Tariff Watch

[CatalinaWOW]

I actually agree with you.  I am more responding to the finger pointing about who is to blame.  Sure the US initiated this round of tariffs, but apparently didn't respond to prior rounds.  But others say it is impossible to ignore tariffs and must be retaliated.

All of this is irrational, both the responses and the expectation of a rational response.

[all_repair]

Responsing to tariff is a complicated play.  Announcing you shall respond is a good way to prevent the initiating body to place the first punch.  So to avoid the fight.  After receiving the punch, should one returns the punch.  Not returning does it means the initiator shall not give more punches, and other bystander would not also start giving punches if they think you are an easy target.

[shteii01]

Chinese had to "save face" so their retaliation was NEVER in doubt.

The interesting thing is that everyone is "afraid" of China.  In about six months to a year, when the dust settles, we will see what happens to US.  If US comes out ok or better (which I believe we will), then other players (cough cough Europe cough cough) will see that they can put tariffs on Chinese stuff and not just survive, but do fine.  If then Europe follows up with their own round of tariffs, then expect an avalanche of other countries putting tariffs on China.

Responsing to tariff is a complicated play.  Announcing you shall respond is a good way to prevent the initiating body to place the first punch.  So to avoid the fight.  After receiving the punch, should one returns the punch.  Not returning does it means the initiator shall not give more punches, and other bystander would not also start giving punches if they think you are an easy target.

[CatalinaWOW]

If one return punch stopped all fights there wouldn't be any fights.  Nor does every unreturned punch result in more punches.  Not in street fights, not in economic competition, not in international wars.  It isn't science.  You can't calculate the results.  Only in hindsight do some of the answers seem obvious, and even then there is real question as to what would have happened if other choices had been made. 

shteii01 has it right.  The issue is face.  No less for the Europeans commenting here than for the Chinese.  And certainly for the US.
Which is the irrational part.  Everyone is feeling wronged, everyone is saying we won't let you shove us around anymore.  With little regard to the actual facts.

[innkeeper]

There will not be trade war.
Chinese government needs to feed its people by importing food from other countries.  US is one of the major exporters of food to China.  Even if China reduces its food purchases from US, other countries don't have the food to supply China completely, so those other countries will buy from US and sell to China.  China will pay premium either way.

A couple of weeks ago on the radio in the business news they reported that even though Mexico put tariffs on US pork, the sales of pork to Mexico were 5% higher than last year.  I mentioned it to my dad, he said they probably reselling it to China.

China on Friday imposed $34 billion in retaliatory tariffs on American soybeans, cars and other products.
now we export only 130 billion in products, so already China has upped their average tariff from 5% to 30% an increase overall of 25%

now in contrast, the us has a lot more ability to impose tariffs on more goods considering we import 462 billion dollars in goods.
most of what China imports is equipment and technology to produce products to sell back to us or raw materials for the same, and lastly food and fuel.
our tariff increase, though 25% on some goods, just represented a pittance in comparison to the total imports. if average across all imports the tariffs only represent an overall tariff increase of 7%if you average it over all Chinese imports. the usa could go a lot further and has to in order for the original tariffs to be effective. id see a general increase in tariffs of all Chinese goods of 7% coming to offset china's move. the bold move would be to blanketly do what the Chinese did and increase the rate of all Chinese imports to 25%  ... let's see them match that.

maybe uncle sam could start buying and stockpiling soybeans, ... there are so many things that can be done.

the trade war as started and the USA has the leverage.

[innkeeper]

china will fight countries correcting trade imbalances tooth and nail, hell, it's in their best interest to do so.

most countries, and especially America, can only fault themselves for getting into that situation. and, they are the only ones that can dig themselves out.. if they have the stomach for it.

[all_repair]

CatalinaWow, it is not face.  The logic goes this way, the person going to impose tariff think tariff works.  However wrong is it, you cant convince him.  only way is to use his logic to tell him, tariff shall be imposed back.  If not returning tariff works, there was not one to start with, so how does it get started in the first place.  Due to the new economy and international outsourcing, the blue collar is not taken care of.  Trump has identified the pain rightly, but treatment is totally wrong.  He has sold poison the patient as the medicine.  To the patient, Trump has to be right because he was the first that identify with him.   These trade deficits are people working hard to sell cheaper to US than US can make themselves, there is nothing ill about it.  The problem is the account deficit, and instead of saving on the war machines to balance the equation, now with additional taxes through tariff on US people, these taxes can be further wasted on US war machines.

