I got that the Times hates Trump and anything he decides.
I agree with sentiments marking him as a mental-sluggard buffoon.
Yet at times, he gets some things right.
China's non-tariff barriers, its tariff barriers, and its euchring US jv's out of IP are no small wrongs. Great vote-getters in the US too--sth. impt. to note when all is political.
Even when China agrees to changes, it publicly denies doing so, then never makes changes anyway.
2
We are afraid of many and all things this impulsive, ignorant man might do. My money is in cash and will stay there while he has any authority. It would be like giving your savings to a difficult 6yo.
1
Trump and his staff demonstrate little understanding of basic economics, let alone the role of the federal government in today's international economic affairs. Given that they react to what they think might be best for whoever gets their attention, at any given moment, (as long as it does not adversely affect Trump's personal wealth), it's no surprise that they have no plan to improve things for most of us. They offer only, "A little bit this, a little bit of that . . . a hotel here, or a hotel there . . . ." Trump, as he always has, is "just blowin' smoke."
1
"Yet the trade deficit is rising, not falling, because Americans like buying inexpensive goods from foreign nations (like, say, China)."
Canadians tend to buy Canadian-made products because they know it supports their industries. The UK has run "Buy British" campaigns a couple of times over the past decades. The French are furiously proud of all things French.
I don't understand why the US government doesn't try a "Buy American" campaign. We are all subjected to endless statements of how great our country is, but Americans apparently are happy to sell their industries out to save a buck (and most of what we're buying from China is plastic garbage). Then workers complain that factories are closing down. Wouldn't a concerted effort on the part of our government to get consumers to understand cause and effect, and encourage Americans to buy American-made products help?
1
You know what’s a scary thought, daily? Larry Kudlow, the man who in 2008 famously declared the economy was on great footing and insisted that there was no credit bubble is the presudent’s right hand economic advisor.
3
Fittingly, the 90-day period will end on April 1.
2
Peace with China is the more reasonable option in every respect. The needlessly adversarial nature of American foreign conduct toward China has to stop, and it's clearly causing more damage to the American people than it is to China, the bogeyman that we are all brainwashed to hate.
17
I agree that Trump's punitive tariff policy will only hurt US consumers in the long run. Putting tariffs on imported goods will not suddenly result in the manufacture of those types of goods in the US. Our only hope for the growth of manufacturing jobs in the United States is government encouragement of research and development of clean alternative energy and advanced technologies. Neither this administration nor any other can bring vibrant textile or clothing manufacturing industries back to the US. Nor can the global trade in machine parts revert back to the 1950s when all this stuff was manufactured in Detroit. It will never again be feasible to manufacture that stuff here. But, the likelihood that this administration has the will to address this problem realistically is zero.
5
The incompetent, incoherent know-nothing with a tiny attention span, no interest in details and endless fact-free opinions feeds his narcissistic mania for attention by endless remarks that only serve to demonstrate supreme ignorance. For him, everything in life is a zero-sum game, and he is sure he's the master of winning. He isn't, but reality is simply not something he recognizes. Functional economic policy is lost on him. He hasn't a clue.
Eclectic Pragmatism — http://eclectic-pragmatist.tumblr.com/
Eclectic Pragmatist — https://medium.com/eclectic-pragmatism
4
Can someone please explain why the party that hates taxes is cheering this on? Is it because an increase in the price of consumer goods is no big deal to the rich? Are they that craven? (yes.)
6
Congrats for another excellent editorial opinion!
Few Administrations would resort to tariffs and other protectionist measures when the economy is in an upswing and near full employment. The Midterms results are in, Trump should have discovered that a deepening trade war with China wouldn't help his reelection chance.
So warming up to China is really Trump' s only choice, and the right course of action.
Hate Trump all you want but he has brought the issue of intellectual property theft and its forced transfer to the forefront of discussion.
Assuming Trump fails in getting any meaningful changes it will be interesting to see how the next Democratic occupant of the White House resolves the problem.
Put a pin in this topic.
1
Let's wait to put the pin in until the 90-day period ends on April Fools Day.
@Jp
As if any of that is news? Bill Gates famously told the Chinese 20+ years ago that if they steal software, at least he wanted them to steal HIS software.
1
The trade deficit is unsustainable.It is based on unfair trade policies and on stealing the intellectual properties of our companies.It is a long term national security concern.Tariffs are a temporary answer.
Obama did nothing.Trump is trying to fix it Thank you
Mr. President.
1
Trump is doing the country a favor by highlighting issues that we need to deal with but weren't discussing with any sense of urgency.
Racism, alive and well. Check.
Economic decline of middle class, exacerbating racist tendencies. Check.
China eating our lunch economically, and challenging us militarily. Check.
In a way, Trump is acting as our court jester. In medieval courts, the court jester's job was to say things that others could not, with the tacit understanding that as the court jester, he could not vie for power.
Trump has ascended to the ultimate seat of power, partly because he highlighted the issues that we would not face. If we can survive his presidency without fatal damage, we might actually be able to address these issues in a rational way, and thank the court jester for not allowing us to hide them under the carpet.
(TPP might have been the answer to China, but it was not sold well. If we had believed it, Hillary would be president now).
3
Sometimes I think Trump became president just to compete with Putin to become the first trillionaire. What better way than causing swoons and crests in markets and industries while your investment managers are prewarned on nonofficial iPhones. Good China day, bad China day. Surely the SEC would detect investments timed to his tweets like they caught Foster Winans. https://en.wikipedia.org/wiki/R._Foster_Winans
3
@Professorai: Yep, I never thought Trump's intention was to act as our court jester. This is a side effect of his buffonery and greed.
1
Why did you limit your headline to tariffs, Editorial Board?
This man doesn't understand health care coverage. He doesn't understand the role of the Department of Justice nor the role of the Attorney General. It has been clear for months that the importance of NATO is lost on him. Climate change is something he doesn't want to gain clarity on. All too often, both pundits and Americans at large have been left befuddled after a statement from him.... wondering "What was that all about?"
A certain lack of understanding about complex issues is understandable. An unwillingness to learn is unforgivable.
122
I recently went to a local bike shop to buy a new bike for my daughter. I try to support local, small businesses but I was shocked at the prices for kids bikes. I asked the owner about the high prices and he proceeded to tell me that he’s had to raise prices around 40% because of the steel tariffs. Being that my budget couldn’t manage his bike prices, I had to go to a big box store where they can still manage to absorb some of the tariff damage before passing it onto the consumer. I can’t imagine how his small business is going to survive. So much winning.
10
@Patterdee: Newsflash: Tariffs are 10%, and they are based on the wholesale price. A bicycle that wholesaled for $100 and sold for $200 would go up by $10, or 5%.
The dealer was lying to you, or his suppliers were lying to him.
2
Since you constantly deride Trump’s efforts to balance the world trading stage as some idiotic whim of an economic maniac, please have your in-house experts, Krugman perhaps, explain to those of us who are his equally dumb minions about the benefits to America of tariffs, intellectual property theft, and currency manipulation imposed ON us by other countries, especially China. Of course there are short term losers in this battle which you delight in highlighting, but the long term benefits to American companies will be spectacular when he succeeds. This is so patently obvious that to ignore it in your reporting only gives ammunition to your ‘fake news’ critics.
1
Please explain how this will work in the long term? On IP theft I agree with you and it needs addressing but tarifs are not going to solve that issue. Will you stop buying cheap goods from China and buy only American made, are you willing to pay more for the goods you buy? Why don’t you focus on simply producing better quality products which people actually want? For example Europeans will not buy American beef because it is the most hormone laden beef in the world, no amount of tarif réduction would fix that. Again I am willing to listen but please forgive me that I find the argument “just trust me on this” sufficient. It should be easy if it is all so obvious. Thanks in advance.
1
Read the PaulM comments on a small steel fabricator and see what you think then about short term pain caused by the geniuses in the WH.
Rather than providing an incentive to choose American goods over exports the tariff "taxes" make less money available for consumers to buy American goods and services. If, in fact, we are headed to a yield inversion the coming recession will be gratuitously longer and deeper.
5
I'll never understand how some people don't make the connection between free-market capitalism, and offshoring of manufacturing, etc.
1
@Tom what is your point?
1
@Paul W, I’m happy to spell it out in more detail:
Offshoring of manufacturing (and related erosion of middle America) are a direct and natural result of the economic system so many of us defend so vociferously.
Several commenters stated that we should bring manufacturing back. One commenter even stated he would be willing to buy American made for a ‘reasonable markup’ (whatever ‘reasonable’ means). The fact is that market forces will always reward the businesses that can produce things more efficiently and punish those that produce similar quality less efficiently.
If (as suggested by more than one commenter) we would like to artificially skew the ‘playing field’ to the advantage of domestic production, it’s still more likely to benefit a small and already powerful/wealthy minority than it is going to benefit a large sum of workers etc. The reason for this is that (again) capitalist forces replacing manual effort with ever increasing automation.
I’m not saying capitalism is inherently bad. But it is flawed (as is any other ‘ism’).
In other words, be careful what you wish for.
1
Bingo. The same republicans who pushed free trade and sent jobs overseas are the ones those displaced folks are voting for.
Makes zero sense.
But i still want my cheap stuff at the Walmart.....
1
Tariffs are doing considerable economic damage in small ways that most Americans don't see or feel. A small steel fabricator friend reports that when the tariffs on steel were imposed, American steel companies doubled the price for domestic steel. My friend had to reflect the increased cost in his prices and his sales went down. Eventually he had to reduce profits, the cost of his labor, to stay in business and was no longer able to hire help. He is barely able to generate a subsistence living at this point.
6
@PaulM: How can a 10% tariff of foreign steel allow a domestic steel maker to double their prices? What part of this equation am I missing?
Maybe he was charging too little for his steel before, or maybe he's gouging now. If capitalism works as it should, other domestic steel makers should quickly undercut his price and force him back into the mainstream.
1
So apparently the failing NYTimes understands the financial markets better than a billionaire?
1
Yes
8
If I could see his tax returns, I might believe he is a billionaire. As it stands now, he may have a negative net worth.
3
Ask any banker in the know, trump’s net-worth is negative. He is no billionaire. Why do you think we do not see those Tex returns?
3
What a fantasy of Trump and his supporters, to bring back manufacturing... unless we want to reverse and go back to
Here is why we don't have manufacturing anymore in America.
We don't want smokestacks in our back yards.
We don't want pollution in our ground and rivers.
We don't want suffering of our families caused by myriads of factory accidents and lawsuits.
We don't want our children to be laborers.
Hence we enacted laws that made it more expensive to manufacture in America, and let a willing China take that over. They don't care as much about their pollutions, their factory abuses, their health.
So let us ask ourselves. Do we really want to bring all the pollutants to our backyards again? Would it not be better to build our automation, services sector, our healthcare, our sciences and keep buying the pollutant and unhealthy to manufacture goods from China?
China will also figure this pollution thing out or choke.
The people who really need to read this will not.
6
They may read it - they just won't understand it. As evidenced by the comments herein of the Trump supporters.
4
I hope the New York Times remembers all this when a Democrat is next in the White House. The trade deficit is not widening because "Americans like to buy cheap imports" but because financial capital is flowing into the US, which makes Americans able to purchase imports cheaply. (The correct balance of trade, with financial flows included, is always zero by definition.) If the US wants to reduce the deficit in the current accounts (goods and services only), Congress might consider stopping the many implicit and explicit subsidies to borrowing and penalties to savings, which would induce Americans to save more (and thus provide more of the financial flows domestically) -- though how important this would be is an open question.
@Richard Langlois: "The trade deficit is not widening because "Americans like to buy cheap imports" but because financial capital is flowing into the US, which makes Americans able to purchase imports cheaply. "
That's international trade trickle down theory.
Next time another country buys bonds or someone from that country purchases real estate maybe they can send the check to someone who is out of work or underemployed (we don't hear that term much anymore).
Americans purchase imports when they feel they get more value either in terms of lower price, better quality at an acceptable price or the product is not produced in this country. This has all contributed to a decrease in the manufacturing base here.
Folks can hate Trump all they want and purchase the products they choose, but don't pretend those purchasing choices don't impact the American worker. And screaming "Automation did it!" does change things.
The trade war is over and the US lost. Just looking at nominal tariffs misses the more modern ways of winning.
And Trump graduated from the Wharton School? He is acting as if he attended Trump University School of Business majoring in three card monte.
8
@RWF
Three card monte? You’re exploding his skill set.
6
@db2 Touche!
4
Trump - simple meme: I come, I mess stuff up, I leave.
4
Hey all you stock market players who voted for "Tariff Man," how do you like them apples? Sorry for those whose retirement accounts are plummeting because of yet another stupidity from the Tweeter-in-Chief, but elections do have consequences. And those waiting for the coal mines to reopen are still waiting. Who'd have thunk it.
8
@Christy Stocks are still up overall.
It’s becoming more and more obvious that Trump is ignorant about just about everything except conning people for his own gain.
9
@Javaforce
Amen to that!
3
Aren't tariffs just tax-revenue producing border regulations?
2
NYT's how about a headline that states quite simply .."Tariffs are the TAXES US sellers have pay on the imported goods" Then a very short article explaining, again, that the tariffs/tax is added to the price we pay on the imported goods we buy at the store....most sellers of imported goods have to pass that tariff/tax on to us.... if not cleared up the die-hards will blame the "greedy" sellers or Obama or Hillary.... and Fox News will enjoy that
1
From the so-called president's tweet:
"We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN"
This man isn't even a good liar.
4
Tariffs are only one of the many things this man does not understand. This man whose gut tells him more than other people's brains, will leave his greatest contribution to history as the prime example of the Dunning Kruger Effect; "a cognitive bias in which people of low ability have illusory superiority and mistakenly assess their cognitive ability as greater than it is."
5
Maybe if everyone stopped paying attention to the one craving attention via twits, we can have grown-up conversations?
Americans still are 50% Republicans. Tells me a lot about how terrible America is because the party with such history as Republicans still even exists.
2
Actually 24% of the (registered to vote) population identify as Republicans. 42% Independents and about 30% as Democrats.
3
China has been stealing, cheating, robbing the USA for decades. This has cost us untold billions, soon trillions
They deny this stealth state policy, and they won't stop.
What are you going to do about it?
1
So now all trade policy should be dictated by the immediate market reaction? There are many things in life that have negative short term results but are amazingly good over the long term. I would think that objecting to the theft of Trillions of dollars of IP by the Chinese and correcting some unfair trade practices should be worth a little short term pain to market participants.
Also this idea that tariffs get automatically tacked on to the price of everything currently imported from China is second grade economics. The real threat to China is that industries (like building Apple's iPhone) move their production to Vietnam or Mexico or maybe even the USA and those jobs will never move back to China. Trump holds all the cards and is fixing some problems that other Presidents had no stomach to fix. Reagan was pretty protectionist with quotas to create the huge foreign-car manufacturing industry in the USA. Your children will thank Trump for his efforts.
1
As a Fox Business analyst said yesterday about the President's tweets, "I have seen better and more knowledgeable writing about trade scrawled on bathroom stalls!"
8
Last month I ordered a new blind from a manufacturer that sells you a good custom made product at reasonable cost. I was shocked it cost me about 35% more than an identical blind I bought six months ago. It is an aluminum blind manufactured by a Canadian company.
Let me echo the fact stated by many of your readers: Tariffs are taxes paid by us, the consumers. This needs to be repeated often until more Americans realize that we bear the brunt of it. The "tariff man" does not tell you its is a regressive tax hitting all of us. Tariffs do have a detrimental effect on the importer in the form of lower demand due to cost but in a global economy that is not a benefit to us either because it invited reciprocity. Perhaps Trump wants to minimize the cost of the "tax cuts" to the 1% on the sly. Or, he is really stupid a distinct possibility.
Personally speaking, I am tired of winning but I believe that nothing will change for the better until the orange one and his deplorable cohorts are driven from the White House. Sad.
7
The markets certainly voted with their feet, marching down the road: the DJIA, NASDAQ, and the S&P500 all dropping three plus per cent. The analysts can try their best, but they can not blame it on other than Donald's lies! His defeat by China is almost identical to his defeat at the hands of NK.
Who knew that trade was so complicated?
6
The old saying in America used to be:
if you are you are so smart, how come you are not rich. Donald Trump is proving
it wrong. He is rich but no smart.
1
If you want to measure the impact of tariffs, just go to the grocery store. Trump, as usual, picked a fight he couldn't win.
We, the american public, are surely the losers
4
So now the race-grievance NYTimes Editorial Board is full of market-based advice.
Beware!
For when Black Nationalists and other minority-rights activists offer opinions on the American economy, they are almost always in favor of enriching themselves.
And leaving working America "(white America", as a left-wing paper described them yesterday) out in the cold.
So it might be time for a full America to finally admit that its urban and rural differences are ripping it apart.
And start to think seriously about a peaceful separation that would protect the thoughts, rights and futures of all Americans.
And not just the urban few.
... it was the right thing to do. Just ask the markets
NO
The fell, a new record, today
When will the Trump controlled SEC investigate the inside trading that must be rampant among those “in the know” about Trumps pending Tweets. Someone must be making an absolute killing...follow the money...
Cleaning up the messes this administration has made is going to take 20 years.
6
Unless there were import-substitution for goods coming in from China, tariffs are taxes on the American businesses and consumers. For Trump’s tariffs to succeed, it will take years risking huge damage to American economy and paupering millions of Americans especially the Trump’s base. The Chinese and the world know this except Trump and his thugs because they are either ignorant or in denial. Time is on the side of the Chinese. Trump will fold soon as he has wiothe Canadian and Mexican .
