[gumby]

> This actually looks like the start of the disentanglement between the US economy and the Chinese economy. What will likely happens next (my best guess)...

I agree with your conclusion but not your map; I see China investing and stepping up ag purchases from Brazil sub-saharan Africa; increasing the militarization of oil-producing countries, and exporting cheap products to Europe, Africa, South America and their southern mining province, Australia. The US will be forced to pay more for everything and so imports will shift to trans-shipment points; US exports will be more expensive as their imports will be more expensive. This seems like a generous gift of price support from the Trump administration to the rest of the world.

The US is a manufacturing powerhouse, but its production is bipolar: super cheap stuff too expensive to ship (paper, chopsticks, etc) and ultra-high-added-value stuff (extremely high precision bearings and the like). Not cars in huge volume but planes: sure! Tariffs don't address this structural issue; if anything they exacerbate it.

[joefranklinsrs]

"The US will be forced to pay more for everything"

I'm assuming your assumption is because China is taking over all of the resources/production capabilities around the world? I don't think that can even remotely happen. Again, lots of multinationals are already 30% in Vietnam, Malaysia, or India. Companies can source ag or oil from plenty of non-Chinese sources. The consumers have barely felt the supply chain shifts.

"The US is a manufacturing powerhouse, but its production is bipolar"

You would be surprised at how much reshoring and US factories automation have occurred in the last few years in US. It will increase in scope after this current round of tariffs.

[gumby]

>> "The US will be forced to pay more for everything"

> I'm assuming your assumption is because China is taking over all of the resources/production capabilities around the world?

No, it's because the US government is forcing US consumers (and producers) to pay more for the goods than buyers in other countries will -- that's what a tariff is.

> You would be surprised at how much reshoring and US factories automation have occurred in the last few years in US.

Indeed I would be surprised and until recently I bought a lot of manufactured goods. OK, I may have overdone it on the beryllium bearing example: I did see a piece of fancy firefighting equipment being built in the Central Valley for shipment to a customer in NZ. But it was exotic enough that it wasn't worth figuring out how to make in NZ, while the volume was so low (they made 3-4 of them a year, at $100K/pop) that it couldn't keep the lights on. Most of what they made was farm gear and solar mounts for sale in the valley.

Another example: I bought some pressure vessels (about $60K each FOB Redwood City) made in LA: about half a dozen guys, a massive steel roller press and some excellent union welders. I could get them for much less from India, with about 50 guys feeding 2" sheet steel manually into a tiny roller press, excellent welding, also x-rayed and to the same safety standard. After shipping? About $65K. But that same factory in Amedebad is shipping tons of stuff to the oilfields of Central Asia and the Middle East -- they didn't really care if they got our businesses. While the factory in Los Angeles couldn't keep busy. So that's the low end: "not worth shipping". While $150K of high pressure steam boiler had parts falling off it in shipment from Chicago. It would have been cheaper for us to buy from Germany and have it shipped over just in terms of TCO.

So yes I'm pretty familiar, as a customer, of US heavy industry.

[rgbrenner]

You would be surprised at how much reshoring and US factories automation have occurred in the last few years in US. It will increase in scope after this current round of tariffs.

Here's real manufacturing output: https://fred.stlouisfed.org/series/OUTMS

Here's durable and non-durable goods manufacturing employment: https://fred.stlouisfed.org/series/PRS31006013 https://fred.stlouisfed.org/series/PRS32006013

Notice they are lower than before the 2008 recession. The recession that is now a decade old.

In comparison, here's imports of goods and services: https://fred.stlouisfed.org/series/IEAMGSN And here's imports of goods from China: https://fred.stlouisfed.org/series/IMPCH

Reshoring? I'm not so sure about that overall. It's great that US manufacturing is recovering though.