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Thread: Tariff Wars... and rumors of tariff wars

  1. #1

    Tariff Wars... and rumors of tariff wars

    (Looking at the Hinckley Institute category, I'm way, waaaaaay behind LA Ute in starting threads. He's a U Poli Sci grad, I'm a U Econ grad, so I'll hide behind that. Anyway, here goes!)

    Move 1
    : In January, Trump applied tariffs on Chinese made solar panels and washing machines:

    So far, the Chinese have be verbose about the tariffs, but haven't responded in kind. (There's a fairly solid case to be made that China engages in unfair trade practices, particularly with regard to not allowing foreign companies transparent access to their domestic markets.)

    Move 2?:
    Now it appears the Trump administration is poised to impose a broad set of tariffs against China, on a wide variety of products.

    Move 3?:
    American farmers are highly concerned because a very big percentage of their exports go to China:

    Earlier this week, NPR interviewed the president of the soy bean farmers association, who said 1/3 of the US soy bean crop is exported to China, and they're highly concerned that Latin American farmers are poised to fill the void if China retaliates against the US with a sizable tariff on US soy beans. (China has been quietly cultivating economic ties to Latin America, and a number of LA nations are now in the Trans Pacific Partnership trade block... ie, no tariffs.)

    We'll see where this all goes, but agriculture in Latin America may be a big winner from all this.

    I say, Bring back the US-built Curtis Mathes TV sets!

    (Mathes was a Canadian, ironically)

  2. #2
    Administrator U-Ute's Avatar
    Join Date
    Feb 2013
    Salt Lake City
    Getting into a battle over verbosity with a lawyer sounds a bit like a land war in China: I'm not sure that's the battle you want to take on.

  3. #3
    So far, the Chinese seem to be taking a pretty measured response to the initial foray into a full blown trade war. Trump has identified $30 Billion in tariffs to be applied. The Chinese have identified about $3 Billion. They seem to be hoping the adults in the US will push toward rationality.

    At the same time, China is very aggressively stepping up "economic diplomacy" in their relationships throughout the rest of the world, looking to build up trade partners via loans / grants to help third world nations build their economic infrastructure.

    If things REALLY get ugly, the Chinese will slow down / start refusing to buy T-Bills, right when the new Republican budget blows the top off the deficit and issuing more debt is required, which would probably raise bond rates sharply, raising interest rates far more quickly than the Fed could using their usual methods.

    Hang on...

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