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China Already Won. [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2025-04-27

China has already beaten the US at global trade. Most countries trade more with China than they do with the US (see map above). So, when Tramp forces those countries to decide which trading partner is more important to them, most of them have already decided that it’s China.

China does $1 trillion more trade than the US annually, because they export more to the world than we do. China has 240 million people with college degrees. We have 100 million. Chinese people work hard.

The US GDP is $27 trillion. In international economics, when we compare countries economically, we use purchasing power parity (PPP). Since there are many differences between countries—like what food people eat, what they have more or less of, and what their currency is worth—, we don’t just look at the total GDP in US $. We adjust each country’s GDP by what they can buy with their local currency. China’s PPP GDP is $35 trillion. China’s economy is now 30% larger than ours, so they already are the #1 economy in the world.

Americans rightly complain about prison labor, child labor and other unfair working conditions in China, but most of the goods they export are manufactured by hard-working Chinese people who have modern conveniences like big TVs, cars and comfortable homes. Not peasants.

Americans rightly complain about the Chinese government trying to control the value of their currency to boost exports, but their international trade contributes less than 3% of their economy. And the primary beneficiary of their currency ‘manipulation’ is the US, because the Chinese buy US $ treasury bonds. So far.

Americans apparently don’t understand the difference between free trade and free markets. Free trade is always good for both sides, otherwise either participant would be free not to participate. Free markets are characterized by competition, where there are winners and losers every day. If you are less competitive, you will lose in a free market. That might mean losing income, losing your job and finding another line of work.

Tariffs are always bad for trade, but they also hurt free markets. Tariffs allow inefficient companies to have less competition. That doesn’t mean that domestic consumers will get better or cheaper products. It means that a tariff-protected company can raise prices and still sell more. So domestic consumers have fewer choices, will pay more and will buy inferior products.

After losing their export markets, domestic firms might have more profits and they might hire more workers, but they still can’t offer significantly higher salaries for similar work than other countries do. A steelworker in China earns $15,000 per year. A steel worker in the US earns $50,000. If American firms raise their wages and prices due to less competition, then more foreign steel will find a way into our market. China will ship through 3rd countries. Other countries, like Indonesia, will sell us more steel.

Tariffs do not protect against competition. In the short run, they raise prices and disrupt business. In the long run, they raise prices and allow inefficient companies to protect their profits. Protected industries have less incentive to innovate or improve.

Imagine if each of our 50 states all decided they needed tariffs to protect the jobs in their state, stopping trade. Every state would have to grow food, mine ore, make steel, build cars, and manufacture medicine, by itself. While that would guarantee those jobs in every state, overall, everyone would have to work harder for less.

If your neighbor owns a bar and works harder than you do, you might complain that she’s getting rich off of all the money you spend drinking beer there. And you might demand she buy your rusty 1997 F-150 pickup truck, so you can have more beer money. If she doesn’t want to, that’s your problem. Stop crying in your beer.

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[1] Url: https://www.dailykos.com/stories/2025/4/27/2319067/-China-Already-Won?pm_campaign=front_page&pm_source=more_community&pm_medium=web

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