The Global Economy Was Improving. Then the Fighting Resumed.

The escalating trade war between the United States and China is threatening the global economy.

Comments: 230

  1. Who pays these tariffs and where does the money go? It sounds like a tax that is paid by importers of Chinese made (or American made, for the Chinese tariffs) goods, a tax which I presume just gets passed on as higher prices. So does each government basically collect the tariffs as a tax, which then goes into its general fund? This part of the tariff process -- who pays, where does the money go -- always seems missing from these stories. I think some people presume the Chinese government is forced to pay tariffs which results in more support for this as a policy. As far as I know, the policy's goals are to make Chinese goods more expensive to consumers but really, ultimately businesses who buy manufactured goods, incentivizing them to find other sources and creating an incentive for other people to produce these goods when they otherwise couldn't compete against the Chinese.

  2. @Mobocracy It is a "tax" that can be, perhaps painfully, initially, avoided. Buy from some place other than China. If the response is, 'but how do I do that, they make everything?', perhaps we should all pause, and think about that. Because this is another way of saying...America will have to live (or die) with a never ending trade deficit with China. Some people think that is no big deal. Others think it is. But that is the argument that SHOULD be spelled out to the American people. And as well, if the Chinese 'make everything' as to not allow us the freedom of choice to by elsewhere, what does that say about our supply chain dependence on them in a crisis with them? Trump's omnipresent bluster notwithstanding, it WILL be a painful period when America confronts these issues. And either does something about them or decides to live with this dramatic trade imbalance. Either way we should face up to this dynamic, once and for all.

  3. @Mobocracy You asked: "So does each government basically collect the tariffs as a tax, which then goes into its general fund? . . . This part of the tariff process -- who pays, where does the money go . . . " On the US side, tariffs are paid to Customs & Border Protection who then remit them to the Treasury. The funds are not earmarked for any specific government purposes, so they to to the general fund. As to who pays, generally the importer of record pays the tariff, at least initially. The importer obviously passes that cost on to various parties. Economists, regardless of political persuasion, agree that the bulk of the tariff is eventually borne by the consumer. Tariffs and taxes are functionally equivalent. President Trump is correct when he states that "we are collecting billions" from his tariffs. What he's not telling you is that most of that money is, or will soon be, coming from your own pocket. As is the case with many taxes, tariffs are highly regressive, and cause more economic harm to lower income groups.

  4. @jonst: Years ago I read a story about how the US Military needed a special 'widget' (for something) and couldn't get it in the US and so bought it from China. I remember thinking that that wasn't too smart, in case we needed to go to war. I wonder if that's still true and if there are, in addition, other 'must-haves' for the military that are now made in foreign countries, including China? America, in addition to being a war-like nation is certainly a stupid nation. Perhaps we deserve the coming downfall that Trump is creating through his illogical destructiveness and all his lying/gaslighting.

  5. This is scripted fighting, with a deal date already reached and a meeting set in Florida with Trump and the dictator from China about planned a year in advance. Look for 10% rally in the stock market, and in about November no one will remember this issue. Maybe money in Switzerland is being discussed and shared.

  6. Why should American workers have to compete with third world slaves? Why should American factories have to compete with state-subsidized factories in other countries where pollution is unregulated?

  7. @Greg Why should American taxpayers -- on Trump and Rick Perry's orders, have to subsidize his trade wars and "Beautiful coal?" While the GOP cries "socialism!"

  8. Don’t worry the EPA is run by a coal lobbyist. He has already helped deregulate the environmental rules and destroy the institution.

  9. Of course, POTUS is taking advantage of our strong economy. Our domestic market is so huge as compared to rest of the world that a little slippage in exports does not harm our economy. We are not export dominated economy and everyone knows it. While this pain might be bearable, the key advantage is other Asian Tigers will soon set up activities to bypass tariffs on Chinese goods and start exporting them. For that matter, nimble Chinese manufacturers may set up factories in these Tiger countries to bypass the tariffs. As long as our economy remains strong and chances appear to be good - this may be a short summer squall at worst. As to Europe - I think it is the least concern of this POTUS after the way he has been treated on a host of concerns he has raised with them. So, on one hand, this may be slightly painful to USA - on the other hand, Europe might rethink its knee jerk opposition to everything this POTUS does.

  10. @Neil Re "We are not export dominated economy and everyone knows it.:" ??? Tell that to the farmers in my state, Michigan, where one of every three acres farmed is for EXPORT. Tell that to the soybean farmers of the Upper Midwest? Ah, but Trump is the king of bankruptcy. All these smaller farmers will go bankrupt (check the farm bankruptcy rates lately, Neil?), and Big Ag and the hedge fund people can sweep in and sweep up the little dead farms at bargain-basement prices. Rural America will sink deeper into obscurity. And ... MAGA!

  11. @Dixon Dudderar Exactly, billionaires benefit from bankruptcies and recessions. The Republicans aren't dummies.

  12. The communist party allows the voices of Chinese nationalism to rise. It helps the government weather the storm and portends also that the Chinese are in this for the long haul. When the economic pain of this needless trade war reverberates through all the farm states and Trump country, will the Trump nationalists still be so loyal to him? He won by such a razor thin margin, an almost freak occurrence of the electoral map tally, that one doubted it would ever be repeated. Even before this trade war. It will be good riddance if this naive fool is defeated in 2020, before he and his party actually tank the economy and set us irreversibly on the road to bankruptcy. He got his ideas on trade from watching Lou Dobbs on TV. Oh for the love of Pete.

