Trump ratchets up his trade war
The Trump administration and China will expand their trade war with new tariffs to be imposed next week
By Ted Cox
Resisting calls for caution from farmers, manufacturers, and business leaders, President Trump announced a new round of tariffs this week in his trade war with China.
China immediately announced that it would respond in kind with retaliatory tariffs next week, when the new U.S. tariffs take effect.
It’s a dramatic expansion of their trade war. After both sides imposed tariffs on $50 billion in goods received from the other country earlier this year, Trump announced Monday that he would impose a 10 percent tariff on an additional $200 billion in Chinese goods, to rise to 25 percent next year if the trade war isn’t resolved.
China, which doesn’t import nearly as much in U.S. goods as vice versa, announced it would impose tariffs on an additional $60 billion in U.S. products, concentrating on meat, wheat, and textiles, according to a Bloomberg report. The tariffs of between 5 and 10 percent will target more than 5,000 U.S. products.
Trump lashed back in a tweet Tuesday morning taking it personal, stating: “China has openly stated that they are actively trying to impact and change our election by attacking our farmers, ranchers and industrial workers because of their loyalty to me.”
He made the same point this summer in an appearance at the U.S. Steel Granite City Works, where his steel tariffs led workers to be rehired.
But farmers have suffered from China’s retaliatory tariffs, and the Illinois Soybean Association has specifically asked the president to pursue “trade, not aid.” Just last week, the Illinois Soybean Association played host to a Chinese agricultural trade delegation, with all agreeing the tariffs must stop. But, according to the association’s Mark Albertson, the Chinese made it clear “they have no plans to buy our beans unless the tariff goes away.”
In July, the Illinois Chamber of Commerce, while lauding the rehiring of steelworkers, quickly added: “We also urge the president to consider not only the new steel jobs he celebrates today, but the potential job losses and jobs that never get created as a result of the tariff battle now underway with our trading partners.
“What is needed is a thorough and targeted strategy to remedy these trade problems and not a scattershot, seemingly random tariff policy that puts our agriculture and manufacturing economies at risk,” the chamber added. “The president will find many willing partners in the business community to support him in the right strategy and we hope he will accept our assistance.”
Critics have argued that protectionist tariffs might save jobs, but at a larger cost to consumers and manufacturers. A New York Times story on Monday cited tariffs imposed on tire imports by the Obama administration and found that they had preserved 1,200 U.S. jobs, but at a cost of $1.1 billion to U.S. consumers, or almost $1 million a job for positions paying $40,000 a year.
The U.S. Chamber of Commerce has found that Trump’s trade war with China, Canada, and Mexico threatens $4.3 billion in Illinois exports, with China specifically targeting soybean exports ($1.3 billion), passenger vehicles ($445 million), and grain sorghum ($133 million), according to a story in Crain’s Chicago Business.
In an attempt to ease the impact on U.S. consumer goods in high demand, the Trump administration removed smartwatches and Bluetooth devices, bicycle helmets, high chairs, children’s car seats, and playpens from the newly imposed tariffs.
China warned of a protracted trade war perhaps lasting years, as Trump threatened to impose tariffs on an additional $267 billion in Chinese goods, which would bring the total to more than the just over $500 billion in goods annually imported from China.