Soybeans, Cars, Planes, and "To Hell With Wall Street"
Mike Mish Shedlock
Trump imposed another $50 billion tariffs on China, as noted yesterday.
Today, Beijing Hit Back at the U.S. with tariffs on an equivalent $50 billion of goods.
While the Trump list would affect 1,300 categories of goods, China critically is targeting a narrower range of 106 types of U.S. goods, many of them high-profile. Soybeans and smaller commercial passenger planes, mostly made by Boeing Co. , are the most valuable U.S. exports to China, worth nearly $23 billion last year.
Also prominent in China’s retaliation are sport-utility vehicles and other agricultural products, from beef to sorghum—goods that were chosen to hit U.S. states that supported President Donald Trump, according to people familiar with Beijing’s plans.
Not a Trade War
Mercy me. Don't call this a trade war. It's really a peanut butter sandwich.
Trade Dispute Will Hit Automakers
If a tit-for-tat tariff dispute between the two countries erupts into a full-blown trade war, auto production in both will be affected, but U.S. factories would feel the strongest effect because China imports nearly 270,000 U.S. vehicles, worth $11 billion, and sends relatively few back.
Tesla’s California plant, which ships an estimated 15,000 cars a year to China, as well as BMW’s South Carolina facility and Daimler AG’s Alabama factory, could lose hundreds of millions of dollars’ worth of production if China goes ahead with its threat to double import tariffs. All three export high-margin luxury models, many of them sport utility vehicles, to China.
Ford’s problem is twofold, involving both imports of premium Lincoln vehicles to China and a plan to export low-cost Focus compacts from China to the United States.
Barclays auto analyst Brian Johnson, in an investor note on Wednesday, predicted that Tesla “would bear the brunt of any increased auto tariff on a relative basis,” with China accounting for 17 percent of the company’s revenue.
To Hell With Wall Street
Steve Bannon chimed in with a "brilliant" comment: "To hell with Wall Street".
“Ask the working people in Ohio, Pennsylvania and Michigan about Wall Street. Wall Street supported and cheered on the export of their jobs. To hell with Wall Street if they don’t like it. It’s time somebody stood up to them and Donald Trump is the perfect guy. Wall Street is always short term. Trump is trying to protect the beating heart of American capitalism - our innovation.”
Brilliant. Let's shoot ourselves in the foot.
We will not label that a peanut butter sandwich. Instead, we call that "winning".
Mike "Mish" Shedlock