effects of trade policies and protectionist measures, it does not address how FDI interacts with trade deficits or the broader balance of payments. This omission is notable, as FDI plays a significant role in financing current account deficits and influencing long-term economic dynamics.
By not considering FDI, the article overlooks a critical component of the international financial system that can affect the sustainability of trade deficits and the overall economic impact of trade policies. Incorporating FDI into the analysis would provide a more comprehensive understanding of the potential consequences of escalating trade conflicts. What will not hold true in the article with continued strong FDI in the US is:
1. it's trade deficit will remain. If FDI into the US stays robust, the US can continue running a trade deficit without economic collapse or adjustment pressure. The article assumes escalating tariffs are aimed at reducing the trade deficit, but doesn’t account for the fact that persistent FDI neutralizes that pressure.
2. FDI helps reinforce the dollar as a global reserve currency. If that status isn't under threat, financial flows into the US may actually increase during trade instability, contradicting any suggestion of a weakening US position due to its deficit.
3. If companies continue to invest in the US despite the trade war (perhaps to produce inside tariff walls), this blunts the long-term negative impact of trade disruptions and may even partially localize value chains rather than destroy them. This would temporarily increase FDI.
4. Strong FDI inflows into the US reflect continued confidence in American institutions and markets, even amid trade tensions. With sustained FDI inflows the macro-economic risks are much lower.
The article is economics only and only considers it from that angle and it ignores that the US could've used diplomacy in relation to its allies to reach more or less the same goal. So there's no explanation for why do
exactly this to reach that.
Finally, and probably the worse part of the analysis is that it does not question whether the proposed end goal is feasible. Because it is again, a party of contradictions. The end-goal assumes the US can "out-export" China or reassert global dominance. The structural conditions do not allow it.
1. Demographic scale favours China. The US would need to leverage automation, innovation and high-value exports to compete because it cannot on volume cost alone. Meanwhile China continues to climb the value chain so US will be confronted with diminishing returns trying to stay ahead.
2. Rebuilding the industrial base in the US requires massive investment, time and political consensus and except for time, they don't have it.
3. As the last few decades have shown, being a dominant exporter is not the only measure of power. Being the reserve currency, having the most liquid and trusted capital markets, leading tech companies, military reach and cultural and soft power are involved as well. Focusing on trade only misunderstands the kind of power the US already holds (but is relinquishing in its aggressive trade policies).
4. If FDI does decline it will result in lower growth, weaker dollar, austerity or inflation and loss of global influence. It's not strategic at all.
The problem is, as I've explained before, that to reduce the trade deficit you
must reduce FDI. To reduce FDI global trust in the USA
must diminish. But at the same time trust is
essential if you want to lead a global alliance of "team USA". It's contradictory crap as usual with Trump.
Next time you want to call everybody here "silly", you might start by being more critical of what you read.