Tariffs on China Don’t Cover the Costs of Trump’s Trade War

[K1052]

And now for a different kind of total policy failure.

But government figures show that the revenue the United States has collected from tariffs on $250 billion worth of Chinese goods is not enough to cover the cost of the president’s bailout for farmers, let alone compensate the many other industries hurt by trade tensions. The longer Mr. Trump’s dispute with China drags on, the more difficult it could be for him to ignore that gap.

Mr. Trump’s tariffs on Chinese imports raised $20.8 billion through Wednesday, according to data from United States Customs and Border Protection. Mr. Trump has already committed to paying American farmers hurt by the trade war $28 billion.

The government has provided no such benefit to the myriad other businesses, including plane makers, technology companies and medical device manufacturers, that have lost contracts and revenue as a result of Mr. Trump’s tariffs and China’s retaliation against American goods.

Trade talks with China have faltered in recent months, and Mr. Trump and his aides appear to be in no hurry to resolve the dispute, projecting confidence that China is suffering more of the harm, if not all of it.

Mr. Trump’s tariffs are undeniably hurting China, where exports power about 20 percent of the economy, compared with 12 percent in the United States. On Monday, the Chinese government said its economy had grown at a 6.2 percent annual rate in the second quarter, the lowest rate in 27 years.

There is little sign, though, that China’s loss is America’s gain. Much of the business activity is shifting to other low-cost countries, like Vietnam, with a transition cost attached for American companies that depend on them.

Numerous companies have announced changes in their supply chains or other effects from the tariffs, and more could be revealed as companies report second-quarter earnings in coming weeks. Nintendo has accelerated the shift of its Switch console to Vietnam from China, according to Panjiva, a supply chain research firm, while GoPro, Hasbro and other companies are reworking their supply chains to reduce their exposure to China.

Numerous studies have shown that American consumers are bearing much of the cost of the tariffs. Studies from the Tax Foundation in Washington and the Penn Wharton Budget Model at the University of Pennsylvania have shown that the tariffs amount to a significant tax increase on Americans, by raising the prices of goods. The damage is concentrated, as a percentage of income, among the lowest earners, who spend a larger share of their pay on imports than the upper middle class and the rich.

But the monthly pace of revenue collection from tariffs has not increased this year. That’s because America is importing fewer Chinese goods than it did a year ago, which has canceled out the higher tariffs on a larger share of Chinese goods.

That decline appears to be the product of an overall slowdown in trade — which has contributed to weakened exports for American manufacturers — and the shift in supply chains to other countries. Imported goods from Vietnam have risen more than 30 percent this year from a year ago, Commerce Department data show.

https://www.nytimes.com/2019/07/15/business/trade-war-tariffs-revenue.html

Costs up, bailouts to his political allies in progress, consumers paying, manufacturing not coming back, and China still giving him the stiff arm. While he lies relentlessly about it all.

 

[DrunkenSano]

Anyone that thinks that one side "gains" or can actually make some sort of profit off of tariffs during a trade war is foolish. It's a war, both sides will lose. The question is which side will lose more and enough where they cry uncle and surrender, forcing them to give up concessions to the victor so that the winner has a long term gain from the war.

 

[K1052]

Anyone that thinks that one side "gains" or can actually make some sort of profit off of tariffs during a trade war is foolish. It's a war, both sides will lose. The question is which side will lose more and enough where they cry uncle and surrender, forcing them to give up concessions to the victor so that the winner has a long term gain from the war.

President Deals promised that China would capitulate and do so quickly.

 

[zinfamous]

so winning = $8 billion + losses and the farming and factory workers taking the burden in cost?

Hopefully Webster's will update the listings for "winning," as they seem to be making many updates these days.

 

[fskimospy]

President Deals promised that China would capitulate and do so quickly.

I remember hearing on here that China would be surrendering post haste. Odd that this hasn't happened.

 

[brycejones]

Trump can’t even win a simple trade war.

 

[K1052]

I remember hearing on here that China would be surrendering post haste. Odd that this hasn't happened.

It's almost like somebody with basically no knowledge or experience hugely underestimated what the other side was willing to endure.

 

[dainthomas]

My brother works at a car stereo store. Their business is really hurting (and his commissions are way down) as far fewer people are buying stereos, alarms etc after the tariffs jacked the prices up. I thought he hated Trump before....

 

[ch33zw1z]

Im not sure why you guys hate America and winning so much.

 

[Jaskalas]

Economic genius here boys.

https://twitter.com/x/status/969525362580484098

 

[ImpulsE69]

So his plan is to file bankruptcy for the country because that's what smart people do!

 

[blackangst1]

Tariffs almost never do anything positive in solving a tradewar....

 

[JSt0rm]

nobody knew being president was so hard.

 

[K1052]

10% on the next 300B of trade starting in September. Happy Hollidays! People are going to feel this one and consumer spending is about the only thing propping up the broader economy. Also numb nuts was never close to a deal with the Chinese and all those promises of huge commodity purchases for farmers are again exposed as false.

