Trump pulls trigger in US-China tit-for-tat tariff tiff: 10% slapped on $200bn of imported kit US President Donald Trump has slapped 10 per cent import tariffs on US$200bn of gear arriving in America from China. This is on top of a package of tariffs on $50bn of incoming Chinese-made parts used for “aerospace, information and communication technology, and machinery,” that was imposed earlier this year. China, …
A report on US/China trade I heard a few years again explained that while China sent vast amounts of consumer products to the US there was actually a booming trade in exporting portraits of US presidents from the US to China which has likely to remain buoyant for as long as the US treasury had printing presses.
whole opium for tea affair. That didn't go very well for them
To be fair, they did have a point - there was so much silver flowing out of the country (the Europeans wanted silver for their opium - by that point the British were already growing enough tea in the various bits of Empire that they didn't really need Chinese tea) that the Chinese currency was crashing (their currency was based on the silver tael and there wasn't enough silver left to make the standard coin so they had to debase the coinage..).
And the various European powers were forcing the Chinese government to allow people to buy the opium, despite the fact that it was illegal to do so in China.
So - not so much of a trade war as a "you will buy our poison that's killing your population" war.
If the two countries get into a trade war, where the one has regular elections that can "throw the bums out" if they are blamed for the problems caused by the trade war, and the other is a dictatorship that is able to limit discussion of the problems, and those who manage to discuss the problems can't do anything to change the decision makers minds, it is pretty obvious who is going to blink first.
Trump will be forced to back down, but will undoubtedly come up with some sort of excuse for why he won, or that democrats were to blame for the US losing. Or both, somehow.
This is why Democracies, can America still claim to be?, should not have any significant dependence on Autocracies. Globalization has failed developed Nations. The theory of it was noble but the practice of it was quickly controlled by the Corporations that knew how it would role out.
Quite the reverse is likely to be true. simply believing that the entire planet cannot bear to simply pay a "Trump tax" is likely to reduce trade not improve it.
There are more countries in the world than play in the world series you know!
Since when did being a bully become "a strong bargaining position"
Well, to be fair, it's worked for the USA for the last 30+ years so we shouldn't be surprised that the idiot is trying it too. It's just that previous administrations used a certain amount of subtlety and tact (ie made their threats behind closed doors).
I don't imagine taking a hit in their US markets is going to hit all that hard. Sure, the US consumes more per head than anyone else, but they're still less than 5% of the world.
I'm pretty confident the US needs Chinese goods enough to overcome some silly tariffs.
Maybe this is how Trump reduces government debt. By taxing people more through trade tariffs...
If the tariffs make it cheaper to manufacture in India then China that US companies will move to India. As Indian manufacturing expands and gets cheaper then even more manufacturing will move there. The Chinese government have been worried about India stealing their manufacturing base for a while now.
And more and more companies are getting fed up with China for stealing their products and ignoring their IP, look at what happened to Micron. A Chinese company started making DRAM using Micron's designs and IP, so Micron sued them but the Chinese courts turned around and said that this Chinese company was the owner of these designs and IP and that Micron had to stop manufacturing DRAM.
Trump might not know what he is doing, but he didn't draw up these tariffs, career civil servants did, and they do know what they are doing and targeted areas where China is most vulnerable. These tariffs are bad for the US, but worse for China and in Trump's mind if you hurt somebody more then they hurt you then you have won, even if there was no reason for anyone to get hurt to begin with.
"If the tariffs make it cheaper to manufacture in India then China ..."
It already is cheaper to manufacture in India (and Bangladesh, Vietnam, etc) than in China. That's why most clothing is made in Bangladesh and Vietnam. China has the infrastructure and knowhow for cheap manufacturing of widgets and electronics, but that infrastructure and knowhow costs money and time to build up.
Some companies might take a calculated gamble and move their manufacturing out of China, but they will need quite some infrastructure investment. I think many more will gamble that Trump won't last as president and it's more cost effective to wait it out for a couple of years and see the tariffs dropped by a new US regime.
Meanwhile American industry will move their few remaining manufacturing facilities to India and similar. Harley, Indian and the rest of the US motorcycle industry are already moving due to Trump's aluminium and steel tariffs and the car industry can't be far behind them.
The problem is bigger than that. It goes back to Globalization and lack of Corporate regulation. Trump and cohort are running Bannon's Libertarian agenda. Bernie Sanders, also, knew (knows) that manufacturing job losses are unsustainable, especially to unreliable Autocracies. China will use all those manufacturing patents as it sees fit and as an Autocratic exporter with huge developing population, economically, can afford to loss some external market while developing its internal market and other markets more local. Many countries under export bans for some of these goods would love to see this trade war continue as they'll be able to buy goods previously not available to them. Realistically, they probably already do.
in Trump's mind if you hurt somebody more then they hurt you then you have won, even if there was no reason for anyone to get hurt to begin with.
Yes, he appears to think that everything is a zero-sum game. Has nobody ever told him that a rising tide lifts all ships?
So you tax goods the US mfr base uses to make it's things like cars, boats and planes, making them more expensive.
The tariffs push up prices on US steel and aloominum because of demand increases, meaning US mfr's already using home produced materials have their material costs go up 30%.
Those US mfr's start losing orders and laying off staff.. just before the mid-terms.
This trade war idiocy just doens't stack up
It's the Bannon Fascist agenda in the guise of Libertarianism, which is a bad idea all on its own. They're deconstructing the economy. The already extremely wealthy will weather the collapse well as they already own much and will be able to acquire more. That'll leave the rest of us or the survivors as indentured servants. Very Dickensian.
Trump says "The US is the world's piggybank". Well how does he think the US filled that piggybank in the first place? Empires have always syphoned funds from the rest of the world.
Now the world is paying taxes to the US on everything, mainly in the form of transaction charges.
https://www.youtube.com/watch?v=QXIAgGNRa4g
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