[chmod775]

Even though the US are China's biggest trading partner, US trade "only" accounts for about ~18% of China's total trade.

China is still trading with other countries. While it may take a hit from US companies pulling some manufacturing out of China, some of those will be replaced by other - both Chinese and foreign - companies. Especially other foreign companies operating in China will profit from reduced competition for Chinese labor / manufacturing, encouraging them to move more manufacturing there. This will blunt the impact of manufacturing for the US market disappearing.

Also US companies will only withdraw in part from from China, since they can still manufacture goods intended for anywhere else in the world there - just not for the US.

In the end China will take a hit, but nothing close to requiring those measures you're picturing.

The US will have to bootstrap a lot of manufacturing to replace Chinese labor. This will sound good on paper and look good on some economic metrics, because it requires domestic investment. But since the American lifestyle won't be "subsidized" by cheap and exploitative Chinese labor anymore, the average American may actually find himself to have less than before.

And the rest of the world will profit from having two major players intentionally cripple each other.

[joefranklinsrs]

"The US will have to bootstrap a lot of manufacturing to replace Chinese labor."

They just have to move to cheaper countries to replace Chinese labor. One time upfront asset cost, but lower expense over time.

"US trade "only" accounts for about ~18% China's total trade"

Once China is not part of the trade flow between US and X country (Taiwan, South Korea, Japan, etc), the total trade for China will fall even more than 18%.

"they can still manufacture goods intended for anywhere else in the world there - just not for the US"

US is the largest consumer market in the world. Japan is second at 1/3 of the size of US. EU consumer market is mostly fragmented. There is just not that much singular consumer demand outside of US. Plus other countries are enacting tariffs on China as well - India for example.

"Especially other foreign companies operating in China will profit from reduced competition for Chinese labor / manufacturing, encouraging them to move more manufacturing there."

There are lots of countries that have way cheaper labor costs than China, there's no reason for the foreign companies to go there in the face of increasing tariffs. Nike is 30% in Vietnam. Samsung is producing more of its phones in Vietnam. Uniqlo increased its presence in Vietnam by 40%.

"US companies will only withdraw in part from from China, since they can still manufacture goods intended for anywhere else in the world there "

Again, tariffs and cheaper labor costs elsewhere will entice companies to move out of China entirely. Not to mention the threat of Chinese government takeover of assets, or capital outflow restriction.

[chmod775]

> Once China is not part of the trade flow between US and X country (Taiwan, South Korea, Japan, etc), the total trade for China will fall even more than 18%.

If those are actually further up the value chain leading to exports to the US (as you seem to suggest), those would largely be imported goods.

Edit: Moot point really. Those would just be a consequence of manufacturing happening in China. It's better to have a direct look at the amount of manufacturing happening in China, instead of guessing at parameters directly which are actually a dependent on it. That would be like trying to guess whether a taxi company will buy less fuel if you're no longer a customer (maybe they'll have other customers instead), and on top of that wondering whether that's a bad thing. It's just the wrong aspect to focus on.

> US is the largest consumer market in the world. Japan is second at 1/3 of the size of US. EU consumer market is mostly fragmented. There is just not that much singular consumer demand outside of US.

Which apparently doesn't seem to mean much - as proven by the fact that plenty of brands have no trouble selling basically everywhere despite "fragmented" markets. Also what do you mean when you say the EU consumer market is fragmented? The main selling point of the EU is that it is literally a single market.

> Plus other countries are enacting tariffs on China as well - India for example.

India already appears to be backpedaling on their earlier posturing.

> There are lots of countries that have way cheaper labor costs than China, there's no reason for the foreign companies to go there in the face of increasing tariffs.

The most noteworthy tariffs are China <-> US right now. There's little reason for non-US companies to go elsewhere, especially now that Chinese labor and manufacturing is going to become cheaper again - emphasis on manufacturing, not labor, since the infrastructure and know-how already exist in China.

[joefranklinsrs]

"If those are actually further up the value chain leading to exports to the US (as you seem to suggest), those would largely be imported goods."

The Chinese factories that produce goods destined for US, also produce goods for other countries, leading to trade between China and those countries. When factories move to Malaysia or Vietnam, those trades disappear.

