[quote=FlyerInHi]
Tariffs are consumption tax on Americans. Tariffs also restrict choices and consumer wellbeing. [/quote]
Generally tariffs are ineffective and economically negative. At least that what’s economists will tell you. Except that in an Economic Cold War, they make perfect sense against a single/group of country(ies) that you want to create higher costs for their products.
[quote=FlyerInHi]
…I believe that sourcing away from China will not be easy.
True, Chinese manufacturers are moving production to Vietnam, Ethiopia, etc… but if we source from those countries, will help China in the end because those countries will use our USD to buy Huawei phones.[/quote]
Give enough time and money, the supply chain will move out of China. What’s the definition of not easy? I have a hard time believing that by year 3 profit-greedy companies will not have found a way to alter the supply chain.
Your argument about other countries buying Huawei phones doesn’t quite jibe. Higher tariffs will force production out of China (which is happening already in some sectors due to labor costs). Any production and jobs that are moved out of China is a net negative to their GDP. Either way it’s lost GDP output regardless of whether another country bought a consumer good from China. How much lost output is a matter of debate.
The question at this point is whether we will step back from the brink of an Economic Cold War or whether the world will divide into 2 different economic and technology spheres.
Or maybe as part of a deal, Trump will outsource the housing of refugees to China where they already have a few million in camps. They do build stuff quick over there.