Editorial comment. You said, "the current one is . . . rattling around like a loose part in the global economic machine. Wrong. It's rattling around like a broken connecting rod in a racing car engine.
1
Really?
-800 points.
1
Trump and the bunch of clownish-ideologues (the one with the white mustache is the head clown) that surround him have started a trade war that hurts us and the Chinese. Nobody will win. In the end Xi Jinping is smarter than all of the Trump cohort added together. He will finesse this in time. The way to deal with the Chinese is to make friends with them. Anybody who knows Chinese people will know this the right way to do it. You make friends with them, eat meals together, go visit famous sights when over there, etc. The Chinese value friendship above all. Nothing like a friend visiting from afar... somebody famous said a long time ago.
Reality Check tariffs are just naother form of nafta. Think about this how many trillions spent in last twenty years on imported computors for government use with are tax money. Usa never needed to import thing they freely gave away texile industry to china. Next came computors made in china. Now the electric cars wil be made in china. We are own worse enemy.
It’s clear that Tariff Man is the easiest mark in the world. Conned by “good friends” Xi, MBS, Kim Jong Un and, of course, Putin. Add Netanyahu as well. But the biggest con job was on himself: willful ignorance combined with “great intelligence”. Sad indeed!
4
Mr Trump has little appreciation for the fact that the United States is part of a global enterprise. His protectionist and xenophobic instincts prevent him from partnering with other countries in a responsible manner. Instead he has a tendency to bluster and blumber about the world stage as if he knew everything when it is imminently obvious how ignorant he is. His disastrous trade wars have and will hurt people, but then that is what this president excells at.
82
The structural issues that are at the heart of the legitimate US complaint about China (subsidies to industry, forced transfer of intellectual property by foreign investors) affect all countries not just the US. Any remedy of these problems will also help other trading partners with China, just just the US. The negotiations on these matters should rightly be in the WTO and not bilateral at all. However, it's not clear what Trump's real complaint about China is. Maybe it's just that he wants the bilateral trade balance to change. This is a meaningless goal in economic terms.
1
Trump only benefits Trump. The zero sum game works for him. The contrast of a Trump with the likes of George Bush or a John McCain should wake up the foggy voters.
1
The trade deficit must be the measure against which tariffs are set for China.
The larger the deficit, the larger the tariffs. If China wants to reduce tariffs, they must reduce the deficit.
It is a fool’s errand to negotiate rules with China when they have no intention of playing by them.
@Ken
But how does the trade deficit actually work?
An iPhone is assembled in China and every one sold in the US adds say $500 to the US trade deficit. However major components are made in Japan or Korea and the Chinese only contribute nimble fingers and a few low end components, maybe $50 in value. Apple also sell millions of Chinese made iPhones in China, making a few hundred dollars in profit on each one.
So are iPhones positive or negative in the flow of money from China to the US?
Using tariffs to leverage concessions from the world's largest economy is a ploy taken direct from the year 1932. Trump is not intelligent enough to manage his own finances without resorting to such chicanery as tax fraud, so why do we trust him to negotiate for our own, once the world's most robust, economy? Everything and everyone the orange toupee wearer touches is destroyed. Don't look too closely at the details of his bargains with China, they resemble that of Faust and Mephistopheles.
4
Most of all, Trump does not understand that in dealing with the consequences of a trade war, China's regime allows it to correct, "make-up" or repress its own market (and currency) because China follows a "communist" model. This means a "capitalistic" wannabe where the State owns and co-owns everything and represses and, suppresses what they do not like.
However, in our country, the market corrects itself (for the most part) and as much as the President wants to govern as a totalitarian emperor, our system does not allow it. Yet. Therefore, the consequences of a trade war could be really ugly for us.
Many comments point out that a tariff is a tax passed into the consumer so that’s s bad thing. I’m guessing everyone would then agree that taxes on corporations are the exact same thing.....a tax on consumers??? So when Trump cut corporate taxes you now admit that was a really good thing for consumers?!?
1
"...my two greatest assets have been mental stability and being, like, really smart."
"...not smart, but genius....and a very stable genius at that!"
"I always told people, you know I'm a very smart guy."
"China has total respect for Donald Trump and for Donald Trump’s very, very large brain.”
Feel better investors? Feel better farmers? Feel better manufacturers? Feel better GM employees? Feel better America?
We have an absolute genius in charge of the insane asylum. We inmates just don't understand tariffs, trade wars, how losing your sales markets for your soybeans is good for you, how rising costs of raw materials used in your business is good for you, how driving up the costs of your products is good for you, how watching the stock markets plunge is good for you. We can't all be geniuses.
3
When I see Trump at these meetings with foreign leaders, he seems totally lost. Look at his body language and look at his face.
4
This is why Donald Trump likes to surround himself with people who are not as smart as himself; and, why he has so much trouble finding anyone who fits that description.
1
Yes, American consumers are paying the terriffs and American companies are suffering in this "trade war." Trump is ignorant about economics including basic ideas about free trade dating back to Ricardo, and he's a blustering buffoon on the world stage. But, when the Times writes "In imposing tariffs, the United States has accused China of walling off markets, requiring American companies to share their advanced technology, stealing intellectual property through joint ventures, counterfeiting goods and outright theft in the form of cyberespionage," we should remember that these accusations are true. Regardless of the wisdom of Trumps response we are trading with a corrupt, tyrannical, and manipulative China that is practicing "state capitalism" all g with other more traditional forms of conflict - including military aggression that looks a lot like central Europe in 1936. While Trump bloviates we should never start to think that, if only Trump weren't president, China would be a reasonable partner.
34
As long as he considers everything constructive fake news, a witch hunt, a dark-state conspiracy, or Obama's fault, this kind of thing will happen again and again.
I'm a liberal Democrat who strongly disagrees with Trump's tactics (tariffs, not differentiating between friends and foes, democracies and dictatorships) BUT I can't agree to the short shrift the Times' editorial board is giving to China's egregious bending and breaking of WTO rules.
Who are these "American businesses which operate in China" that want a "gradualist approach?" Could they be the same cast of "engagement" fans who got us here in the first place?
Status quo ante ain't gonna cut it! China must commit, in writing, to new rules of the road.
If Trump were really trying to fix this he would have built a coalition with the other big economy democracies and China would have folded quickly. The fact that he chose to alienate our allies shows his real goal is to destroy the US led postwar paradigm and clear the field for the global oligarchy mafia.
3
Our resident fathead is rather like one of those medieval court jesters with bells all over him. Every move is signaled long before it's made. That's because all his theater is aimed at his not over bright base and not actually the resolution of real problems that exist in the US trade relationship with China.
2
Sometimes you elect people because they tell you they can play chess better then anyone else. And they know the best people who can play 3D chess
Then you come to find out they are running around holding a box of old checkers with a battered checker board.
On the one hand, this paper in particular and the establishment in general, wails and gnashes it's teeth with regard to climate change, global warming and greenhouse emissions. China is the single biggest polluter in the world and bringing China's citizenry of 1.5 billion up to western consumption standards is the single biggest threat to the health of the planet ever faced by mankind. China, by inputs, pollutes more than the U.S. and the E.U. combined. Given that Chinese carbon outputs are unregulated, given their coal emissions are unscrubbed, it is easy to assume China's actual damage to the environment is far greater when measured against the West and our superior regulation.
On the other hand, this paper in particular and the establishment in general, oppose any measures that will slow China's ascent and possible destruction of the world as we know it because "the markets" want the extra gross margin which comes from the environmentally unregulated, low cost production which is de rigueur for China. Production that is then given access to the American marketplace and pays almost nothing for all the ills it incurs to American working people and the global environment.
Liberals and those who are concerned about the planet should be ecstatic over the prospects of Chinese tariffs. Over the prospect of anything that tamps down China's continued assault on the globe and it's limited resources. Why don't they understand what's at stake?
1
@Arthur Taylor
I think what you are saying is you recognize an American standard of living applied to the whole planet is a recipe for disaster. Agreed.
But your solution is to keep poor people from bettering themselves. You single out the Chinese because they pulled hundreds of millions out of grinding poverty but if the billions of people in the Indian subcontinent or Africa were to threaten a similar rise, your arguments on the environment would also hold true.
Selfishly telling people they must forever remain below your standard of living and establishing measures to ensure their continuing poverty. Is that what America stands for?
1
Perhaps Republican politicians from states like Nebraska and Ohio can prevail on Trump to see the damage from his policies and the potential political consequences. Otherwise, we're faced with policy based on fantasy notions of using tariffs to punish nasty foreigners and restore American exports.
“We are right now taking in $billions in Tariffs.“ Nice try, but tariffs are just a tax, and ultimately our consumers, workers and farmers (read, citizens) foot the bill. Just ask the farmers in the Midwest and laid-off auto workers at GM.
1
The Trump administration's use of tariffs differs from most previous administrations in that they have - from the beginning - been considered bargaining tools, not punishment devices.
Temporary phenomona.
Employed as such, they are very effective.
A month ago I had to buy a new fridge. I'm glad I got it now instead of January.
The tariff is simply a tax added to Chines goods to make them cost the same or more than the same good made here. This tax is paid by the person buying the product or the company importing it. Trump believes this will cause the Chinese exports and economy to slow giving him leverage to make them agree to what he wants. At least for the short term this will hurt the US population either directly when buying a product or indirectly like yesterdays stock crash. I believe a far better long term solution is to make American business more efficient with a better educated and trained work force and a modern infrastructure /transportation network. Trump and his pals cant see this as they want quick, headline grabbing news showing them punching back regardless who is getting hurt.
3
For all those well-meaning Americans who believe Trump knows what he is doing, I refer you to his words Tweeted for all to see:
"I am a tariff man...We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN"
Who does he think is paying those tariffs? Clearly he does not understand that he has raised taxes on American consumers. This makes him almost criminally incompetent.
17
The problem is very basic. Spending more than one earns does not work. America can afford to import no more in $ terms than it exports in $ terms. That solution also is basic, exchange control. Grant US exporters $ exchange credits that US importers must buy before exchanging and spending equivalent $ elsewhere. That eliminates all concern with tariffs and tariff wars as a means to resolve trade imbalance. Trump twits will not do it.
As for what China demands of private companies for manufacturing there, China is a sovereign nation and will makes its own rules regarding such matters. Companies will make their own decisions about whether or not to agree to those terms and manufacture there. Trump will not decide for them.
1
This editorial is almost completely wrong-headed.
No question that US-imposed tariffs hurt the US economy, at least in the short run. But Clinton, Bush and Obama ignored China's high tariffs against US products for many years. While China imposed outrageously higher tariffs, it forced US companies to reveal technology, required majority equity partnerships, and stole what technology they couldn't gain through restricted access to its consumer market.
And, there is nothing believable about China's supposed efforts to "further widen market access, raise policy transparency and impose fair and impartial regulation". China has not honored its promises since Nixon first opened the doors to a new market for American businesses.
China has much more to lose through a protracted trade war than the US. If the US does not act now, China's strength could exceed US dominance over time in that part of the world. The new Chinese military installations on disputed islands in SE Asia are evidence of that.
Finally, GM is not cutting jobs because of the tariffs, though its costs have evidently risen by them. GM is shuttering plants because the taste of the buying public has changed from sedans to SUVs and pick-ups. Its disingenuous for the editorial to suggest otherwise simply to make an argument unrelated to the costs of doing business in the US for General Motors.
5
Trade wars are NEVER easy to win because everyone in them loses.
1
Tariffs are paid by the purchaser, therefore tariffs paid on Chinese imports don't bring in billions of dollars to the US, it is an indirect tax paid for by Americans, money already here. The indirect effect is meant to be redirecting purchases to other (hopefully domestic) suppliers, but if the billions of dollars trumpeted by Trump materialize, it can only be from American consumers, not extra, foreign wealth brought to the US.
9
"...as he found out with Mexico, Canada and now China, trade is more than the sum of goods and services exchanged between nations."
Did I miss some recent news? As far as I know Trump only considers goods when evaluating trade relationships. Well, in a way he considers services but lumps them in with goods.
While partnering with China in many respects is advantageous and unavoidable, they also cannot be trusted as far as we can throw them. We should not be overly swayed by the cheerleading pro-China US business crowd. They are the voice of short-term gain, not reasoned, stable diplomacy. On the other-hand, as many have said, reckless tariffs are not the way to keep China on the good side of the good partner ledger. Out interests and actually those of China, would be best served by resurrecting, as best we can, the TPP and be a general strategy of re-engagement in the region. Strengthen on our market power and alliances and compete well with China. This is not a panacea, but it definitely is superior to our incoherent and counterproductive current approach that appears to be based upon mere nothingness.
5
If trump blinked, it might have been because his brain was trying to catch up with what the adults were saying about trade and tariffs. Then he demonstrated that he ignored and/or misunderstood everything they were trying to tell him, because he went out and styled himself as the Tariff man in one of his usual error-filled mis-tweets.
7
No doubt Trump brings to the US presedency unprecedented disrespect for the highest office, a lifelong attitude of dysdain for law and order, aspirations of becoming one of the thugs of the highest order and contempt for the meek and the poor. Qualities befitting a man with little redeemable attributes. However one aspect of his personality has been very successfully covered-up is his inability to learn. Perhaps it was his ignorance (or even arrogance) which has been the biggest obstacle in achieving anything meaningful in his personal and professional life. Now it is our national catastrophe.
14
What a wonderful opening sentence.
1
Wall Street and Corporate America have been the enablers of China's destruction of American jobs. They salivated over access to China's market, and made a devil's bargain for temporary profits in exchange for the forced transfer of technology and mass layoffs.
Trump voters know this viscerally, seeing their towns and factories devastated by trade with China. The liberal elitists on both coasts may bemoan the rise in prices for their latest "iphone XXX," but the "Basket of Deplorables" will have their day.
@javelar
Capitalism is all about competition and the US lost in in it's competition. The US has always sought the lowest prices in resources and goods. Capitalism is all about maximizing profits by having the lowest prices in wages and resources.
It isn't the 'liberal elites' who have done this, but the rich supported by the republicans who have wreaked havoc on the rest of america. Reagan started the opening of business in other countries for profit. Under him wages started to become stagnant and have continued to stay that way under the trickle down theory that by giving all the money to the rich, the rest of us would benefit. It proved to be a lie. Only the rich got the benefits.
I don't see any day coming for you, trump's policies are hurting the deplorables. The conman isn't going to help you at all. But he will help to take whatever wealth you have left to give it to the rich.
Oh by the way, automation has been the biggest job destroyer in the US and as technology continues to improve, it will increase job lose. It is quite possible within 10 yrs, that trucks will be self-driving, which means many truck drivers will lose their jobs. And that is just one area where jobs will be lost to automation.
2
It's almost as if, the day before a new trade war tweet, Trump tells his friends to sell their stocks. Then he does his Tariff Man tweet. And then they all buy stocks at much lower prices. I mean, that's what I would do if I was a scheming, immoral liar who also happens to be POTUS.
6
Okay, remind me again why Congress allows Trump to dump his tariffs on other countries.
Stop with the Chinese Propaganda. It's not Trump's trade war. It's a 20 year old war that the last 3 presidents just caved to because the bankers were getting rich outsourcing.
1
@John
So what jobs do you want back from China?
Sewing up underpants destined for a one dollar store? Making low quality plastic toys bought, broken and discarded within hours? Rushing from your dormitory and working 16 hours a day on an assembly line because Apple is releasing a new iPhone and they want millions ready for launch?
These type of jobs are repititive, boring, underpaid and sometimes hazardous. Tariffs on China will only move them to the next low wage economy. Is making the US a low wage economy what you want?
3
'Yet the trade deficit is rising, not falling, because Americans like buying inexpensive goods from foreign nations (like, say, China). '
It has been my hobby/obsession for many years, to check, whenever I am in a store to buy something or simply checking things out, to see where a product, be it clothes, shoes, cameras, gadgets, kitchen tools, whatever, is made.
I often do see India, Pakistan, etc., on clothes' labels, sometimes even places like Lesotho (!), Brunei (!), Bahrain (!), etc. But it seems that almost 90% of the time, it is 'Made in China' on most products!
And for the last two years, we ourselves have owned a Volvo SUV The car is made in Sweden, but the Volvo company is now owned by the Chinese!
But with Trump's magic wand, we will shut them out of the American market very soon.
2
The markets only represent the expectations of the very richest selfish people who will betray their country. I’m talking about Henry Paulson. He has known for years what harm trade with China will bring to America but he cares only for himself and his wealthy buddies. Those of us that have lived and worked in China for years know that enriching China is as smart as the idea of trade for enriching Japan and Germany in the 1930s. The super rich do not care that they are helping build the militaristic regime that may start world war 3 after they have unloaded their positions. The Chinese believe they can outlast anyone in terms of enduring hardship and soft Americans are to be played like a violin. A tariff truce signals to China that Americans cannot endure any turbulence in their opulent lifestyle. America blinked. Sigh. Was Lightizer consulted as to a truce? Navarro?
5
To tariff, or not to tariff, that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous imports,
Or to raise tariffs against a sea of Chinese products
And by opposing end them.
As with Hamlet, so we wonder whether Trump's tariff-madness is real or fake? They market gyrates each day in paroxysms of hope and fear. Every day of uncertainty, every day of fear, damages the economy and the market edges slowly toward despair...