  13. @Michael There was a lot of cheating in the South, too. Republicans in the Supreme Court allowed them to close polling places in minority communities. And then there was the outright cheating and Russian disinformation. It will all happen again.

  14. So this is not a surprise that talks have failed so far. This is what has happened for the past two years and if you asked former business partners of trump, it's how he operates. His M O is to promise the world then all of a sudden it's the other guys fault and he has to pull out. We have no idea as to exactly what was in the deal that China reneged on. We are told that the Chines are paying the tariffs but that is not true, goods come to our ports and are purchased by importers who then have to pay for the tariffs. The people who buy from the importers have a choice pass on the increase or eat it. We are told that this is about intellectual property and the Chines are stealing our ideas. If so then they can go to the WTO and sue. American co. went to China for the low working wages, you know exploit them as they have here. They made deals that had them giving away intellectual property in order to build factories, no one put a gun to their head to do this. They just wanted to make more money than in the US. US co. started coming home about 2010 when labour in China was growing and shipping coast were increasing. It has been estimated that they saved about 3% when they went to China. Thats right 3% that's what they made to sell the middle class down the road. Know they want US to bail them out, and state that it's a fight for all of US. Tariffs will not hurt their bottom line as bad as the middle classes. So instead of suing and using their money they want ours.

  15. @oscar jr It's not a surprise that his policy ideas all came from his father, who voted for Herbert Hoover. It's amazing that the Republicans won't impeach a man destroying their wealth. But rich people are always overconfident and used to making excuses for bad behavior.

  16. Tariffs are a tax on the American consumer. Regardless of how many time Trump lies and says that China is paying this tax, China is not. Tariffs are placed upon goods arriving in this country and are paid by the importer. Initially, some importers tried to hide a price increase from the consumer and some did not. Imported washing machines (and dryers which we not subject to tariffs) rose in prices and the consumer paid more for the same product. Imported steel rose in price as well. However, American businesses decided that, rather than compete against high priced imports, it made good sense to raise their prices to match. And, the government extracted more taxes from the consumer and businesses made an unearned profit. Now that all products imported from China will be tariffed, this amounts to a tax on the American people that Trump would never have been able to get through Congressional legislation. Tariffs are, essentially, a national sales tax which goes into the general funds of the United States.

  17. China has used the WTO to its advantage and does need to change its policies. But when the US acts unilaterally it seems so counterproductive and seems to strengthen China's desire to resist change. We need to work with our allies. Unfortunately, thanks to Trump and his administration, we are turning our historic allies against us. We, as Americans, will pay the price for our foolishness. We are paying the tariffs now; and in the long run, we will pay many times over as the world moves forward without US leadership. After all, what sane country would want to follow Donald Trump???

  18. The United States would.

  19. So....by deductive reasoning that makes The United States.....?

  20. Yes, John--I'm sorry, yes.

  21. But come on, the trade war is great for countries like Russia, for a weakened America can only mean a stronger Russia. An America bogged down in a decades long war in Iran will help bankrupt us, and Putin will once again dance with glee. Though he is nominally a friend of the Shia Iranian government, he is totally devoted to the inundation of America in debt and internal battling. When one totals things up on a win-loss board, one needs to change the label "Trump" and put in "Trump/Putin", and then the reasons for stupid trade wars and Middle East bloodbaths become apparent. We are led by fools and traitors. Not sure where that puts the Senate, to be honest... Hugh Massengill, Eugene Oregon

  22. It's a matter of take some bitter medicine now or face the total collapse of the system later on. I'd rather have the bitter medicine now.

  23. @Amy If the total collapse of the system isn't an immature brat unilaterally starting trade wars and real wars, what is it exactly? You all don't get it. We stopped taxing the rich. We have no money to recover in a recession. Once we lose our spot on the pedestal, we will never get it back. Look at the British empire a century ago. We're the richest nation in the world, the only problem with the system is Republicans running rural states into the ground to help people that are already rich. Unions, immigration, international trade, federal regulation, these are the things that built our middle class prosperity, and he's throwing them all out.

  24. @Amy The "bitter medicine now" is a certainty. There is no assurance at all that the "bitter medicine now" gets us to a better time later. The history of tariff wars is uniformly bad. Look up the Smoot–Hawley Tariff Act to see a really bad example. https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act

  25. Call the Kid by it's Name. the worlds problem is not Trumps problem. China Reneged on its agreements. I was knocked off by Chinese of Intellectual property By the Millions and there was nobody to talk to to stop this. finally we have someone stand up for our Intellectual property. keep it up till China Signs that Clause of Protecting US IP

  26. Headline: Then the Fighting Resumed. Fake news! But don't worry! I fixed it: Then, Donald J. Trump decided to throw the economy into chaos, burdening American consumers, and terrifying American farmers, with no apparent understanding of how trade works, and no clear strategy for how to win a war he just impulsively escalated. You're welcome.

  27. DT has your comapny's future, your IRA and 401k, and your fathers pension stacked up on the table as poker chips. His currency to burn in a testosterone rant. Why would I care about IP for companies like Apple, if they don't care enough to locate fabrications in China in the first place. Apparently it wasn't a concern, ever!

  28. This is a part of what effective action on climate change will look like. It will require less international trade and higher prices. The Green New Deal wants to have its cake (economic growth) and eat it too (action on climate change).

  29. Do we all get it now that Trump is doing everything he can to destabilize the world and create enough chaos, even a war, to save himself the humiliation of political defeat in 2020? He is leading us up to a declaration of emergency rule for himself. And the Republicans in the House and Senate are helping him all the way, all the time.

