China

In Latest Trade Negotiating Gambit, Trump Essentially Asks China To Put Tariffs on U.S. Manufacturing

But wasn't the whole point of the trade war to boost U.S. manufacturing?

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At the center of the economic nationalism that underpins President Donald Trump's trade agenda, there's a seemingly unsolvable agriculture problem: America grows more food than it eats.

A lot more, actually, and all that agricultural excess has to go somewhere. In 2017, the last full year before the start of Trump's trade war, America exported $133 billion worth of food, beverage, and animal feed products, according to data from the federal Department of Commerce. That's the largest single category of American exports—even outpacing the $109 billion of petroleum products the U.S. sent abroad that year, and nearly as much as all passenger car ($53 billion) and airplane ($99 billion) exports combined.

All those agricultural exports are great for the country as a whole, and for the individual farmers, truckers, and exporters who benefit from that trade. The dollars they earn by selling soybeans, corn, and produce to other countries is then used to buy other things—because that's how trade works—and often those other things are made in China. That's a problem for Trump's zero-sum economic nationalism.

So when Trump decided to erect trade barriers in the form of tariffs on steel, aluminum, washing machines, solar panels, and thousands of Chinese-made goods, he was throwing a giant presidential monkey wrench into a cycle of buying-and-selling that benefited American farmers (and other business in the agriculture sector). And when China cut off purchases of American agricultural goods, it was American farmers who paid the biggest price. Without those export markets to relieve excess supply, prices fell and supply chains had to be reconfigured on the fly.

Still, the Trump administration's policy objectives were clear. American manufacturing had to be protected against cheaper products coming from China. If that meant farmers took it on the chin, so be it.

That's why it's a little bit ironic to see that, a year after the trade war started, the Trump administration is now trying to score a "win for farmers" by securing access to Chinese export markets in a new trade deal with China. That's how Bloomberg describes the latest gambit in the ongoing trade negotiations between the two nations, in which Trump's team is asking China to shift $50 billion of retaliatory tariffs off agricultural goods and onto other American exports in advance of next year's elections. The U.S. would maintain its own tariffs on Chinese goods even if a trade deal is reached, the news organization reports, citing sources familiar with the negotiations.

That's stunning. The Trump administration's newest trade negotiating tactic is to ask China to put tariffs on American manufactured goods—the very sector Trump's trade war was supposed to be helping—in order to relieve the pain the trade war caused for American farmers.

And what's going to happen if China goes along with that idea? Like before, American farmers will export goods to China, and then will use the money they earn to buy other things—because that's how trade works—and often those other things will be made in China.

"It's not enough to switch tariffs from farm products to manufactured goods; the Trump administration also wants to encourage the Chinese to buy more U.S. farm products than ever before, which will cause China to send even more manufactured goods to America," writes Scott Sumner, an economist with the Mercatus Center, a free market think tank. "Any policy that encourages the export of farm products also encourages the import of manufactured goods. (There's a reason they call it 'trade'.)"

On one hand, it's great that the Trump administration is effectively admitting a mistake and trying to reverse course out of the mess it created. China was already buying lots of American agricultural goods before Trump came along, but if he wants to basically restore the old status quo and claim that he "won" something for American farmers—well, fine, that's what politicians do all the time.

But that's some serious goalpost-moving on the administration's part. And if the past year's efforts at protecting American manufacturing jobs end with China slapping tariffs on American manufacturing goods at the Trump administration's request, well, I'm not sure how that will go down in all those Rust Belt diners.

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40 responses to “In Latest Trade Negotiating Gambit, Trump Essentially Asks China To Put Tariffs on U.S. Manufacturing

  1. Oh, ok.

  2. It’s funny that he’s been dreaming of being in the position to start a trade war with China and to try to bully them into submission and then when he actually makes it into this dream position, he does what he’d been planning all that time to do, and it doesn’t work and it fucks everything up. There has to be a name for that sort of thing, probably German or Greek.

    1. Schadenfeude and hubris. And Heil der Trumpfenfuhrer!!!

      (Let us now out-compete the Chinks at contest = cut-off-yer -nose to spite yer face!)

      Oooops, they changed the rules? Now, let’s cut off our dicks to spite their faces!!!!

  3. At what point when the great trade war monster hasn’t taken revenge on America for its sinful ways will the faithful stop believing in his coming? You guys are worse than the global warming believers.

    1. Economics denier

    2. This comment doesn’t even make any sense. The article links to all the cause and effect of Trump’s trade policy. It is a well known fact that Trump is trying to decrease American import of Chinese manufactured goods. It is a well known fact that in return, the Chinese are not importing American farm goods. There is no mystical sky god being invoked here. This is all in the record.

      And if it is true as reported that Trump is asking China to relieve the farmers by moving those agg tariffs to other industries, then it is indeed sad. It shows that Trump has finally realized that there are costs associated with tariffs and that his solution is to spread the pain to other people, rather than remove the source of that pain.

    3. You guys are worse than the global warming believers.

      The export of soy so that China can grow its largely coal-reliant population should be a slap in the fact to the global warming ideologues.

      I wonder how many Mexicans are working in the US illegally to grow soy for China?

  4. I really hope those boxing Trump things are made in China.

  5. All those agricultural exports are great for the country as a whole, and for the individual farmers, truckers, and exporters who benefit from that trade. The dollars they earn by selling soybeans, corn, and produce to other countries is then used to buy other things—because that’s how trade works—and often those other things are made in China. That’s a problem for Trump’s zero-sum economic nationalism.

    Unfortunately, putting Trump’s comments aside, America’s global agricultural export system is way more complicated than you can imagine.

    Example, we export cheap agricultural products (food etc.) to places in south America that are cheaper than what the locals can produce. As a result, the local producers in South America are devastated. America subsidizes many of these farm products allowing farmers to sell to overseas markets at cut-rate prices.

    South American farmers WON a ruling with the WTO that essentially said the US has to stop subsidizing its products. At the bargaining table, the US simply said that the subsidies weren’t going to stop (because *cough*federalism*cough*) and so the US agreed to simply give the South American countries money that they could distribute to their farmers.

    1. Hell, we pay farmers not to farm in order to drive up the price of crops and then give a third of the population of California food stamps because the price of food is supposedly too high. It isn’t just the export market that’s complicated. We spend a fraction of our household expenditures on food compared to other countries–including those in South America.

      https://www.vox.com/2014/7/6/5874499/map-heres-how-much-every-country-spends-on-food

    2. We also export the subsidized produce to Africa, where the local farmers are again out-competed by the Fed Gov.
      I’m more than sympathetic to reducing any and all tariffs, but the case of the poor US farmer is a hard one with which to sympathize.
      But all that pales before the fact that Iowa is the first primary, right?

      1. Pulling an Eddy here:
        Pretty sure it was David Friedman who claimed Toyotas are made in Nebraska:
        The grain is shipped from the west coast ports. Somewhere on the Pacific, that grain enters a factory, and emerges as Toyotas, bound for the US.

  6. The idea that Trump’s trade negotiations are in any way driven by political considerations is hardly shocking. I keep saying the same basic thing because so many of my fellow libertarians can’t seem to understand it. The purpose of libertarianism is not to seize the reigns of power and inflict an unpopular trade (or immigration) policy on the American people over their objections and against their will. Our job is to persuade the American people to demand free trade *and a more liberal immigration policy) from their elected representatives.

    Our job is certainly not to pretend we’re confused when the president or our elected representatives to Congress take the will of voters into consideration–certainly not on issues like trade agreements and immigration, which are both well within the proper purview of democracy.

    You’re shocked (Shocked!) that elected politicians–right here in the United States of America–consider whether voters will support their trade policies, like, for reals? If you want to be an elitist, please go be an elitist–and leave persuading the American people to support free trade to a real free market capitalist libertarian.

    1. leave persuading the American people to support free trade to a real free market capitalist libertarian

      Obligatory.

      1. Within this context, you’re simply arguing for elitism with that.

        It doesn’t matter whether juries are rational. Justice requires their existence.

