Everyone Loses as China Escalates Trade War With Tariffs on American Pork, Fruit, and More

"No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers."


Imagine China/Newscom

President Donald Trump's trade war just got a little harder to win.

China announced new tariffs on 128 American imports yesterday, primarily targeting agricultural products such as pork, nuts, fruit, and wine. In a statement, the Chinese government said it was imposing the new tariffs "in order to safeguard China's interests and balance the losses caused by the United States' additional tariffs."

Trump put tariffs on steel and aluminum imports to America last month, then doubled down with a second round of tariffs on Chinese-made electronics, furniture, and other goods. If the former failed to trigger a trade war with China, Trump seemed determined to get one started when he announced the latter on March 22. "This is the first of many" penalties aimed at Chinese goods, the president said as he signed the order.

Regardless of whether it's Trump or Chinese President Xi Jinping ordering the tariffs, Americans stand to lose.

The trade barriers Trump issued to prop up the steel and aluminum industries will end up increasing costs for thousands of downstream businesses—by one count, there are 46 American jobs in steel-consuming industries for every steel-producing job in the country. Other tariffs aimed at Chinese goods will likely have less of a direct effect on the economy as a whole, analysts say, but will leave Americans will fewer options and higher prices for a variety of household items.

Now retaliatory tariffs may cut off overseas markets for American farms and wineries. If American pork, wine, and other products become more expensive in China, Chinese importers might start getting their supplies elsewhere. Spanish pork, Chilean wine, and Australian nuts could replace American products in one of the world's largest and fastest-growing economies.

No wonder American producers are worried.

"We sell a lot of pork to China, so higher tariffs on our exports going there will harm our producers and undermine the rural economy," says Jim Heimerl, president of the National Pork Producers Council and the owner of an Ohio farm. "No one wins in these tit-for-tat trade disputes, least of all the farmers and the consumers."

According to Heimerl's group, the United States exported $1.1 billion of pork to China, making that country the third largest market for U.S. pork.

The Chinese tariffs will hit a wide range of American-grown fruit as well, including apples, oranges, watermelons, strawberries, raspberries, cranberries, cherries, grapes, and pineapples.

China's retaliatory tariffs have to meet two conditions to be effective, writes Alicia Garcia-Herrero, chief economist for Asia Pacific at Natixis, a French investment firm.

"First, China should be a large enough (possibly irreplaceable) market for a specific US export product, so that a reduction in Chinese imports due to tariff measures does harm the US industry providing that specific good," Garcia-Herrero writes. "Second, the US should not be the main producer of that specific product, so China can easily find substitutes when trying to import that product."

Trade retaliation will be costly for China, in the same way that slapping tariffs on Chinese commodities and consumer goods will be costly for Americans. That might be enough to push China to negotiate with Trump, but a trade war is unlikely to be as straightforward or as easy as Trump seems to think. China could also retaliate in other ways, by slowing investment in the U.S. or selling American debt, says Garcia-Herrero.

The new Chinese tariffs are a double blow to American farmers, who were already facing the prospect of higher prices for farm machinery and equipment, thanks to Trump's tariffs on steel and aluminum. In a March letter to the White House, Iowa's congressional delegation urged Trump to reconsider the tariff.

The effects are being felt on Wall Street too. The Dow Jones industrial average, like other major stock market indices, has slid more than 10 percent since peaking on January 26, shortly before Trump began dialing up his rhetoric on trade. Significant drops on the stock market have coincided with Trump's announcement of new tariffs, and the Dow fell 65 points this morning following news of China's retaliatory tariffs (and following Trump's Easter Sunday Twitter tirade against the North American Free Trade Agreement). Walmart was the biggest loser among the index's members on Monday.

"The new bearish narrative is that tariffs implemented by the Trump administration will spur a global trade war that would spiral the world into a recession," Nick Raich, CEO of the investment analysis website The Earnings Scout, tells CNBC. "We understand the fear."

