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China Fire Backs With New Tariffs on U.S. Goods Worth $60 Billion

China Fire Backs With New Tariffs on U.S. Goods Worth $60 Billion

Move comes right after Trump announced $200 billion worth of tariffs on Chinese goods.

https://commons.wikimedia.org/wiki/File:Turnbull_selfie_with_Xi_Trump_Quang.jpg

On Monday evening, President Donald Trump announced new tariffs on Chinese goods worth $200 billion and threatened to add more if the Chinese do not change their trading practices.

Well, that did not work because China answered with new tariffs on U.S. goods worth $60 billion.

Trump Tariffs

The new tariffs are on top of the $50 billion Trump passed earlier this year. The new tariffs will go into effect on September 24. It will start at 10% and go up to 25% on January 1.

Once these new tariffs go into effect, “Trump will have imposed tariffs on nearly half of the Chinese goods imported to the U.S., which last year were valued at $505 billion.”

Trump warned China not to retaliate because he will then implement even more tariffs. If he does that, “all Chinese imports would be hit.”

At the last minute, the administration removed 300 goods from the list. These include “smart watches, some chemicals, and other products such as bicycle helmets and high chairs.”

Apple CEO Tim Cook explained this morning why Trump removed some of Apple’s products:

President Donald Trump’s latest list of proposed tariffs on $200 billion worth of Chinese goods spared some Apple products at the last minute. Apple had earlier said the proposed tariffs would affect the Apple Watch, AirPods and a host of other products.

“I don’t want to speak for [the Trump administration], but I think they looked at this and said that it’s not really great for the United States to put a tariff on those type of products,” Cook told “Good Morning America.”

Cook has been vocal about the ongoing trade disagreement, even speaking directly with Trump about the tariffs. He has maintained that the company’s flagship handset, the iPhone, isn’t likely to see tariffs.

“The iPhone is assembled in China, but the parts come from everywhere, including the United States. You know the glass comes from Kentucky; there are chips that come from the U.S. and of course the research and development is all done in the United States,” Cook said.

The fact is tariffs will only hurt us consumers because it will raise the prices on the stuff we buy. Economics is not hard and I wish people would stop making it messy. A company can only provide products if it makes a profit (sorry, socialists!). The tariff is a tax. In order to make up for this cost, companies have to raise prices on items. Yes, it’s a must because they need to make a profit in order to stay in business.

China Retaliates

Looks like China will back down. From Reuters:

The Chinese commerce ministry’s statement came hours after Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated against the U.S. action.

The brief statement gave no details on China’s plans, but Foreign Ministry spokesman Geng Shuang told a news briefing later that the U.S. steps have brought “new uncertainty” to talks between the two countries.

“China has always emphasized that the only correct way to resolve the China-U.S. trade issue is via talks and consultations held on an equal, sincere and mutually respectful basis. But at this time, everything the United States does not give the impression of sincerity or goodwill,” he added.

These tariffs will go into effect on September 24 as well. From Business Insider:

Trump’s new tariffs threaten to derail plans to send Chinese President Xi Jinping’s top economic adviser to the US for trade talks. The South China Morning Post reports that plans to send Vice Premier Liu He for meetings with senior US officials may now be scrapped. The Wall Street Journal later reported that China could continue with the meetings, but send vice commerce minister Wang Shouwen instead of Liu.

“We have been stressing that talks need to happen on the basis of parity, equality, and good faith,” a representative from the Chinese Foreign Ministry said at a press briefing, according to the Financial Times.

If the higher tariffs happen in January, China will respond accordingly. However, China doesn’t import as many goods from the U.S. so they don’t have as much wiggle room. The new Chinese tariffs affect about “85% to 95% of American exports.”

China doesn’t know when it should start negotiating with Trump. Some people want to wait after the midterm elections because they believe “President Trump isn’t ready to cut a deal, is bashing China now to appeal to his political base and may be more willing to negotiate after the elections.”

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Comments

‘China fire backs?’

Come on yall.