2
US Congress/Republican leadership needs to hold Mr. Trump back before he does what he has done to his various businesses - he is ready to bankrupt the country as he pushes the economy towards recession.
The track record of his advisory like Kudlow and Navarro isn't stellar either.
Yes the US treasury makes money on Tariff Mr. Trump but eventually the consumer pays for it. You are taxing the poor people again as the rich has more money to spend whereas the poor middle class folks who are deciding to buy food for the kids or get healthcare are the ones suffering.
2020 is not that far away if the Republican leadership is not going to act know to rein in this bombastic rhetoric of this President, they would loose the Senate also.
6
China is not a fair trading partner. But how receptive is the United States towards trade with the rest of the world?
High tariffs? Yes, among others, the US has a 25% tariff on light trucks, a significant part of its auto market. Non-tariff barriers such as import quotas? Try importing sugar into the US. Subsidised exports? US agriculture is subsidised by billions of dollars under Farm Bills.
In all those ways, the US is just another protectionist nation and getting worse under Trump. What is unique is the US dictating trade between its allies and countries under its displeasure through economic blackmail, something so far China has never attempted.
If you want a trade alliance against China, better put your own house in order.
7
Dear Mr. Tariff Man -
From my Company's POV ... so we add a price increase of 10% to 25% to our products. Understood without any added value, enhancements, upgrades ... or even 'new & improved'.
Sidebar: the unforeseen & unplanned up-charge in the pricing process leaves customers & consumers unhappy.
Conversely ... we can operate bare bones or perhaps at a loss.
Easy ... peasy!
8
Trump doesn't need Cohen as his Fixer anymore for his messes like this. He's got the Senate, the House (for another 6 weeks) and the Supreme Court. What? Him Worry? (That's a reference for us Old Folks).
5
Re: Tariffs, new taxes , and all that jazz
The government needs a certain amount of money to operate. It can raise that with tariffs, (for most of its existence the method used by the US) or with income or consumption taxes (last 100 years)
In the end, it is a wash, because in the end it is always the American middle class that pays, because that is were the money is.
Given the irresponsible tax cuts of Trump, the government will sooner then later be forced to raise taxes.
It does not matter to US taxpayers if that comes as tariffs or as an increase in the taxes you pay on April 15th.
In the end it's them who pay
However, doing it with tariffs may save some jobs.
3
...and lose many others!
Virtually all the readership of this column and the editors themselves are allowing their reason to be blinded by their hatred of Trump. The truth is that the United States has been sold down the river by every past President - most notably Bill Clinton who started the great sale of America to China. Trump recognizes that trade without local manufacturing will result in economic colonization. He simply lacks adequate tools to do anything about it. Maybe the US is already lost. Maybe it has a chance still to claw back from the edge. Dont like Trump? Google "Thriftville Squanderville" and read an article by Warren Buffet from 2004 in which he talks about a form of tariffs as the only way to prevent the economic colonization of America. Please focus on helping the country understand how serious the situation is for itself from past policy rather than clouding it with statements of disdain for the President. For what its worth, I dislike many of Trump's policies but on China he is absolutely correct.
6
@CommonSenseEconomics
And how does the US compete? By lowering wages until they match the chinese wage? It is far more expensive to live in the US, so wages must be higher or you will continue the trend of min wage jobs which do not allow people to support themselves. And if wages are higher, then the product price is much higher. Poor people can't afford expensive goods. Which is one reason why the capitalists have sought the cheapest goods.
The US is not self-sufficient nor can it be. The entire history of the US has been one of gathering cheap resources and labor in order to generate wealth. And often that has come from other countries.
Capitalism demands maximizing profits, which one can only do by keeping wages and resource costs low. And Reagan started the outsourcing to china, not Clinton. Bringing manufacturing back is fool's gold, there is no way to compete in price. And as the farmers have learned, putting tariffs on chinese goods, means the chinese stop importing their goods. Which is why trump was offering 10 billion $ to farmers in relief aid. And farmers are just one of the groups to be hurt.
Americans consume more than any other country per capita. Which is why our exports do not match our imports.
I remember Rick Perry saying texas would become competitive with china, his way was to reduce US wages to what the chinese made so that it would be cheap enough to make things in the US again. Try telling americans they have to live on 2$ a day.
3
Trump's ignorance on this subject is astonishing. Any first year student of economics knows that tariffs are a tax on domestic consumers, not on the foreign companies being targeted. So when Trump boasts that "we are taking in $billions in tariffs", he is saying the federal government is taking in more money from each and every American. Way to go, Mr. President.
20
Trump didn't blink, he's giving China the opportunity to reconsider their position - which they did, with their new IP announcement.
The goal of this particular engagement is to demonstrate to China that the US is willing to pay the price to get what it wants. China is in no position to do the same, due to their domestic stability issues (which tend to be overlooked or ignored by the Western press). China needs to open its markets. It's been playing by rules designed to work in China's favor...but the time for favorable treatment is over.
2
Tariffs are not a tax. They are a cost imposed on importers who are taking advantage of cheap overseas labor. They are the most efficient way to bring jobs back to the United States and protect America's working class. The NYT doesn't get it.
@Sam Rose
Tariffs are most assuredly a "tax", specifically a government-imposed charge for the privilege of importing the goods under tariff.
Unless the importer "eats" some or all of the tax amount, guess who gets to pay that extra amount?
Hint: the ultimate consumer gets to cover that extra expense.
Simple math.
23
@Joe From Boston nope. A tax is imposed on everybody who fits in a broad class. A sales tax has universal application on all purchasers of a particular good within a particular jursidiction. Tariffs do not. Moreover, tariffs are paid by the importer at the port of entry not at the point of sale to the consumer. A producer who uses steel doesn't pay the tariff and domestic steel is never subject to the steel tariff.
Sam, wrong. The consumer pays the tariff when they buy the product as its price has been increased by the producer to cover its added cost brought on by the tariff.
22
Y'all powers that be are going to rationalize and justify until the USA looks like Germany in 1946.
Is it right to temporarily juice the markets, so Trump gets re-elected, while allowing the Chinese Communist Party's currency manipulation, intellectual property theft, and other bad behavior go unchallenged? That's some terrible short term thinking.
3
despite his assertion that he went to the best school ( a transfer student not a direct admit!) he clearly missed the classes in Econ 101 in which you learn that tariffs are protectionist taxes on the host country. His trade policies are disjointed and DUMB. Wharton should ask him to give back his degree!
9
I still mourn Trump's impulsive decision to leave the Trans Pacific Partnership because President Obama had promoted it. America was given trade access to many countries that are no longer open to our trade. Of course, China wants to be recognized in its part of the world - and should be. In the US we have enough problems to solve in our part of the world. But Trump's choice of Saudi Arabia, Israel, and Russia for unconditional love, abandoning partners who have helped keep the peace since WWII... no words can describe the bad judgment (ignorance?) Try to forget who was responsible for the Vietnamese War disaster. Try to forget W's unprovoked attack on Iraq.. or the 17 countries where our military now tries to make friends, but doesn't.
The press didn't do a good job of explaining the advantages of the TPP. Now it's too late. I'm sure China doesn't mind our absence. Nor did the press do a good job explaining the cost of unprovoked military attacks on other countries.
10
@MGL The TPP would have been a disaster. We have seen America's workers lose their economic security while a tiny number have grown unimaginably rich as a direct result of trade deals - large and small. I can't understand why so many otherwise intelligent people don't get this.
2
Just another of the Faux Pas de Trump.
5
Good idea, NYT. If China won't give in, despite the loss of millions of US manufacturing jobs since they were allowed into the WTO and despite their sophisticated methods of taking US technology by financing dummy corporations to buy controlling shares of US tech companies and then transferring the technology to the Chinese military, better we just let it slide rather than have to endure any pain or dislocation.
And if there's any pain left at all, well, there's always all that fentanyl coming in from China that can help sooth it , no matter the tens of thousands of US deaths each year from it.
But NYT America doesn't like sacrifice, and it doesn't like pain. And it doesn't like even a chance that Trump ends up winning on something that is in America's long-term interest despite the short-term sacrifice. In fact, if the NYT Editorial Board of today existed back in 1861, it would have called Lincoln delusional and urged we just let the South go its merry way. Who needs the hassle, after all.
2
I guess you don’t have any money in the stock market.
Trump blinked over the weekend. A Truce? The markets gyrated upward yesterday. The Times editorial board publishes. Trump blinks again between then and now. The markets gyrate back down.
No Truce, after all?
Tonight, Trump will tweet that Obama is responsible for market declines.
What will the Tomes editorial board offer up by way pf analysis now?
1
While I find Donald and his ilk dismissible, i.e. (born into it $$$. Didn't necessarily earn it, I find it disturbing that the NYT would post such a wall of text without at least refuting this..."We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN"
Because if this statement by Capt. Narcissist in Chief is factually correct, then to my absolute horror, he wins! Fake (narrow focused) news. Or did I miss it in the article? I am old and tired so maybe I skimmed past the part where I would have shut him down by disproving that we are not taking in $billions in Tariffs. Because if we are, I don't know what to believe anymore.
1
@Munthassem Khan
Tariffs are taxes imposed on the importer, not on the exporter.
The importer adds that additional cost to his cost of goods and other operating expenses, and then applies a profit margin, to determine a total cost for the goods.
The CONSUMER pays that total cost.
YOU, the American consumer, end up paying the cost of the tariffs.
China pays ZERO.
Delusional Donnie cannot do simple math. Maybe that explains why he went BANKRUPT 6 times, four of those times running MONEY MACHINES ... er ... casinos.
How talented must one be to go bankrupt running a casino? Four times takes exceptional talent, and no ability to learn from bankruptcies 1, 2 and 3. Delusional Donnie actually managed that "success" - he won 4 times at the game of BANKRUPTCY running casinos.
So much winning, my head is spinning.
12
@Joe From Boston you do not understand how pricing works. Assuming a reasonably competitive market, the additional costs imposed by the tariff do not meaningfully lead to a cost increase. They do lead to higher wages however.
@Sam Rose
When the ONLY SUPPLY comes from an overseas source, as is the case for many products we import, your argument fails, because there is no "competitive market", except by one importer eating the tariff costs to get an advantage over another importer.
Wages only go up if there is also a domestic supply.
Look at the history of Smoot-Hawley in the 1930s.
11
As this piece points out, the Chinese have been having our lunch and stealing our technology for decades. I say Trump is probably on the right track and will win this one in the end.
The market is not a good enough indicator by itself alone.
2
The devaluation of the dollar has a following among economist it would have the basic effect of raising exports and decreasing imports without the issue of tariffs raised. There is a mythical attraction for ‘a strong dollar’ that needs examining and The Times could lead that discussion. Now would be a very good time.
2
Are Trump´s proxies selling the market short? Though ignorant on many topics, he has seen the power of the tweet to cause market gyrations and I´m sure he´s been taking advantage of the ability to take a position before tweeting.
It feels like our country is being piloted by a person who has seen a history documentary about pilots and thus thinks he knows how to fly. Get out the barf bags and assume the crash position.
3
Where is that beautiful middle class tax cut he promised for soon after the mid-terms? Never heard peep about it.
9
So, was this editorial composed before or after the DJI dumped 799 points today (12/4) and the bond yield curve inverted?
"Ask the markets", indeed!
Time alone will tell how great the damage (or benefit) of the whipsaw Trump policies (if one can call the president's tweets any sort of coherent policy) may be...
12
Well in the long run, China has more to lose with the sustenance of this trade war. The problem will be that the war’s sustenance will exceed Trump’s one term and may indeed end up sinking him because for instance the US growth rate or the economy tanks. And the US electorate brings in another Obama type softie in 2020 and China smiles again.
Net: Trump has the courage to stand up to China. And it will hurt China, and rightfully so, for a variety of reasons. But the US political systems are just not designed for long trade wars, and that may be a problem that Trump is starting to highlight.
2
Sure am glad we have a "businessman" "leading" our country. Not.
10
The president "blinked"?? He always blinks. He's all bombast or, as one of my colleagues said, all sizzle and no steak.
His other go-to method is to declare defeats to be victory. He did it with the mid-term elections. He probably did it when he was in business and declaring bankruptcy multiple times. He lives off money his father gave him and the multiple scams he has run over the years. (See, for example, Trump University.)
Remember the candidate's health plan? No details, but he assured everyone that it would be terrific, that everyone would love it, and that it would be less costly than the ACA. Two years on: nothing. There was no plan, ever.
This guy has less to him than the wizard of Oz. He's all smoke and mirrors. Something goes wrong, and his first reaction is not to try to set it right, but to find someone to blame. Never him, of course; this guy has never made a mistake in his life. The bankruptcies, divorces, stiffing contractors, extra-marital affairs were all "successes" in his book.
Anyone who believes that he would have gone into the school where a mass shooting was taking place (and with no weapon, no less!), please call me; I have a bridge to sell you. It goes nowhere.
15
The markets jumped up on the initial news and then plunged on the reality.
17
@Jerry in NH Indeed - You just given a succinct description of the nearly two year Trump "presidency
1
While Fox "News" and his supporters wear blinders, everyone else - including everyone not in America - sees Trump for what he is: a giant fraud and liar. Why would ANY country want to do any deals with him? The only good news is that for all his bombast and bragging, he hasn't actually been able to implement much of his agenda, Were he able to do that, we might already be in the throes of another Great Depression, with war on the horizon.
Hmmmm. I wonder who else came to power at the advent of the Depression and caused a World War?
6
As an ordinary citizen, I’m waiting for the financial windfall that was promised to me for all of this”winning”. I’m waiting for the huge hike in my take-home, the substantially higher standard of living, and the much lower prices at the market. Not to mention all of the great infrastructure that we were promised. Any day now. Any day...
14
@Mickey
I am still waiting for Regan's peace dividend.
you'll have to wait a long while for your financial windfall.
5
I’m still waiting for that healthcare plan he promised in the debate. I guess his
Plan is “don’t get sick, don’t get in an accident, good lord, NEVER get an autoimmune disease or have a kid with Downs....”
2
Raise taxes on the voters for Trump to help pay for the carnage of his presidency experienced by even themselves, let alone the rest of us.
10
A day late. Read what happened today. Tweets can really upend a thesis.
4
Life is getting more expensive under Trump's thumb, and in a most stupid way. This is a failed businessman (4 or 5 bankruptcies) trying to show his prowess in screwing things up. And his advisers aren't any better, parrotting whatever their boss mumbles in between his Fox Noise pseudo-reporting...and his impromptu lies whenever he is asked about uncomfortable facts. We are currently in a lose-lose situation that Trump carefully ignores...while we are left holding the bag. Can't we see we are living an institutionalized violence called 'pluto-kleptocracy'?
9
Trump’s trade war is subjecting more than one-fifth of total U.S. trade to higher tariffs. Trump's base thinks this is a smart idea and that Trump is actually trying to save their jobs.
Trump and his base are wrong.
Trump and his economic team are in the tariff business solely for the false sound bite that tariffs will bring jobs back to the U.S. This false sound bite goes to the republican base, and a false sound bite is all the U.S. gets out of setting retaliatory economic tariffs on industries.
Every college 101 macroeconomic class teaches the basic principle that tariffs do not work, tariffs almost always backfire, and tariffs usually cause more economic and social harm than good to countries setting the tariffs. Data and experts resoundingly agree that focusing on tariffs as a solution towards saving jobs here in U.S. is wasted time and counterproductive in the extreme.
Bottom line: Prices for virtually all products sold in the U.S. that are covered under the tariff policies of Trump are going up....Way Up. And the big whoosh sound we're hearing is the sound that manufacturing jobs are making as they exit the U.S. in response to Trump's tariffs.
Memo to Trump's base and folks advising Trump on trade and tariff policy:
Wake Up!!!
10
Everything in trump's little world is transactional. While that may have worked for a relatively small business in a single industry, he lacks the intellectual capacity and curiousity to understand the implications of this approach in a much broader global environment. Not only is he frighteningly out of his depth, but his arrogance and wildly inlated self image which prevents him from seeking input from true experts (rather than Fox pundits) compound the risk
8
Tariff man says he owns 500 companies at least, and no one suspects at least one of them of raking in tons of money each time he tweets some idiocy that sends the market into a frenzy? Well past time to make those tax returns publicly available so even his supporters can see with their own eyes that "he knows how to make money" implies his taking it right out of their pockets. While they are watching, no less!
3
Oh what an act it is! Slapstick economics starring Curly Lighthizer, Larry Navarro and Mo Bolton. All to the delight of an audience of One. Has anyone seen Shep Laffer? Shep, where are you...
5
Trump and team's deal making efforts would be blown off by China if he weren't the President of the United States. The President suffers from the illusion of believing that China is responding to his prowess as a deal-maker. The President of China is in for life. You have to believe part of their calculus on trade deals with the U.S. involves the longevity of Trump. They like many others will have to navigate the troubled waters of trade wars with Donald with an eye on doing the least damage to their economy for whatever times it takes.
It is too bad that somebody didn't think of banding together with the major players of the Pacific rim and other trading blocs to bring China to the table with an allied front.
9
Not only are American consumers and manufacturers paying a lot more for Chinese imports, American farmers are losing huge Chinese markets and now American investors are stuck on an out-of-control roller coaster propelled by their President's "strategy" vis a vis China.
Sun Tzu would approve of the real strategic dynamics here: To come out on top, the Chinese didn't need to do anything after the Argentina dinner except remain quiet and let the Trump cabal's strategy of deception and bad faith fall apart under its own falsity and contradictions -- not to mention the weak and incompetent generalship attempting to carry it out. What a humiliation.