NEXT: Foreign Servers No Longer Safe From Justice Department Snooping, Trade War With China Heats Up, Kremlin Says Trump Has Requested White House Summit With Putin: Reason Roundup

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  1. Look, nobody ever said that Making America Great Again would be easy or painless or great.

    1. Or possible or good for liberty or good for prosperity or bad for all the warfare / welfare types.

      1. Look, he said he was going to make *America* great, he didn’t say shit about making America*ns* great. America is the collective, Americans are the individuals and we’re all socialists now.

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    2. I would hope that most people who support(ed) Trump for these policy proposals did so with the realization that it won’t be painless or easy. Of course, I seriously doubt that. A trade war with the Chinese is bound to be very painful, the argument that those in favor ought to be making is that it will be a net positive for the nation in the long-run.

      Just like when we argue for curtailing welfare and government handouts, we don’t (or shouldn’t) make the argument that it’s all going to be sunshine and roses. It is going to be unbelievably painful and very difficult in the short-run, but in the long-run it will be good for the nation and the population at large.

      1. Well, they can MAKE that argument, but it won’t make it true. Even if you put a “to be sure” in there. With welfare reform, etc. there is at least some basis in economic reasoning, liberty, and dare I say morality.

        On trade, its either well-intentioned but ill-informed destructiveness (not unlike said welfare) or a cynical play for votes without regard to the net economic damage done.

        I (sincerely if not optimistically) await the supposed 12-dimensional chess Trump is playing to work itself out, and trade barriers everywhere to start falling. More realistically, I’ll have to settle for him (maybe) getting re-elected from this and displacing someone even worse (of which there are plenty). In politics, it helps to have profoundly low expectations.

      2. but in the long-run it will be good for the nation and the population at large.

        Please explain your reasoning.

      3. You have to be in it for the long game. This trade imbalance fight cannot be won without determination.

    3. Serious question. Does anyone think Hillary would have imposed tarrifs? I am just wondering if the whole “Hillary would have been worse” meme has lost its persuasive power.

      1. I don’t know about whether she would have imposed tariffs or not. But I’ll bet my left nut that she would be pushing to legislate the 2A out of existence.

        1. Hard to say. So many shootings only happened because Trump is president.

          1. Only because he hasn’t imposed gun control.

      2. I doubt she would have. She’s definitely one of the Obama democrats and they generally liked freer trade in large markets.

      3. My guess not.

        OTOH, with HRC would have:

        99% for sure:
        No deregulation
        Supreme court nutjobs
        Full court press against the 2A
        Continuation of Title IX insanity on campuses

        Better than 50/50 odds:
        Way more spending
        Some variation of free college for all
        Some kind of attack on the 1A via “hate speech”
        Incompetently led military actions

        Trump certainly has shit the bed the past 2 months, but I can still defend my reluctant vote.

        1. What would Gary Johnson have done?

          1. Asked somebody where Aleppo was, hopefully.

            1. That, and NOT changed the CRA.

          2. Vetoed everything, and as his vetoes get overriden, debt would quadruple like in New Mexico.

        2. First off, Title IX on campuses is still insane, because it’s largely up to the university administration. Obama and Trump have relatively little to do with it, besides encouraging or discouraging the practice. Also, I think Clinton would have been more amenable to decreasing the severity of the drug war, which would be far more deregulation than what Trump has done so far. Trump, however, is doubling down.

          Gotta say, on your 50/50 list, I’m not sure if Clinton would have spent all that much more than Trump, especially with an adversarial Congress. He has ramped up military spending and wants to increase infrastructure spending, as that gets votes. On the 1A, Trump has not been any kind of ally to free speech and has threatened media corporations, which is “some kind of attack.” As for military actions, we haven’t changed much from the Obama era, and I don’t think Clinton would have changed much either. They seem like they would have been the same.

          1. On Title IX, it is still crazy, but at least some policy shifts are taking place. My understanding was the DOJ and DOE influence this a lot. My guess is HRC would have doubled down the other way.

