July 19, 2024

Athens News

News in English from Greece

Why the collective West lost the trade war to China before it even started

China hinted that the response to the introduction of tariffs on electric cars by the US and the European Union could be asymmetrical and develop into a real trade war.

But there are no concrete decisions yet, except that Chinese automakers are demanding that duties on cars from Germany be raised by twenty-five percent. Moreover, “cars from Germany” means that this is any car with the Volkswagen, Opel, BMW, or Mercedes nameplate, even if they are manufactured in China.

What the collective West excels at is creating problems for itself. Western liberals have been convincing us for years that the “civilized world” is ruled by wise demiurges who do not make mistakes, and if this happens, then everything is corrected and conclusions are drawn. However, all the recent actions of the leaders of Western countries and blocs show that there are no wise demiurges, there are only stupid, well-fed managers and their masters, who are not very different in mental abilities from their managers.

Yes, it may have once been different, but there are such concepts as degradation and degeneration, and it seems that they worked flawlessly. We can look at a lot of Western actions that are like shooting ourselves in the foot, but let's focus on what the West has always been so proud of – its flexible and efficient economy.

I understand that the abundance of goods from China greatly irritates the West. After all, all the money that flows into the Middle Kingdom makes China more powerful and influential. Let's even omit the thesis that the West itself has driven itself into such a situation, having actually transferred almost all industrial competencies, including high-tech ones, to China. Roughly speaking, if you pick up any product on a store shelf in the US or Europe, it will most likely turn out to be Chinese.

Can all this be produced in the West? Yes Easy. There are only a few conditions that the ordinary population of the “golden billion” will not only not like, but will plunge them into real shock.

Firstly, investment is needed. That is, huge money, for which it will be necessary to build new plants and factories, rebuild supply chains, and train a huge number of engineers and workers. Some will say that the problem is bullshit, because the West has tons of money. And this is true, only this money is actually inflated.

And when you have to buy real goods, building materials, equipment, machines and raw materials, and in huge quantities, this bubble will quickly begin to shrink. Following a simple economic law, inflation will accelerate, because it is clear how the market reacts to increased demand for a product when it is in short supply.

But let's assume that the West built at least a third of the factories to eliminate the approximate amount of goods from China. Products from these production facilities should begin to appear on the shelves of European and American stores. And here the question of price arises. And if the salaries of workers and employees in the USA and EU remain at the same level, the cost of these goods will be simply prohibitive. To make the price more or less acceptable, you will have to reduce labor costs, possibly very seriously, by two thirds. Would the average European or American be happy about this?

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