More Tariffs on China: "They Better Pay Attention" was the Hamptons Message

Not only did Trump whine about interest rates at the Hamptons fundraiser, he also threatened China.

The Wall Street Journal reports U.S. Moves Toward New Tariffs on China Despite Fresh Round of Trade Talks.

> The Trump administration is moving closer this week to levying tariffs on nearly half of Chinese imports despite broad opposition from U.S. business and the start of a fresh round of talks between the U.S. and China to settle the trade dispute.

> Trump is a deal guy, said one person closely following the talks. Until the Chinese make a concrete offer, the person said, Mr. Trump will continue to encourage the dueling agencies about what action to take.

> President Trump, a Republican, continues to take a skeptical, hawkish view toward Beijing, said U.S. officials. At a fundraiser on Friday in the tony Hamptons section of New Yorks Long Island, he focused on China, said two participants. The message was: They better pay attention because were not done with those guys yet, said one of the participants.

> The U.S. is considering tariffs of either 10% or 25% on thousands of categories of products, including for the first time a substantial number of consumer goods, including furniture, computer parts and luggage.

> So far, the administration has levied 25% tariffs on $34 billion in Chinese goodsmainly machinery and electronic componentswhich was matched dollar for dollar by Beijing. On Thursday, 25% tariffs are set to go in place on another $16 billion of Chinese imports, which Beijing also promises to match.

> The American Chemistry Council, a chemical industry trade group, said that after the first hearings on the China trade dispute, the trade representative removed all but one of the targeted chemicals from tariffs. But then it added even more chemicals to the second round of tariffs due to go into effect on Thursday, and removed very few after ACC objected. That record means they arent really listening to people, said Edward Brzytwa, the ACCs director for international trade.

> On Wednesday, Chinese negotiators are due to start talking with a U.S. team led by Treasury Undersecretary David Malpass, at the invitation of the U.S. The negotiations are aimed at finding a way for both sides to address the trade disputes, the officials said, and could lead to more rounds of talks. If all goes well, the two sides would figure out a way to end the trade dispute ahead of planned meetings between Mr. Trump and Chinese leader Xi Jinping at multilateral summits in November, said officials in both nations.

> But there are plenty of obstacles ahead, particularly if the U.S. goes ahead with its tariffs plans and China hits back, as it has threatened, with tariffs on another $60 billion of U.S. goods. That would mean $110 billion of U.S. exports to China85% of the totalwould be subject to tariffs. Such an outcome is likely to increase pressure on Mr. Trump to go ahead with even more levies.

Tired of Threats

I am tired of these threats. Just do it. Massive tariffs will either collapse trade or they won't. And if they don't, just keep piling on tariffs until that happens or until China and the EU agree to the alleged free trade Trump wants.

After all, the Fed will bail out any administration mistakes. Right?

For reflection on my sarcastic comments, please see Trump Complains About Fed Rate Hikes: Expected Powell to be "Cheap Money Chair".

Mike "Mish" Shedlock

Comments (16)
No. 1-5
2banana
2banana

There are several ways to negotiate. One is to roll over and play dead like obama. Kinda like the folks who pay full MSRP on a new car.


I am tired of these threats. Just do it. Massive tariffs will either collapse trade or they won't.

Roger_Ramjet
Roger_Ramjet

I strongly believe that these trade threats have nothing to do with trade but rather are entirely about global hegemony. Its clear that the US is committed in maintaining its global military and economic dominance. Any country that stands in its way will be crushed, either militarily (for weaker countries such as Iraq, Syria and Libya) or economically (for stronger countries such as China, Russia, Iran and Turkey, for now).

No economist, business person or farmer, believes that a trade war is a good idea, yet Trump continues to dole out sanctions and tariffs without regard to the obvious negative outcomes that major trade wars will eventually have on the US economy.

But I believe that this will be an exercise in attrition, as economic damage results in social and political upheaval in targeted countries (and hopefully not the US). This will take a while and hopefully it will not evolve from and economic war into a real war. But there is very real and significant risk here that that market continues to ignore or downplay.

thimk
thimk

The yuan devaluation and dollar strength has muted tariffs place on Chinese imports to the US. On Chinese tariffs placed on US exports , well that's a different story. The "national sales tax program" is pulling in big bucks. Maybe a military parade will be funded.

Kinuachdrach
Kinuachdrach

The idea that any (voluntary) deal is a good deal is simplistic, to say the least. Good for whom? Classic example would be Exxon's take over of Mobil -- which was a great deal for the Mobil CEO who agreed to the deal, maybe not such a good deal for the shareholders, and definitely not a good deal for the employees.

When a US manufacturer wants to enter the Chinese market and is told that the price of admission is to make the product in China (and bring the technology too), the US manufacturer may be faced with choosing the least unacceptable option. If he does not agree, his competitor will. Moving manufacturing to China may not be a good decision (except for the Chinese), but it may be less bad than the alternative.

The Chinese have played the potential of their 1 Billion person market brilliantly. Now at last we have a US President who is not taken in by over-simplified economic theories and is using the reality of the huge US market to advantage. Of course, the Chinese influence-buyers are out to get him. No surprise there.

Realist
Realist

Sadly, Americans elected the worst president in their history. Trump is a moron. His supporters appear too dim-witted to realize what he is doing to them with these tariffs. They cheer as he destroys the good relations America had with its allies. They religiously believe the litany of lies he pumps out every single day. You couldnt possibly make this stuff up .