The Wall Street Journal reports U.S. Moves Toward New Tariffs on China Despite Fresh Round of Trade Talks.
> The Trump administration is moving closer this week to levying tariffs on nearly half of Chinese imports despite broad opposition from U.S. business and the start of a fresh round of talks between the U.S. and China to settle the trade dispute.
> “Trump is a deal guy,” said one person closely following the talks. Until the Chinese make a concrete offer, the person said, Mr. Trump will continue to encourage the dueling agencies about what action to take.
> President Trump, a Republican, continues to take a skeptical, hawkish view toward Beijing, said U.S. officials. At a fundraiser on Friday in the tony Hamptons section of New York’s Long Island, he focused on China, said two participants. The message was: “They better pay attention because we’re not done with those guys yet,” said one of the participants.
> The U.S. is considering tariffs of either 10% or 25% on thousands of categories of products, including for the first time a substantial number of consumer goods, including furniture, computer parts and luggage.
> So far, the administration has levied 25% tariffs on $34 billion in Chinese goods—mainly machinery and electronic components—which was matched dollar for dollar by Beijing. On Thursday, 25% tariffs are set to go in place on another $16 billion of Chinese imports, which Beijing also promises to match.
> The American Chemistry Council, a chemical industry trade group, said that after the first hearings on the China trade dispute, the trade representative removed all but one of the targeted chemicals from tariffs. But then it added even more chemicals to the second round of tariffs due to go into effect on Thursday, and removed very few after ACC objected. That record “means they aren’t really listening to people,” said Edward Brzytwa, the ACC’s director for international trade.
> On Wednesday, Chinese negotiators are due to start talking with a U.S. team led by Treasury Undersecretary David Malpass, at the invitation of the U.S. The negotiations are aimed at finding a way for both sides to address the trade disputes, the officials said, and could lead to more rounds of talks. If all goes well, the two sides would figure out a way to end the trade dispute ahead of planned meetings between Mr. Trump and Chinese leader Xi Jinping at multilateral summits in November, said officials in both nations.
> But there are plenty of obstacles ahead, particularly if the U.S. goes ahead with its tariffs plans and China hits back, as it has threatened, with tariffs on another $60 billion of U.S. goods. That would mean $110 billion of U.S. exports to China—85% of the total—would be subject to tariffs. Such an outcome is likely to increase pressure on Mr. Trump to go ahead with even more levies.
Tired of Threats
I am tired of these threats. Just do it. Massive tariffs will either collapse trade or they won't. And if they don't, just keep piling on tariffs until that happens or until China and the EU agree to the alleged free trade Trump wants.
After all, the Fed will bail out any administration mistakes. Right?
For reflection on my sarcastic comments, please see Trump Complains About Fed Rate Hikes: Expected Powell to be "Cheap Money Chair".
Mike "Mish" Shedlock