  30. @Hugh Putin must be happy with this unilateral seat of the pants move by Trump. Larry Kudlow should resign since Trump doesn’t seem to value his input.

  31. Since China joined the WTO, and before, they have continually manipulated the system to their advantage. They have ignored the international norms and rules. Perhaps what Trump is doing with tariffs will lead to a trade war. However, to "pass the buck", as previous presidents have done, would lead to no trade at all. China would control. At some point the US had to stop being the pacifier.

  32. Maybe we shouldn’t run up such large debts with them.

  33. Where do economists live? The sky and ocean are being armed with weapons of mass extinction. Fundamentally, we're cutting on our children's jugular every day, bringing the promise of global "premature and perverted death" and you're reporting on knife sales. I read about the glorious efficiency of the market, e.g., that 20 countries are engaged with market efficiency via specialization to produce various parts to create a Barbie doll. 20 countries... shipping fluff across the globe. That may be efficient as measured by monetary code, but the efficacy of the world's dominant app — humans deploying monetary code — has been crushed, blown up by exponentially accelerating complexity. Complex relationship-value computation can't be done with that app anymore. The information processing specs are far too weak, i.e., the information processing of relationship-value lacks sufficient: Reach Speed Accuracy Power and Creativity. Those very relationship-information-processing competencies are ALL Fundaments of passing selection tests. That's why the sky and ocean are being converted into omnipotent terrorists. Fundamentally, our biological & cultural coding structures do not match our unprecedented environs. That's a survival problem because: “The rule of thumb is that the complexity of the organism has to match the complexity of the environment at all scales in order to increase the likelihood of survival.” Physicist, complexity scientist — Yaneer Bar-Yam — "Making Things Work"

  34. The grossly incompetent Trump is now in a bind. He successfully demagogued the trade/loss of US blue collar job issue into the WH with an insane trade war with the whole world instead of a non onerous carefully crafted plan. It is slowly leading to disaster but he cannot be viewed by his base as giving in. I still say the demagogue will announce sometime between now and 2020 that the war is over and he is the greatest president since Lincoln after getting a few crumbs from China.

  35. @Paul: And he'll demand to have his face carved into Mt. Rushmore.

  36. @Sophia-Yes, it is just a matter of time. If he doesn't succeed he will carve in into Trump Tower someplace.

  37. Reading the comments here it seems most are unwilling to experience some discomfort and allow the Chinese to continue on their present path of domination and subjugation. The Chinese are not our friends unless of course your name is Hunter Biden.

  38. Some discomfort for what exactly? So the free market can impose rules? When do republicans actually support any rules? If you were a store and had access to 1 billion customers and tomorrow you have access to 100 million how much will your sales potentially fall? Some discomfort? Trade wars and protectionism often lead to war. Trade means we are talking. Isolationism and xenophobia means zero sum and we have to fight over what we need or want.

  39. Or Ivanka Trump. Or Jared Kushner and Family.

  40. There are a few victors when tariffs are imposed but many losers, depending on what industries are being targeted. However, China can’t expect to pull the rug out from under this agreement and have us take it in stride. If it’s a bad deal then walk away.

  41. Not jus a trade war... but a trade war with a country who happens to hold significant US government dollar denominated debt at low interest rates... be aware

  42. The first words out of some Americans' mouths are "We surrender." People hate Trump, but he is the only President in twenty years to push back on China. I'm more more worried that he'll cave for a few soybeans.

  43. @Jim It is this sort of simplistic cowboy-style thinking that got us into all this trouble in the first place. Trump has no understanding of tariffs, let alone the economy. To make it worse, he lacks not just diplomatic skills, but basic tact. He has no understanding of the consequences of starting a trade war. He is a consequence-free president, for he has a number of fawning shills who cheer whatever he does.

  44. @Jim No. That is the wishful thinking of maybe a Trump supporter. If Trump wanted to effectively change China, he would build a coalition of our allies that would have the ability, if acting in an economic alliance, to negotiate forcefully with China as the European market is the same size of the U.S.'s. Only together will we change policies that are more reasonable especially around IP. But Trump has added tariffs to Canada and Europe and antagonized them. You see the losers here are the American consumer who pays the tariffs, the American workers affected by the flows of trade in which they work, workers affected by global supply chains everywhere, the Chinese lose, American farmers lose markets, Europeans lose similarly, and guess who wins - Russia. What a shock. So now we have a trade war when only a few weeks ago we were supposedly just about there on a deal - just a Trump lie. Like all the other lies. But now we have gas prices surging with our threats against Iran and guess who loses just in time for summer, what a coincidence. The same folks lose and win as the above. But who really wins - the producers of oil, that's who. Like Saudi Arabia, and you guessed it, Russia. Hmmm. It is just so predictable. Every thing Trump has done has benefited Russia and hurt our allies. It has hurt Americans who buy goods and Americans who sell things like agricultural products, you know farmers. Starting to get the real picture? You reap what you sow.

  45. if they don't buy our soybeans they'll eat (what's the price of tree bark these days) instead.

  46. The idea that a tariff on $200 billion in goods traded between the US and China will somehow implode a $100 trillion global economy is ludicrous. While I am not a fan of tariffs, China has run roughshod over the global trading system for too long. Say what you will about Trump, he has taken the problem on, unlike his two predecessors. The Times has emphasized the "threat" of tariffs in its coverage, while minimizing the risk of China's lawless approach to trade. A bit of balance is in order, even if it somehow benefits the paper's enemy in the White House.

