President Trump has proposed to impose tariffs on up to $60 billion in imports from China. So China is fighting back with proposed tariffs of its own on imports from the US. CNBC reports:
The world’s second largest economy (China) has responded to President Donald Trump’s controversial trade tariffs.
… Trump signed an executive memorandum on Thursday that will impose tariffs on up to $60 billion in Chinese imports. “This is the first of many” trade actions, the president said. The new measures will primarily target certain products in the technology sector where Beijing holds an advantage over Washington.
(In retaliation) China’s commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement released on its website posted Friday morning.
The U.S. goods, which had an import value of $3 billion in 2017, include wine, fresh fruit, dried fruit and nuts, steel pipes, modified ethanol, and ginseng, the ministry said. Those products could see a 15 percent duty, while a 25 percent tariff could be imposed on U.S. pork and recycled aluminium goods, according to the statement.
The statement did not go into greater detail. U.S. agricultural products, particularly soybeans, have been flagged as the biggest area of potential retaliation by Chinese President Xi Jinping’s administration.
That followed Trump’s executive order earlier this month that imposed broad duties on foreign aluminum and steel imports — an action that many said could trigger a global trade war.
OK, let’s analyze this. For decades America has been caught in a one-way trading system that has worked against the US. Here is an example about steel. Trump has recently proposed steep tariffs on Chinese steel coming into the US.
We have faced the loss of millions of high-paying jobs in the US steel industry over many decades in both jobs lost and jobs never created. The reasons are simple:
*Labor unions, coming from the political left, pushed US labor costs through the roof. US companies could not compete. Many companies closed or shrank significantly in the 1970s, 1980s and 1990s.
*Foreign nations had an endless supply of low-cost labor.
*High domestic taxes on US firms, also coming from the political left, put our firms at a competitive disadvantage.
*Extreme regulation (from the left) put US firms at a strong disadvantage, including oppressive ‘green’ regulations.
*Foreign nations like Japan, China and India have been taxpayer-subsidizing their steel industries for decades (an idea from the left) and then “dumping” the resulting cheap steel on the US market, further undercutting our US industry.
*China has added a new wrinkle. It has been manipulating its own currency to make its products even more affordable in world trade. President Trump has been talking about this issue for years.
All of these factors combined have devastated the American steel industry. So now that president Trump is striking back and simply seeking to start to take back just some of the advantage that foreign producers like China have been enjoying for so long, China is striking back.
This is intended to stir up the international community with fears of a “trade war”. But that “war” has been fought unfairly for decades against the US and against free trade, with nobody to point it out. The international media and government systems which tilt far to the left have simply ignored the real threats to “free trade” from nations like China.
Trump is now taking the side of the US. Great. He is the first president in decades to seek to remedy the real reason for the devastation of hundreds of US town and cities with the destruction of their factories instead of watching passively as jobs have disappeared, as presidents did for many years.
American manufacturing jobs peaked in 1979 at 19 million. Today there are 12 million in a much bigger population. This has been devastating to the American economy.
Now president Trump is targeting these goods from China with up to $60 billion in tariffs. CNBC reports about China’s retaliation against Trump:
The decision (by China) to target $3 billion in U.S. imports is significant, “but it’s not a lot in terms of the total U.S.-China relationship,” said economist Tony Nash, who is CEO and founder of data analytics firm Complete Intelligence.
Chinese imports from the U.S. are expected to hit $172 billion this year, he pointed out.
Recent U.S. trade actions severely damage the multilateral trading system and disturb the international trading order, China’s commerce ministry said, urging Washington to resolve its issues with Beijing to avoid harming the bilateral relationship.
As usual the Chinese commerce ministry is only giving its side of the story. China has been taking advantage not only of the US but of the whole world trading system for decades. This must end.
China’s economy is the second largest in the world. It is about one-half of the size of the US economy, at around $10 trillion annually or maybe more, although those figures are not verifiable.
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