The big surprise to me is that there was anyone left who still believed anything these people had to say and bet serious money on it. How many times do you have to be lied to and conned before you realize you're being lied to and conned, and that it will never change?
6
Definitively Trump is no "Tariff Man". However, Trump indeed is a Bankruptcy Man. Six times, to the detriments of people who invested in him. The question now, is USA gonna be one of them investors' ?
2
Its in the America's interest to remove Trump, where are the Senate Republicans? Dereliction of duty, is that a crime?
6
If one looks closer at trump mode-of-operation, it is easy to see.
When on stage alone facing his ill-informed crowed - he plays the tough-puff dude. BUT, when he shares the stage with other leaders - they looking straight into his eyes, he melts like a butter left out in the sun.
PM Abe, of Japan, President Macron of France, Putin of Russia - they all have figured him out and play him like a toy to get concessions - praise him with phony platitudes, to lead him believe he accomplished yet another "historical" deal with them.
Watching this man operate - it is easy to understand how he built his empire through the numerous bankruptcies & the 3500 lawsuits - not the old fashion way - earn it.
5
Interesting how NYT editorials seem to be giving the Chinese the benefit of the doubt on the protection of intellectual property, cyber theft and investment while eviscerating Trump - the first President with the guts to go against the US Chamber of Commerce and CPP. Even the most liberal of economists acknowledge that the Chinese were taking advantage of the US... but apparently this has not trickled across the editorial table. I wonder why.
4
@Kai
apple took Samsung to US court for copyright/patent infringement and won big bucks. do you have any evidence to show US companies took legal action against Chinese companies to court for IP theft? please do not perpetuate the myths.
Clinton and Obama use google to badmouth china about cyberattack and hacking. google is moving back quietly into china. I wonder google isn't worry about hacking this time.
@Kai
The problem is that trump uses a hammer which hits americans by increasing prices for them and closes markets for american exports.
If you are going to try and solve a problem, you need the proper tool. Not every problem is a nail waiting for a hammer.
Trump is a moron. The damage he is doing to this country is enormous. Too bad his base is clueless
7
So sick and tired of Donald Trump. A certifiable moron. Why doesn’t this useless, ignorant, bigoted hypocrite just disappear?
What a boring jerk.
5
Trade wars fought with escalating punitive tariffs are of course bad for the economy.
However, the author of this piece seems intent on returning to the status quo ante. There is no slightest mention of fixing anything, nor of how else to fix it.
Personally, I think setting up a train wreck and then blustering threats as a method to negotiate is not the best method against an opponent of evident caution and sophistication. It works against a cruder opponent, but backfires against someone who is unmoved by the emotions.
However, there is a problem, and refusing to solve the problem is not an option.
6
Trump's seat of the pants ideas are just like the seat of his pants.
Bully and bluster, lie and cheat, take what you can get: it will not add up well, no way.
The earth is honest, and it's not bargaining.
Greedy looting boosted the economy for a bit, but there will be a price, if not sooner, later. And there'll be no Obama to ramp it back up.
The truth matters.
5
Never in my over 40 years as a journalist have I ever seen a newspaper with such bias , hate and contempt for one man. The have no respect for facts any more. Sad.
2
@Tony J Mann
You talking about our cowardly bully-in-chief? The fount of neverending bias, hate and contempt, with his fan club that are happy to make exercising bias, hate and contempt great again?
"I and and the public know
What all schoolchildren learn
Those to whom evil is done
Do evil in return."
WH Auden September 1, 1939
https://www.poets.org/poetsorg/poem/september-1-1939
11
You know, it’s funny. I see pretty much this same post again and again, and yet somehow, none of you wacky kids never seem to able to explain what the Times lied about or misrepresented or plain got wrong.
Gosh, I wonder why that is?
11
@Tony J Mann
You are talking about Murdock's newspapers and Fox "news", right?
8
"You Don’t Understand Tariffs, Man"
Wow, those are a bunch of cool hepcats down at the NYT Editorial Board.
1
Trump logic: Taxes are bad and make the economy poor, unless you call them tariffs in which case they'll 'MAKE AMERICA RICH AGAIN'. Which is also ironic since America has a trillion dollar deficit this year.
I can only conclude that the man truly is as stupid as he sounds and has no conception of how any of this actually works.
6
"Trade Deal" with China is as "done" as "Nuclear deal" with North Korea.
7
"They wanted the saber rattling to stop; when the truce was announced, the market rallied."
Maybe the editorial board was a bit hasty (perhaps by a day?) with that comment?
2
In 1932 two GOP Smoot and Hawley learned the hard way they can't bully every country into their way so when their tariffs upset the whole world they were removed from office the following year. The GOP with Trump went with a bully attitude again and China put them in their place. They have to compromise with people. Why the GOP supporters keep voting for failure leaders I can't understand. Very sad.
3
Trump's isolationist tariffs will have as much to do with his undoing as the collusion and obstruction charges that will be brought. The tariffs are doing damage to farmers, workers in the auto industry, and others who voted for him in 2016. They are now realizing that the man they picked is an ignorant shyster, not the great deal maker he purports to be.
3
His tweet should really read "...I am a Tariff Idiot."
5
Did I miss something? Media keeps claiming that the tax cut juiced the economy. The rich pocketed more money, but there’s just so many luxuries one can buy. The corporations pocketed more money, which they promptly used to buy back stock, mot invest in new plants, equipment, or people. The bulk of consumers got a pittance, and any consumption on our part is due to delayed purchases. So, how, exactly did the tax cut juice an already growing economy?
5
Why is there any coverage of Trump at all? Why doesn't the media ignore him and find the experts who can actually say something intelligent about todays problems? That would be news worth listening to.
3
@Bobotheclown Like it or not he is the President and whatever his ramblings are about, they carry more weight than what any expert might say. Sad but true.
4
I think we know see why Trump had so many bankruptcies.
6
Tariffs?
He doesn’t understand ANYTHING!
6
How can the Chinese or any other entity on the World Stage negotiate with the likes of the USA today? We don't even act in our own self interest. We have put a bunch of self-serving grifters in charge of our government that our pulling everything apart including our laws our institutions and our humanity. And, we have worse to come in the next few months as trump unravels.
3
I would like to know, when people in the U.S. are going to accept the fact, trump is totally insane, and lies constantly.
4
Granddaddy was a barber from Germany. Nobody knows what he did at Wharton. What do you expect?
2
@Trevor Diaz
In fact, all four of his grandparents were European villagers. One set, yes, from rural southern Germany, and one from remote northern Scotland.
And his present wife and first wife also hail from rural or small-town Europe.
That the markets are down today is entirely consistent with this Editorial:
Yesterday there was a sense that the tariff wars were being shelved, and the markets reacted positively.
But today there was bad press about Trump blinking, and the markets are likely anticipating/expecting that Trump again will inject another round of ignorance and stupidity.
1
Tariffs, schmariffs.
More fake news, another fake deal.
Where's the beef, Little Donnie?
1
Our national discountenance and embarrassment continues.
2
Duh! He doesn’t understand ANYTHING.
2
"...Just ask the Markets????"
The Dow is down 800 points!!!!!
2
apparently not (given today's close)......nicely timed article
1
".. tariffs have added hundreds of millions of dollars of costs. That’s one of several reasons GM cutting jobs at some assembly plants in the Midwest.'
I understood the key reason the GM plants were closing because they were making vehicles models no longer in demand (vs pickup trucks, for example) Tariffs or not, the plants were doomed by bad management forecasting. Not even the workers losing their jobs were reported blaming Trump or the tariffs.
@Mark Shyres
That's true for GM, but not for the other auto makers in the US. They shouldn't have cited GM.
1
Once again, the Republicans are getting us into a recession, led fearlessly by Donald Trump, our putative president. Let's hope our current voters will have the sense in 2020 to elect Democrats to get us out of this mess, as they did in 1992 and 2008. Every vote for a Republican is a vote against America's future, and all too many people, especially in the South, went GOP this fall.
2
Let's start with the NYT graphic of ports the Chinese have built around the world. WOW! Just WOW! Even after World War II, America didn't have that kind of power or will. Then let's move on to the intellectual property that US firms hand over to China, just for the chance of doing business there. WOW! Just WOW! What did they think the Chinese were going to do with that free knowledge? But the pot of gold was just too big to pass up. Then let's move on to the number of Chinese students here in U.S. grad schools, moving into the tech world. WOW! Just WOW! Now think, what do you see the Chinese doing with them? So what trade war, it's over, they've won.
6
Aaaaand....the Dow drops 800 points today. So much for it's "approval".
3
If you wish to be a success in the world, promise everything, deliver nothing. -Napoleon Bonaparte
2
Trump keeps trumpeting about bringing back jobs to the US and getting rid of "illegals" but look at his and his families personal behaviors. They still manufacture abroad, invest abroad, hire H1B workers and buy their clothes in foreign countries. Have you seen Melania sporting any $51,000 coats made in America? Everything is usually French designers.
6
Government shouldn't be in the trade business to begin with. It's not the job of the Feds to deal with: tariffs, foreign bribes, customs control (aside from prohibited substances), or promoting the efforts of U.S. businesses abroad.
+++++
If Fort Wayne Widgets can't figure out how to sell its products in Macedonia that's just tough. See: The cost of business includes ineptitude, bad luck, ignorance, lack of capital, wrong leadership, lousy salesmanship, et al.
@HLB Engineering
To me what is happening is pure capitalism. Isn't that what we brag about as being the best economic system. It's working for the rich just like it always has, for the rest not so much.
In the past, if Mr. Trump decisions were ignorant and uniformed, he can always declare bankruptcy and leave someone else to pay his bills. Same here. He can walk away and it won't be his money that is lost.
3
Editorialists telling billionaire about tariffs! Sounds like a bar joke.
Donald is a con man; tariffs are for making money at other people's expense. Thx GOP. Ray Sipe
3
Trump never understood any policy area. His strengths are in lying, bullying, abusing, and cheating. Navarro is a flake, Lighthizer has no depth - both are servile to their demented and abusive boss. Whatever China's unfair trade policies, America under Trump has shown itself irrational and abusive of the whole structure of global trade relationships painfully built over decades.
5
in order to become completely knowledgeable in a subject requires many years of study. Donald Trump professes knowledge is countless subjects which implies he is either a genius or has many PhDs. Based on his performance as the POTUS it can be concluded that this either /or implication is invalid. The more relevant implication is that he is either an idiot or evil. Based on his performance over the past two years (on tariffs and many other subjects) it appears he is evil.
7
This is the president who, as candidate, declared that he would pay less than 100 cents on the dollar to foreign holders of US bonds. As president he calls himself the Tariff Man. Instead of Making America Rich Again, he is likely to bring down upon us the great depression that we managed to avert after the financial crisis of a decade ago.
6
Perhaps it's time to put a tariff on his gut.
8
Don't out "ask the markets" into a headline that has to stay up for more than 8 hours.
The president is playing around. He has no policy. He terrifies everybody with his willingness to trash any agreement and any convention. Ask the markets.
6
It seems to me that this "deal" is like many other of mr. Trumps deal - eg the deal with Kim Jong-un. A deal which is presented like a sunstantial deal which will solve a problem (btw a problem caused by himself) but has no real substance. Nice for the cameras and the press conference, but when the partners separate they present different views as to what was agreed on. A bit like North Korea. Nothing has changed there - Jong-un is still working on his nukes. A bit like Mr. Trumps private deals - probably also explains why so many of them ended up in the legal system.
A man who is more concerned with appearing successful than actually doing something of value should not be a man running the US. I certainly hope Mr. Mueller eventually will hold his feet to the fire, and can not wait to see what will happen then. I hold a very fine bottle of champagne cold and ready and will take the day after off work.
7
NAFTA, the worst trade deal ever by Trump’s blather, is still in place with minor adjustments. The Obama’s TPP deal, which included updates to NAFTA, was actually a better deal for all parties involved. Furthermore, if ratified and together with EU, it would constitute much better position for the rest of the world to extract concessions from China.
Going alone against China is a fool’s idea.
9
Who knew trade could be this complicated? Certainly not the circus clown in the oval office.
7
Trump is like a child playing in a grown up's game as far as economics and trade goes. Is it any wonder that his businesses failed miserably leading to numerous bankruptcies? The world is an interconnected playing field where actions taken lead to effects in others, something that is understood by almost everyone except Trump. Claiming victory as he does with almost every failure is not the same as winning and our economy and our position in the world is a loser for that no matter what Trump says in his self promotion frenzy.
2
Am I the only one who thinks Trump knows exactly how tariffs work and that he knows his base either doesn't understand or doesn't care? As long as it looks like he's getting something done, his base is happy.
And look at how many people spread Trump's comment so widely and thoroughly via Twitter that it's only a matter of time that his supporters will cheer on Tariff Man, not mock him, like the rest of us are.
Once again, the media believes he's just dumb, which he's not. And as everyone scrambles to dissect, explain, mock, he's off to the next thing.
4
What effective measures would the Editorial Board suggest as remedies for Chins's theft of intellectual property?
@ThirdWay
For one, not pulling out of currently negotiated trade deals that dealt with exactly that issue. Secondly, talk to the corporations that have "turned a blind eye" in the interest of profits. Lastly, work with all other trading partners and the world courts and WTO instead of insulting them.
5
@ThirdWay
Apple took Samsung to court for copyright/patent infringement and won. just because you see it in print doesn't mean it's true. show me an instance where US company take Chinese company to court for IP theft and won?
transfer of technology is well within WTO rules.
@doctor no
The problem is that china demands the intellectual property of a business to open a shop of any kind in china. And businesses agree to that deal because of the decreased cost of making goods in china.
The other cases of pure theft could be handled legally, but no one tries to do so.
As well as not understanding tariffs, your collusion colleagues are invoking the 5th, and in your words," like the mob", "it's criminals who plea the 5th". Collusion! Snitch hunt!
2
For a man who doesn't drink, Mr. Trump's eyes are remarkably red-rimmed. In fact, that high-def photograph is alarming. I am concerned.
5
I don't know whether Trump misunderstands tariffs, or is simply more concerned about the fate of his blue collar base than economic growth. Of one thing I am certain, NYT understands very little about economics. If it did, it would not endorse socialists or those who want to rob those who earned to pay those who did not, or the dirigiste.
Mickeyd
NYC27m ago who writes
"That tariffs are nothing but a tax is undeniable. That it doesn't seem so is also true. But I find the Editorials Board's method entirely unconvincing. One example: Nafta 2 is only slightly different from Nafta"
Actually, to a US autoworker not . Nafta2 includes the stipulation that an increasing content fraction of Cars made in Mexico and imported in the US must be made by workers paid at least $ 16 per hour.
Had that been written into NAFTA one, thousands of workers just in Syracuse NY, formerly employed at the Fisher GM plant on GM circle, New Process Gear Works (that made transmissions for GM, Jeep and Ford, BMWs, Jeeps, Chrysler, Ford and General Motors trucks, and Humvees) Carrier air conditioning would still have jobs
The new agreement will not bring back jobs but it will stop further outsourcing of US auto jobs
1
How about recognizing that China is stealing American intellectual property, forcing American partners to give up intellectual property to do business there? By worrying about Americans paying more for cheap goods for Walmart, Dollar stores, we're doing what Kruschev said, The US will sell us the rope to hang them with. We are very shortsighted in this era.
1
Tariffs protect US corn growing farms, that otherwise would be ruined by agricultural ethanol from Brazil. And cotton growers, and wool producers, even peanut farms
What is good for farmers is good for other workers.
Alas, if you want cheaper gas (10% of what you fill each time you stop at a gas station is Ethanol) go ask the politicians to drop the tariff at the price of destroying US farms.
@Gerhard It might be wise to analyze the long term net cost of growing corn by mining our agricultural lands and becoming so dependent on a couple of monoculture crops. It is not sustainable.
6
@Gerhard
Actually it is subsidies that 'protect' farmers. The tariffs are hurting the farmers right now because china retaliated against the US by refusing to import our farm products. Which means no market for all that soybean, pork, corn, etc. that we were exporting.
Tariffs raise the price of imported goods, we don't import farm products from China, we export them to china.
And actually cheaper gas would come about if those farmers had to turn their corn into ethanol for the pump because of the tariff.
1
Ask the markets? You mean the ones that are down 800 points today?
5
Tell me again why we were supposed to elect a "businessman" to lead our country.
4
@Trg
We didn’t.
5
@Mickey Indeed. Note the quotes.
1
trump started something he had no clue about and surely has no clue to straighten out.
7
"When the truce was announced, the market rallied."
Not exactly.
2
@August West
Makes you wonder if Mr. Trump is gaming the markets and despite his purported loathing of Wall Street, is merely helping fill the pockets of some wealthy donors riding the waves he creates?
3
@Mickey
It's beyond Trump's power to manipulate the markets, and NYT should know better than to take one day's market results and draw any conclusions. That's the sort of thing Trump does. Even as this editorial was published, the Dow lost 800 points.
The bull market is all but over. No one, really, can claim credit or blame. Nothing good lasts forever, and this one lasted a long, long time.
1
1. Just so there is no misunderstanding -- Trump is a moral monster who tear gases children and who cozies up to dictators who order mafia style killings of journalists.
2. Yes, it should be called Naft2
3. Yes, Naft2 shows that Trump is a phony who has neither the desire nor the requisite plan to help the industrial working class.