  47. You mean “ The Peoples Enemy In The White House” ?

  48. ‘Unlike his predecessors’? TPP was designed to pressure through collaborations of many nations. The Donald’s is a reactionary approach to taxing imports is risking manufacturing in the US. China produces and control raw materials needed in the US for industrial and consumer goods. Pressing them into a corner will have consequences.

  49. stop making sense.

  50. Was improving only at the financial level. World trade has grown to a halt since 2008-9. That why inequality has skyrocketed since then. Globalization is functionally over.

  51. Which leads to war. Trade and disagree or xenophobia and war.

  52. It has become obvious why Trump has gone bankrupt so many times.

  53. @Tom The only folks who suffered as a result of Trump’s multiple bankruptcies were his contractors and lenders. He and his family made off like bandits. He has used his tax evasions and business malfeasance as badges of honor, building cred amongst his cultish and enraptured base. So, no; I don’t believe, by fomenting economic chaos across the globe, that he will personally suffer the slings and arrows of outrageous fortune. (He and his cronies are probably shorting the Street as we speak.) Rather, it will be our citizens and all others around the world, who will bear the consequences of his life-long grift.

  54. There is a strong possibility that the increased economic activity we have seen was in anticipation of this trade war. I bought and new furnace and AC last year for fear of a big price increase. I bought a new battery for my ebike two months ago for the same reason. I stocked my inventory for my business last year for fear of higher cost items. Well, the trade war has arrived and here is what has happened. Business has crashed. I'm having the worst year in in over 20 years. It's scary bad. Yesterday, one of my large suppliers called me and asked if I wanted to buy anything. I'm a small shop, I don't buy that much. They never call, but they called. That means their sales are tanking. They said things were slow. I asked them if other customers said their sales were off and they said yes. In business, when people admit that sales are slow, that means they are really slow. My supplier said that prices are going up. I can see that now from the original tariffs. Increases will get much worse now. This talk of who pays tariffs is nuts. No producer, distributer, or manufacturer can eat a 25% tax. A 5% tax, maybe, but not 25%. The consumer always pays that tax, always. These costs are always passed through the system. These tariff taxes will greatly slow the global economy. The tariffs will cripple key industries which others leverage off of. You can't sell tires if you don't sell cars. You can't sell ear buds if you don't sell iPads. Losses get magnified.

  55. @Bruce Rozenblit: I'm prepaying my heating oil for this coming winter (and my furnace is still running today, May 15!) in anticipation of increasing 'upsets' with Iran, or maybe full-blown tail-wagging war and a spike in oil prices. How is it possible his cult fan base likes this chaos?

  56. @Bruce Rozenblit What kind of business are you in? I do recall in a prior job, calling customers to see if "they needed anything" when times were slow. It wasn't fun.

  57. @sophia Because they saw him on TV as a 'big man'. Go figure. Great White Hope.

  58. Trump wants the stock market to fall at his predicted time to make more money. Some of his cronies and maybe himself make more money when the stock market falls by "short selling" their stocks. If you can have a crystal ball (Trump Tweeter), you can predict when this happens. To explain how this works, read the book or watch the movie - "The Big Short". For example, Trump borrows 100 shares of stock in Company A from me worth $100 per share, with the stipulation to give me my 100 shares back in 2 months. He then immediately sells the borrowed stock (short sells) for it's full value of $10,000. He tweets some obnoxious statement about how he is going to get China, and hit them with tariffs. China retaliates with their own tariffs as punishment and the stock market prices fall drastically. The stock that I lent to Trump drops in value 50% to $50 dollars a share. Trump then buys the 100 shares of stock back at $50 dollars a share (only half the cost that he bought it for) for $5,000. He returns the 100 shares of borrowed stock to me. I have my 100 shares of stock back, but it is only worth half the value, $5,000, as when I lent it to him. What happens to the other $5,000, and where did it go? Trump's pocket. He keeps it and makes $5,000 off of the deal, doing nothing. In reality, no one knows when the market drops or goes up - but if you had a time machine, or can manipulate markets like Trump can with his "tweeter", you can fleece America. Happy Landing Folks!

  59. @Tim Shaw: thank you for that. No doubt to me the Team TrumPutin are working fast at it. The Crime Family in the ShiteHouse never disappoints.

  60. "These are not ordinary times." ordinary time exists in quantum physics but not in shipping

  61. It amazes me that so many Americans have not read or do not remember their constitution. And the manipulation of it by various administrations. Originally revenue was supposed to come mainly from TARIFFS. On imports. If it is felt that the consumer needs some relief from tariffs simply, reduce income tax for those earning less than 100K Per Annum. This fight is not about trade, it is about getting p45 reelected, and making china play by the same trade and IP rules, as everybody else. The first is unnecessary, the second is long over due job, that needs to be done. Having finally started America should finish the job, as it has already set itself, and the planet, on the path to recession. Possibly depression. Hence America may as well, get something in the way of future rule compliance from ccp china, in return for the coming Economic pain.

  62. @d If a president is placing tariffs on goods then he/she should at least be honest and state the tariffs are a hidden tax on the consumer rather than gaslighting and stating a government, say China or Mexico, is paying the tariff. That is some of the issue-the constant and blatant lies from Trump.

  63. Article fails to mention that the trade war would not have resumed if the entirety of the American public, and Congress, would support this president in his efforts to stop China's abuses. They know he is bitterly disliked by half the country and are desperately hoping he is not re-elected in 2020. They are not in a position to wait out the election though so it will be settled in a couple of weeks. Then the naysayers can criticize whatever is in that agreement and it will be published here.

