People buying and selling goods and services within the US are contributing to the GDP. If some people take some of that money they would've spent domestically and instead use it to import extra stuff (which doesn't count towards GDP), the GDP will go down.
Most of the value of an iPhone is recorded as American GDP because American IP and software went into it, Apple is keeping a lot of the price for the phone, and only sending a bit off to China for assembly (and a larger bit off to South Korea, Japan, and Taiwan for components that China is assembling). What remains is still a lot of American GDP.
A small business who is contracting China to make the thing that they then sell is also generating a lot of GDP. Yes, they send some percent off to China to make the thing, but a majority is GDP generated here in the USA (the small business does the design, marketing, sales, etc...). If they go belly up because of the trade war (very likely, since no one else can make their thing, and before China developed this capability, making the thing wasn't even possible!), that GDP is gone, the people that small business was employing are unemployed.
The increased purchases should not decrease American GDP, unless consumers are buying directly from China using Temu and are not buying at Walmart.
thfuran|10 months ago
seanmcdirmid|10 months ago
Most of the value of an iPhone is recorded as American GDP because American IP and software went into it, Apple is keeping a lot of the price for the phone, and only sending a bit off to China for assembly (and a larger bit off to South Korea, Japan, and Taiwan for components that China is assembling). What remains is still a lot of American GDP.
A small business who is contracting China to make the thing that they then sell is also generating a lot of GDP. Yes, they send some percent off to China to make the thing, but a majority is GDP generated here in the USA (the small business does the design, marketing, sales, etc...). If they go belly up because of the trade war (very likely, since no one else can make their thing, and before China developed this capability, making the thing wasn't even possible!), that GDP is gone, the people that small business was employing are unemployed.
The increased purchases should not decrease American GDP, unless consumers are buying directly from China using Temu and are not buying at Walmart.