And yes. Tariffs are taxes. They are also a NEGOTIATING tool.

People whining about ‘tariffs hurt the economy’ and ‘tariffs are bad’ are correct. THAT’S THEIR POINT HERE.

For decades the US has meekly allowed every other country to impose tariffs on US goods to prevent their competition with domestic products while never facing any on anything they want to send to the US.

Trump has ended that. Either we have a world where NOBODY has tariffs (which is his stated goal), or both sides have tariffs.

    Ragspierre in reply to Olinser. | September 18, 2018 at 4:00 pm

    Dude…!!!

    THAT is total, ahistorical, and utterly ignorant. Do some research.

    Jeebusssss…

    tom_swift in reply to Olinser. | September 18, 2018 at 4:10 pm

    They are also a NEGOTIATING tool.

    Yes, indeed.

    The tedious details of a circuitous journey are of little interest so long as the final destination is worthwhile.

    It’s amazing how many hammerheads can’t grasp this, but consider every minor twist and turn to be cause for panic.

All China has to fight back with is a limp noodle. We can sell our goods elsewhere, they cannot. No replacing the world’s largest consumer market by far.

All China has to fight back with is a limp noodle. We can sell our goods elsewhere, they cannot. No replacing the world’s largest consumer market by far.

ScottTheEngineer | September 18, 2018 at 3:25 pm

I’ll be losing money because of this. But I’d rather lose it to a tariff war on something I decided to purchase than have the government take it from my check to pay for garbage cleanup in Mexico. We’ve become the worlds bottom bitch. Thanks Obama.

Sixty billion in tariffs. An unassessed trillion dollars in labor and environmental arbitrage. There is extraordinary profit in sacrificing regulations, and replacing entitled, privileged, some may say, American workers. Then compensating through redistributive change and immigration reform.

    n.n in reply to n.n. | September 18, 2018 at 3:29 pm

    … redistributive change, immigration reform, and asset inflation. Perhaps natural resources are not finitely available and accessible, and human life is delivered by Stork.

Hmmm. Let me think. If President Trump imposes tariffs on imports from China, it means that American made products become more desirable price-wise and more Americans are finding employment. And if China imposes tariffs on imports from America, the Chinese have to pay more for American-made products. And if they don’t buy American-made products because of the tariffs, we have more to sell inside the U.S. or to other trading partners. Exactly how does that hurt the U.S.? It looks like a win-win situation to me. Screw the Chinese and their cheap stuff.

    Close The Fed in reply to Elric. | September 18, 2018 at 5:25 pm

    Thank you Elric, for not taking ignoring the “messy” facts about tariffs. People want to oversimplify it, but always seem to forget: American government and industry lived off of tariffs in the 19th century and we did extraordinarily well then, expanding in leaps, with no INTRUSIVE income tax and our people very fully employed.

      Ragspierre in reply to Close The Fed. | September 18, 2018 at 5:40 pm

      Curse you for attempting the lie that “tariffs were good” in the good ol’ days.

      Protectionist tariffs have NOTHING but a history of economic ruin.

      THAT is what we’re dealing with here.

      You are correct. Before enacting the federal income tax the federal government was funded by tariffs (and occasional taxes for wars). I’m afraid it’s been downhill from there.

I don’t want Chinese goods – they are crap. I’ve had to replace 4 DVD players in the past 2 months because they are made with substandard parts that fall apart within days of getting out of the box.

$100 x 4, plus the hours of time spent troubleshooting and going back and forth from the store, plus fuel, plus the aggravation. What do you guys charge per hour? Would you like to spend your Saturday afternoons arguing with some beurocrat at Best Buy?

I’m willing to pay top dollar for top quality. Something that doesn’t require an additional warranty because they have faith their product will still work properly after 12 months.

Anyone here remember when a widget would last forever?

Screw China.

    Close The Fed in reply to Fen. | September 18, 2018 at 5:27 pm

    Yes, Fen, my Swingline staplers have lasted a very long time, as have my Revereware stainless steel pots. My IBM typewriter lasted a long time, especially considering I didn’t actually do any maintenance on it.

