Patterico's Pontifications

8/24/2019

Trump adds More Tariffs, plus Predictions

Filed under: Economics — DRJ @ 8:04 am



[Headlines from DRJ]

Trump heaps another 5% tariff on Chinese goods in latest tit-for-tat escalation:

U.S. President Donald Trump on Friday lashed back at a new round of Chinese tariffs by heaping an additional 5% duty on some $550 billion in targeted Chinese goods in the latest tit-for-tat trade war escalation by the world’s two largest economies.

Trump’s move, announced on Twitter, came hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods, prompting the president earlier in the day to demand U.S. companies move their operations out of China.

It must be hard for American businesses to keep count of where things stand, which is not good for business. I predict the stock market will fall more next week since this happened after the close.

UK PM Johnson to tell Trump to de-escalate trade tensions:

British Prime Minister Boris Johnson said he would be telling President Donald Trump at this weekend’s G7 summit to pull back from a trade war which is already destabilising economic growth around the world.

Asked if he would be telling Trump he should not escalate the trade war with China, Johnson said “you bet”.

Johnson said his priorities for the summit “are clearly the state of global trade. I am very worried about the way it’s going, the growth of protectionism, of tariffs that we’re seeing.”

I also predict Trump won’t be saying nice things about Boris on Twitter.

— DRJ

15 Responses to “Trump adds More Tariffs, plus Predictions”

  1. Do you have any predictions how this will end up?

    DRJ (15874d)

  2. $550 billion x .05 = approximately $28 Billion. The US Economy – $20,000 Billion. Impact on US Economy = 1/700. OMG, We’re all going DIE! Its a trade War!!!

    rcocean (1a839e)

  3. NPR had a story on the Shoe Tariff. The whole focus was on the rise in shoe prices. Not once did NPR talk about the US Shoe Industry and how many jobs were at risk from foreign competition. Plus, there was the typical stupidity of assuming a 15% increase in wholesale imports will Automatically result in a price rise in ALL Shoe prices. Evidently, shoe retailers don’t set their price to maximize revenue – instead they stupidly add a fixed fee to the wholesale cost. LOL.

    At one point they talked about a family of four, buying $500 worth of shoes and how much more they will pay. Strangely, NPR almost never discusses why Tuition at many colleges is now $50,000/year or why legal fees keeping going up every year, or why my cable bill keeps going up. But they’re incredibly concerned about Shoes going up by 15%. My God, a family of 4 might pay $75 more a year!

    rcocean (1a839e)

  4. Do you have any predictions how this will end up?

    JP Morgan estimates that Trump’s moronic tariffs – including this latest batch – will cost the average American household $1000 a year.

    Dave (1bb933)

  5. “Emergency! Emergency! Everyone to get from tweet!”

    Colonel Haiku (2601c0)

  6. 3… good point. The cost of higher education is out of control.

    Colonel Haiku (2601c0)

  7. If you have a problem with the tariffs on Chinese goods, you can easily avoid the tariffs by buying your goods from other countries like Finland. Well, maybe not Finland. But I’m sure there are countries that haven’t irritated Trump personally you could buy from. North Korea?

    Jerryskids (702a61)

  8. Trump claims that he does, in fact, have authority to order US companies out of China:

    When leaving the White House for the G7 summit in France, Trump told reporters, “I have the absolute right to do that, but we’ll see how it goes.” He later explained that he was referring to the 1977 International Emergency Economic Powers Act (IEEPA), and in a Friday tweet wrote: “For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!”

    The only Republican candidate for president was strongly critical of The Chosen One:

    Former Massachusetts Gov. Bill Weld, who has mounted a longshot bid against Trump for the 2020 Republican presidential nomination, called it “outrageous” that a US President would tell US companies how to conduct business.

    “That he believes he can actually carry out such an outrage is the insanity of a would-be dictator,” Weld tweeted Saturday.

    Dave (1bb933)

  9. He can, but first has to declare a “national emergency”.

    Whether it’s a smart play to use this authority is a separate subject…

    Colonel Haiku (2601c0)

  10. There are plenty of shoes made in Vietnam and Malaysia.

    I remember when my mom was buying shoes for us that she’d go for the cheaper ones that lasted the longest rather than caving into our pressure for a certain brand name.

    Most people on a budget will adjust their purchasing habits when they see the price difference, and if not, it was their choice to have spent more

    When Trump “orders” US companies to find other markets, he’s signaling them to develop suppliers and manufacturers in other places.

    steveg (354706)

  11. Now that China has pretty much stepped in it, they’ve invited a long overdue pushback from the rest of the world with respect to its export-driven growth. And the Chinese have nearly run out of room to prioritize their internal political goals over economic goals. In 2017, it was easy to spurn foreign investment, but that’s not the case in 2019.

    The recent Chinese currency devaluation was a kick to the groin of investors. China, faced with little choice, had to do it. Currently, the only thing really gating substantial capital flight is that it’s difficult for foreign investors to extract capital from China.

    The action now is fast and furious, played on multiple stages… North Korea… our domestic politics… and the media, much of which appears to side with the Chinese (follow the money)… many Chinese projects in Africa are now being cancelled…. as narciso pointed out, their activities re: the artificial islands has petered out… countries that have been enticed by China to accept loans are increasingly backing away when the terms and conditions are analyzed.

    Colonel Haiku (2601c0)

  12. “I predict the stock market will fall more next week since this happened after the close.” I pulled a bunch of money out of the market yesterday morning.

    Patterico (115b1f)

  13. news is terrible, beyond press release, and analysis is totally about American political considerations and animus against, much of Europe has inflicted serious wounds with it’s cap and trade and other policies, which weaken the advantages for their manufacturing, that’s on top of their social dislocations, from the great immigration of 2015-2016,

    narciso (d1f714)

  14. I’m not sure about our Past/current(?) relationship with China. Over the long term it feels like good politics and bad economics. The balance could probably be better, but that would take subtlety and Trump doesn’t have any. Sigh.

    Nic (896fdf)

  15. The stock market rarely sky-rockets when its uncertain who will be elected POTUS. Too much uncertainty. I’ve pulled back my investments too.

    rcocean (1a839e)


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