Trump vs. World

April 6, 2018
CNBC
Trump wants to protect farmers from Chinese trade retaliation. That may create a bigger problem

  • President Donald Trump, in protecting U.S. farmers from tariffs by China, may end up inviting more economies into the trade spat, experts said Friday.
  • If Trump administration chooses to subsidize American farmers further, other agricultural exporters could retaliate with subsidies and tariffs of their own, the experts explained.
  • However the U.S. protects its farmers is unlikely to be effective because China can always impose counter-measures, said Rajiv Biswas, Asia Pacific chief economist at IHS Markit.

President Donald Trump, wanting to protect U.S. farmers from China’sthreatened tariffs, may end up pitting his country against many more nations in a trade spat that has hit global markets and worried the international business community, experts said Friday.

If the Trump administration chooses to subsidize American farmers further, that could trigger retaliatory tariffs and subsidies in major exporters of agricultural products such as the European Union and Brazil, the experts added.

An additional agricultural subsidy from the U.S. “brings third parties into the dispute, who could be expected, at a minimum, to complain to the World Trade Organization,” said Simon Baptist, Asia managing director and chief economist at the Economist Intelligence Unit.

“It is basically impossible for the U.S. to be confident that any actions it takes will protect its agricultural sector from Chinese tariffs, given the ways that other countries will respond to it.”-Simon Baptist, Asia managing director and chief economist at the Economist Intelligence Unit

Chad P. Bown, a senior fellow at the Peterson Institute for International Economics, sounded a similar warning. In a Twitter post, he said additional subsidies for American farmers would escalate trade tensions beyond the two largest economies in the world.

Farmers in Europe, CanadaAustralia, Brazil and Argentina who have been “suffering because of Trump subsidies” would demand retaliatory actions from their governments, Bown said.

Chad P. Bown

@ChadBown

How THIS escalates beyond US-China
• Trump slaps tariffs on China
• China retaliates on US agriculture
• Trump subsidizes US agriculture to pay them off
• Farmers in EU, CAN, AUS, BRA, ARG, etc – now suffering because of Trump subsidies – demand retaliatory tariffs/subsidies

There have already been complaints about American agriculture on the world stage.

Chinese state-run media Global Times said in an editorial last month that subsidies from the U.S. government have given American soybean farmers an unfair competitive advantage in selling to China. Subsequently, Beijing on Wednesday announced tariffs on 106 U.S. products, including soybeans — the most valuable U.S. agricultural export to China.

In response, Trump on Thursday proposed an additional $100 billion worth of tariffs on Chinese products and asked the U.S. Secretary of Agriculture “to use his broad authority to implement a plan to protect our farmers and agricultural interests.”

The U.S. Department of Agriculture told Reuters after the president’s statement that it first needs to “see the reaction of what tariffs will be and what the reaction of markets are” in deciding on ways to shield farmers from the trade conflict.

Trump can’t really help US farmers after all

Whatever measures the USDA eventually comes up with, it’s unlikely that they would be effective because China can always impose counter-measures, experts said.

Such tit-for-tat could actually benefit other agricultural exporters because China may end up buying more from them instead of the U.S., Rajiv Biswas, Asia Pacific chief economist at IHS Markit, told CNBC in an email.

Soybeans are harvested near Princeton, Ill.

Soybean farmer: China is going against middle America  

“Chinese tariffs on U.S. agricultural products will likely result in significant trade diversion to other agricultural exporters, as Chinese buyers switch import orders for items such as beef, wine, fruits, soybeans and cereals to other nations such as Australia, New Zealand, Brazil and the EU,” he said.

That would mean the U.S. loses market share in a major consumer, even if additional subsidies help its farmers stay competitive internationally, Baptist said.

“It is basically impossible for the U.S. to be confident that any actions it takes will protect its agricultural sector from Chinese tariffs, given the ways that other countries will respond to it,” he added.    Source

April 1, 2018
dw.com
China targets US meat, fruit in retaliation against tariffs on Chinese goods

“We don’t want a trade war, but we are absolutely not afraid of it,” a senior Chinese spokesman said as US tariffs entered force in late March. Beijing’s retaliatory measures appear to make good on that promise.

China said it will start taxing $3 billion (€2.4 billion) of imports of US meat, fruit and other goods beginning Monday in response to US tariffs on Chinese goods.

The announcement follows weeks of Chinese threats to introduce the measures amid a deepening trade dispute between Beijing and Washington.

Read more: Vice Premier Liu He says China ready to ‘defend itself’ against US tariffs

What China is targeting:

  • China’s Customs Tariff Commission will target a total of 128 US goods.
  • It will increase the tariff rate on eight US imports, including pork, by 25 percent.
  • A new 15 percent tariff will be placed on 120 other US goods, including fruits.

Read more: Did Donald Trump really just launch a trade war with China?

Why this matters: Beijing’s move is the latest escalation in its trade dispute with Washington. US President Donald Trump announced a 25 percent tariff on foreign steel imports and a 10 percent tariff on aluminum imports beginning March 23 with temporary exemptions for some countries but none for China. The US has separately threatened to impose some $50 billion (€40.6 billion) in tariffson Chinese goods over alleged misuse of US intellectual property.

Swine’s significance: China is the world’s top consumer of pork. Beijing’s tariff on pork imports is likely to hurt the US pork industry, which has already been put under pressure recently by weaker demand from China. The US exported $1.1 billion in pork products to China in 2017.

China ‘not afraid’ of trade war: Analysts have warned that the US tariffs on foreign goods could spark a global trade war as other countries retaliate with their own tariffs. A Chinese Commerce Ministry spokesman said in late March: “We don’t want a trade war, but we are absolutely not afraid of it.”

Read more: Asian markets jittery over trade war fears

amp/aw (AP, dpa, AFP)
Video & Source

March 22, 2018
qz.com
Explore all $506 billion in goods that the US imported from China in 2017

US president Donald Trump apparently isn’t done implementing protectionist trade measures. This week, his administration is expected to announce $30 billion in new duties on the US’s largest trading partner, China.

Unlike the mostly tax-free treatment of the US’s next largest trading partners, Canada and Mexico, $207.9 billion worth of the $505.6 billion of goods that China sent to the US in 2017 was subject to some level of tariff. The US assessed $13.5 billion in tariffs on Chinese products last year, before collecting punitive measures such as anti-dumping taxes.

Quartz gathered import data from the US Census Bureau comprising 11,741 hierarchical product categories, the amount imported, and the tax assessed. Every product the US buys at least $1 million worth from China is shown below through the lens of the Harmonized System, the international standard for categorizing and taxing traded goods.

The data are plotted along two axes: how much money the US sends to China for those products, and what portion of all international purchases come from China. Policy makers consult both of these factors when determining which products or categories to levy duties upon.  Read more

 

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