I see.. if we impose tariffs, China would export less, having a lowered need to buy dollars. The same result occurs if spending slows due to declining home values/higher interest rates and lowered home equity withdrawals. However, don’t the dollars they buy just cancel out the dollars we spend, so as we buy fewer Chinese goods over the next few years, China buys fewer T-bills. Whether we buy $60b/month or $30b/month from China, they would buy either $60bil/month or $30bil/month in T-bills. They are financing us either way.

I know why tariffs are bad, but my thinking was that American companies can not hope to compete against Chinese companies, regardles of the level of innovation. Every idea must be manufactured, and all labor which does not absolutely require face-to-face customer interaction is at risk of being exported. Even radiologists are at risk of losing jobs, as American hospitals electronically transmit their images to Indian radiologists.

Unless you are dealing directly with an end-user customer, your job can be outsourced to India. It doesn’t matter whether your product is good or bad. You can have a clever idea for a new asthma drug, but then the manufacture takes place in Japan. You can invent a fabric which doesn’t wrinkle, but the Chinese will manufacture it. You can design a car with lower gas mileage, but it will be made in Taiwan.

Regardless of American ingenuity, the lack of tariffs will cause all work to eventually be done overseas. Unless that work requires you to interact with the customer or know specific local regulations, such as engineering, law, medicine, your job can be outsourced.

Is anyone reading this certain that their job is safe against Chinese competition? Wouldn’t any of you feel better with tariffs, even if that means you must pay a little more for certain goods to cover the high cost of health care for American workers. With tariffs, we give up having a lower cost for our goods, but we gain the security of keeping American jobs in America. With the current system, we are going into debt financing China’s emergence into an industrialized nation. They are competing with us for resources (oil, commodities, goods), driving up the price of resources for everyone.

I thought about this many years ago, and felt that it was only fair, humanitarian, for us to lower our standards of living and wages until it meets the gradually raising standards of 3rd world countries. While a humanitarian and selfless goal, it is disaster for our economy in the long run. American wages must be reduced by an amount equivalent to the rise in Chinese wages, a zero sum game.

Why couldn’t we just close our borders, and just buy and sell things to each other?