[helius]

The US defense sector is the largest exporter in that sector in the world, with $142 billion in exports annually, so it certainly does not add to the current accounts deficit, quite the opposite. China imports $16 billion/year in aerospace and defense from the US (despite the international sanctions on weapons technologies).

In other words, if China wants absolute dictatorship in greater China region, China has to clone western technology and  sustain domestic needs independently

Interestingly, they are making some of that cloned technology publicly available. In 2017, the PLA declassified over 2,000 military and dual-use patents including a system for drone attitude stabilization.

[all_repair]

since 911, US had wasted 7 plus trillions on the wars at Syria, Iraq and another middle East country.  That is not including few hundreds of military bases outside US.  This is a huge load to carry.

[ebastler]

China on Friday imposed $34 billion in retaliatory tariffs on American soybeans, cars and other products.
now we export only 130 billion in products, so already China has upped their average tariff from 5% to 30% an increase overall of 25%

Your math is quite flawed. If China introduces a new 25% tariff on imports worth $34billion, that's equivalent to an extra tariff of only 6.5% averaged over the $130 billion import volume.

[innkeeper]

China on Friday imposed $34 billion in retaliatory tariffs on American soybeans, cars and other products.
now we export only 130 billion in products, so already China has upped their average tariff from 5% to 30% an increase overall of 25%

Your math is quite flawed. If China introduces a new 25% tariff on imports worth $34billion, that's equivalent to an extra tariff of only 6.5% averaged over the $130 billion import volume.

the extra 34 billion is ~25% of 130 billion...

not sure how you are working your math...

the tariff before that was 5% they increased it by 34 billion to match usa increase.

[ebastler]

the extra 34 billion is ~25% of 130 billion...
not sure how you are working your math...
the tariff before that was 5% they increased it by 34 billion to match usa increase.

In your earlier post, you were not talking about the percentage number of products that are covered by tariffs, but about the percentage value of products which China collects as tariff, right?

China has upped their average tariff from 5% to 30% an increase overall of 25%

[CatalinaWOW]

CatalinaWow, it is not face.  The logic goes this way, the person going to impose tariff think tariff works.  However wrong is it, you cant convince him.  only way is to use his logic to tell him, tariff shall be imposed back.  If not returning tariff works, there was not one to start with, so how does it get started in the first place.  Due to the new economy and international outsourcing, the blue collar is not taken care of.  Trump has identified the pain rightly, but treatment is totally wrong.  He has sold poison the patient as the medicine.  To the patient, Trump has to be right because he was the first that identify with him.   These trade deficits are people working hard to sell cheaper to US than US can make themselves, there is nothing ill about it.  The problem is the account deficit, and instead of saving on the war machines to balance the equation, now with additional taxes through tariff on US people, these taxes can be further wasted on US war machines.

So just hypothetically, the person imposing the first tariff is not operating on a logical basis.  Your statements seem to imply you believe this.  Now you say the only way to convince this person is to apply tariff back.  Might work if dealing with a logical person.  But in fist fights and trade wars logic is often not the first thing in line.  I hit you.  You hit me back.  I hit you harder.  You hit me back harder.  At what point in this chain does logic suddenly enter.  Usually when on side is so bloody they can't take the next punch.  The other side is usually in about the same condition.

If there is no other way than hitting back the future is very grim.  But I believe there are other options.  I have watched them work (and also fail).  The point is that while these other options don't always work, they offer the possibility of a less painful end state.  The end state in a trade war is so bad that some believe that short term pain is a better option.   We will never know the optimum course.  We will eventually know the outcome of the course we take, and history will of course say that whatever was done was inevitable. 

The trade deficits are a result of many things.  In many cases it is just the wealth of the US showing up.  Barring force it is impossible for one region or nation to stay wealthier than another.  But there are other reasons, including non-tariff barriers to trade.  These include laws which require local ownership, local standards, non staffing of ports of entry and a whole list of things.

US military presence in the world is one of those mixed bags.  Much of what is done (suppressing piracy, terrorism and the like) is useful and most nations of the world are glad that it is being done.  Most are also glad they are not footing the bill.  The US has mixed feeling about this also.  We are tiring of footing the bill for this, and loosing the capability of paying the bill.  Whether the world is happier when that ends is an open question.  Either someone else will step up to the plate and be the new target of resentment, or the world will become used to a higher level of danger.

[shteii01]

There will not be trade war.
Chinese government needs to feed its people by importing food from other countries.  US is one of the major exporters of food to China.  Even if China reduces its food purchases from US, other countries don't have the food to supply China completely, so those other countries will buy from US and sell to China.  China will pay premium either way.