            On the rest, fair enough. Its more or less speculation. I remember GWB running on a “more humble foreign policy” for his first term. Its a bit unpredictable.

            On the 1A, I think Trump’s main thrust has been slander/defamation which at least has some (shaky) legal basis. On HRC, I’d speculate she would be amenable to some kind of “hate speech” code like Canada has, though she did not campaign on this. My speculation here is due to kind of people she would likely attract to her administration from academy etc.

    4. America? I thought it was Alabama they were talking about!

  2. The pork tariff is the one that matters – you start messing with Iowa pork farmers and they’ll start squealing like, uh, some sort of squealing animal. First-in-the-country primaries means they’re entitled to have their asses kissed as they’re led to their place at the head of the line at the uh, feeding contraption for certain barnyard animals.

    1. Except that the Chinese will get the blame, not the guy who started it.

    2. If every Iowa pork farmer who supported Pres. Trump is bankrupted by tariffs, that would be a just result. Harsh, but fair.

      Also fair is that the pain of Chinese tariffs be inflicted mostly on Trump supporters. I hope the Chinese were deft enough to arrange such an equitable circumstance.

      1. Also fair is that the pain of Chinese tariffs be inflicted mostly on Trump supporters.

        I highly doubt it will be though. The effects will ripple through the entire economy, hurting pretty much everyone, the pig farmers in Iowa will simply be the first to be hurt.

        I hope the Chinese were deft enough to arrange such an equitable circumstance.

        Not likely. I’m not sure it’s possible to arrange tariffs that way. I would think you’d run into the same kind of “knowledge problem” that makes central planning so ineffective.

    3. China now owns Smithfield.

      They’ll be charging/paying the ‘tariff’ to themselves.

  3. On the other hand, I’d like to hear more about this tit-for-tat trade war, like, what’s a tat and how do I trade them?

    1. It’s pretty easy to understand, Jerry. If a lady shows you her boob, you are supposed to inject her with ink in the shape of a dolphin or something.

      1. Define ink.

  4. From a purely political perspective, the temptation is to think that Trump has more to lose because of democracy. Xi stays in power regardless of how the Chinese people vote.

    We should also think about what happens if they lose power. When Trump leaves office, he’ll go back to Mira Lago, play some golf, and get back on the bimbo bus.

    If Xi’s actions create massive discontent, and he loses power as a result, his best case scenario is probably like the Gang of Four. Trump is more likely to lose, but Xi has far more to lose if he loses.

    1. Putting aside the negative economic ramifications of tariffs, why do you think the US is more likely to lose? I’m just asking because if China is not hitting double digit economic growth they’re going to have a lot of disgruntled unmarried men out of work. The Chinese, I think, are in a more precarious position.

      1. Oh, the Chinese people and economy has more to lose than the U.S., but I was looking at it from the perspective of the two leaders.

        . . . you know, the psychopathic strategist perspective.

        Someone is going to blink first. Xi has more t lose than Trump, even if Trump’s power being subject to elections means he can lose power because the economy takes a moderate hit.

        We haven’t seen China in recession since it joined the WTO, but if that happened because of a trade war, Xi might be lucky to come out the other side without his head on a pike.

      2. Wages are much lower in China so unemployment won’t be an issue. China hasn’t hit double-digit growth in years and it hasn’t led to mass unemployment. I think Chinese people are used to a lower standard of living and more easily manipulated and controlled by their government, so they will be able to tolerate economic pain for longer. And unmarried men these days are more likely to content themselves with video games and porn rather than protest in the streets.

        1. “and more easily manipulated and controlled by their government,”

          More easily than the Americans? You don’t know much about communist societies, do you?

    2. Xi stays in power regardless of how the Chinese people vote.

      Pretty smart of him to sew up that whole “president for life” thing before initiating tariffs that will end up hurting a lot of his own people.

