Saturday, August 03, 2019

Trade war escalates with new, broader tariffs on Chinese imports; more pressure on farmers, maybe through 2020

The U.S. trade war with China escalated again Thursday when President Trump said he would put a 10 percent tariff on an additional $300 billion worth of Chinese imports in September.

The announcement came as trade talks continued and as the president complained China didn’t follow through with a promise to buy more American farm products, and charged that China hasn’t stemmed the flow of the deadly opioid fentanyl to the U.S.

The tariffs would be in addition to 25 percent Trump previously imposed on $250 billion worth of goods from China. His announcement "stunned financial markets" and brought a warning from China that it would "have to take necessary counter-measures," Reuters reports.

The Associated Press notes, "U.S. consumers are likely to feel the pain if Trump proceeds with the new tariffs. Trump’s earlier tariffs had been designed to minimize the impact on ordinary Americans by focusing on industrial goods. The new tariffs will hit a vast range of consumer products from cellphones to silk scarves."

American farmers are particularly vulnerable in the trade war, so the administration announced another aid package for farmers hurt by it, but the source of money for that is running short, and many observers expect the Chinese to hang tough until after the presidential election in 15 months.

A Democratic-leaning group, Tariffs Hurt the Heartland, warned that more tariffs could result in farm failures: “The administration is doubling down on a failing strategy. Nobody wins in a trade war, and raising tariffs further on American businesses and consumers will only result in slower economic growth, more farm bankruptcies, fewer jobs and higher prices. . . . We all agree China is a bad actor, but an unprecedented tax hike on hardworking Americans is not the answer. It's time for the administration to come up with a real strategy, put a stop to harmful tariffs and finally deliver the trade deal Americans were promised."

No comments: