More Tariffs

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US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin returned from two days of talks in China on Thursday.  After briefing the President on the results of the talks, the President announced a decision to apply a 10% tariff on an additional $300 billion worth of Chinese products.  These tariffs will go into effect on September 1st.

Hat Tip…CTH

At one of PDJT’s impromptu pressers this afternoon (always interesting) as he headed out to a campaign rally, PDJT was asked why he is waiting until September 1st.  The reporter thought PDJT might be giving Premier Xi an opportunity to negotiate his way out of additional tariffs.

THE PRESIDENT: No. No, no, no. It’s September 1. The reason is, it takes a long time for the ships to come over. And it’s a period of time. So I’m giving him four — like a four-week period of time before the tariffs go on.

While there have been no specific details about the negotiations, this move seems to indicate that the Chinese were not willing to start from where the negotiations left off.   And PDJT will not accept anything less than that.  Conversations that I have had with execs in companies that do business over there are unanimous in their assertions that the Chinese routinely steal trade secrets.  Lighthizer’s previously negotiated compliance and enforcement clauses, specific to each unique trade sector, are not negotiable.

Is PDJT trying to spur some movement in the trade talks?  The President continues to talk nicely about Premier XI.  However, I believe that the President does not think that a trade deal is likely with China.  This adding of additional tariffs appears to be in response to the fact that Chinese reneged on their word.  China had promised to buy significant quantities of agricultural products as well as to stem the flow of fentanyl out of their country.  They have not done either of these things.  Fentanyl is the primary driver of our opioid crisis.

It appears that China doesn’t want a deal. They want to ride things out until 2020, hoping for a change in leadership here.  The Chinese take a long view of things in general and probably believe they can make to 2020.

That remains to be seen.  China is having problems feeding its people.  An outbreak of swine flu has caused the culling of millions of pigs.  China eats about half of the world’s pork.  In addition, the fall armyworm is expected to arrive in China’s North China Plain where much of their corn is grown this year. Discontent can rise up quickly when people are hungry.

The Chinese are dangling North Korea again.  North Korea China shot off a couple of short range test missiles. No nukes.  No ICBM’s.

 

This will not work.  PDJT has already exposed the connection to the world.  Everyone now knows China is the one ordering the missile launches.

In the meanwhile, the multinationals that bet big on China will be howling.  But, smart business people will adjust their operations and transplant them to Southeast Asia, Brazil, Mexico.  Some are already doing so.  Additional tariffs may push others to join the crowd leaving China.  This will bring increasing prosperity to these other regions of the world.

All of this is good for freedom.  All of this is good for individual liberty.  Yes, some difficult times may be ahead for China.  In ten years if not sooner, China will be quite different from what it is today.  But, in the end billions of people will benefit from the increasing prosperity of the world from the changes wrought by PDJT.