Trump Goes Back For Thirds At The All You Can Eat Humiliation China Buffet
Okay, POP QUIZ. If you go to the grocery store and spend $16.87 on tofu, tampons, and tortilla chips, did you lose money on the deal? OR, is that just how buying stuff, or "commerce" if you're fancy, works?
Don't listen to that idiot. Or do, and just keep your knees together and eat dirt, whatever. The point is, President Arty McDeals assumed he could bluff and bully a billion Chinese people into harming their own economy by threatening to restrict access to the American market. So last year he slapped tariffs of 10 percent on about $200 billion of Chinese imports. In Trump's BE BEST brain, this is just like forcing GYNA to write a check to the US Treasury for $20 billion.
And while China has eaten some of the costs, Reuters reports that it's largely American importers and consumers who've paid the price:
A Congressional Research Service report in February found that the tariffs had led to an increase of as much as 12 percent in the price of washing machines in the United States, compared to January 2018 when the duties were not in effect.
According to a study by the Peterson Institute for International Economics, the steel and aluminum tariffs increased the price of steel products by nearly 9 percent last year, pushing up costs for steel users by $5.6 billion.
Separately, a study by the Federal Reserve Bank of New York, Princeton University, and Columbia University concluded that the Chinese and steel and aluminum tariffs cost companies and consumers $3 billion a month in additional taxes and companies a further $1.4 billion in efficiency loses in 2018.
As have American soybean farmers, who saw the bottom of their market fall out as China enacted retaliatory tariffs -- if you want to kick Trump in the nuts, Iowa's not a bad place to aim your boot -- and Chinese farmers went shopping for pigfeed in Brazil and Russia.
But fear not, Real Muricans, as Donald Trump has been promising for weeks that an amazing new trade deal is just around the corner. Except, on Friday, Chinese trade negotiators sent their US counterparts a new draft with one or two minor changes. Reuters reports:
The document was riddled with reversals by China that undermined core U.S. demands, the sources told Reuters.
In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.
Whoopsie! Guess our Asian friends worked out that a weak president, fighting for his political life and desperate to make a deal, might be willing to revise his position and try to sell it to his own constituents as a bigly win. (Plus, it's not like Americans are actually going to start making our own sneakers again, right?)
Naturally, Trump responded in his typical, measured fashion.
Just kidding. He threatened to impose an additional 15 percent tariff on hundreds of billions of dollars of Chinese imports starting this Friday when the Chinese trade delegation is supposed to be here to finalize the deal. Because supply chains have so much built-in flexibility and can easily absorb wild price fluctuations with just a few hours' notice. Look how excited the DOW was on Tuesday!
Image via CNN
At first, Chinese trade negotiators responded to Trump's bluster by threatening to cancel Friday's meeting. But now they've agreed to make the trip, and if it doesn't work out, they'll just impose retaliatory tariffs when they get home. Easy peasy!
Naturally, Trump is spinning this as a big win.
And maybe it will all work out. Or maybe we're on the verge of an exciting new trade war! Oh, look, here's the US Trade Representative's Notice that the new tariffs are set to take effect at noon on Friday, less than 48 hours from now. Never mind, we'd probably get bored in retirement anyway, right?
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Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.