A couple of weeks ago on the radio in the business news they reported that even though Mexico put tariffs on US pork, the sales of pork to Mexico were 5% higher than last year.  I mentioned it to my dad, he said they probably reselling it to China.

China on Friday imposed $34 billion in retaliatory tariffs on American soybeans, cars and other products.
now we export only 130 billion in products, so already China has upped their average tariff from 5% to 30% an increase overall of 25%

now in contrast, the us has a lot more ability to impose tariffs on more goods considering we import 462 billion dollars in goods.
most of what China imports is equipment and technology to produce products to sell back to us or raw materials for the same, and lastly food and fuel.
our tariff increase, though 25% on some goods, just represented a pittance in comparison to the total imports. if average across all imports the tariffs only represent an overall tariff increase of 7%if you average it over all Chinese imports. the usa could go a lot further and has to in order for the original tariffs to be effective. id see a general increase in tariffs of all Chinese goods of 7% coming to offset china's move. the bold move would be to blanketly do what the Chinese did and increase the rate of all Chinese imports to 25%  ... let's see them match that.

maybe uncle sam could start buying and stockpiling soybeans, ... there are so many things that can be done.

the trade war as started and the USA has the leverage.

Argentina had bad soy bean crop.  They will be buying soy beans from US to fill their contracts with China.

[carljrb]

Canada imposes a 270% tariff on US dairy products

That's quite fair tough, considering you people are paying farmers 22.2B a year in subsidies (your agriculture is anything but fair). That's 73% of the farmer's market return. Plus, US milk is of lower quality. Those subsidies are just as "unfair" of an advantage for your farmers, and this just balances it out.

3.  My country is the injured party.  Played by everyone.

Exactly that. A whole lot of drama about being a victim, and quickly imposing tariffs on everything. Everyone loses, especially those trying to have a trade war against the whole planet...

[MT]

since 911, US had wasted 7 plus trillions on the wars at Syria, Iraq and another middle East country.  That is not including few hundreds of military bases outside US.  This is a huge load to carry.

Nope its 21 trillions and all unaccounted for since Pentagon dont have internal revisions of what they do and purchase.

[all_repair]

@CatalinaWow, it happened before when USA externalised their internal problem 20 year ago when it could not compete with the Japanese.  One demand lead to another, and Japan submitted until the last one.  But Japan had no chance to devalue the yen after inflated so much on US demand, and the world had seen at least 10 lost years of Japan some say 20 years.   Once an illogical and unreasonable demand got its way, it is an open invitation for more unreasonable and illogical demands like the US-Japan trade friction has shown.

[CatalinaWOW]

@CatalinaWow, it happened before when USA externalised their internal problem 20 year ago when it could not compete with the Japanese.  One demand lead to another, and Japan submitted until the last one.  But Japan had no chance to devalue the yen after inflated so much on US demand, and the world had seen at least 10 lost years of Japan some say 20 years.   Once an illogical and unreasonable demand got its way, it is an open invitation for more unreasonable and illogical demands like the US-Japan trade friction has shown.

This is a good example of one failure.  The only thing I am arguing with is your certitude that reciprocal tariffs will result in a good outcome.  The world has gone down the route of tit for tat tariffs before with terrible results.  Many think those were far worse than the lost decade or decades for Japan (which had several causes, including the one you mention).

I am also saying that when one player clearly doesn't have a full deck to operate with, the overall outcome is not likely to be improved by imitating that player.  But if you think arguing with an idiot is useful, go right ahead, I won't stop you.

[all_repair]

This is a good example of one failure.  The only thing I am arguing with is your certitude that reciprocal tariffs will result in a good outcome.  The world has gone down the route of tit for tat tariffs before with terrible results.  Many think those were far worse than the lost decade or decades for Japan (which had several causes, including the one you mention).

I am also saying that when one player clearly doesn't have a full deck to operate with, the overall outcome is not likely to be improved by imitating that player.  But if you think arguing with an idiot is useful, go right ahead, I won't stop you.

No one wins in a trade war.  It is very clear in all non-USA countries.  What the others are interested is not in the tariff war, but to stop it through the voters that voted for Trump.  Hope that works.  Why should the rest of the world be Japan that lost decades, but the very party that has the internal problem enjoy the benefits of bullying.  If the world spin into depression like the forgotten 1930, it can a good lesson for the next biggest player for the next 100 year.