  64. @GregP What part of the TTP didn't you think would have worked to accomplish the goals you stated?

  65. @GregP I'm sorry, but why would the entirety of the American public ever support someone who openly denigrates everyone outside his minuscule base of straight white protestant men? If we're going for stopping abuses, why aren't any Trump super fans clamoring for an end to Russia's myriad abuses?

  66. @GregP: You think China is going to bow to Trump on this? Do you realize how long China has been a nation? And currently under a 'president for life' who doesn't have to worry about the next election? You think Trump can take down Xi? China owns our debt which is considerable. Yes, we're powerful and so are they. And together with our allies - like Canada, Great Britain, France, Germany - we could have put way more pressure on changing China's bad ways. But we have a 'leader' who says, "I alone can fix it". America is crumbling quickly. No one in their sane mind can support Trump. How you can, I do not understand.

  67. This tariff battle is nothing more than Trumps effort to bring back American Jobs from China, and he may succeed.The Tariffs will destroy the American Importers of Chinese goods, and encourage American Factories to take the covers off their machines & start to produce again. This will mean that there will be a demand for Factory workers , which may be impossible to acquire, Header Men that operated Cold Headers for the production of rivets & other Fasteners have by this time found different jobs in different industries. It will be very hard to replace their skills.If Trump is successful he will increase a robust Industry to new heights & reduce unemployment to new levels. This will be very difficult for the Dems. to overcome in 2020.

  68. @Independent1776 The US does not just have factories and machines sitting idle, waiting to start producing. It takes a couple of years to procure and install machinery, set up a supply chain, and hire the right talent. All that for one product. The switch can not happen overnight.

  69. @Independent1776 Your premise is wrong. What Trump is doing is good only for the Russians and those who invest based on knowing when Trump will upset the political and economic winds with this approach to China that changes from month to month. If and when a company decides to build a factory in the U.S. it takes years and capital. Capital that will be invested in automation and robotic means of production. That means most of the jobs will go to more or less highly skilled engineers. If companies decide to move out of China and not invest in technology, they will move to low cost countries like Mexico, and elsewhere where costs are low. Either way, it's just an illusion that low level production jobs are coming back to the U.S. until some other cost offsets the labor cost. And as Republicans have opposed all infrastructure spending including updating the power grids that might provide an economic advantage, there are no real incentives to move production here. If Trump wanted to contain China and reduce its ability to extract concessions in terms of IP he would be better off with a combined front of allies - Canada, Western allies all united against Chinese policies. But what has Trump done? Added tariffs to Canadian and European allies products that weakens them and eliminates any chance of building such an effective alliance needed to thwart China's policies. And again, who wins here. Let's see, China loses, U.S. loses, Europe loses, and by default Russia wins. Wonder why?

  70. @Jason With all due respect you don't know what your talking about. American Manufacturers of Blind Rivets stopped manufacturing & started to Import , because they couldn't compete with China.Most of the Factories that produced Screws now import from China because they couldn't compete.To avoid the Tariffs these Companies see a great opportunity to start up their production as the Importers go out of business.

  71. Higher taxes (tariffs) and prices are nothing compared to the havoc China could wreak if they stopped being the USA's greatest lender. Keynesians (I'm looking at you, Krugman) ridiculed the debt hawks, and now the chickens may come home to roost.

  72. “The harm could be especially severe for countries that are most dependent on trade, including Singapore, Malaysia, Mexico and Japan.” You’re 2 for 4. The primary result of a tariff war with China will be a shift in supply chains to other low-wage countries. This includes Malaysia and Mexico. It also includes Vietnam, Philippines, Indonesia, India, and maybe Pakistan. If we are lucky, it might also include Central America. This shift is necessary to reduce U.S. dependence on China, which has chosen to become a diplomatic and military rival/adversary to the U.S.

  73. @John The shift had already started a few ago when Chinese workers wanted higher wages and countries moved to Vietnam and Cambodia. Have you looked at the labels on children's clothes lately in Walmart? Most are not made in china anymore. While I'm happy for the countries I mentioned to have jobs, I'm just sorry that the corporations moving there are exploiting those people. In the NAFTA negotiations Canada insisted on Mexico improving labour conditions for people. I've never heard Republicans worry about people in developing countries working for slave wages. It seems it's only Democrats who seem concerned that a woman making toys for western companies can't afford to buy the dolls for her own daughter.

  74. exactly. shifting production to Central American nations will mean they will not have to uproot their families to travel thousands of miles to another country.

  75. So they want higher wages from these companies and they leave? So how exactly is this China’s fault. The people supporting Trump on here seem to think their wages and their lives will somehow be made better. How?

  76. It seems to me that the article is avoiding parts of the story leading up to this. wasn't Canadian steel a "national security" threat a few weeks ago? wasn't TPP meant to put pressure on China? It seems like it is "trade deficit" crisis one day, "intellectual property", and so on. While I agree that China has long screwed other countries, including the US on intellectual property, Trump is just throwing issues up on the wall to see what sticks.

  77. If tariffs do not lower the stocks and overall wealth of The Con Man in Chiefs buddies his Mara Largo dues paying cult tariffs will continue. Even the family income from $200k to $400k are drastically hurt by tariffs because of 401k and interest rates will be problematic as profits are decreased at the manufacturing level in turn lowering stocks and the overall increase of consumer goods by 25% to 50%. Middle class and poverty stricken and especially the $40k and below are screwed.

