Comment by FredPret
12 days ago
The theory is that it leads to worse outcomes for the weaker partner and less-bad outcomes for the stronger one.
- People used to think Japan was going to overtake the USA, until a short trade war in the 80's sent Japan on a downward spiral.
- The trade war against Russia hurt the West a lot with higher energy and food prices, but it whacked the Russian economy very much harder.
- The same thing can be said for the West vs USSR - it hurt the West, but bankrupted the USSR
Isn’t the US the weaker partner here?
Struggling to understand in which context the US is the weaker partner.
- GDP [0]
- Total wealth [1]
- Military
- Demographics (US - growing, China - aging and shrinking)
- Soft power
[0] https://tradingeconomics.com/
[1] [https://www.ubs.com/global/en/family-office-uhnw/reports/glo...]
GDP and wealth are hard to compare because China does so much stuff for cheaper. They can build massive infrastructure projects like high speed trains, huge bridges and dams all for way cheaper than we do, so their money actually goes farther. That means even for the same GDP they have more productive capability.
Military is not the only way to exercise power - look at the Belt and Road initiative.
Demographics - how many PhDs are coming out of each country.
And obviously we’re banning DJI because they are the dominant player - we couldn’t compete economically so we’re using legal power instead. If the US was just better at building consumer drones this never would have happened.
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Manufacturing capability and infrastructure would be my guess. I guess if the trend continues and factories keep moving to India and Mexico, it might be a different game in 10 years.
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