[donotdespisethesnake]

It's been shown that the "tit for tat" policy works best https://en.wikipedia.org/wiki/Tit_for_tat. Also, Trumps tariffs are really shooting the USA in the foot by targeting components and not finished goods. https://www.nytimes.com/2018/07/07/opinion/how-to-lose-a-trade-war.html

Trump has said he is already committed to a trade war, so I think we can say it has started. The US also lacks allies, and even worse has antagonised them with tariffs. Only 17% of Chinese exports go to the US.

Trump will inevitably lose the trade war and back down, as other Presidents have done. But he will win with his supporters for having tried. He will get turfed out at the next election, the new Pres will rip up all of Trumps policies, and the PRC will shake their head at the failure of "Western democracy". Politics is now just a show to entertain the masses.

[Bud]

All you said is just a bunch of opinions.

[MT]

Dumpf has not won anything, nor the other sides, trade wars is like an eye for an foot group battle in a closed 4 by 4meter room using hand grenades! Sit and count percentage tariffs, punishments when global trade is entirely interconnected and inter tangled the MAGA and MIA is just a angel dust dream, oligarchs the winners and middle class and below the pieces on the global chess board sacrificed at will, at any time , for any reason, even stupid and the morbid.

Politics is just a bad expensive theatrical play for the grey masses at their expense. 
The reason for this so called trade war is entirety US domestic.

[rstofer]

No one wins in a trade war.  It is very clear in all non-USA countries.  What the others are interested is not in the tariff war, but to stop it through the voters that voted for Trump.  Hope that works.  Why should the rest of the world be Japan that lost decades, but the very party that has the internal problem enjoy the benefits of bullying.  If the world spin into depression like the forgotten 1930, it can a good lesson for the next biggest player for the next 100 year.

You aren't going to change Trump voters.  If anything, they are going to double down and he will be reelected in 2020.  If you don't like him now, just wait until he is in his second term and can't run for reelection.

The working people are tired of supporting the rest of the world.  Whether it is NATO, the UN or unbalanced trade, the voters are angry and Trump is the manifestation of that anger.  Why should we support other countries when we can't afford to fix our own problems?  Trump is right!  Take care of America first.  If there is anything left over then consider spending it elsewhere.

Germany is a big economy.  Why don't they support NATO at the agreed financial level?  They're not even close and don't plan to be for the next 10 years - if then.  Why should we pay for their defense?  Do they think they are far enough away from the Russian border that they don't need to worry about it?  If so, why are we worrying about it?  Pull out!  Bring everything home.

http://money.cnn.com/2017/05/25/news/nato-funding-explained-trump/index.html

Estonia pays full price for NATO.  They have to!  They're right on the border and pretty easy for Russia to run right over.  But at least they are smart enough to realize they have a problem and had better support NATO at the full 2% of GDP.  Unfortunately, they are going to be tossed on the scrap heap when NATO collapses.  If the other countries don't increase their contributions, Trump will walk away.  The voters will support him!

Why should the voters support NAFTA when the Canadians impose a 270% tariff on our dairy products?  How is that 'Free Trade'?  The US has gotten the short stick in all of these agreements.  The best thing Trump did was cancel the TPP and TTIP agreements.  All NAFTA accomplished was moving auto manufacturing jobs to Mexico.  How did that help the US?

I don't think people understand the depth of the discontent in this country.  Hillary's defeat is one example!  She was the anointed one, absolutely guaranteed the presidency, no doubt about it, it was her turn. Until the voters had their say!  Notice which states helped crush her campaign.  States with working people!  Their views aren't going to change.

[donotdespisethesnake]

All you said is just a bunch of opinions.

First time on the internet? 

[donotdespisethesnake]

Dumpf has not won anything, nor the other sides, trade wars is like an eye for an foot group battle in a closed 4 by 4meter room using hand grenades! Sit and count percentage tariffs, punishments when global trade is entirely interconnected and inter tangled the MAGA and MIA is just a angel dust dream, oligarchs the winners and middle class and below the pieces on the global chess board sacrificed at will, at any time , for any reason, even stupid and the morbid.

Politics is just a bad expensive theatrical play for the grey masses at their expense. 
The reason for this so called trade war is entirety US domestic.

Doesn't every political leaders win support by creating fictional enemies or to render domestic threats?

Certainly, if leaders cannot stay in power by force, fear is an effective way to control the population and gain legitimacy for the government - "only we can protect you!". Sometimes they create real enemies, but obviously fictional ones carry less risk.

https://en.wikipedia.org/wiki/The_Power_of_Nightmares

Trump plays well on American's natural paranoia. There are some who genuinely believe China is literally going to invade the US, probably "via Mexico".