  78. It's a given that consumers will pay more and producers will sell less thus everyone losing money. The producers that lose money then cannot pay much to the consumers that work for them. That means the entire concept of nations using import tariffs in concert will result in a recession or worse. The original idea that instigated Trump to tariffs was the idea of repatriating foreign manufacturing. Instead of legislating penalties directly on corporations and not consumers, it is quite obvious that the Trump Wall st. White House took advantage of the repatriation issue to redirect the Consumption taxes or tariffs to the treasury to offset the tax cuts for the mostly wealthy passed in 2017. Those tax cuts to mostly the wealthy, and corporations that left us, enlarged the federal deficit by about 150 billion dollars per year over the next ten years. The Tariffs will be bringing in about 134 Billion dollars from American consumers per year from Chinese products bought here alone. Trump is taxing Americans to pay for the burden the wealthy have been released from. Now the burden of paying to operate our nation falls almost entirely on the 99%. The wealthy 1% are already paying fewer taxes and might now pay none like corporations traditionally. This shifting of the public's wealth to the wealthy is criminal, immoral and should result in public outrage. It would make a darn good platform for those opposed to Trump et al to take back our government from these scoundrels.

  79. @WITNESS OF OUR TIMES-What's scary is the transfer isn't just tax dollars to the ultra wealthy. He is privatizing our government and giving away our public lands along with threatening our water, air and coastlines.

  80. Reality Check dont be fooled agun by tarriffs. Take into account how many trillions usa government has spent on imports for governmnet use like computors. Knowingly know those computors oringinated an where built in usa an exported to be built over seas. We are own worse enemy not china only taking advantage of are own greed. Building products in china an then selling them same price as if was built in usa is are own doing. Began with texile industry an now its tech industry ,NAFTA

  81. why can't others understand.

  82. Economies rise and fall on expectations. Expectations of growth, or expectations of recession. Global business reacts to expectations, projections, because business investments need lead time. Any business leader, in any country, needs predictability in order to plan and execute investments for business success. In normal times, countries do reasonably predictable things to influence future economic performance. Along comes Trump, a "business genius" who thrives on unpredictability - recall he bragged about being 'unpredictable in negotiations' during his primary campaign. He's done nothing to discredit his embrace of unpredictability as a strategy, despite a continuing string of weak or negative outcomes. Trump is easily predicted to be reliably unstable, reliably unpredictable. Those negotiators in other countries, or business executives, who count on rational or well-planned, foreseeable actions from Trump -will- be disappointed. Trump thrives on chaos, because chaos covers incompetence, chaos covers inattention, and chaos covers corruption and deceit. When Trump was only a self-promoting "real estate developer" con man, Trump's unpredictable and unstable decisions were a hazard only to Trump's economic future, and that of banks or investors foolish enough to do business with him. Unfortunately for us all, Trump's "unpredictable" chaos victims now include the entire world's population, and our economic future. We should all be -very- concerned.

  83. Every conman has to be unpredictable. Otherwise no one would get conned. We have an emotional, unstable, idiot, conman in Chief. Heaven help us all...

  84. My fears are that these ongoing "tariff wars" between the United States and China will have negative spillover effects within the next 2 years that may prove be to the detriment of American consumers (in particular from the poor and working classes), U.S. farms, agribusiness, and corporations directly impacted by these "tariff wars", as well as the world economy itself. More Americans need to wake up to the fact that though the United States is, at present, the No. 1 economic power in the world, its economy is more intricately interconnected with the world economy than ever before. Therefore, I regard it as naïve that, all of a sudden, U.S. corporations that have relocated abroad over the last 35 years, will suddenly alter their business and investment plans and "come home" to hire skilled workers. Corporations, given their sheer size, cannot change at the drop of a hat their way of conducting business. It takes time for them to close shop in one area (e.g. overseas) and set up shop at home and be up and running smoothly. We are speaking of time that translates into years and steady, painstaking development of investment (and capital) and striving for market share that ensures profits, diversity of operations, and GROWTH. The bloated, enfant terrible in the White House is throwing yet another hissy fit from which few will benefit and many will suffer.

  85. I see numerous issues with this article. 1. This article is skewed, for it only mentioned President Trump. It seems as though there is no economic team whatsoever, Secretary of State, or any other officials who have helped forge this US policy. 2. Second, only two short quotes from experts were provided. 3. In addition, elsewhere in the article, there is a formula of quoting statistics and jumping to conclusions; labeling the statistic "important" or considering it evidence of imminent doom. 4. There are also standard anti-Chinese attack jabs, like referring to the Chinese Government as the vague "Communist Party" and unjustified, unreferenced claims of propaganda against the Chinese government. Most of this piece is opinion. I expected an article to state "...echoed in last weeks European Union proceedings, there has formed a concensus around lower economic tariffs". "German industrial exports, critical for everything from Chinese wheel truing machines to beverage bottling equipment, stand to lag, as the $3Billion market for such goods become vulnerable to China's decreased manufacturing output." etc. This article simply lacks details and lacks any insight deeper than a Westerner's casual recitation of an economic report.

  86. Perhaps this will help: TPP would have been much more effective and less chaotic. Got it?

  87. This is a great opportunity for the Dem's to peel away votes from Trump not only in agriculture but other exporters as well. It Trump remains intransigent, he will probably drive the world into recession anyway, and just in time for the 2020 election. Trump is stuck with his tough guy persona, and it may cost him re-election.

  88. Gosh...remember TPP? The grownup, powerful diplomatic tool for slowly tightening the box around China? I think I do. But this chaos is messing with my memory...

  89. @Mike Pod. Right. I was just pining for it yesterday.