        It doesn’t matter whether voters are rational on wars, trade treaties, or immigration policy either. A free society is one in which the government cannot impose wars, trade treaties, or immigration policies on its people over their objections and without their consent–regardless of whether they’re rational. Incidentally, the First Amendment protects both rational speech and stupid speech, too. If you want to advocate for authoritarianism on the basis that people are too stupid to vote for politicians that reflect their interests on wars, trade agreements, and immigration, then go ahead and do so openly. Regardless of whether you think a particular trade agreement is rational, imposing one on the American people over their objections and against their will is authoritarian. The libertarian alternative to such authoritarianism is persuading the American people to choose the rational policy, and that’s the libertarian cause–whether you like it or not.

        P.S. We didn’t get NAFTA and GATT over the objections of the American people. Those treaties were ratified by the senate, so don’t tell me that people can’t and won’t choose more free trade than they have because they’re irrational–not after they’ve already done so.

  7. “Under the proposed agreement, China would commit by 2025 to buy more U.S. commodities, including soybeans and energy products, and allow 100 percent foreign ownership for U.S. companies operating in China as a binding pledge that can trigger retaliation from the U.S. if left unfulfilled, people familiar with the situation said earlier this month.”

    —-Bloomberg (From link in article)

    If that’s true, it isn’t clear to me yet whether this trade deal might not be worth it. Requiring American companies to take on a majority Chinese partner is the way China has forced technology transfers out of competitors. Personally, I’d rather we both rid ourselves of all the tariffs on both sides that have been implemented since Trump took office, but if Trump has managed to put an end to China’s primary means to forced technology transfers, then accepting China’s retaliatory tariffs on our exports might still be a good deal for the U.S.–even if it isn’t ideal.

    1. The length people go to, to rationalize their support of Trump, is just amazing.

      Fuck, bud, Trump’s better than any Dem I know of, but that doesn’t mean you have to pretend he has no bad spots.

      All you Trumpistas can’t seem to wrap your heads around the idea that being better than Dems doesn’t mean perfect.

      1. Your irrationality is pretty amazing. For instance, I can argue that I might support a trade agreement that keeps extra tariffs if it also means an end to forced technology transfers, but you can’t even formulate a stupid response to that. No, instead you talk about Trump and whether I support him–as if the argument that ending technology transfers in exchange for higher tariffs wouldn’t be the same even if Hillary Clinton were negotiating the agreement.

        I suspect the reason you don’t address people’s arguments rationally is because you can’t. I suspect you’re incapable of addressing people’s arguments rationally. Care to prove me wrong? I dare you.

        1. I might support a trade agreement that keeps extra tariffs if it also means an end to forced technology transfers

          So you want the distribution of winnings & losses of a zero-sum game to be different.

          1. The agreement where the Chinese drop all of their trade barriers in exchange for the U.S. dropping all of ours isn’t under consideration. So, what’s on offer is a series of trade offs. If you’re evaluating those based on something other than weighing the costs and benefits, you’re being irrational. Opposing a trade agreement because it doesn’t make trade completely free is dumber opposing a trade agreement because it frees up trade more than before, and that’s because free trade people should know better.

        2. “…if it also means an end to forced technology transfers…”
          What are those?

          1. Are you being facetious? I’ll assume you’re being serious!

            Presently, before a foreign company can set up shop to manufacture, sell, or do anything else, in China, there’s a government agency that oversees your application to operate in China. They then assign you a Chinese partner if you don’t already have one. They may direct you specifically to share x, y, and z technology with the partner as a condition of manufacturing and selling in China, or they may simply require that your form a partnership and become a minority shareholder–in which case your technology becomes the property of the partnership.

            In this way, China uses access to its market as a means to strip American companies of any advantages their proprietary technology gives them over their Chinese competitors, not only in the Chinese market but everywhere in the world. If Trump has successfully negotiated an end to forced technology transfers like that, then that is a significant barrier to entry into the Chinese markets that he’s brought down. Whatever disadvantages there are in his trade trade agreement, and I see some big ones, they may need to be weighed against the advantages of ending forced technology transfers.