4. Yes, his trade war is being run incompetently.
But * please * spare us the free trade lectures. Trump was elected because of the Washington consensus on economics -- a consensus that has devastated the Industrial Core of this country. Free trade with China does nothing to help the citizens of the industrial heartland.
We need an industrial policy that encourages domestic manufacturing. We need to start making vacuum cleaners, blenders, computers and iPhones in this country. If we don't we should be prepared to give the free trade lectures in front a mob that makes the Paris protests look tame.
No, Trump, is not person to do it but it needs to be done.
1
We have an incredibly uneducated buffoon making critical policy decisions, seemingly at his whim, and this cannot end well. Thanks, GOP! Well done. You’ve done more to damage the US than our adversaries could ever hope for.
Enjoy the tax cut for the 5% and appreciation from corporate shareholders across the land.
3
Why blame the GOP? Blame the American people who voted for an ignorant, or blame the Framers and Founding Fathers for creating the Electoral College which allow states with vast populations of cows and pigs to determine the future of America.
2
"You Don’t Understand Tariffs, Man"
Well... obviously the Grey Lady don't understand markets, man.
The S&P is down 3% today - a day after the pause and the 'blink'.
So maybe - sometimes - the markets are just the markets.
2
@SteveRR
The market went down because of trump's tweet about there might not be a deal with china. His behavior scares them.
1
Three blind mice - Lighthizer, Navarro and Bolton, tell POTUS he's spot on with his tough -guy trade mantra, and needs to stay the course even if that means an economic roller coaster and likely eventual stalemate as Trump's bluster and bravado is basically ignored by the Chinese. And oh yes, re. projected economic growth, if I recall you chided the growth under Obama (surprise) and predicted 4%. Master of deals, failed economics 101.
4
This op-ed has aged particularly well today. (Markets continue to crash.)
1
Gosh I wish things were actually as simple as they are in Donald Trump’s head! Alas, they aren’t, and we find ourselves with very little technical competence at the federal level and no moral leadership in the executive branch.
3
Just ask the markets you say. Yesterday, my stocks jumped straight up like rockets the first twenty minutes of opening then falling to a more sane level. Today? Terrible. Oh well, that's the market as a whole, not much better than gambling for a living.
The editors here write "China, which has countered with $110 billion in tariffs on American goods". Is it $110 billion in tariffs or tariffs on $110 billion of goods? There's quite a difference in the two. To collect $110 billion in tariffs would represent more than a trillion dollars in goods if the tariffs were 10%. China doesn't import nearly that much from the US.
1
Oh were to start.
When you make the dollar stronger imports become cheaper. Helps consumer, hurts producers.
Yes China is manipulating its currency, they are propping it up. If it drops it will make their exports cheaper.
A steel tariff raises production costs which impacts sales of items with steel. So a few steel mills benefit while industries that use steel and consumers that buy those products lose.
Tariffs on finished good result in consumers paying more for a domestic equivalent or money being withdrawn from the circular flow because it is now in government revenue, not the consumer economy. In addition the retaliatory tariff hurts American industry. Tax cuts to industries go to stock buybacks or debt reduction, while cuts to middle class go almost immediately into the economy as expenditure.
Increasing the deficit requires a grater percent of revenue to pay it down. This gets worse as rates go up, & rates need to go up to counter the inflationary pressures of the tax cuts pouring more capitol in the economy.
And just for kicks the future economy is in renewable's not coal.
Everything he is doing will harm the economy. He thinks you just declare bankruptcy and agree to pay back a portion of your debt, "yeah yeah that's how we do it in jorsey"
It gets better, nest week he shuts the government down until he gets his money for the wall. the market will love that to.
Thank you GOP, winning is so much fun
4
On top of Mr. Trumps lack of understanding of tariffs themselves, there is altogether too much cart-before-the-horse bombast, boasts, threats, promises, self-congratulation going on. Trade just isn't as simple as he makes it.
With the non-stop barrage of contradictory tweetblasts, the man shows himself to be ignorant, erratic and unreliable as usual. He dependably misses the point so many times. How does one get through to him? His capriciousness would be daunting enough, but negotiating as equal an partner seems completely out of his wheelhouse. His usual method of threatening till his "opponent" bends to his will doesn't generally work when making international trade deals and "compromise" isn't part of his limited vocabulary.
Obviously no steady hand, Trump is more like a volcanic eruption intermittently spewing lava and hot rocks all over the place. Who benefits by this? Besides Trump’s own fragile ego, not many others - witness today’s stock plunge.
248
@sashakl
How does one get through to Trump? By getting through to the 60 million people who voted for him. So far, even the farmers who are being hurt by these tariffs are still for Trump and they say they will vote for him again. Trump has tapped into larger forces than trade and those forces will stay with him through catastrophes still to come. We would need the equivalent of a Great Depression to pry these voters loose and we may see them drag us into another depression. But this time no one will be able to say they did not see it coming.
48
Trump spews like a volcano, but it’s mostly hot gases.
19
@Bobotheclown
Sorry you are wrong. US farmers benefit from devotions they get access to China's 1.3 billion people.
Also on the renegotiated NAFTA - USMCA has Canada reducing tariffs to American farmers.
1
"Businesses and investors can’t abide uncertainty, and that contributed to Wall Street’s November swoon, which wiped out all of the year’s gains at one point. They wanted the saber rattling to stop; when the truce was announced, the market rallied." Uh...you guys might want to check out the markets today.
119
The markets have been acting like hysterical old ladies this year; it really makes me wish I had a better option for my 401k.
10
@Dennis Smith
You are absolutely right. Uncertainty is the enemy of the economy, stock market and decision makers.
14
@Dennis Smith For better or worse, a fair amount of the market is listening to Trump. Since Trump is unstable, his actions and statements are unstable, and that makes the market unstable. The best we can hope for is that a Democrat controlled house and a weary Senate will end up marginalizing Bush on anything important. (Our response to MBS in Saudi Arabia may be a good example of this.)
8
I think if you ask the markets today you may get a different answer (written as of an 800 pt drop).
3
@doug
You are right. Hardly a day passes after a mildly positive editorial is published and this man wrecks it with another Twitter outburst.
2
Things we know that Trump doesn't have a clue about:
1. Capital Markets thrive in stability
2. Citizens like stability
3 Friends like reliable people they can count on.
4. Tariffs don't work
5. Careful planning is essential in all things
6. Being a lifetime learner is also essential
7. Damage is hard to repair.
8. Loyalty is essential but always requires a two-way street
9. A friendless person is that way for a reason
10. Self-aggrandizement is never a good idea.
11. Honesty counts 100%
12. No one is a successful liar - ever.
The remarkable thing is that this list is of virtues that exceptions to are never acceptable. One exception by itself would exclude a person from a leadership role. Possessing all these traits would make you a social pariah
7
China doesn't pay the tariffs, we American consumers do.
4
Today's mega market swoon reveals just how much investors have faith in Trump deals.
3
Today the Stock Market spoke loudly and clearly and said exactly what it thinks of this "winnable trade war."
3
The President keeps bragging about his “gut” which he maintains is a better barometer of not only things economic, but things involving intelligence assessments from the CIA. I would remind his followers and sycophants, it was his gut that thought investing in Atlantic City casinos was a good investment.
6
If you look at Trump's tweets, he obviously is selling the idea that China is paying the tariffs, an outright false claim that would be alarming if he actually believes this. Hopefully he doesn't, but how crazy would it be if he actually does?
Anyway, I contend the onus for fixing the Chinese trade deficit may fall on USA consumers. One example is how I personally will not buy foods packaged by China. I can buy smoked oysters at ridiculously low cost coming from China, but I understand the source may be from the most polluted waters on the planet. I can buy drill bits or screwdrivers from China, but experience tells me the product is commonly of lower quality than American made. I personally look to see the country of origin more now than ever. Chinese products start at the bottom of quality expectations.
2
Several commenters have said that tariffs are really taxes paid by consumers. Tariffs also raise the cost of stuff we import, which at a place like Walmart, is everything. Trump's tax cut reduces the amount the uber-rich pay into the treasury, but his tariffs (he's Tariff Man!) seek to make up the difference. Tariffs paid by the rest of us. Isn't that nice? What a swell way to Make America Great Again!
4
If the Editorial Board's analysis is correct, the disruptions of Trump's trade war are essentially a dead weight loss for society -- negative externalities of government due to Trump's delusion that he could "win." The 10 percent tariffs are an additional tax burden on the American people -- taxes included in the price of imports, taxes imposed on you without your consent.
The Chinese economy is almost two thirds the size of the American economy. But, in terms of purchasing power parity, it is almost a quarter bigger than the American economy. Its growth rate is about four percent more than that of the American economy. Hence, the good news is that future American rulers would likely avoid repeating Trump's folly, unless their real goal is increasing taxes on you without your consent.
4
When Trump commenced his trade war with China he was fortunate to have a healthy economy, one that could take a few punches. What happens if the economy starts to weaken, will a few more body blows start a cascade downward? His only real achievement so far (aside from ballooning the deficit!) is to not have messed up the economy Obama left him. The TPP looks a lot better now in hindsight.
120
@Tom Hayden Trumps goal from the beginning has been to undo everything that Obama did. Undoing the recovery will be his crowning achievement.
34
@Tom Hayden
If stupidity, vanity and outright ignorance would have been measured in political terms - trump certainly is the President of United state of Amerika.
5
@Tom Hayden
How about:
3% GDP. growth - Obama managed 1.5% in last 6 quarters
Criminal justice reform - both parties. - so you should like
DHS deporting 2,000 illegal felons to make us safer
USMCA
Energy independence
Stopping Assad gazing his people
No rocket or nuclear tests in North Korea
VA can now fire incompetence like jerk who refused vets benefits
Must be something in there you like??
1
Trump thinks that trade will resume as previously if the tariffs get worked out. But apparently long-standing trade relationships between US farmers and their foreign clients have been disrupted and may never resume, as those clients have taken their business elsewhere. Trump has damaged many of these farmers permanently.
4
Tax cuts that benefit the most wealthy and increase the deficit.
Tariffs that are really a tax increase for American consumers.
These policies are hurting farmers and will eventually ruin retirement plans for many Americans as we watch our 401Ks disappear. The inmates (Trump,Navaro,Mnuchin, Bolton ,Ross and Ludlow) are running the asylum. We don't need anymore incredible deals from someone who has faced bankruptcy seven times.
God help us!
2
Like so many others, I am so tired of all this 'winning' that Trump crowed about during his campaign. He is a deeply ignorant and dangerous man in so many ways, evidenced by the market's reaction to his taunting Tweets about China today.
J. K. Rowling stated it so well when she referred to Trump as a 'tiny little man'.
6
Interesting to watch how the market flops when Trump announces he's about to implement one of his ideas, and how the market reacts so positively when investors think Trump is backing down on his stated goal. He should keep on retreating from his plans - it'd be great for my 401(k).
6
My question to the Trump administration is: What is the point of all of these tariffs?
If the administration just wanted a new NAFTA, okay, now they have one. Why are the tariffs still there?
If the administration just wanted China to give them more IP patents, okay, now they have them. Why are the tariffs still there?
If the administration just wanted to punch on the EU, okay, now they've shown where their loyalties are. Why are the tariffs still there?
If the Trump administration doesn't have one, single reason for the tariffs being in place, when how will they know when they have succeeded? When will it be enough that the tariffs can go?
It seems to me like this is just enrichment of the US government at the hands of the taxpaying American. In other words, the rich of the United States got a giant tax cut on behalf of the President. But now the working class has to pay more on every single consumer product, because the President said so.
8
I am interested in how much revenue for our government is generated by tariffs on Chinese goods. Trump says "billions" and at 10% on "up to $250 billion worth of goods" it would be $25 billion, right? I never read an article about tariffs that even mentions the revenue side of the equation. Even if tariffs on imported goods pushed up consumer prices and is a backdoor tax on American consumers, there's still that revenue our government can use to do some things. How about Medicare for All? Paying a few more pennies or a couple of dollars for Walmart junk made in China would be a small price to pay for guaranteed medical insurance for all Americans, wouldn't it?
1
The difficulty is that the increase in government revenue pales in comparison to the level of economic destruction tariffs cause. China loses out on exports, the United States loses out with dramatically increased prices and inflation, and china's retaliatory tariffs cause an enormous loss in American export revenue.
Also, a slowing of the economy due to the reasons listed above leads to greater unemployment and the vast variety of social woes that will cause. Everyone loses.
Tariffs are awful for everyone. Although the government does monetize some portion of the loss, the loss to the overall world economy is significantly greater. I'm all for effective single payer medical legislation, but tariffs are just about the worst way for the government to raise money. A progressive income tax increase would be a much better way to fund such a program, causing significantly less pain and terror to the economic actors involved.
2
@abigail49 Keep in mind that $25 billion comes out of other domestic activity, so in effect shrinks the GDP.
It would have been better had President Trump never picked a trade war in the first place, but that option was not on the table last weekend. The president could either have followed through on a hard line with the Chinese regarding tariffs, etc., or he could blink, as this writer puts it. For all of the reasons put forward in this forum, I agree that openness is generally a healthier approach to trade. The problem is that the President's bluster, with no follow through, has created geostrategic risks that are external to trade related economic performance.
In short, the world was watching and what they saw was a president who backed down when his opponent called his bluff. He looks unwilling to suffer any negative consequences for sticking to his guns. Do you think this will act as a deterrent on the Chinese in the South China Sea? The potential costs there for putting China in check are much higher, to put it mildly. Or Russia in the Baltic region or the Black Sea? Nor does such vacillation generate a heck of a lot of faith in US resolve among our friends, or potential friends.
So, perhaps it is for the best that President Trump blinked. But the costs will be high. That, in a nut shell, exemplifies the tragedy of this man as our president.
2
Based on todays disaster on the stock exchange, this editorial was written in haste. As we see there may not have been any agreement between Trump and XI. That or / and Xi is playing the US markets. Since Trump his meetings without any third parties or transcripts of meetings with other world leaders we may never know. But on thing is for sure , it seems that the American people cannot trust what Trump tells us about his one on one meetings with other world leaders.
2
In response to Scott B who writes: "Either way, tariffs are little more than a direct tax on American citizens"
1. The consensus view of Economists is that full implementation of Trump's Tariffs would add $ 60 to the monthly bill of a US Household
2. This increase needs to be weighted against the ability to
to pay. The cheap costs of imported goods come with the price of the loss of well paying US jobs.
3. The most recent example: layoffs at GM. GM produces some Focus models in Mexico, exclusively produces the Buick Vision and the Cadillac CT6 Hybrid. At one sixth of US wages. It imports these cars into the US at 2.5% tariffs
-pocketing the wage differentials as corporate profits.
4. Rather than terminating its foreign production of passenger cars and return the work to the US, GM shut down US plants , throwing thousands of US workers out of work
5. GM's long term corporate plans, as those of Ford are to move ALL passenger car production , to low wage countries.
6. Ask any laid US GM worker if she/he would rather pay more to have a job, then to pay $60 more per months to buy cheap TV's from China
7. To those NY TImes readers that drive Pickup Trucks and large SUV's : You have been paying what Scott B calls a tax of 25% since 1964. Because, that is when the US introduced a 25% import tariff on imported light trucks.
8. Want cheaper large SUV's and pick up trucks ? Ask to drop the tax - and throw thousands more US workers out of work
5
@Woof - Due to the Trump administrations denial of climate change and promotion of cheap oil and coal, Americans started purchasing more SUVs and trucks. Less Americans are buying automobiles let alone GM models. GM is moving its plant to China to focus on electric cars to sell to the burgeoning Chinese middle class who are buying electric cars. China is promoting clean energy and electric cars are the future. Why would GM build electric cars in the US only to sell to Chinese consumers? If Trump wants to create more good paying manufacturing jobs for the middle class who voted for him in the rust belt he should promote technology that is the future like electric cars. He should focus on retraining coal miners instead of making believe that coal is the future. He should be looking to the future and supporting innovators instead of promising to make America the way it was in the 1950s. When the USA made quality products we could afford great trade deals. Now we no longer make anything but rather farm out work to 3rd world workers. If we had the same innovative spirit as in the 20th Century, we'd naturally be great again. Instead we have a President promising to keep the horse and carriage instead of competing with the car industries just to appease those people who make carriages and groom horses.
4
@Woof
While the trade deficit is an enormous problem, the auto industry is, perhaps, not the best example to use. Foreign investment in vehicle production here in the US has been unprecedented. Look at the huge factory BMW is building down south as well as those already here (i.e. the Toyota Camry is 100% domestic content). Global auto companies are manufacturing here for worldwide consumption.
I would look at electronics, metals, and solar panels, among other things, being dumped on our markets as a better example.
Finally, ask how many GM workers drive a GM (or, any domestic) vehicle.
That tariffs are nothing but a tax is undeniable. That it doesn't seem so is also true. But I find the Editorials Board's method entirely unconvincing. One example: Nafta 2 is only slightly different from Nafta. It is not clear Congress will approve it.
If it is not so different why would it have trouble in Congress? If it isn't passed by Congress, there are all sorts of reasons Congress might not pass it. The most notable is the political flip. But either way it doesn't logically mean that tariffs are troublesome (though they are, of course). Nit picking? I don't think so. But that's obvious because I wrote it.