  90. There seem to be this presumption among a lot of commenters that Trumps wars will actually "fix" the problems. What if they make thins worse? Somehow if we block all trade between US and China its presumed that China will hurt a lot more than US and that they will "give in" and do as we say. Remember a decade ago when the world economy tanked - well China didn't even have a recession. They simply moved their factory workers to build interstates, high speed train tracks, solar and wind farms. If they lose say 20 of their 120 million manufacturing jobs, they will simply get even further ahead of US in modern infrastructure. How could they pay for that - well they have over a trillion in US government bonds. But what happens in the US if inflation gets jacked up to 10%? - everybody hurts. I agree that we need to do something; but that "something" should not be shooting ourselves in the foot.

  91. finally, elderly savers will make a decent return on their savings. Young generations will spend themselves into debt all the while blaming the elderly for global warming.

  92. For the planet to survive, there will need to be a continued contraction of trade for a long period. We know how to produce profits (there is no dignity in starvation); what we don't know how to do, and have chosen to not do, is to include on the ledger books of business the costs of our doing business to our planet. We scar the ocean bottoms, we carve away mountain tops, ravage the remaining forests, and foul air everywhere. We expand our habitat, destroying environments that have no defense against our hunger and thirst. Our population is exploding, and we only know to harvest what was once a bounty, and is now decimated beyond recognition. Our global relationships with each other are proportional to our relationship with our planet; dismal. The costs of doing business are real, and until we include the cost of extracting the natural resources that make us money, keep the lights on, drive us to work, and allow us 'creature' comforts, we will continue to put in jeopardy the health of our planet, the one thing each and everyone needs above profit.

  93. exactly, more so-called growth means more pollution. If you continue to buy worthless Chinese goods because you don't want to spend a few dollars more then stop whining when someone declares global warming a hoax.

  94. @David Roy That's a simplistic view. The human economy is a double-edge sword: growth is bad for the environment. But so is contraction. People who are out of work or under-employed care even LESS about the environment. That's why people kill species like rhinos and elephants they know to be endangered--they're poor and few options.

  95. Trump: I did it my way! Back in a time when America was great. Like in the late 80's , early 90's, when Trump ran up debt, and alienated his financial backers. MAGA. /s

  96. There is no war between the U.S. and China. Rather, there is an assault on humanity by whoever is pulling Trump's strings. Not the same at all. Nothing about this is organic. It is a plan.

  97. Manufacturing indexes were down today, the direct result of tariffs. We're headed for a recession and collapse of fiscal instability in our federal government. Impeach Trump now!

  98. Short pain, does not compare to the pain we and our children would suffer if we do not stop China from taking advantage of America. Good job, Donald.

  99. @Ivan China is the USA's LARGEST creditor. If they decide to sell their bonds, or don't buy more, this tariff war will pale in comparison to the damage done by China not investing.

  100. those same chicken littles had previously insisted that we had to confront China.

  101. The problem with your conjecture, is that unfortunately there is not a long term gain to be had. There will only be losers in both sides.

  102. I'm 65 and run a small business that both imports and exports. I have 4 employees in the US who all make over 100K a year. We have a group health plan and 401K plan. I'm seriously considering closing my business and laying off my employees. It's not just that tariffs will squeeze my profits, I'm very concerned that both my US customers and Chinese customers will have their cash flow squeezed to the point where they will delay payments or file for bankruptcy. Even if I pass along the cost of the tariff, I'm paying for it at the dock and getting paid 30 to 60 days later on both sides. Current credit lines will need to be increased and borrowing cost and risk will also increase. Every company that imports from or exports to China will have these same short term cash squeeze. I'm not complaining because I can afford to get out. My pension plan did very well under President Obama. I'm just pointing out that complaining about trade displacing jobs doesn't take into account that reducing trade will displace American jobs.

  103. @HL you are so correct. Too many people who are ignorant about International trade, don't understand that it also creates jobs in this country for Americans. Take the typical foreign automobile, for example, in order for sales to be successful, they have to build infrastructure within our country, which includes dealerships, buildings, mechanics, salesman, accountants, etc etc. Consequently, for Trump to claim that trade is just a zero-sum game, and that we are losing when we have a trade imbalance, is just plain economic ignorance, and his trade war is equally dangerous.

  104. It improved for companies, not everyone else.

  105. Just more proof that the economy is doing well, not because of Trump, but in spite of him.

  106. If things are going well, they will get bad soon. Trump and his gang will see to that. They can never leave "well enough" alone. Trump has to be in the spotlight doing something he was advised not to do. Tariffs are great according to Trump and so he enters a trade war without the slightest idea of what he is doing. As usual, he notes how the US will make billions of dollars from this China debacle. That is his economic policy: make lots of money off someone else's back. He claims success while we take it in the ear. This is not a president; not our president and he does not represent me. How about you?

  107. Interesting no one has mentioned the tax revenue generated by these tariffs - figured at least some on the left would enjoy this.

  108. @Brent P That's an excellent point. My new tariff tax is going to farmer welfare. Awesome deal.

  109. Any revenue gained by the Federal Government through tariffs, is just going to compensate those in the agricultural industry who are suffering large losses under Trumponomics. Trump has already been calling for a farmer subsidy plan.

  110. @Brent P Tax increases to pay for the Corporate Welfare or the Military and the coming war in the ME? Maybe use the few Billion collected to fix the Trillion Dollar infrastructure problem, only exacerbated by the last tax give away? Sad to see so many talk about things in only Left-Right terms. What ever happened to We the People?

