May 7, 2019

Increased Tariffs on Chinese Goods

We're officially on Insta! Did I throw on a blazer at 5 am for all you lovely people? You bet I did!

“Accusing Beijing of ‘reneging’ on commitments it made in earlier talks, the nation’s top trade negotiator said Monday that the Trump administration will increase tariffs on $200 billion in Chinese goods.” AP News

See past issues

From the Left

The left criticizes the tariffs for hurting US consumers, and worries about an escalating trade war.

“According to a paper published [in] March by economists Mary Amiti of the New York Federal Reserve Bank, Stephen J. Redding of Princeton University and David Weinstein of Columbia University, practically all of the effect of the tariffs ‘fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters’... the total cost of tariffs on importers and consumers was nearly $1.4 billion a month. In another survey, researchers at the Federal Bank of Atlanta, the University of Chicago and Stanford concluded that tariffs had led to nearly $33 billion worth of reduced investment in the U.S. in 2018 alone.”
Luke Barnes, ThinkProgress

“The real worry financial markets always have about tariffs… is not so much the tariffs themselves as what comes next. China could retaliate by cutting purchases of American agricultural goods, buying European airplanes rather than American airplanes, or trying to bias the domestic Chinese auto market against American brands. At that point, talks aimed at deescalation might get back under way. But the US could also counter-retaliate. This kind of ‘trade war’ between the world’s two largest economies could spiral out of control and end up severely damaging the global economy.…

“Trump’s aides tend to say that this is all overstated. That the basic reality is the US economy is in a strong position, that Chinese leaders’ own position is more tenuous, and that Trump is simply an aggressive negotiator playing for advantage. On the other hand, obtaining that advantage requires him to credibly act like someone who doesn’t understand — or doesn’t care about — the potential harms of a giant trade war. The problem is he’s sometimes much too convincing about it.”
Matthew Yglesias, Vox

Some note that “Trump can’t make any permanent trade agreements unless Congress agrees. That’s a long process he hasn’t even started. Instead, Trump is using executive authority, which lasts only as long as he is president. Any promise he makes to China will expire on January 20, 2021, just 21 months from now, unless he is reelected. The Chinese know this. That’s why they are in no hurry to make the kind of deals Trump wants. He might ‘encourage’ them with threats and maybe even higher tariffs. But then he risks crashing the markets. So, China’s best negotiating strategy is to wait, which they do very well.”
Patrick W. Watson, Forbes

Finally, many are criticizing the Trump administration for “[relenting] on imposing sanctions on key Chinese officials involved in carrying out human rights abuses in Xinjiang… in a bid to supposedly counter terrorism, Beijing has set up a vast system of ‘reeducation camps’ to dissuade the region’s predominantly Muslim Turkic minorities, including Uighurs, from embracing religious extremism. Advocates and Uighur exiles abroad point to a totalitarian dragnet that has disappeared a chunk of the region’s population and ushered in a draconian 21st-century surveillance state… [the failure to address this behavior is a] glaring absence in Trump’s showdown with China.”
Ishaan Tharoor, Washington Post

Trump's “goal, it seems, is to put so much pressure on Tehran that it has no choice but to completely change its behavior — but he could end up leading the countries to the brink of war in the process… Now is typically the time when cooler heads prevail, but it’s unclear if there are cooler heads around… It’s hard to overstate how avoidable this situation was.”
Alex Ward, Vox

“In theory, there’s no reason why a bad businessman can’t go on to become a good president. But a commander-in-chief whose signature legislative achievement expanded tax loopholes that he himself describes as grossly unfair is pretty much a bad president, by definition.”
Eric Levitz, New York Magazine

From the Right

The right is critical of China’s trade practices, and supportive of Trump’s tough negotiating tactics.

From the Right

The right is critical of China’s trade practices, and supportive of Trump’s tough negotiating tactics.

Beijing has too often violated the global trading rules it agreed to and profits from. It steals trade secrets and intellectual property and handicaps foreign companies with punitive regulation. Chinese abuses have undermined political support for free trade in the U.S… There’s no denying that [Trump’s] border taxes on Chinese goods have prodded Beijing to negotiate, though tariffs have also imposed costs on U.S. consumers and producers, especially in agriculture...

