[triceratops]

> just fix your sh*t to reduce the trade imbalance

But why does each individual country's trade need to be perfectly balanced with the US? What are the odds of that happening for every single country? What are the odds of it working for every possible pair of countries?

[CountSessine]

I agree with you, but I also think you have this idea that trade is currently governed by largely linear and symmetric rules in Ricardian harmony, and that just isn’t the case.

Every industrialized exporting country in the world has optimized for exporting to the US, and there’s plenty of govt policy involved. Trade barriers are the norm, not the exception. If other countries optimize their trade rules, regulations, and money supply to optimize for a sizeable trade surplus with the US, they can change their policy to reduce the surplus.

[LPisGood]

The word “optimize” is being used a lot here, and I think it’s covering up the clear lack of a plan.

The USA exports plenty of goods, and in cases where there are these nebulous “trade barriers” being imposed, they should be investigated, discovered, publicized, and negotiated. That work was clearly not done here.

[triceratops]

> I also think you have this idea that trade is currently governed by largely linear and symmetric rules

I didn't think that. Every country has tariffs and trade barriers to protect the industries they want to grow or protect. Even the US. Even before this administration or the last one, or the one before that. Sugar, for example.

> Every industrialized exporting country in the world has optimized for exporting to the US

Or maybe, more accurately, to earn US dollars. Possibly because of petroleum, which every country needs? I don't really know, I'm not an expert.

[alfiedotwtf]

There is a surplus trade between the US and Australia and, yet our beef industry was called out as being imbalanced towards US beef.

… it was never about imbalances but protectionism and racketeering

[CountSessine]

Read the Miran paper. It’s not about imbalances. It’s about negotiating leverage. Australia in particular is going to be the most interesting case in the world.

Strategically, Australia is more sympathetic to the US, but your trade with China is many multiples of your trade with the US. If you join the US you’ll have to raise tariffs against China and if you don’t you’ll naturally fall into China's orbit. Interesting times!

[alfiedotwtf]

The thing that I still don't understand is:

  - These tariffs are permanent to rebalance trade
  - These tariffs are temporary to use for negotiations

If they're permanent:

  - US companies build factories
  - Manufacturing comes back to the US
  - China is left manufacturing what the US can't do locally
  - China will dramatically up cost of resources US can't source elsewhere
  - Nobody wins

If they're temporary:

  - China waits out the storm
  - Prices revert back to the mean
  - Nobody wins

So either way:

  - Countries have divested US exports
  - US has lost long term income
  - US has lost soft power (and eventual hegemony)
  - There's now a lot of pissed off people

Even looking at what's happening to Las Vegas, the number of pissed off people will likely go up even if tariffs went back to before or brand new trade deals were signed across all trade paths let alone even a handful.

I'd be keen to know your thoughts. And thanks - I just added the Miran paper to my Kindle, so thanks for the reference!

[rstuart4133]

> Strategically, Australia is more sympathetic to the US, but your trade with China is many multiples of your trade with the US. If you join the US you’ll have to raise tariffs against China and if you don’t you’ll naturally fall into China's orbit. Interesting times!

As an Australian, I'd put the odds of Australia imposing strong tariffs on anyone at very close to zero.

After we gave up on tariffs about 20 years ago we've seen only growth. We are one of the few (only) western economy to have not had a recession in that time. It's not something we are likely to give up on easily. Both the major political parties have firmly re-iterated a "no tariffs" policy.

As for "moving towards China" - I don't see much evidence of that. Australia is firmly rooted in the West. But there has been a change. Right now, I think it's true to say Australia is wondering if Trump's USA is as firmed root in the West as rest of the OECD is. I guess it's possible Australia may drift away from the USA as a consequence, but it won't be towards China. And it won't happen in the short term as Trump's USA is viewed as a temporary thing that will end with Trump.

None of this has much to do with the topic the paper is discussing. Australia has also been on the receiving end of China's industrialisation, so I imagine most Australian's would look on with interest and sympathy at the USA's attempt to undo the worst effects.