THE CONTINUING TRADE WAR

The trade was escalated dramatically this week, with both America and China threatening to impose new tariffs on hundreds of billions of dollars of goods.

Trump already raised tariffs from 10% to 25% on $200 billion worth of Chinese goods.  In retaliation, China announced higher tariffs of $60 billion worth of American products.

Now, Trump is threatening to tax $300 billion in additional Chinese products, which would include virtually every product China exports to America.

While Trump promised $15 billion in aid to farmers, Roger Johnson, president of the National Farmers Union said, “These new tariffs could not have come at a worst time.”  And that, “Temporary aid won’t undo the permanent damage to agricultural exporters.  Fifteen billion is a drop in the bucket.

Farm bankruptcies in the mid-West reached their highest levels since thee 2008 housing crisis.

Economist Paul Krugman (Nobel Prize winner, but no match for the intellect of Donald Trump) said, “Trump’s trade was is wrecking America’s farm economy.”

Since Trump placed tariffs on farm products, China has made deals with South America and Africa to meet its needs.  When the trade war is over, China will never return to the American market.   Thousands of farmers will go bankrupt.  Trump threatened to shut off Hwauei and ZTE, so China invested $5 billion in a brand new city that does nothing but develop state of the art chips.  They will be faster and cheaper than those America produces.  China will take all of America’s markets away…thanks to the brilliance of Donald Trump

These tariffs are taxes on Americans.  For example, the price of washing machines has increase 12%, or $86 since Trump slapped tariffs on appliances that come mostly from China.

It is true that the Chinese government has supported its exporting companies and that they demanded American companies turn over their proprietary technology in order  to do business in China, but the talks should be on those circumstances, not tariffs on products that are paid for by the American consumer.

Trump has won battles in the real estate business by putting pressure on weaker, less wealthy (and honest) opponents.  Xi Jinping is not one of Donald’s real estate stooges.  Trump is not going to be able to do that to China.  Xi cannot be seen as backing down to America.  That could jeopardize his standing in the country.  And the Chinese memory is very long indeed.  Evry move Trump makes to stymie China will result in China moving quickly to become the world’s biggest economy and be the reserve currency of the world

Trump is in a real fix.  If he can’t reach a deal, consumers will suffer and he’ll lose their vote.

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