“Mr. Xi has to concede more than Mr. Trump does—without being embarrassed in the process. China already has largely free access to the U.S. market and rule of law. China’s main demand is that Mr. Trump lift his tariffs, which is reasonable if China agrees to cease its multiple trade violations. This includes protections for IP, a reduction in tariff rates toward U.S. levels, a reduction in subsidies for state-owned companies, more liberal rules for joint ventures, and an end to cyber theft.”
Editorial Board, Wall Street Journal

“The president’s tough line now—heading into the final stretch of negotiations—will reduce friction later. China is less likely to cheat on any future agreement if it needs to comply to earn a reduction of these tariffs. China will cheat if the U.S. has no tariffs to enforce it… China has a long history of quickly breaking promises to the West. From refusing to abide by the rules of the World Trade Organization after it joined in 2001 to abandoning President Xi Jinping’s promise to President Obama not to militarize the South China Sea, Beijing’s record makes strong enforcement mechanisms a necessary precondition to any U.S. agreement to a deal.”
Michael Pillsbury, Wall Street Journal

Trump’s “policy is right on the mark here. Chinese President Xi Jinping intends to destroy the U.S.-led international system of fair commerce under the democratic rule of law. He aims to replace it with one of intellectual theft and feudal mercantilism. China is playing games in the trade negotiations to protect that agenda. But Trump's tariffs and other economic actions challenge Xi by jabbing at his unelected regime's economic vulnerability.”
Tom Rogan, Washington Examiner

“The trade war is, to a large extent, a conflict over the Chinese Communist Party’s most important means of keeping itself in power: subsidies and the state sector… significantly changing China’s trade practices would mean forcing the Chinese Communist Party to upend a core piece of what is holding its fragile political system together… [But] from the American perspective, the costs of living with these trade practices are far too high to justify perpetuating an unreformed trade relationship with China…

“If the United States is determined to no longer bear the painful consequences of China’s trade practices, it can either get Beijing to significantly reform its economy—extremely unlikely given the nature of Chinese politics today—or it can decide to curtail the trade relationship… sooner or later, American policymakers will have to face this reality and the uncomfortable implications of it.”
Nick Taber, The American Conservative

Some argue, “It stands to reason that if Kim is willing to starve his own people, deprive his economy of any growth, and pour billions of dollars into missile tech, he will, at some point, develop weapons America and its allies mastered decades ago. And short of an invasion or a diplomatic agreement, under the present circumstances, there is very little we can do to stop him… Taking a hardline approach—what many call the ‘big deal’—or only granting sanctions relief after full denuclearization and the end of Kim’s missile programs is completely impractical and something North Korea would never agree to… only a step-by-step process of disarming Pyongyang, where each side gets a benefit for making a concession, will work.”
Harry J. Kazianis, The American Conservative

Others posit that “the reason Kim is developing missiles that can strike Seattle or LA is that 28,000 U.S. troops are in South Korea… If we cannot persuade Pyongyang to give up its nuclear weapons in return for a lifting of sanctions, perhaps we should pull U.S. forces off the peninsula and let China deal with the possible acquisition of their own nuclear weapons by Japan, South Korea, and Taiwan…

“After an exhausting two weeks [between North Korea, Iran, Venezuela, and others], one is tempted to ask: How many quarrels, clashes and conflicts can even a superpower manage at one time? And is it not the time for the United States, preoccupied with so many crises, to begin asking, ‘Why is this our problem?’”
Pat Buchanan, Townhall

Counterpoint: “after the War of 1812, President Madison… enacted the Tariff of 1816 to price British textiles out of competition, so Americans would build the new factories and capture the booming U.S. market. It worked. Tariffs [also] financed Mr. Lincoln’s War. The Tariff of 1890 bears the name of Ohio Congressman and future President William McKinley, who said that a foreign manufacturer ‘has no right or claim to equality with our own… He pays no taxes. He performs no civil duties’… [A tariff’s] purpose is not just to raise revenue but to make a nation economically independent of others, and to bring its citizens to rely upon each other rather than foreign entities.”
Patrick J. Buchanan, The American Conservative

A libertarian's take

“The scoop reflects poorly on Trump, who willfully misled the public for a decade in hopes of fraudulently representing himself as a man with a Midas touch. But he could not have succeeded without the assistance of many Americans, some mercenary, others over-credulous, who helped to spread the deceit and deception, generating countless newspaper articles, magazine stories, and TV segments that misinformed the public about the publicity hound’s record in business. New evidence of his staggering losses in that decade therefore provides an apt occasion to reflect on the media’s complicity in Trump’s brazen deceit and deception… Let [this] be a lesson for today’s tabloids, gossip columnists, over-credulous or mercenary journalists, and reality-television producers.”
Conor Friedersdorf, The Atlantic

On the bright side...

Artificial Intelligence creates never-ending death metal.
Science Focus

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