That would be a major devaluation in the remninbi/yuan. I would be skeptical of a rumor like that. For one thing China is always very close mouthed on their currency manipulations, and for another a devaluation of that magnitude would be extremely destabilizing to China's internal economy.
Thanks for the post. Isn't the theory that imposing tariffs on China will result in corporations moving production from China back to the USA? If so, how long will that take? Americans that are already struggling to pay bills will be harder pressed to make ends meet. Will re-industrializing America take decades, as many have predicted?
Certainly one of President Trump's rebuttals to tariff opposition is that if companies reshore their production to the US there will be no tariff.
How long will that take? Depends on the company and depends on the industry. Building out a high-tech chip fabrication facility is a years-long process. Reactivating a formerly shuttered automotive plant might be a months-long process. Building a new factory could take anywhere from six months to two years, depending on the particulars.
But we should also be mindful that companies have been exiting China for years already. A lot of that industry is moving to India and Southeast Asia, some of it is heading to Mexico, and perhaps some of it will come to the United States.
Will re-industrialization take decades? No. While I am normally skeptical of strategist Peter Zeihan's timelines, he puts the reindustrialization process for the US at 5-10 years, and that I think is a realistic timeline.
What happens in the meantime? That hinges entirely on how trade negotiations unfold between the Trump Administration and America's trading partners. The one thing we do know about that process is that Donald Trump loves to be a deal maker.
We should not minimize the potential risks to Donald Trump's trade and tariff strategy, but neither should we minimize the potential rewards. Re-industrialization would be an immense benefit to the US economy that would endure for generations.
I hear that China will soon revalue their gold to $5,319.00 per ounce. The ramifications of that could be off the charts.
That would be a major devaluation in the remninbi/yuan. I would be skeptical of a rumor like that. For one thing China is always very close mouthed on their currency manipulations, and for another a devaluation of that magnitude would be extremely destabilizing to China's internal economy.
Thanks for the post. Isn't the theory that imposing tariffs on China will result in corporations moving production from China back to the USA? If so, how long will that take? Americans that are already struggling to pay bills will be harder pressed to make ends meet. Will re-industrializing America take decades, as many have predicted?
Certainly one of President Trump's rebuttals to tariff opposition is that if companies reshore their production to the US there will be no tariff.
How long will that take? Depends on the company and depends on the industry. Building out a high-tech chip fabrication facility is a years-long process. Reactivating a formerly shuttered automotive plant might be a months-long process. Building a new factory could take anywhere from six months to two years, depending on the particulars.
But we should also be mindful that companies have been exiting China for years already. A lot of that industry is moving to India and Southeast Asia, some of it is heading to Mexico, and perhaps some of it will come to the United States.
Will re-industrialization take decades? No. While I am normally skeptical of strategist Peter Zeihan's timelines, he puts the reindustrialization process for the US at 5-10 years, and that I think is a realistic timeline.
What happens in the meantime? That hinges entirely on how trade negotiations unfold between the Trump Administration and America's trading partners. The one thing we do know about that process is that Donald Trump loves to be a deal maker.
We should not minimize the potential risks to Donald Trump's trade and tariff strategy, but neither should we minimize the potential rewards. Re-industrialization would be an immense benefit to the US economy that would endure for generations.
Thank you for the thorough explanation.