"as proven by the fact that plenty of brands have no trouble selling basically everywhere despite "fragmented" markets" . I was addressing your point "they can still manufacture goods intended for anywhere else in the world there - just not for the US" . You're basically losing 30%-40% of your sales. That's not something that can just be brushed off.

"India already appears to be backpedaling on their earlier posturing." Citation? a cursory search shows otherwise https://www.power-technology.com/comment/india-levies-safegu... https://economictimes.indiatimes.com/industry/indl-goods/svs...

"especially now that Chinese labor and manufacturing is going to become cheaper again"

Why? Wage and rent inflation is skyrocketing in China. Yuan will drop dramatically, which means energy/resource imports will skyrocket.

[rgbrenner]

"30-40%" is literally all exports from China. You're saying that if the US doesn't trade with them, there won't be a single buyer of Chinese goods anywhere in the world? That's pretty far fetched.

[learc83]

>The main selling point of the EU is that it is literally a single market.

The EU is legally a single market, but culturaly and linguistically it's not.

[cuboidGoat]

The same is also true of the USA.

[learc83]

92% of the US speaks English proficiently and 80% primarily. Cultural differences across the US are miniscule compared to the differences between EU countries.

Turn on a TV in NYC and in North Dakota, the vast majority of the content is exactly the same. The only differences are local news and advertising for local businesses.

Turn on a TV in France and Poland for comparison.

[cuboidGoat]

>Cultural differences across the US are miniscule compared to the differences between EU countries.

Linguistically and culturally, the US has massive differences within it. And the fact that the media landscape does not reflect the breadth of cultures within the USA, has been a point of contention for a very long time.

[imron]

> They just have to move to cheaper countries to replace Chinese labor.

You also have to factor in though that one of Trump's stated goals is to bring manufacturing back to the US.

Any company removing itself from China to a place with cheaper labour risks Trump implementing similar measures against that country at some point in the future also.

And does the company uproot its manufacturing again and again or does it just move operations back to the US, taking advantage of tax incentives to do so.

[age_of_stone]

you forgot that China would be the biggest consumer market in the world. comparing to cheaper labor, western companies may prefer more market shares.

[steve19]

But China protects local emcumbents and new entrants, forces joint ventures and IP transfer. If the Chinese market worth it? For some companies yes if course, but I don't think the Chinese market is always a good idea... Which is exactly what China wants.

[sonnyblarney]

1) 20% is a lot, moreover, others will join, and the US will strong arm others into playing.

2) China has little with which to retaliate. They can do whatever they want to 'American farmers' it won't matter because it's just a commodity: China will buy it's soy beans from Brazil, and Brazil's other customers will buy from the US. It'll have a null effect.

China is right now creating the biggest debt bubble the world has ever seen and it's scary - we don't know where they are going to go next.

See, in 2004 they had so much upside in front of them - but now ... it's not so clear.

I think we're going to see China grow at a more regular rate of 4% and that in the end, nothing existential will come of this trade war. It will hurt China a little worse than the US but it's not like we're going to see a fundamental shift in anything.

[teknologist]

> The US will have to bootstrap a lot of manufacturing to replace Chinese labor.

Just abandon the H1B program and make it easier for foreign labour to come in to do the work. Problem solved.

[notabot]

Last time I checked Trump wasn't exactly a fan of immigrants either.

[snaky]

That's especially acute considering China is more and more opening to foreign labour - despite the fact there is no path to Chinese citizenship for foreigners, well, except Nobel prize and Olympic gold winners.

[robjan]

I know a number of people who were non-Chinese "foreigners", but who attained Chinese citizenship. As long as you legally remain in the country for sufficient time it's not impossible.

[teknologist]

It would have a completely different effect in China though and serve to raise the average salary rather than reduce it. The fact of the matter is that foreigners are generally paid more in China (speaking from my own experience and that of friends and acquaintances who have also worked in China).

[mr_toad]

> And the rest of the world will profit from having two major players intentionally cripple each other.

We won’t profit from having our two best customers/ suppliers cripple each other.

And, copycat politicians are already watching closely to see how many votes this buys.