  5. It’s as if Trump is pretending that today’s inevitable global economy is really the economy of bygone years, and is adjusting accordingly. Unfortunately, this will likely be a lesson of why tossing aside notions of adaptation and innovation will cost dearly when pining for the “good old days” that don’t exist anymore.

    When your campaign slogan is the antithesis of embracing change, garbage in, garbage out.

    1. Inevitable?

  6. President Donald Trump’s trade war

    Do you know who else fought a trade war?

    1. Aunty Entity and Master Blaster?

      1. Master Blaster was one of my favorite games.

    2. My rum-running Scottish ancestors?

    3. British East India Company?

    4. The New England Patriots and the Carolina Panthers?

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  8. President Donald Trump’s trade war just got a little harder to win.

    I must’ve missed the point in time where they were easy to win.

    1. It’s in reference to Trump’s claim in a tweet a few weeks back: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win”

  9. Trade War: When governments compete over which one can inflict the most damage to their own domestic economy.

    1. And to see which one’s people will hang their political leaders from lampposts first.

      1. Meh, I doubt it. People aren’t smart enough to realize how proposed tariffs will hurt them. They certainly aren’t smart enough to realize what it was that caused their pain.

        Republicans: “It was the Democrats”
        Democrats: “It was the Republicans”

        Sheep: *nod heads/continue to vote for their Team*

      2. Dude, tariffs are a tax on China! They are a tax on foreigners! Foreigners pay the tax!

        1. They are if zero Americans buy that imported product.

          You are partially correct though that costs on sold products are usually borne by the buyer.

  10. Yeah, it’s the end of the world. Not exaggerated or anything. If 1 strawberry farmer loses a customer, the US is done for.

    1. You showed that straw man who is boss!

      1. I didn’t build the straw man. Every tariff story pretends that there will be a near-infinite series of counter-tarriffs and reprisals. They should stick to what has actually happened rather than making up stories about what they imagine might happen.

        1. Nobody is calling for the end of the world or that the US is done for. That’s a straw man.

          The reality is that these tariffs on Chinese goods will hurt Americans. It forces us to pay more for stuff unnecessarily.
          The reality is that there is indeed a trickle down effect. Make imported steel more expensive and everything made with that steel will be more expensive. It may not be intended or immediately seen, but it is a fact.
          The reality is that tariffs encourage retaliatory tariffs. We just saw it happen. Now producers of exports are being harmed as well as consumers of imports.
          Everyone loses.

          Is it the end of the world? No. Nobody claimed that it was.

          Will this have a negative effect on the economy? Abso-fucking-lutely.

          1. Between tariffs and the tax bill, it’s 10 steps forward, 1 step back for the economy.

            1. The Dow Jones is down to November levels. Same for the NASDAQ and S&P. The impending trade war has already wiped out the gains made by the tax break.

              1. Maybe the USA will have gains bigger than 2017.

                I doubt you will give credit to trump for that though.

                Truth is the USA has a stronger economy when there is free trade. There is currently not free trade with China.

                1. Maybe the USA will have gains bigger than 2017.

                  It certainly doesn’t look like it now.

                  I doubt you will give credit to trump for that though.

                  I was giving credit to Trump after the tax break for the gains, and I’m still giving him the credit of taking us down the shitter now. Why do you find yourself incapable of criticizing Trump in anything but the most ineffectual, fawning manner?

                  Truth is the USA has a stronger economy when there is free trade. There is currently not free trade with China.

                  Yes, but this action is taking us in the opposite direction. Trade with China is now less free than it was under Obama. Even you should be able to see that. Actually negotiating a trade deal is a far better tactic.

                2. Truth is the USA has a stronger economy when there is free trade. There is currently not free trade with China.

                  Where to begin…

                  1. Is it free anywhere? Does the US subsidize its farmers?
                  2. So you’re going to make trade more free by establishing tariffs?

                  Please explain how Americans lose in the previous arrangement.

              2. Yeah, the “trade war” stock losses are already thousands of times the total amount that will ever get collected in tariffs.

                Discounting 1000 years of tariffs… does that seem rational?

