Donald Trump says tariffs 'working big time'

Kenny Grant
August 6, 2018

President Trump speaks during a campaign rally July 31 at the Florida State Fairgrounds Expo Hall in Tampa.

It is indeed due to the lack of meaningful consultation between China and the US that Beijing has chose to elevate the stakes in a manner that is directly reflective of Donald Trump's unwillingness to negotiate a new era in Sino-US trading relations on a win-win model.

The Chinese Commerce Ministry said a decision to impose additional tariffs was made in response to USA plan to raise tariffs on Dollars 200 billion of Chinese goods from 10 per cent to 25 per cent, state-run Xinhua news agency reported.

While China has to defend its right to develop, the Chinese people "really want to avoid a trade war", Global Times, a typically belligerent tabloid controlled by the People's Daily, wrote in an editorial yesterday evening.

In addition, Beijing announced on Friday that it would add duties ranging from 5 to 25 per cent on an additional US$60 billion in United States goods if the Trump administration went ahead with similar action, warning that further countermeasures were ready at any time.

After weeks of half-measure negotiations between the two countries, talks have broken down and now both the White House and Beijing are locked in a rapid escalation of trade threats that experts have predicted could damage both economies. Neither side is showing any sign of backing down.

"Copper is a global market that depends much less on regional trade flows and therefore tariffs in any one region should not have a material impact on the market", Chris LaFemina, an analyst at Jefferies, said by telephone from NY. The move was meant to bring China back to the negotiating table for talks over US demands for structural changes to the Chinese economy and a cut in the bilateral trade deficit.

But as is common with his Twitter posts, some of his claims were either unproven or incorrect.

For example, he claimed that China was financing advertisements to convince Americans to stop Trump's trade agenda. "Likewise other countries. We are Winning, but must be strong!"

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The Chinese government calls its response 'rational'.

July 16: China filed another complaint to the WTO over Trump's $200 billion tariff plan. Beijing retaliated by imposing similar charges on the same amount of US products. "Other countries use Tariffs against, but when we use them, foolish people scream!"

The US trade war on China has therefore resulted in the US having to spend money on bailing out domestic industries that would not need the help if Washington officials would work to resolve the trade war on a win-win compromise.

Tariffs are working big time.

China has threatened to increase tariffs on imported American goods if the United States follows through with its threats to ratchet up the trade war. Rather, the US importers bringing the products into the United States pay the tariffs.

The list included products as varied as snow blowers and 3-D printers, suggesting Chinese authorities were struggling to find enough imports their own economy can do without.

This could drive USA importers to stop bringing in certain goods because they are too costly, hurting the foreign manufacturers, but those foreign companies do not pay the tariffs, and neither do the foreign countries where those companies are based.

"The in a better position to ride through the tariff concerns because of a strong economy", said Sung Won Sohn, chief economist at SS Economics in Los Angeles.

The White House is now negotiating with South Korea and the European Union regarding trade agreements for soy beans, energy products, steel and aluminum.

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