Stupid is As Stupid Does: Trump Hits China With $200 Billion More Tariffs

The global trade war escalated moments ago when Trump fired back with a threat of $200 billion more tariffs.

In response to US tariffs, China put $50 million of its own tariffs on US good. Trump did not like that and responded with a threat of $200 billion more tariffs.

President Donald Trump has requested the United States Trade Representative to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent.

The new duties will go into effect "if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced," the president said in a statement provided by the White House late on Monday.

The move comes after the U.S. on Friday announced that it would impose a 25 percent tariff on up to $50 billion of Chinese products. Tariffs on an initial list of goods worth some $34 billion will kick in on July 6.

Monday's proposed measure is in response to Beijing's decision to raise tariffs on U.S. exports, the White House statement said.

Stupid is As Stupid Does

Not to worry. Trade wars are very winnable.

China's prices will rise. US prices will rise.

We call this "winning"

Mike "Mish" Shedlock

Comments
No. 1-25
LawrenceBird
LawrenceBird

China exports just under 500B of goods to the US. That is slightly less than 20% of their worldwide exports and somewhere between 3 and 5% of their GDP. I really doubt that China will blink as they know the US does not have alternative sourcing for much of those exports. So while Trumps taxes will reduce demand somewhat, it won't bring China's economy to its knees nor will it bring back (net) any US jobs.

Tocino
Tocino

Where will go the money collected?

In the end it is just a tax and the USA need money to pay their deficit.

G.Haris
G.Haris

Hello Mish,

Can't help but wonder if Trump has the wider geopolitical implications with China in mind as he escalates this "trade war". By shrinking their economy, it will curtail their military expansion. This is right out the the Reagan playbook when he squared off against Gorbachev in Reykjavik.

Sechel
Sechel

China clearly exports more to the U.S. than the U.S. to Japan, but this logic driving Trump's trade threats ignores that U.S. companies like Apple, Walmart and General Motors all operate in Japan and are looking to expand. China can make life very difficult for these companies and it is in U.S. interest to see American companies succeed globally even if part of that success means competing in a foreign market.

Stuki
Stuki

Everyone else has a "trade surplus" with America, because every other country has a capital account deficit with America. The former being nothing more than the mirror of the latter.

It has no significance on it's own at all. Just another Newspeakian term. Useful for riling up the illiterates to cheer for Dear Leader, when he announces which country we have currently always been at war with.

Get rid of the capital account surplus, by stopping printing and debt growth, and the trade deficit is gone. Inevitably.

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