            2. Um, yeah. Because making stuff more expensive stimulates the economy, and retaliatory tariffs resulting in less exports also stimulate the economy. Your logic is impeccable.

              1. Well yeah, if lowering taxes hurts the economy the obviously raising taxes helps it. Duh.

    2. Bastiat never lived to see how Californians profited from These States getting sucked into the Ottoman Empire wars after a berserker prophet hijacked Mecca. While Jimmy and Ronnie shut off Iranian pistachios, Californians went berserk planting pistachio trees, and now practically anyone can afford pistachios that aren’t dyed the color of blood on a pavement.

  11. It doesn’t matter what economic pain results it’ll all be ignored or projected onto Democrats by the people who voted for Trump.

    1. Ideally, the people who will sustain the economic pain associated with tariffs will be Trump supporters.

      Better a Trump supporter be bankrupted than an innocent lose a dime.

      1. What are Trump supporters guilty of, other than not supporting Hillary?

        1. They put a tariffs-happy goober in a position from which to impose these authoritarian measures; they should sustain the consequences. Accountability for authoritarians is always good.

          1. So if Hillary had been elected and was doing her damnedest to impose gun control, would you be hoping it only affected her supporters?

            Both of them are authoritarians.

        2. Not voting Libertarian, of course! I can think of no stupider waste of a ballot.

  12. Just make it a blanket tariff on all Chinese imports. Fuck [the government of] China. Until they decide to play by the same rules as the rest of the modern world, they don’t deserve to be part of the global economy.

    1. This is what happens when you don’t get an education, kids.

      1. Sometimes I wonder if the fact that economics isn’t taught in high school is because there is an intentional effort to create a population of economicus ingnoramicus.

        1. If Gatto is right – and he’s pretty convincing – that is a logical thing to conclude, and it fits with the disappearance of rhetoric from curricula at the same time as schooling became compulsory.

          1. 140 pages? Dude…

            1. Sometimes my comments come with homework. Deal with it.

              For real, though, it’s a great book. My own experiences in public school, and my kid’s, made a lot more sense after i read it.

        2. Political economy was a normal school subject in the twenties.

      2. This is what happens when you don’t get an education, kids.

        What’s that Artie, we get someone like you? You’re a shining example of what “education” means.

        1. The Rev. is so uneducated he cannot fathom arguments outside what the Democratic Party narrative is.

    2. We’ve been changing tariffs for the last two decades in violation of WTO agreements and somehow it’s China breaking the rules the “modern world” plays by? Let’s just forget that China is half of the modern world (population-wise, NA+Europe

      1. Just noticed that I accidentally html and it killed the last part of my comment. Population wise, NA+Europe is less than China.

    3. “Just make it a blanket tariff on all Chinese imports.”

      But where am I to buy my blankets from then???

      1. Native American reservations.

        And unlike the blankets we gave them, they’ll probably be clean of syphilis or sars.

  13. But – but – but – negotiation tactics! Nth-D chess! Go nuclear on trade because somebody is breaking “rules”!

    1. Apparently Xi got the translated version of “The Art of the Deal”

  14. Before the Whigs invented protective tariffs (and even after, between wars), the importation tax yielded revenue for the government. So the US federal government and the Altruistic Democratic Communist People’s State of China both get increased revenues off of imports. So… how can anybody be everybody without those two unproductive governing bodies?

  15. China uses VAT Tax which exempts exports. America uses corporate tax. If American manufacturers are required to pay taxes so should China manufacturers otherwise there is an unfair advantage ( i.e. Tax ).

    There’s a reason the Constitution granted the federal government the ability to create Tariffs in order to balance their own legislative workings with foreign countries workings.

    Don’t forget the U.N. UPU (Universal Postage Union) treaty which has essentially created U.S. Subsidies for import shipping. Why should the taxpayers be stuck paying for import shipping on X,Y,Z foreign purchases? That’s the first thing that should have been gotten rid of.

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