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[quote=Anonymous][quote=Anonymous]See, Kevin O'Leary identifies the problem with China and the steps needed to fix it.

He's not mealy mouthed and doesn't mince words that might offend people.   The problem has been going on for decades and the only words we've heard from so many who don't know what to say is to speak in generalities like "We have to work together".

NOPE.  Problem identified (it was decades ago), and solutions are in the works.  Meanwhile, vapid journalists nip at his heels, because that's all journalists can do.  They have no depth of knowledge in anything of substance; they just opinionate all day.

[youtube]https://www.youtube.com/watch?v=i0X4jqch7Rs[/youtube]
[/quote]

China makes a lot of stuff we need. Not just cheap plastic crap, they make semiconductors, iPhones, laptops, circuit boards, auto parts, industrial machine equipment and parts - and some of this stuff cannot be procured from anywhere else either at all, or in the volume that we need.

The U.S. makes far less stuff that the Chinese need, and much of it can be purchased elsewhere, like soybeans and corn. They don’t buy a lot of oil from us. They don’t buy electronics from us. They mostly get money from us.

Having a trade war with China is like a farm having a trade war with John Deere. The farm says, “we are sick of buying expensive tractors and harvesters from you while you just buy some eggs and milk”. John Deere says, fine, even though you buy a lot of tractors from us, we will tariff you too. John Deere is losing money, but decides to use its $1 trillion dollar trade surplus to ride out the downturn. The government passes a stimulus package to help stabilize things. John Deere buys eggs and beef from other trading partners, even though it is a little more expensive. They still have all the goods they need, but they have to spend more money.

Unlike John Deere, the farm has a trade deficit and the government never considers using tariff money to help them out. They can’t afford harvesters and tractors and farm equipment and there is no other place to buy them, except from John Deere. They have to spend far more money to buy goods, and have to increase their prices, causing inflation and higher interest rates. In addition, no one wants to invest in them because of their poor economic outlook, so they have less capital.

When two entities engage in a trade war, it is not a zero sum poker game. The one with the trade surplus has the advantage. Especially when the trade consists of irreplaceable items. [/quote]

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