As noted tariffs are a form of tax and before the first world war our primary form. They were used to protect indigenous industries as well raise revenues. They were effectively a progressive tax because mostly luxury goods were shipped into this country. But now with our interconnected international supply chains and manufacturing it is impossible to separate out luxury goods and tariffs will hurt all, forcing us to pay more causing inflation. Just a mine field that will hurt everyone. And as we see from today's economic news the delicate balance that keeps the economy growing is teetering
2
The stock market is reacting to the discrepancy between President Trump's overly optimistic (based on sugar plum dreams rather than hard core facts) tweets versus the stark statement from China which just stated that there would be a temporary 90 day halt in the trade war. Economic advisor Larry Kudlow's statement this am didn't support Trump's gleeful tweet nor did Steven Mnuchin, Wilbur Ross or Robert Lighthizer. Wall St. doesn't rely on tweets for its economic trades just as the military won't believe President Trump when he stated on the world stage that there was no longer any needed to worry because he met with North Korean leader, Kim Jong-un and he told him that he wasn't going to keep developing long range nuclear missiles. Let's face the cold hard reality of the difference between China and the USA. The US's debt to China as of Sept. 2018 was 1.15 trillion dollars. China's economic growth is currently about 6.5% as opposed to the US's 3.5%. The US deficit is projected to be 984 billion. China's deficit is 28.2 billion. China is investing in infrastructure across the globe including owning ports in strategic areas across the world. In a few years, most experts agree the Chinese currency, Yuan, will surpass the dollar as the standard global currency. Even European governments are replacing their reserves with Yuan instead of the dollar. These circumstances puts China in a better position to negotiate a strong trade deal than what Trump's hype promises.
5
If Trump really wants to stick it to China, he would push Congress to lower the federal minimum wage to $5 an hour, because right now it’s way too high and that’s hurting American jobs. Democrats may argue that a person cannot live off $5 an hour. This isn’t really true. A person making $5 an hour would be grossing about $10K per year. Under the new tax law, a person earning that money would be exempt from any federal income taxes. Further, they would still be eligible for Medicaid. Now, the Democrats might argue that a person cannot rent a decent apartment on that wage. Yes and No. They might not be able to rent in New York City or San Francisco or L.A., but in our nation’s poorest cities, like Detroit and Cleveland and Memphis, 2 or 3 adults each earning $5 an hour can afford to rent a house together. They might even be eligible for Section 8 assistance. Earning $5 an hour would be a godsend for our nation’s poor. It means a roof over their heads and food in their refrigerators that they bought with their own money. It means having a cell phone and a laptop. If Trump really wants to kick the American economy into high gear and pull the homeless out of abject poverty, he should push to lower the federal minimum wage to $5 an hour as a way to encourage corporations to bring back manufacturing jobs.
3
@Mark Re: minimalist wage --> if only the states, counties, cities, and school districts were only so forgiving of one's income.
2
@Mark - If you think the yellow vests look disastrous in Paris, just wait for the sleeping giant of America's huge underbelly of minimum wage workers to unleash their anger on the American cities across the country. Your reasoning is faulty anyhow. How do you think the American economy has prospered for the last century if not with the consumer mindset of the American capitalist engine. Without any spending power, 90% of the American population will stop buying goods and services, thus grinding the American economic machine to a staggering halt. Not to mention, ensuring the presidential success of a future Bernie Sanders or any other Democratic candidate promising a decent living for the majority of American workers.
4
@HLB Engineering
Some states, like Nevada, have no income taxes. And some states could follow suit and lower their minimum wage requirements to the federal level to attract manufacturing jobs to their state.
President Trump appears to not understand that it is American companies and American consumers who are paying the tariffs, not the Chinese. My husband wrote a large check to ransom his incoming shipment from China last week; a 25% tariff would extremely punitive. If Mr. Trump intends to put American businesses out of business, he's doing a terrific job.
15
"Just ask the markets"???
The Dow is down over 700 points today. Because, as you say in your own paper, "Stocks Slide After Trump Tweets on Trade". To wit: "....I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN"
So much for Trump's tariffs. And your reporting.
1
@Max Dither See: Inverted yield curve; T bills need to be short leashed.
I think the NY Times is batting about .150 when it comes to the market. The point of this article is that when the trade situation was stabilized the market rallied....well today it dropped 799 points. What is your explanation now?
1
@Greg Jones If you started watching the Brexit debate this morning (Live C-SPAN2), you'll see that the government that figures itself bright enough to enter trade deals somehow can't muster the intellectual light to exit them. See: Governments lose their minds when trade issues come to the floor; The UK needs to leave Theresa May, as well.
1
Rex Tillerson nailed it.....
15
Truth!
1
For everyone who remarks on what a fool Trump is (stating the obvious), please don't forget to mention it's the Republican party that has chosen to keep him in power. Seems only fair to share the blame.
15
There was no deal. Plain and simple. Just bluster.
In case anyone forgot how this works, think way back to the amazing deal he made with North Korea.
How'd that work out?
Stop getting played by this conman. (I'm looking at you, journalists.)
8
Guess this was written before today. Markets in a downward spin
2
A lot of people have asked me if I'm a genius". "I tell them I don't know, but I'm like real smart" Straight from the lips of the dumbest President EVER.
10
I ask ‘Who’s he trying to convince?’
Trump is ignorant. He doesn't understand and misrepresents how tariffs work.
The US Govt does NOT “take in” tariff money ... tariffs are (indirect) “taxes” on US importers/exporters & ultimately consumers (higher prices).
Stop lying to “We the People”.. and tell them that your “Tariff Man” tariffs are causing prices to go UP .... and these costs are largely passed onto the consumer
5
Trump has said "trade wars is easy to win", are we winning yet! What a buffoon and a shame!
8
Can he please stop? I can't take any more "wining" or whining for that matter.
4
China can easily outsource what it needs for its economy. It has African mines, Brazilian agriculture, and Asiatic labor. America has only a vast consumer market that treasures cheap goods wherever they are found. It's all a matter of planning and the Chinese think long term and the President can't see beyond tomorrow.
11
Negotiations
China 1-Trump 0
4
I find it curious that Trump has not created anything...any legislation...for improving the country......he only strikes down what is already in place (Trans Pacific, NAFTA, Geneva Accord, Paris Peace, etc.) threatens to kill it, then wants to "improve" it under his name, thereby bringing it back. He's pure bluster and bluff. And lying is his middle name. He sucks the life out of others who have done better than him and claims its him - who has done it all....the hero. Shame on him.
17
The sad truth is that, yes, China has been stealing our trade secrets, patents, refusing to open their markets to our goods, without tariffs. That has been obvious for decades. The problem, is that this man, DT, hasn't a clue, as to how to really deal with Xi Jinping, because it takes brains, will power, and not a whiplash type of behavior. Would to God, someone in his administration, could, or should take the reins away from him related to China, which needs an intelligent partner to deal with in this country related to all of the issues, and without that, things are only going to become worse, and not better for their economy, our economy, which in a global market, only has uncertainty, which affects most of the world's markets, also.
11
If tariffs were the only thing that Trump doesn't understand that would be great. Trump's knowledge of "business" is limited to Real Estate Development where insults, threats, jibes are traded between rivals in what is a zero-sum game - you either get the development of you don't.
Other businesses and international business are a whole different game and Trump simply doesn't get it. He likes to complain about stuff he doesn't understand. The US Government doesn't own the intellectual property of businesses, and the business owners who move production to China know that their secrets aren't safe but in creating jobs in China they are creating additional markets. No, that doesn't translate into real estate thinking because Trump doesn't get win-win games.
The only thing Trump has won is the support of a bunch of Americans who don't understand how the world works either. Slamming the national engine in reverse only makes getting to the future harder and, like it or not, the future is where we are going.
7
Sorry, Editorial Board, going after China for its trade misdeeds has been a bipartisan, international interest for years. As long as the corporations represented by the stock market have financial turnover, they will do business until China has the balance of our cash.
1
@Bob Choderker
True, but one doesn't use a shotgun to kill a fly. Tariffs are not the way to accomplish the goal.
1
The most important sentence in this editorial is "Whatever the rationale for imposing them, tariffs are taxes..." Maybe if we renamed them "Import Taxes" Republicans. especially, but Democrats, too, would start dealing sensibly with these issues.
3
China has every right to demand technology transfers and joint projects of companies that want to do business in its markets. Indeed, this is part of the bargain of joining the WTO. No country should agree to be relegated to second class status.
1
@Shaun Narine
Sure, China can demand what it likes. But others can refuse the demands, if they like. The WTO can demand they agree. But countries can campaign for rule changes or leave the WTO if they feel like it. Let all parties strive for what's in their widest possible interest.
I sense, however, in your language a feeling that western firms should invest capital and share technology for moral reasons; that it's just not fair to withhold funds for setting up plants or withhold expertise that will help your competitor to eventually put you out of business. If that is your feeling (and maybe it isn't), I disagree, for obvious reasons.
1
"...an incredible deal.".. Only if you're playing a game where you're satisfied with avoid penalties instead of scoring points.
2
I suspect that if someone asked Trump how tariffs work, he would have no idea.
18
Yep. He’s not just Clueless on Tariffs that simply drive COSTS UP for ALL Americans, but an Incompetent Buffoon who simply needs to shut up, stop twittering in the wee hours, and focus his limited attention span on taking take care of Melania & his family. Stocks would then rally and his approval ratings here at home would rocket upwards.
4
"Americans like buying inexpensive goods" from China? I think you mean "corporations like selling Americans virtually disposable products made with cheap labor and little quality control".
In some product categories, there's little else on the market that's not made in China. A typical situation on Amazon for almost any electronic product is that 10% of purchases are dead on arrival or shortly thereafter. Personally, I'd prefer to pay more for dependable products.
1
Companies sell what the consumer is willing to pay for. Americans, for a large part, wouldn't notice quality even if it hit them on their head. Look at your kitchen cabinetry, household appliances, your shoddy windows, American cars, your houses. It's all disposable. How many of you 'invest' in a Miele dishwasher or a Liebherr refrigerator? Only a tiny elite will consider paying double or triple the average price for quality.
The stuff is available in the US (mostly imported from Europe) but the market demand here is tiny. Only the top 2% in the big cities will consider buying up. And sadly most of those will not buy it because it's a well-made long-life product, and it's the right thing to do from an ecological point of view. They will buy it because the name on the product will show their friends that it was expensive.
2
Tomorrow is the funeral of the last conservative President of the United States of America and it will be accompanied by all the kudos as to his character and values. Much like McCain his judgement failures will receive very little broadcast. This is only fair in a world where very ordinary people are put in positions where the ramification of failed decisions are only apparent after decades and integrity is something we carry with us and is almost impossible to hide.
Brian Mulroney will deliver a eulogy and he is our last truly conservative Prime Minister. I hope Mulroney has many more years ahead of him but his departure from this vale of tears will warrant maybe a fifteen minute retrospective of a patrician who held back our evolution for barely an instant but shackled our independence to a failing nation for four decades.
We know the USA, Russia and China are not our friends and the only European trade relationship that is tenable given our ethics and values is the one between Sweden, Estonia and Finland where size and population bear little significance to sovereignty.
We are still committed to democracy because it works for our incurably middle-class country where our Prime Minister was elected despite the fact that his father was Pierre Elliot Trudeau and that Quebec voted for the son of its least loved politician. Our conservatives barely tolerate our most competent Prime Minister precisely because he is not at all a patrician. He is vin ordinaire, he is one of us.
4
At some point the Trump base has to understand that Trump could care less about them. Trump likes to make waves all around the world - make sure they all know he's here. It's ALL about him.
Fortunately, his recklessness, and Robert Mueller, are catching up to him. It's just a matter of how much damage he does before we are rid of him.
15
I am an importer that does most of my business out of China. I supply major retailers. Most of our production must remain in China since they have a superior infrastructure and easy access to the supply chain than other countries in the region. We cannot afford to absorb the 10% tariff increase nor the additional 25% planned for later (total 35% additional tax). These additional 'taxes' are being passed on to the retailers. They will in turn pass them on to the American consumer. I suggest the retailers label their items with the original retail price and then note the new retail price on the price sticker that reads ' Trump Tax Included' That is reality.
42
Trump's tariffs will ultimately do nothing more than increase prices to Americans for many commodities that are affordable because they are manufactured in countries with low labor rates.
People remember back before the 1980's when everything technical was very expensive AND made in America by Americans at American wage rates.
Companies began to realize that if manufacturing was performed in Asia by low paid workers, costs for most manufactured items could be reduced by a massive amount. Hence the affordable prices for Americans.
And hence the trade deficits!
In Trump's naive view, raising tariffs should reduce deficits, lower the amount of imports and put Americans back to work. WRONG! Americans don't make enough to afford their present standard of living if commodities are manufactured by American hand labor. But they make too much to manufacture commodities for costs that are competitive with Asia.
So if Trump is capable of eliminating the trade deficit he will simultaneously greatly lower the American standard of living.
It is a vicious circle, one with possible solutions, but those solutions will not be solved by simple application of tariffs to eliminate trade deficits.
11
Whatever flaws China has, and there are many, what is plain is that the economy of China is growing at a far greater rate than that of the United States.
As far as an understanding of just about anything, be it trade or economics or global trade our leader is still in diapers.
Communism in China sure ain’t perfect but the very damaging capitalism as practiced in the USA isn’t doing so well. Just ask the farmer who grows soybeans or the teachers who work in just about any state and they will tell you all about it.
11
As you carefully point out, trade is a two way street. But, not a zero sum game. Way too complicated for Trump. The problems we face with China are the result of a series of blunders for the past 25 years. The "war" that is referenced does require a comprehensive international ( our allies) effort that allows our national interests to meld with those who see the long term value of democracy and capitalism, without sacrificing one for the other. China is not our friend. But we need to be disciplined about how we contain them. That takes time and intelligent thought. Trump has neither.
408
@Mark
"How we contain them"?
I am afraid that is like locking the barn after the horses have been stolen. China is a country that contains over 1.3 BILLION people and as a society has existed for over 2000 years. As long as big business continues to look upon China as an opportunity and not an adversary, really, nothing else matters, regardless of what Trump says.
It was recently announced that 100 of the largest companies on the S & P 500 index told the administration continued implementation of tariffs, especially against China will, early in 2019, result in significant price increases on various goods in an American economy where 70% of its GDP is based on consumer sales, could seriously damage the economy going forward.
Let's see who blinks first.
82
@Mark The comprehensive international effort was called T.P.P..
45
@Deus. We could still resurrect TPP. Also, Australia has had some innovative ideas. Get away from cheap money.One of the reasons that the United States runs a trade deficit is because borrowing from abroad is cheap and easy. If it were more expensive, US citizens and the government would borrow less. A tax on (non–foreign direct investment) capital inflows that rises with the size of the inflow could reduce excessive borrowing for consumption and help close the government imbalance. There are no painless solutions.
7
The depth of Mr. Trump's ignorance on how tariffs work is captured in his statement that: " We are right now taking in $billions in Tariffs." Not only does he overstate the dollar amount of tariffs being collected, but Mr. Trump seems to be under the impression that someone other than American citizens are paying these tariffs. The plain truth is that a tariff on foreign imports is paid either by a business that absorbs the cost increase and/or by an increase in the price of an import that is paid by consumers. Either way, tariffs are little more than a direct tax on American citizens.
President Trump promised that a trade war would be easy to win, would not be felt by Americans and would result in a lowering of the trade deficit, none of which has proven to be true. Instead, we have been witness to yet another demonstration of the President's "bull in a china shop" negotiating technique, in which much is broken and little good in accomplished.
From a businessman who has caused 6 business bankruptcies, why should we expect anything different? Unfortunately, the stakes are a bit higher with Mr. Trump as president of the United States.
893
@Scott B
Enough! Time for him to go.
55
@Scott B
My son is a China expert and scho!ar. He and family lived in Beijing for 5 years. He just wrote a NYT Op Ed Wednesday:
China's Mind Control Has Been Around A Long Time.
He indicated to me that his Chinese friends say Xi respects Trump because he knows what China's trade strategy and Xi's team negotiating strategy are and understands that Trump knows the long game they are playing. Jim say some believe that Xi fears his resolve. But they know us almost as we do.
America for the next decade has leverage with its much larger market in "buying" power. Chna has the long term advantage of 1.3 billion people but currently, and I believe for the next decade, we will enjoy the most important stick of purchasing ability. So the challenge for the U.S. is to squeeze the Chinese, getting concessions like patent protection, the mentioned reduction in auto tariffs and more access to China's 1.3 B agricultural market where we have by far the lowest costs, and the Chinese have to eat - so the demand is huge and growing.
One major problem for us are the 50 million Chinese that leave the country every year. Many the elite wealthy who can't protect their wealth except here in the US . But if 10%
come to America you have 5 million grabbing our best technologies which wind up back in Chinese plants.
I was a CEO of a global telecom company here and China was both one our biggest opportunities and threats. I have personally negotiated with them. They are VERY good and well prepared.
13
@Wally Wolf
My son is a China expert and scholar. He lived in China for 7 years in Beijing and Shanghai. Wednesday he wrote a NYT Op Ed on: China's Mind Control Has Been Around A Long Time. He told me that Xi respects Trump because he believes he understands China's trade goals and Xi's strategy.
Our current leverage is our buying powers which dwarfs China's. Theirs 1.3 billion people. So our strategy is to get as many concessions as possible, like the traffic reduction in auto and more access to more of their 1.3 billion agricultural market. So Trump does understand tariffs and much more related to business. Navarro indicated a few moments ago that Xi and Trump personally went over one by one 140 trade areas.Do
I have personally negotiated with the Chinese. They are tough, through and always well prepared. It's imperative that we win this battle that should have been fought long ago.
