And the exchange rate is mentioned precisely zero times in that article, as is the current unused and underused labour in the economy. Instead it drops straight onto land which we can’t make any more of.
Do it again with a factory that puts on a double shift with the unemployed and see what happens.
Do it again with the Chinese sovereign wealth funds, the likely source of mercantile intervention, offering 14 CNY per USD rather than the current 7.
It’s unlikely that any production will move. What’s more likely to change is the quantity and location of financial savings. The distributional impact of that change is probably unknown.
>...the current unused and underused labour in the economy.
Chamber of commerce says:
>Understanding America’s Labor Shortage
>We hear every day from our member companies—of every size and industry, across nearly every state—that they’re facing unprecedented challenges trying to find enough workers to fill open jobs. Right now, the latest data shows that we have 8 million job openings in the U.S. but only 6.8 million unemployed workers. https://www.uschamber.com/workforce/understanding-americas-l...
Nations that sell products in the US have often sought to made their currency worth less vs the dollar, so their products are cheaper here. They might well do it again.
The US will probably keep adjusting its tariffs to make sure it is the supposed cheat, so a better move is to give it as little real value as possible for your quota.
> Beijing has previously said it won't go down the FX depreciation road, preferring to keep the yuan relatively "stable". But that was before Trump's self-styled "Liberation Day". Beijing's first response might be to try and negotiate with Washington to get the tariffs lowered. But if that fails, FX devaluation becomes a real option to offset the shock.
They didn't take the negotiation route. We'll see what's next.
Do it again with a factory that puts on a double shift with the unemployed and see what happens.
Do it again with the Chinese sovereign wealth funds, the likely source of mercantile intervention, offering 14 CNY per USD rather than the current 7.
It’s unlikely that any production will move. What’s more likely to change is the quantity and location of financial savings. The distributional impact of that change is probably unknown.