He's also still considering tariffs against the EU and India. All this amid a slowing global economy.

 

[fskimospy]

The good news is that trade wars are easy to win.

As I've said from the beginning China is simply not going to give him large trade concessions because giving in to Trump's tactics would encourage more of the same. Also, and perhaps more importantly, Trump has zero credibility and China won't trust him for a second to abide by any deal he makes. Because Trump can't make credible commitments China has no incentive to offer him anything of value.

 

[K1052]

The good news is that trade wars are easy to win.

As I've said from the beginning China is simply not going to give him large trade concessions because giving in to Trump's tactics would encourage more of the same. Also, and perhaps more importantly, Trump has zero credibility and China won't trust him for a second to abide by any deal he makes. Because Trump can't make credible commitments China has no incentive to offer him anything of value.

Why would you make a deal with somebody who can never be trusted? You just don't.

 

[JSt0rm]

The good news is that trade wars are easy to win.

As I've said from the beginning China is simply not going to give him large trade concessions because giving in to Trump's tactics would encourage more of the same. Also, and perhaps more importantly, Trump has zero credibility and China won't trust him for a second to abide by any deal he makes. Because Trump can't make credible commitments China has no incentive to offer him anything of value.

The value add is China provides lax environmental standards and hard working low paid people. 2 things that can’t happen in retardville USA.

If he wanted to do anything make them abide by the same enviro standards we have. That will keep them more competitive.

 

[Fanatical Meat]

I’ll be honest this is one area where Trump has the right idea, if previously mentioned car stereo should be $300 but China does some shenanigans to sell it for $200 they really should be tarriffed (is that a word?) to $300.
Problem is like nearly everything else the President does he has no plan, spent little time making processes or thinking about his next step and will collapse the second he gets offered a few dollars to make the tariffs go away.

I forgot.
Fuck the small scale farmers and production workers. You guys voted for this shit, deal with it. I don’t want to hear you crying about it. No handouts either because you’ll just cast another retarded vote in 2020.

 

[fskimospy]

I’ll be honest this is one area where Trump has the right idea, if previously mentioned car stereo should be $300 but China does some shenanigans to sell it for $200 they really should be tarriffed (is that a word?) to $300.
Problem is like nearly everything else the President does he has no plan, spent little time making processes or thinking about his next step and will collapse the second he gets offered a few dollars to make the tariffs go away.

I forgot.
Fuck the small scale farmers and production workers. You guys voted for this shit, deal with it. I don’t want to hear you crying about it. No handouts either because you’ll just cast another retarded vote in 2020.

Obama thought China engaged in some unfair trade practices so he set up a new regional trade bloc that we were planning on using to pressure China to be better. Upon assuming office Trump withdrew us from it, alienating our allies and demolishing our leverage over China.

Now he’s left wondering why none of the things he is trying are working, because he’s an impulsive, incompetent moron.

 

[Fanatical Meat]

Obama thought China engaged in some unfair trade practices so he set up a new regional trade bloc that we were planning on using to pressure China to be better. Upon assuming office Trump withdrew us from it, alienating our allies and demolishing our leverage over China.

Now he’s left wondering why none of the things he is trying are working, because he’s an impulsive, incompetent moron.

Yup and I was no fan of the TPP however I’m starting to think I may have been at minimum partially wrong.
Regarding farmers & factory workers Trump
Literally said this shit on the campaign trail, the news media predicted farmers & manufacturing would be hit. They ignored it because #MAGA.

 

[K1052]

Lol Trump just told the WH pool that it would be fine if we did no trade with China since we would "save a lot of money".

Hopelessly incompetent.

 

[tweaker2]

Obama thought China engaged in some unfair trade practices so he set up a new regional trade bloc that we were planning on using to pressure China to be better. Upon assuming office Trump withdrew us from it, alienating our allies and demolishing our leverage over China.

Now he’s left wondering why none of the things he is trying are working, because he’s an impulsive, incompetent moron.

Dunning-Kruger effect exacerbated by sycophant confirmation directives.

 

[WelshBloke]

I’ll be honest this is one area where Trump has the right idea, if previously mentioned car stereo should be $300 but China does some shenanigans to sell it for $200 they really should be tarriffed (is that a word?) to $300.

You understand that China doesn't pay that extra $100 the American buying it does? Or the Americans dont buy it and the car stereo salesmen goes out of business.

 

[fskimospy]

Lol Trump just told the WH pool that it would be fine if we did no trade with China since we would "save a lot of money".

Hopelessly incompetent.

This is like saying I would save a lot of money by not buying anything from the grocery store.

There are no words to capture the full magnitude of Trump’s stupidity.

 

[Fanatical Meat]

You understand that China doesn't pay that extra $100 the American buying it does? Or the Americans dont buy it and the car stereo salesmen goes out of business.

Correct but that should be the true price and that is the price that can support US/responsible production.
We all buy too much cheap crap and throw it out too soon