      2. Fuck, bud, Trump’s better than any Dem I know of, but that doesn’t mean you have to pretend he has no bad spots.

        Ken: There’s a lot of bad, but it could be offset by the good.
        Alphabetic halfwit: Quit pretending there’s no bad.

  8. Keep in mind Trump is a troll who often says crazy shit just for the lulz. He has about a 20 second attention span and when he gets bored he just shakes his dick out the Oval Office window and knows that every journalist in the country just can’t help themselves, they have to start talking about Trump shaking his dick out the Oval Office window.

  9. Elites swoon over Pete Buttigieg’s French tweet on Notre Dame fire

    By Tuesday afternoon, the clip had 3.3 million views.

    “I’m crushing pretty hard on #PeteButtigieg2020 right now,” one Twitter user wrote less than a day after Buttigieg announced his candidacy for president.

    Another added, “This guy keeps getting better and better.”

    Quipped one fan: “Why is there even an election for goodness sake. Just give him the damn job and I’m Canadian.”

      1. You know, Pete. Pete Booty-judge.

        1. I saw his name in print enough before I heard it spoken that I still read it with hard Gs. Apparently it’s a Maltese name having something to do with poultry.

          1. Perhaps SIV can enlighten us.

      2. “Who?!”

        Socialist #3

    1. “Pete Buttigieg is a gay Harvard alum, fluent in Gramsci,…”
      http://nymag.com/intelligencer/2019/04/pete-buttigieg-2020-presidential-campaign.html

      One more D, wedded to a failed, thuggish econ ideology. Imagine my surprise.

  10. Drat! So now China will put tariffs on our manufactured goods. I wish Trump hadn’t given them the idea to do that.

  11. Tariffs are a tax on consumers, subsidies a tax on taxpayers. So much for tax breaks.

  12. Does this mean Trump thinks he has those Rust Belt states locked up in 2020?

  13. “It’s hard to make predictions, especially about the future” – so I don’t know if this new trade deal will improve things w/China.

    OT – another debate about a controversial statue of a Civil War era figure

  14. It’s a gross oversimplification on the part of Reason to simultaneously criticize tariffs on the basis that trade is not one dimensional and then argue against tariffs with a one dimensional example of retaliatory tariffs. Meanwhile, zero discussion on the original protectionism enacted by China and how retaliatory tariffs forced them to negotiate, whereas Reason’s cucked approach of “it could always be worse” allows anyone to run roughshod over our blind loyalty to free trade.

    Free trade is ideal. We should always pay attention to make sure it actually occurs instead of being apologists for other nations who violate its tenets.

    1. +1000

  15. In Latest Trade Negotiating Gambit, Trump Essentially Asks China To Put Tariffs on U.S. Manufacturing

    “Still, the Trump administration’s policy objectives were clear. American manufacturing had to be protected against cheaper products coming from China. If that meant farmers took it on the chin, so be it.”

    This is how Boehm justifies to himself the nonsense that he writes.

    Trump’s trade policy could have NEVER been to move the USA and our trading partners to less managed trade than pre-Trump. NEVER! Even when Trump offered free trade with our trading partners and they refused, it never happened…says Boehm.

  16. You idiots aren’t even correct within your own (flawed) little box of thinking.

    They don’t have to export more here you morons… We’ve been running a deficit with them for ages. They’re BUYING the net worth of our nation with their trinkets as it is. We’re trading our sky scrapers in our major cities, stocks in a major businesses, etc for the trinkets. If we export more, that doesn’t mean they need to export more to us, if it did we wouldn’t have been running in the hole this whole time!

    How stupid can you people be.

    Also, the only reason we don’t have China bent over and begging for us to pull our cock out and give us anything we demand, is because Trump hasn’t even tried to step it up where we COULD go, because he knows his hands are tied. If we threatened to slap 200% tariffs on 100% of Chinese imports in 180 days if XYZ demands weren’t met… They’d do whatever we wanted. Because we could throw their economy into a depression INSTANTLY, yet we could still import cheap crap from all their competitors with little lost on our end.

    Who has the upper hand matters, and for right now it is still us. Cuck morons like you have done so much damage to this country it is mind boggling. Fags.

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