    My Jeep, ditto…. keeps on a-going. . . . 22 years old.

    Ragspierre in reply to Fen. | September 18, 2018 at 5:29 pm

    So you don’t own a smart-phone or any American car produced in the last decade or two.

    Doubtful…

      Close The Fed in reply to Ragspierre. | September 18, 2018 at 5:30 pm

      Rags, your reading comprehension is quite poor.

      Suggest you re-read Fen’s comment, then mine, and see why you got an “F.”

      Ragspierre in reply to Ragspierre. | September 19, 2018 at 9:34 am

      I’m still waiting for that elaboration.

      You spoke of your typewriter in the past tense. Guess why?

      I still have my Selectric for those very rare occasions when it would be useful, but mostly it’s just a relic of a bygone time that sits under a dust cover. Guess why?

      Liberty is a wonderful thing. You and I should be allowed to use our property as we see fit. Not be dictated to by a central planner.

    Ragspierre in reply to Fen. | September 18, 2018 at 5:36 pm

    So, explain how you’ve bought several DVD player when the first was under warranty?

      No, we’re not doing another seminar on your lack of reading comprehension.

      1) I didn’t say it was under warranty, although to be fair u can see where you inferred that.

      2) The portion where I did mention the warranty was in reference to them offering a 1 year warranty IN ADDITION to the base price, an admission that they can’t guarantee their product the day after it leaves the store.

      Seriously, you buy a DVD, go home, open box, plug it up, and it doesn’t work properly. Same day. Should you really need to gave it under warranty to get it replaced with no fuss?

      It used to not be this way. American products were over-engineered. Rating says it should haul a ton for 10 years, but it hauls 5 tons for 20 years without a problem.

      Nowadays, it’s as if the product is designed to last just long enough to create uncertainty on whether we got ripped off or it’s no longer worth the hassle of arguing for a refund.

      As for smart phones, lol. I have a pile if 12 smashed ones since January. Because they are stupid and if crappy quality and I have a temper. The Samsung Galaxy flies best.

        Ragspierre in reply to Fen. | September 19, 2018 at 12:12 am

        Name a DVD player without a one year warranty, poor fool.

          Reading comprehension, little troll, reading comprehension.

          And once again, I’d like to thank Professor Jacobson for subjecting the rest of his guests to your bullshit. Really shows how little respect he has for us.

          Ragspierre in reply to Ragspierre. | September 19, 2018 at 8:42 am

          Name a DVD player without a one year warranty.

          I can readily imagine you throwing away things in a blind rage.

          Maybe its you…

          My DVD players have lasted for years of hard use, and my smart-phones serve me well for so long, they become obsolete.

          There isn’t an airliner in the sky that does not use Chinese parts. The computer you peck out your crap on is full of Chinese components. The excellent Lenovo laptop I have was built in China with parts from all over the world.

          That’s reality in the world where people tell they truth.

The decision as an American consumer often comes down to three choices in mass produced goods:

Buy a product produced in China (or other low-cost country) because it is cheap. Pray that the Quality Control Fairy blesses you, so that you don’t end up buying twice.

Buy a product produced in the US (or other high-cost nation), paying significantly more for better materials and better quality control.

Buy a product produced in the US (or other high-cost nation), but from a manufacturer who has cut corners on materials and quality control in the hopes that going cheap will keep them afloat in the face of Chinese competition.

Competing with China on their terms only ensures the higher quality goods stay significantly costlier, as a matter of scale.

It really helped in the 70s, when Japanese cars were eating our lunch and we were reading about college kids telling us they had deliberately put bolts in door panels so there would be noises just for the hell of it. We had to buckle down in the car industry, because otherwise we were going to sink forever.

“The fact is tariffs will only hurt us consumers because it will raise the prices on the stuff we buy. Economics is not hard and I wish people would stop making it messy. A company can only provide products if it makes a profit (sorry, socialists!). The tariff is a tax. In order to make up for this cost, companies have to raise prices on items. Yes, it’s a must because they need to make a profit in order to stay in business.”