2
It’s important to keep pointing out that a tariff is a tax on American consumers. Chinese companies don’t pay the tariff, and Trump is telling the truth that billions of dollars will flow from the pockets of Americans into the treasury for the goods they purchase. If fact, this was how the US made most of its income before the 20th century. It’s a convenient way to try to make up the huge deficits the Trump tax cuts caused.
Don’t think for a second that these tariffs are just punishing the Chinese.
585
@M Trump and his gang of advisors believe that we, the consumer, will forgo the purchase of goods that have tariffs attached and that will be his basis of negotiation.
It will be interesting to see the results after the purchases for the holidays are tallied to see if we did in fact punish China by not purchasing goods produced in China.
But, on the other hand, most of what we purchase is made in China. So, there goes the bargaining chip.
32
@M
That's true for item specific tariffs that apply to all foreign countries up to the lesser of the increased cost of domestic production or the amount of the tariff. The same basic principle is true for Trump's tariffs, but since they only apply to China the tax is pretty low in many cases because the same items can still be purchased from other countries for only a marginally higher cost. This makes it much more an attack on China and their businesses than universal tariffs.
3
@Keith
It is not so easy to shift suppliers, especially if the supplier is making a special product to the importer's design and depending on the skill level required, availability of raw materials, and no doubt other factors.
21
We need trade. We also need a vibrant manufacturing sector that employs a reasonable number of people at reasonable wages. The balance is out-of-whack.
I loath Trump, but he is not wrong about that. He was also the
only guy who made that point. That is a major why he is President.
Again, I loathe the guy and I voted against him.
30
@Lefthalfbach Unless you can find several million more Americans willing to work for wages that don’t rise above the poverty level, or find tens of millions of Americans willing to pay significantly higher prices for the manufactured goods they buy, there will be no return to the halcion days of American manufacturing. Trump is president because about 65 million Americans, and Donald Trump, don’t understand economics.
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@John David James
I would gladly pay reasonably more for clothing, sneakers and so forth. I mean, it's not like stuff from China is all that inexpensive, or all that well made. Every piece of clothing I buy from there seems to pill within a year. I have American and British made stuff that is decades old.
As for labor and wages? Stop screwing unions and those workers will be able to fend for themselves.
We would also need "...medicare for All..." to bring down car prices by eliminating Employer-based Healthcare. And it would have to go. The Unions would have to bite the bullet on that.
I loath Trump. I positively loath him. Am not a big fan of his voters either, certainly not the ones seen at his Rallies.
But, they understand that they are getting poorer and they can add.
Your pov, taken to its logical conclusion, would have next to nothing made here because cheaper labor can be found elsewhere for evreything. You know what the end result of that would be?
Blood-in-the-streets. That's what.
9
@Lefthalfbach
You're both right, a deeply unpleasant fact.
I sometimes think of decently paid westerners working for multinationals abroad. In the poorer countries they find themselves able to afford staff and servants, sometimes several. That's the strong currency advantage. And for a few decades now we've used it without leaving home, putting hundreds of millions of Asians to work. Having such teams of cheap 'servants' in China and elsewhere hasn't just closed factories here.
It has also seriously raised the standard of living in America. America groans under the weight of trillions of dollars of Chinese goods which would have been unobtainable in such quantities had the Chinese not been willing, and able because of the exchange rate, to work for bubkes. Think of everything Chinese being removed from an American home, to be replaced by domestic products costing twice or five times as much.
Can Americans be expected to relinquish this bounty? So many people (or is it most?) are poor or at least not that far from strapped. Can they come up with thousands more a year to live the same and put Americans back in business? Hardly. Regular people can't afford to have Americans make their jeans, phones and bicycles anymore. 'Buy American' patriots are unlikely to become several times more numerous and intensely committed.
That leaves tariffs as a lever. And how many people will agree to pay US manufacturers and their workers through taxes, which is what tariffs are?
9
Who would have guessed that the star of reality-T.V.'s "The Apprentice" would not, even with the added experience come to him from slapping his name on hotel buildings he does not own, have a full measure of expertise in international economic fundamentals, 'their' micro and macro details?
5
Trump's lack of understanding about the impacts of tariffs on American companies, farmers and consumers is born out of his self centered nature. If the action fulfills one of his long time pet peeves (trade deficits) and does not impact him personally, he is fine with the painful sacrifice of others. The fact that our economy and buying power by itself creates trade imbalances with most other trading partners is beyond his ability to comprehend. His uninformed policy initiatives are very dangerous.
4
“Trump blinked on trade with China — and it was the right thing to do. Just ask the markets.” I dont think that’s what the markets are saying today! Markets are taking a geating again today! Brilliant!
3
I already know that Trump is incompetent, I don’t need to be reminded of it every day.
I’d like to see some coverage of how this fact is being covered up by conservative media. I want his enablers to be exposed as liars and frauds.
14
And, after all the blather, bloviating, and bullying, things will return to the same but with t-Rumps name on it so he can take credit for destroying something then "repairing" it. What a doofus. And we all have to suffer though this morass, by someone who knows squat and has sent out nuclear bombs to do treaties. Oh yes, that sure works.
NYT and esteemed commentators here, please don't think you understand why markets move. This narrative fallacy stuff is, well, fallacious.
1
It takes real genius to whipsaw the market like this. I haven't had this many thrills since my last ride on Big Thunder Mountain at Disney World. Sure am glad we've got the Art of the Deal guy giving us such grand ride.
7
@Keith Wagner A ride at disneyworld? Im thinking more like a colonoscopy!
9
@jimD - Best comment of the day.
Wow...He really doesn't understand where those "$billions in Tariffs" "we're raking in" come from. Did Stephen Miller tell him that the Chinese are writing us a check every time a container gets unloaded in Long Beach?
Those costs are borne by the importer, who send the funds to the US Treasury. That firm then has to either eat it (if they've sufficient margin and are feeling benevolent) or more likely, pass the increase costs to the end consumer by raising prices or fees.
So it turns out you can get a Republican to support a tax increase, as long as you call it a tariff.
31
@Aaron Dutenhoefer
"So it turns out you can get a Republican to support a tax increase, as long as you call it a tariff."
Show me a "Regressive Tax" and I'll show you unanimous GOP support:)
1
@Aaron Dutenhoefer
No one apparently told him that Motorola already tried assembling cell phones in the U.S. https://www.theverge.com/2014/5/30/5764836/motorola-shutting-down-us-assembly-plant
If the tariffs go up on electronic parts from China, I can clearly see how they would want to fire these lines back up to make a Moto Z that costs the same an iPhone. Not. I'm not sure what he's trying to accomplish here except kick start electronics assembly in Viet Nam.
4
Deal, no deal, what deal? Ask the farmers on the plains,
what are they going to do with all their soybeans?
3
@The Chief from Cali: Let them eat tofu.
2
As soon as Trump discovered he had the uncontested power to levy tariffs in the name of national security he immediately used that emergency power to bully Canada as negotiations were beginning over Nafta. Trump with uncontested power is like an ill natured baby with an oversized rattle, unbelievably annoying, but ultimately irrelevant. Which isn't to say, one day when he's feeling particularly bored, he won't resort to sparking global armageddon.
9
did you look at the yield curve today or are you basing this off stock prices? which market are you looking at?
As soon as Trump discovered he had the uncontested power to levy tariffs in the name of national security he immediately used that emergency power to bully Canada as negotiations were beginning over Nafta. Trump with power is like a ill natured baby with an oversized rattle, endlessly annoying, but ultimately irrelevant. Which isn't to say, one day when he's feeling bored he won't go ahead, reach for his magical button and proceed to turn the lights out on our world.
2
He's on the right track... Major step left is to market tariffs as Trade War Bonds.
1
Finally this newspaper points out that the USMCA is barely different at all from its predecessor. Never mind 'Naft2'. Try Nafta 1.0.1. It's been letting him get away with bragging about a 'yooge' 'win' for months.
May it now proceed to pointing out that it's Americans who pay the China tariffs, not China. In this editorial it stupidly lets him get away with asserting " I want them to pay" and "We are right now taking in $billions in Tariffs" without comment. Why? Why on earth?
Asked for a reaction on recently imposed tariffs, the Canadian PM who signed Nafta in 1994 showed he has Trump's number, replying that the motivation is the tens of billions of dollars in tariff revenue to help replace money lost to tax cuts. In other words, Walmart shoppers are paying more to enrich the already wealthy.
11
uh-huh.
That's why the market is down 700 points as of 1:45 in the afternoon. Tariff Man really knows what he's doing.
20
Let me make things easy for you. Trump doesn't understand anything, except that he likes money.
10
Yet another pass given to this administration. What this column can be boiled down to is that Trump finally began fixing yet another serious problem of his own making. But all the press is doing is continuing to enable an unhinged dictator.
Trump has no "trade policy" or any other policy for governing our nation. He is motivated only by his hatred of Obama, and his desire to stay in office (read: avoid prison). No doubt many minority communities are hurt economically by Trump's policies, but he's doing absolutely nothing to help them. Subsidies that would help inner city communities who need the help? Not a chance. After all, a lot of brown people live in those places.
This latest "deal" is nothing more than a stunt to shore up his rabid, white base. And this publication, and other reputable news sources need to stop writing serious articles about this president's "policies", as if he were a decent, sane, qualified man. He is none of these things. He has no use for facts and reality, and neither does his base, who remain in lock step with him.
The only lens through which we need to look to understand Trump's actions is race. Does a particular action help whites only? After all, if most people who live in agricultural states are white, it isn't "welfare" to just hand them money. And this is all Trump voters want. A president who continues to tell them that they're the "real" Americans, and a president whose policies help only them. This is all they've ever wanted.
289
@Donegal. OK, and let's back out a level and note that this applies to the entire GOP-R.I.C.O. mob and, of course, also to the MSM enabling, fueled by fear of all the $ & power at the fingertips of GOP donors, especially when it comes to their leverage over advertising.
The GOP's cancer started under Nixon & the Dixiecrats. The shrinking of the MSM spine probably started with Reagan's flushing away the Fairness Doctrine.
Feels like we're in Stage 4 to me.
16
@Donegal
I own a farming operation with my sister in Arkansas. The subsidies that the American farmer receives is a direct result of the market going below par. It has become less and less each year. These alternatives are not welfare. The name "welfare" should be stricken off the books. It has nothing to do with race. It demeans us all. How much do you think combines cost? 500,000. How much do you think seed for soybeans cost? Ask Monsanto. They own us. Soybeans are 8.36 a bushel, the lowest in years. I never voted for Trump, but my sister did. Why? Because neither party has helped the American farmer in the past ten years. And guess what? There are a lot of black farmers in America, two own farms next to mine, along with three farmers from Argentina. And we are all suffering through the tariffs together.
10
@Annie Robinson-You probably know this already, but U.S. agriculture policies and subsidies favor big corporate farms; which get over 70% of the billions handed out. Small farmers suffer and I'm sorry. I truly am.
23
The Trump “ Process “:
Create a huuuuge non-existent problem, or make a mountain out of a molehill.
Rage against someone, anyone. Stir up the Base.
Fumble and mumble, finally allow himself to be convinced he’s wrong.
Do nothing, and declare “ Victory “.
Rinse and Repeat. Ad nauseam.
40
Step one, withdraw from the Obama negotiated TPP which enhanced America's trading options with the pacific rim. Step two, create an unnesecary trade war with China. Step three, call a cease fire when you realize trade wars aren't easy to win. Step four, blame Obama. Is America great again, yet?
14
And then he tweeted and tried to beat his chest again, or say that he was going to, and the markets drop like a stone. Thanks a lot Individual 1. You sure know what you're doing!
3
Paying and privilege, and thinking about “rich”. Such is the perspective that drives 41. Lord help us.
@Alex M
45. HWB is number 41. I am quite certain HWB would not want to be confused with the present occupant even though he is just deceased.
If Trump reasons anything it is that he can simply do a silly dance and then claim victory and his base will assume he has done a great job. To them any criticism is sour grapes by the losers. The article even cites the renegotiation of NAFTA which was mostly just a silly dance. His solving the NK problem, a silly dance. The great stock market he created, a silly dance. He does nothing real and then claims victory. To assume he has some real intent with regard to China is to suppose that he thinks. To him it matters not what the real outcome is, it is only important that he do something and then claim victory.
I think to assume Xi is interested in continued success for the economy of China is without evidence. He is already ruler for life. He has what he wants and any failures that come will be blamed on internal and external enemies. The Times editorial board assumes he thinks like an American capitalist where more is always better, or more accurately, there is not enough money in the world to make a truly greedy capitalist happy. Where Xi and US capitalists are of one mind is in the fact that both will use their people like slaves that can be broken and then discarded as trash.
1
I would ask the markets but theyre busy crashing atm.
5
And yet, this:
https://www.nytimes.com/2018/12/04/business/german-carmakers-trump-tariffs.html?action=click&module=Top%20Stories&pgtype=Homepage
Which is it, then? And who cares what the market did when the truce was announced: a ton of ink has been spilled as of late teasing apart the concepts of market performance and economic health. Can we at least entertain the idea that the tariffs long-game might positively impact the latter?
1
“. . . further widen market access, raise policy transparency and exercise fair and impartial regulation.”
NY Times is buying Chinese rhetoric. One born everyday.
1
No, Mr. Trump, you are not “Tariff Man”.
What you are is a celebrity tariff apprentice who doesn’t understand the most basic thing about tariffs that every real economist knows:
No civilization in the history of mankind has ever protected its way into prosperity.
You are inept. You’re hurting our farmers. You’re crippling our manufacturers who rely on foreign raw materials. You’re throwing the financial markets into daily chaos over the degree of uncertainty about just how inept you are. Just. Please. Stop.
Since we can’t “You’re fired!” you, would you please just watch TV and play golf for the next 2 years and leave the economy to the grownups?
30
With Trump, the bankruptcy king, along with his hardliners in charge, we will see little substance in this war on trade and the hidden tax, the tariffs, will still remain as part of his temper tantrum.
Trump promised the people he would install only the best people. It appears those best people that will negotiate with China are mirror images of him-bombastic, self-aggrandizing and certainly not icons among world trade experts.
When Trump makes claims of the wrongs China is committing I hold judgement whether these claims are untrue, partially true or exaggerated (the latter would be the norm for Trump in order to bolster his ego).
So, perhaps these negotiations will result in a trade agreement, should one be reached, that mimics what we already have, but, Trump will have bragging rights that his supporters will cheer.
In the meantime, we the consumer, the assembly worker, the farmers, retailers and financial markets will be held hostage by the whims of a not so brilliant businessman.
5
Trump doesn't understand much of anything, because he's completely out of his depth.
He's a con man. That's what he does. Then he boasts about and claims credit for "fixing" things he messes up needlessly and on purpose. He acts like an animal marking its territory, except it's our country that's on the receiving end. Gives new meaning to "trickle-down" economics.
Otherwise, he's merely incompetent. Such a magical combination.
47
Guess we chose the wrong businessman for the presidency. Did anyone check Angie's list or the BBB?
45
Trump needs to put just enough of his insane policies in place, so that when he fails spectacularly, as he always does, he can't weasel his way out of it.
Trump's excuses in advance:
-> it was the Fed.
-> It was Nancy Pelosi.
-> It was the Chinese.
-> It was the Mexicans.
-> It's Hilary's email, just ask Maureen Dowd if you don't believe!
24
thanks for referencing Dowd
Americans should all pull their money out of the stock market, let's see how that goes. There is no reason to invest money when some deranged man can trigger a 700 drop in the market by tweeting idiotic messages.
11
Wouldn’t be surprised if he or his cronies short the market right after his tweets.
3
@Jonathan. Thats exactly what I'm in the process of doing. I like the gains I've made and don't care to give them back.. (or more correctly let trump take them away). Happy to sit on the side lines for now.
2
All the more frightening because it’s the naked truth!
The trade war isn’t between China and the U.S. It is between the U.S. shareholder class and the U.S. non-shareholder class.
The shareholder class demands that their corporations maximize returns on investment, which can be accomplished by reducing labor costs through outsourcing production to low wage countries like China. This yields lower cost Chinese goods, but also the indirect impact of reducing the leverage and wages of U.S. workers.
The non-shareholder class loses their jobs and their communities are destroyed. They are told that they are lucky to be able to buy cheap Chinese goods at WalMart.
Trump isn’t negotiating with China. He’s negotiating with a wealthy U.S. establishment, Republican and Democrat, that is determined to retain its return on investment.
I’m a committed, practicing capitalist, a member of the shareholder class, and a globalization winner. Yet I can see that this is a shell game where the financial gains for some are offset by increased social spending for all.
Yes, tariffs are a tax. But so are government subsidized food, housing, medical, and education benefits for the U.S. workers who end up unemployed or underemployed.
I also see that offshoring can lead to a long term decrease in demand, which will ultimately hurt share prices as well.
Lastly, free trade with an adversary like China simply increases the need to increase our own military spending, which is also a tax.
There is no free lunch.
36
@John
Bam--you nailed the polarities, and did so well. The question in my mind is if you are willing to pay higher taxes to pay for social safety net/unemployment services as you gain as a shareholder and beneficiary of globalization. Or if you--like every single one of the Trump supporters I know personally (all wealthy, likely due to where I live, in coastal California) want it all: shareholder gains and cheap products, fat military, healthy government spending on all the services they use (national parks, highways, ports, airports, etc) and reduced spending on social programs, AND FURTHER CUTS TO THEIR TAXES. They want that free lunch, and in good measure are getting it. Which is why privately they support Don the Con. They rail against the threat of socialism, while meanwhile they have socialism of the rich.
