ELI5 how debasing yuan counters the anti-dumping tax?
it strengthens US dollar = shit for stocks + makes exports more expensive imports cheaper. if exports are more expensive it means less foreign currency flowing in and more flowing out.
singapore is an interesting exception to the rule, being the only island city state in the world: tiny with little capacity to produce physical goods, they have to import a shit lot and cant export much so a strong currency actually suits them quiet well cos it makes imports cheap and exports expensive. its vice versa to the US and china. it makes labor more expensive in the US too, basically exporting jobs to, guess where, china, where it just got cheaper to produce goods.
edit: it doesnt so much counter the tax,, its more like a big "fuck you i can play dirty too" "best change your tone or shits guna go south for you quick"
I'm not following. Ignoring your Singapore tangent, how is devaluing the yuan "make labor more expensive in the US"?
And you do know that
US minimal wage is far better than Chinese average wage, so which jobs would they be stealing that they ain't already got?
Not seeing much of a "fuck you" there, to be honest.
so if you wana hire 1000 people to make t-shirts, who do you employ? the ones who demand high pay, or the ones you can employ to do the same thing for a fraction of the price.
I'll employ the cheap Chinese. The ones I would have hired anyhow, only now they'll cost me less, if they still make the same in yuan.
so if im in england, i want 1,000,000,000 t-shirts, im guna hire the chinese instead of the americans.
If you're not crazy/don't want to go broke, sure. I hope you weren't planning on hiring Americans before the yuan got devalued a few points, because then you're not to be trusted with money and should consider voluntary commitment.
so my money then flows into china instead of america. and then because the dollar is strong, and the cost of producing the same t-shirt in america is higher, people will buy the t-shirts from me and import them instead of buying from a local producer in america. so 1) the jobs to produce the t-shirts have shifted to china
Yes, roughly 30 years ago.
and 2) when people in america want to buy t-shirtsm they buy the cheaper chinese version causing capital outflow instead of inflow.
Sure, but you, Brit, are also paying UK taxes, and paying tariff to US (remember the 450% anti-dumping steel tax? like that). So both US and UK are making out just fine
its one country steeling growth from the other.
that 450% means anyone who needs metal will buy in the US instead of china,
Anyone who needs steel in US. Which has nothing to do with you, Brit. You can still get yours from China, probably for less, because glut in China, because none is going to US. Because US steel mills are employing people to make US, domestic steel. Duh.
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