This is simply ill informed.

First, tariffs are not a tax. Tariffs, in this case, are designed to level the economic playing field in order for US domestic manufacturers to compete with cheap imports, in the domestic market. This, in turn, allows domestic companies to expand, or even start up, and employ more consumers. This puts more money into the hands of consumers who will then give it to businesses, which in turn, allows those businesses to grow, hiring more consumers etc. While retail cost of items may initially increase, local, state and federal taxes will likely decrease, which will offset this increase to some extent. As domestic manufacturers gain a larger share of the domestic market, this allows them to more easily access foreign markets, as those countries will likely reduce their protectionist tariffs in order to gain access to the US consumer market.

This is a critical piece of information, so remember it. The US constitutes 27% of the entire world consumer market. 300 million people in a single country account for over 1/4 of all the consumer purchases in the entire WORLD. That is a HUGE amount of leverage. It actually allows the US to CONTROL the world economy. We win by simply removing the US consumer market from the world economy and servicing it through domestic manufacture. The rest of the manufacturing world will deal with the US in order to maintain access to the uS consumer market.

    Ragspierre in reply to Mac45. | September 18, 2018 at 10:22 pm

    You are completely wrong. As before and usual.

      Your typical response. Totally lacking in ANY substantive information.

        Ragspierre in reply to Mac45. | September 19, 2018 at 12:31 pm

        Why would I bother in the face of your chanting the same consummate bullshit?

        I’ve debunked your crap a number of times.

        You cannot cite to ANY economist of repute who supports those lies.

        And they are lies, and completely devoid of any economic backing.

China can either open their markets to US goods and agree to negotiate a FAIR trade agreement, or Trump will simply keep piling on more and more tariffs.

Either way, the American people will be HUGE winners here. The exodus of our manufacturing to China has already ceased – and in fact it has reversed. Jobs are coming back. Anything China sells to us, we’d be far better off producing ourselves or can break even by buying elsewhere. Meanwhile, the massive trade deficit we have with China will begin to shrink.

Very little, by the way, of what we currently sell to China results in much (if any) profit. One of the most unfair trade practices that China imposes is that all foreign companies must sell their product to a Chinese company that then retails it, rather than retailing it themselves. That Chinese company gets virtually all of the profit. We lose very little by reducing our exports to them given this, and stand to gain enormously if Trump’s tariffs can get the Chinese to agree to allow us to sell our products directly to consumers.

US economy is only 12% dependent on trade with the entire world, and while China makes up a few % of that, the fact that it comes in the form of massive imports that crush our manufacturing and a much smaller percent of exports that generate very little in profits, coupled with the fact that we can replace all of it easily with other countries or our own manufacturing, and the simple fact is: we have very little to lose here.

China, on the other hand, is screwed. Their economy is based in large part on exports. The loss of exports to the US can not be made up with increased exports to other countries – all of which are already flooded with cheap Chinese crap already. Their government is also incredibly addicted to the enormous influx of dollars they get as a result of the trade imbalance with the US. Increased cost of imports, particularly commodities like soy beans, has an absolutely crushing effect on the billion or so peasants in China that don’t benefit from the more modern economy the other 150-200 million Chinese people enjoy. Result is: economic downturn in China can result in nationwide revolts leading to regime change. Their govt simply can’t afford to risk anything like this happening.

In short: The US (Trump, really) holds ALL of the cards here. And Trump knows it. He also knows how to play them. China can only hope to wait him out until a new POTUS replaces him. But, this is going to play out before 2020, and Trump is likely to get re-elected anyway.

“Trump announced $200 billion worth of tariffs on Chinese goods.”

That’s simply false.

Trump announced a 10% increase in tariffs on $200 billion worth of Chinese goods, which will later go up to 25%.

That’s $20 billion worth of tariffs, not $200 billion, and after Jan 1 it will be $50 billion worth of tariffs – still not “$200 billion worth of tariffs”.

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