12
@Michael
I'm a conservative outlier, because I'm not looking for lower taxes.
I liked some aspects of the recent tax bill, but didn't like lowering the top rate. I would have preferred to see it increase into the low 40's with the top bracket starting somewhat lower.
I'm not a 5%er, but am not hostile toward them either. I actually admire and respect most of my rich family, friends, and acquaintances. I think we need to be reasonable with tax increases and never raise them with the intent to "punish" success and wealth.
But, yes, if the shareholder class disproportionately accrues the benefits of globalization, including mass immigration of low cost workers, then it's only fair that their tax burden goes up to offset the social costs.
4
@John. Great. Where would we be without a member of the shareholder class and "globalist" winner explaining to the peons how they know best after 40 years of destroying unions and ripping the "47 percent" off?
Nothing this liar president is doing should be taken at face value, or for any other purpose than his and his family's personal benefit. They're accomplished frauds. The absolute pinnacle of the crooked "globalist winner" class.
And now that we know the Trumps were negotiating for their own financial gain with a hostile foreign power, and denying doing so, even as Trump the candidate called out for the Russians' criminal assistance, there's another word for what these people are: TRAITORS.
Our Constitution sets out a specific period of imprisonment for all who are aware of treason but choose to cover it up. Unfortunately, too many of those engaged in the cover up are Republicans still sitting in the Senate and the House.
Vote them out!!
5
"China, which has countered with $110 billion in tariffs on American goods, will reportedly lower some tariffs on American-made autos and resume buying soybeans".....
Canadians up here hardly buy American cars. I can't even see the Chinese buying them, when there are so many other cars like Japanese, Korean, and German cars to buy!
5
I and the president understand tariffs well they are like that stick you hit the mule with to get their attention. That worked somewhat, now we have 90 days to make a deal, or those tariffs will be used again. Very simple!!!
1
@vulcanalex Everything is so simple and "black and white" in Trumpworld.....too bad that doesn't match up at all with reality.
21
@vulcanalex
Phony deals. Incoherent comments from Trump. Kudlow in over his head. Incompetence all around.
America's consumers, Farms, and other businesses are the mules. Trump has our attention as he drives the economy into the ground.
Pretty simple.
7
@vulcanalex What "mule"? Tariffs are a TAX on domestic consumers of foreign goods and American products made with foreign components.
We're hitting ourselves in the face while hoping the Chinese bruise their knuckles.
6
Because Trump doesn't remotely understand Trade economics, he listens to 0.0001% Navarro and sends lightweight Lighthizer to joust with the world's oldest capiralists.
What could possibly go wrong - unless you're a US farmer, manufacturer, small business owner, tech company, banker who loans money to any of those folks, or, of course, a shopper.
23
Mr Trump is essentially a complete conman, whose only trick is to lie , defraud, pander and con his base. Regarding tariffs , the most effective tariff is zero purchase. China need not impose even 1 percent tariff on soybeans, they just quit buying it. Its that act ,more than anything else that has forced con-man Trump to seek truce.
57
Let me summarize your editorial and predict what we happen.
Trump is a free trader unwise before his and Ivanka's trinket/shoe factories in slave labor India went belly-up, he would have brought them back to America.
Trump will get a few bones from China, just like he did from Canada and Mexico and declare himself the greatest president since Lincoln but in reality is the biggest threat to democracy since Lincoln saved us all.
29
Wrong NYT. China is an unusually bad actor, a cheater, a thief, a country that keeps their markets closed by hook or crook.
Trump's mistake was to threaten tariffs with all our friends in Canada, Mexico, Europe, and Korea, thereby using up the good will and patience of his country when he needed to save that ammo for the real battle. NYT, if you give China an inch, they will take a mile. And they will end up dominating you. Mark these words.
1
Well, Will...China is the way of the future, and the US is not, so you have that. Besides, if you travel to Asia you will understand this predicament - the US is in far behind the world...and getting further.
3
@Will Hogan
Yellow peril and white nationalism....they go together like snakes on a plane.
3
@Will Hogan Perhaps China has the better negotiators?
1
It would appear that "winning" is more than spiking the ball in a vacuum - which is pretty much the sum total of the liar-in-chief's self-proclaimed accomplishments. The schizophrenic markets are reflecting global confidence in this continuing clown show.
7
Simple math question for the "very high IQ" Trump. Should be a breeze for you, Donny.
Select which is best Chinese trade figure for the U.S?
------ U.S. export ----- China import ----- deficit/gain
1/. ------ $500B --------- $900B ---------- $400B deficit
2/. ------ $300B --------- $500B ---------- $200B deficit
3/. ------ $300B --------- $300B ---------- $0
4/. ------ $400B --------- $200B ---------- $200B gain
1
Trump's trade policies are just plain stupid. Trump doesn't have a clue how global supply chains function. He doesn't understand that the free market allocates how goods and services are produced, not him.
He doesn't understand that when US manufacturers have access to cheaper materials from China, they can better compete elsewhere in the world. Our deficit with China creates surpluses with other trading partners. He doesn't understand that low cost Chinese produced goods are sold here at a profit and give consumers many choices at very low cost. You can now buy a 50 inch TV for $300.
Trump thinks that the antiquated, closed factories in Ohio are going to ramp up. No they won't. They wouldn't be cost competitive with China unless Chinese prices went up 200%, not 20%.
Trump doesn't understand that foreign exchange rates can vary greater than his tariffs. They are currently working against us, wiping out any price advantages.
Trump doesn't understand that the US and China make up nearly half of the global economy. As we slow down from the tariffs, the world slows down.
All Trump has done is to levy a tax on the American consumer with these tariffs and force domestic producers to shift production elsewhere where costs are lower.
Trump cannot repeal the laws of supply and demand. As the price of the supply goes up, the demand goes down. Trump will cause a recession if this tariff nonsense is not put to an end.
86
@Bruce Rozenblit
Yes, but Trump is the ultimate idiocracy President.
His supporters will learn nothing from his mistakes until the economy is deep in recession.
And...they *do not* read the New York Times.
23
@Bruce Rozenblit So, what are YOU doing to get rid of this conman? It is a situation we are enduring since Jan 2016...!
5
Nothing. I like him though I wish he were more restrained in his comments.
Any ''negotiation'' with China is never going to be a two way street or even has the possibility of some sort of detente.
We are dealing with a totalitarian state that will do what it wants, when it wants. It can move state money to any sector and subsidize it to gain market share at any time. Couple that with currency manipulation (again controlled exclusively by the state), and they have a continuous unfair advantage.
Now throw in that they are playing a geopolitical game of keeping the west (America) on its toes (spending oodles of capital and using resources) in the South China sea, and with North Korea, while at the same time expanding its investments (especially Africa) and they are dominating.
The only thing that can be ''achieved'' is some sort of ''deal'' at the top, where a small group of companies (this administration's backers) that will gain a little more access to the Chinese markets - enriching a select few.
Welcome to the hall of mirrors ...
6
Thanks for writing this. Just a clarification, if I may, per the penultimate paragraph. Canada already bought more goods and services from the U.S. than the U.S. buys from us, notwithstanding Trump’s lies to the contrary. So we were unusual, perhaps, among U.S. trading partners. We Rama trade deficit. We haven’t engaged in unfair trading practices. We didn’t abrogate NAFTA. And now we’re the country most affected by the Trump administration’s tariffs, by far.
23
@Larry McCallum
Yes 400 Canadian dairy family farmers will go out of business snd our steel and aluminum producers and users are facing layoffs and possible disaster while American producers are raising their prices. Americans face increased costs on houses, cars, . . .
9
"But as he found out with Mexico, Canada and now China, trade is more than the sum of goods and services exchanged between nations." The statement implies that Trump may have actually learned something. Unfortunately there is an abundance of evidence that learning is not a thing Trump is particularly interested in doing. I am not optimistic that in this case it will be any different.
64
"...more disruption than progress." This seems to be one of the overriding themes of this entire administration. It is truly unfortunate that Mr. Trump doesn't realize that bellowing insults and acrimony via Twitter is no substitute for actual diplomacy and negotiations. Yes, China is guilty but he is sorely mistaken about Chinese culture if he believes that this is an effective way to engage them.
And of course there is no "deal", just a discussion between him and Xi that will string him along. Put this one in the same basket as North Korea's nuclear program, the wall on the Mexican border, health care reform, etc. Bluster and pontificating to cover up his lack negotiating skills, diplomacy, and knowledge.
85
With his tariffs and insults Trump has destroyed the relationship with Canada, formerly the model of all bi-national relationships. I doubt Justin Trudeau will be giving an eulogy at his funeral as Brian Mulroney will be doing at George Bush's service this week.
69
China is more likely blinking because they can't get enough soybeans from South America and they don't want to pass those high tariffs onto their consumers. They need our soybeans. And if the metals tariffs were a real concern to GM, explain why they're threatening to shutter their plant in Canada. Why not shift production there? Bunch of baloney.
3
@Chris Gray - The Oshawa plant was tooled for sedans, like the US plants that were closed. The metal tariffs are an issue, but not the main issue in this case.
2
“It’s an incredible deal,” the president claimed, and yet it is not, in fact, even a deal.
Moreover, this "incredible deal" was never needed until trump stuck his ugly finger in the trade pie. Trumpsters, OTOH, will fall for this framing and chalk up another "incredible" win for trump and America. It is one thing not to understand tariffs, but it is foolish to applaud Trump for an action that would never have been needed but for his unnecessary meddling.
59
Trump said that the US has a good deal because it is collecting billions in tariffs from China. What an ignorant statement. Tariffs are paid by the buyers of goods (us) not by the sellers (China).
He doesn’t even understand his own policy.
335
@Pb of DC Thank you. I import some packaging components from China, and customs sends ME the bill, not anyone in China.
The money from the tariffs is from American businesses... not the Chinese.
97
When I get my check at the local restaurant I see tax has been added. Thing is, that's not a rebate to me; I have to pay it. I don't know how stupid Trump thinks the public is if he expects us to believe that tariffs on imported goods represent income from the exporting country. Tariffs make imported goods more expensive for the consumer, and in that way may reduce sales of such imported goods and boost sales of previusly more expensive domestic goods. Oh yes! And Mexico will pay for the wall.
135
Of course it's an "incredible" deal! Incredible as in not credible or not believable.
See, our prez is a yuge Engleesh speaker.
20
“the clock is now ticking on the 90-day truce”
And in the meantime there is TPP-11. A modified TPP made up of 11 countries and will go into effect at the end of this month. Had this Administration not left the original Trans-Pacific Partnership, today they would enjoy the benefits of the third largest trade agreement to combat China’s economic powerhouse. But no, President Trump was not about to accept any agreement negotiated by a previous Administration, particularly President Obama’s.
So as the clock ticks away and Wall-Street wakes up to the fact that the truce between China and the U.S. is only temporary, the stock market drops almost all the gains from just a few days ago.
Pretty sad.
54
@cherrylog754 Remember that Trump called both the NAFTA and TPP failures.
I believe the failure is Trump himself.
13
@cherrylog754
To be fair about the decision to leave the TPP, most voters I know who associate with the Democratic party were also against the deal—as was Clinton by the general election. The Bernie populist effect, maybe.
I always trusted Obama and his administration's judgment on the TPP, but I was definitely in the minority. The American voter public got suckered into that one without really considering the real trade and economic implications, but it's now obvious that it was a bad idea. Sorta like a smaller version of Brexit in the UK.
3
Dear NYT, you need to start your articles with a blunt accurate summary of the content which will follow. For example:
Mr Trump is an idiot who understands nothing about Tariffs, or any other economic topic. Apparently he is expert in corruption, possibly the most corrupt President ever. The Republicans apparently do nothing about this and therefore we can safely assume they are happy to have an idiot run the country - an idiot is easy to manipulate, especially one this corrupt.
Now you have "his" attention, continue to expand and explain ...
217
@buffy
I like the idea, but I believe in practice Individual 1 would read five words and just start tweeting. He's not into reading, you know.
16
Buffy
I agree with you in re the lead paragraph of any article or opinion piece on our dear leader. Begin with “our idiotic leader” and go from there.
20
Trump, the "genius," is an absolute idiot who actually believes we are "losers" if we have a trade deficit with some or another country. A complete, utter idiot.
226
Re: Whatever the rationale for imposing them
Tariffs have their place when trading with a country that have much lower wages and few rules about protecting workers or the environment.
The US has used tariffs since the 1920 to protect its agriculture.
The US has used a 25% tariffs since 1964 to protect its production of light trucks (pick up and large SUV's). It has saved the US auto industry as otherwise the production of light trucks would have gone the way of the passenger car industry. As to cheap cars, GM makes the Buick Envision and the Cadillac CT6 hybrid exclusively in China, at Chinese wages (1/4 of the US) and exports them to the US - pocketing the difference as corporate profits
Finally, what counts is NOT the price of a product (inexpensive cars) but the buying power. That's what a product costs relative to salaries earned.
Outsourcing has lowered wages in the US for those exposed to it. Cheaper products make partly up for it.
10
I think it's the NYT Editorial Board that doesn't understand tariffs. We're at the beginning of a trade war with China, and NYT is already pointing out that jobs have not come flooding back to the US. No person on the planet advocates a trade war because of its positive short term effects. The expectation would of course be that a trade war affects both participants in a negative way initially.
The question is whether we should be willing to tolerate the negative effects we know are coming in the short term if we think the strategy of making China pay for its abuses will force it to a more fair trade relationship with the US long term. Unclear at this point how bad it will get and if there is a more fair trade arrangement coming in the future, but Trump is 100% correct that there is no time like the present to push the cause. China is much smaller than us economically today, but in ten years they will be blowing past us according to current projections. In the meantime they're stealing our secret sauce (our IP). If we can't tolerate a little pain to get them to stop now while we enjoy the largest economy in the world, and the economy is firing on all cylinders, just imagine what this fight looks like when they're actually bigger than us at which point it is likely that we would not be on such sure footing economically speaking.
I'm actually optimistic that Trump works out a deal that while not ground breaking is better than the status quo.
1
@Bill
Trump doesn’t have the slightest idea what’s he’s doing. Not sure from where you optimism comes.
58
@Bill
The only chance for extracting concessions from China was lost when Trump rejected TPP and started trade war with EU. Working with all TPP and Eu countries together was the only way to force China to change it’s way.
This predictions of “short term pain and long term gain” are so silly, just empty Trumpian thinking. The G-20 meeting with Xi clearly showed who is in charge in these tnegotiations. Trump was all talk and Xi was the substance.
6
For your information, man, I do understand tariffs. I also know that we have been significantly disadvantaged by unfair tariffs imposed by China and other trading partners. Other than developing countries, of which China is not one, all tariffs should be abolished.
5
The Trump Tariff Wars produced zero positive results for the U.S., or for the global economy -- with a couple of possible exceptions. First, a few Trump voters in areas particularly hard hit by the tariffs may have finally learned that the "stable genius" occupying the White House is neither of those things. Second, it's now confirmed that Larry Kudlow, Trump's chief economic advisor, knows nothing about economics.
191
@ALB
Kudlow supported Bush all the way through the economic meltdown. His stupidity did not require further confirmation.
32
A factory can be moved to another country. However, a soybean field cannot be moved.
17
@Curmudgeon51
But the soybean farmer can be moved off of his or her property when the farm fails. Maybe that's the goal all along. After all, someone will buy the bankrupt farm for pennies on the dollar. Always follow the money.
98
A soybean cannot be moved but farmers in other countries are quite capable of growing soybeans, while those grown in the US rot in the fields for lack of buyers.
33
@Curmudgeon51
Soy farming is shifting to Brazil and it's no coming back.
20
Trump does not know more than the economists anymore then he knows more then the generals or scientists. Trump on almost any issue panders to his base and considers the financial impact to the Trump family.
351
@REBCO
Trump doesn't consider the impact of anything. He just assumes that he can lie his way out of any problem he faces in the future just like he has in the past. And as long as he lands safely offshore with his billions and his hotels he considers it a win. He rightly has no regard or respect for Americans he has harmed because he can truthfully say "they knew who I was before they elected me". In following his own nature he has not mislead anybody.
11
You don't understand trade war, NYT Editorial Board. If the ruling coalition of "very fine people" maintains its grip on power, they win. It doesn't matter if the economic casualties are worse than 1929: a win is still a win. Even if the US were to reach the condition that China was in around 1960, with millions of deaths from famine, a win would still be a win.
It's not about trying to make anything better. It never has been. It's about making things worse for their enemies by a greater amount than they make things worse for themselves. That's why it's called war.
14
@dsws I call it cutting your nose off to spite your face...
24
One of the key problems is that Donald Trump is trying to run the country like he ran his mom & pop licensing operation. There is a clear lack of leadership .. as in true listening, clear statement of goals based on thoughtful analysis, sticking to agreed upon strategies, not throwing your staff under the bus at the first sign of trouble, being charismatic and a source of inspiration, uniting people in a direction.
Tariffs is just one (minor) manifestation.
117
Accurate analysis of shaken but not stirred NAFTA. Anyone or anything trying to paint the road with tiger stripes instead of lanes quickly learn that habits are entrenched and change is hard. So is collecting new taxes with mature industries that can open and close manufacturing plants in the blink of an eye. However farmers are more difficult to handle as dirt resides under their factory floor. So, Trump is more Jell-O than Santa Ana winds blowing out to sea.
5