Tags: china | trump | tariffs

The Folly of the $50 Billion China Deal

The Folly of the $50 Billion China Deal
President Donald Trump talks to the press before boarding Air Force One at Andrews Air Force Base, Maryland, on May 31, 2018, as he travels to Texas for Republican fundraisers. (Jim Watson/AFP/Getty Images)

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Thursday, 31 May 2018 04:55 PM Current | Bio | Archive

Recently President Trump announced his intention to impose high tariffs on $50 billion of imports from China with the aim of reducing our trade deficit.

Besides the obvious, those $50 billion constitute only a small portion of our $375 billion yearly trade deficit with China.

However, there are more serious considerations. First the amount in question represent current and future purchase orders made by U.S. companies to purchase goods from China which either cannot be produced in the U.S. or are only available at higher U.S. cost.

Canceling those orders brings up questions: Can the goods in question be domestically produced or, can they be imported from other foreign countries, in which case the resultant foreign debt is simply shifted to another nation.

Producing the desired goods domestically begs the question of manpower. In order to produce $50 billion worth of manufactured goods requires about 5 million skilled workers. This, with less than 4 percent un-employment seems impossible. Besides manpower, factories and capital to build those too are needed.

In addition, technical know-how is required to produce special electronic components such as used for Apple’s iPhones for example; know-how which U.S. suppliers may not possess. This exposes an obvious weakness which might be considered a national security issue.

I admit, the whole issue seems unsolvable. It really can only be addressed by a slow and well planed shift to restore domestic manufacturing capabilities. Remember, it took us 20 years to slowly drift into our humongous foreign debt. The recent tax overhaul certainly is a step in the right direction. Additionally, the question of education and training needs to be addressed in order to overcome or at least stay even with Chinese advances in Science and Technology.

Hans Baumann is a licensed engineer in four states and a member of Sigma Xi, the Scientific Research Society. He is an adviser to the dean of the University of New Hampshire Business School. Dr. Baumann has published manuals on valves and was a contributor to many works including the "Instrument Engineers' Handbook" and the "Control Valves Handbook." He has also published several books on business management and German history, including "Hitler's Escape," which suggests that Adolf Hitler did not commit suicide and survived World War II. In his latest book, "Atomic Irony" he proves that the Hirshoma Atom Bomb contained captured German Uranium. For more of his reports, Go Here Now.

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Recently President Trump announced his intention to impose high tariffs on $50 billion of imports from China with the aim of reducing our trade deficit.
china, trump, tariffs
398
2018-55-31
Thursday, 31 May 2018 04:55 PM
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