  111. We do need a better trading relatioship with China, one that respects intellectual proprerty rights, among other things. I have doubts as to whether Mr. Trump's approach will work. The TPP would surely have been a better avenue, but that's lost. Mr. Trump seems to think that his deal making skills will result in a better series of bilateral agreements. His approach is always to divide, rather than unite, as can be seen in his domestic politics. His attitude toward the NATO countries--traditional trading partners and allies-- borders on disdain. If it comes down to toughing it out, the Chinese will likely do better than us. They're a police state, not a democracy. (How did we ever get into a trade relationship with a dictatorship?) As a nation, we'll think the sky is falling when the price of flat screen TVs and refrigerators go up. And the Baby Boomers in retirement will see the buying power of their more fixed incomes go down. Along with that of everyone else.

  112. China was not a party to TPP and would have done nothing for intellectual property rights.

  113. @mkm Where did I say that? I didn't. The TPP was a treaty of nations that originally included the U.S. but NOT China. It would have been a better way of dealing with China, from strength. Mr. Trump's method is to deal with nations individually--bilaterally--because he thinks he can get a better "deal." That remains to be seen. His modifications of the NAFTA were minor, yet he claimed some kind of masterful deal. It has yet to be ratified.

  114. "At the center of trouble sits China, the world’s most populous country. Its breakneck development over recent decades has added hundreds of millions of consumers to the global marketplace while supplying a vast assemblage of low-cost goods. Given that China is the source of roughly one-third of the world’s economic growth, any disruption to its trade amounts to a global event." To all the readers who are cheering the president on in his tariff charade.... carefully read and consider what I quoted above from the article.. because this is key. China has added more middle class consumers to the world economy over the last decade then exist in the entire US. The US HAS NO REAL LEVERAGE here... just the insane fantasies of an impulsive president who never has an actual plan for anything.. other then to inject drama into news cycles in order to deflect from the investigations and convictions of people around him, and perhaps himself as well.

  115. @Chuck actually you’re misinformed. Look at our GDP vs China which uses slave Labour from its own country as well as North Korea (think of that next time you buy Chinese manufactured products). The United States is the biggest market in the world. Even if the Chinese were to sell to the rest of the world it would not be close to their sales in the US. Where else will people pay top dollars for their goods? Africa? South America? Europe? Russia? India? The answer is all these regions have trade protections in place and have a poorer populous. Without the US market, China would implode economically and face internal strife.

  116. @Chuck you might want to rephrase it to the impulsive fantasies of an insane president. Darn I hate giving trump that title maybe I should have used head of the executive branch

  117. @Llyod, Indispensible nation? Pure fantansy.Go back to 2008.USA was struggling in the aftermath of financial/housing scandal. China with huge stimulus sailed through smoothly. China is also the biggest trading nation and no.1 trading partner of more countries than US.

  118. Honestly, we need to worry about America first. The reality is that weaker economies abroad makes easier and cheaper for Americans to travel and offers us an advantage. Why would we want to pay more? Oy vey.

  119. The real reality is that major economies are deeply interconnected, a recession in one will usually mean a recession in the others.

  120. Great photo of the Port of Tacoma - a busy port in a beautiful part of the world. I live in Tacoma and wonder how Trump’s trade war will affect the Port which provides so many good jobs. As an aside - somewhere in this photo is a large federal detention center which has a capacity of 1700 “inmates”.

  121. We’re historically overdue a recession, but if Trump provokes one with his trade war his re-election hopes are toast. That would arguably be a rare upshot to an economic downturn.

  122. Perhaps this is his way of fighting climate change - hanging like a sea-anchor to slow the global economy. Not the approach I'd take.

  123. I believe most of us, here and abroad, understand what is really going on. Putin is waging war against our country and we have a president who either has to, or is more than willing to see this country defeated and himself further enriched. Isn't it about time we take to the streets and push Trump the Traitor, out before all is lost? I am in a wheel chair, but i do have a little extra money to help with some of the expenses to see this happen. Let's get going. All of us!

  124. Destroying the global economy is the hallmark of the modern GOP.

  125. Just a shout out to my people in Tacoma Washington. Yes, this city is very beautiful and the view of Rainier happens almost every day. 🌞

  126. After long deliberation (vs. TPP, tariff impact domestically, ...) I stand with Trump on this. Our current economy can absorb the impact of the trade conflict. China, with Xi Jinping, is increasingly a threat to the West and we enable it with continuing unfair trade conditions that fill their coffers and copies our technology, with a blind eye to human rights abuse (e.g. Chinese Muslims), South China sea military deployment, the massive buying of African rare mineral mines etc. Our failure to act 20 years ago necessitates drastic action today. It’s hard not to see Trump as a Hollywood villain who can’t do any good, but on this issue he’s right.

  127. Human rights abuses? Tearing children from the arms of their mothers and throwing them in cages, never to see their families again, isn’t human rights abuse?

  128. The problem with trade wars is they can lead to real wars.

  129. So we cry about a lack of a living wage but then criticize Trump for trying to pull that off through tariffs that will benefit our economy. Just a bit disingenuous I would say!

  130. But tariffs won’t raise wages.

  131. @Confused - Trump products are made in China. Trump is notorious for stiffing the people who work for him. He doesn't care about providing a living wage.

  132. A Modest Proposal Refit and use the CHINA shipping containers as housing around El Paso. Perhaps,Trump might want to make a wall with them.

  133. But Wait !! There is more good news. The 6month-10 yr curve is inverted for several days now and retail sales are down. Yes, folks....a recession is coming here in Consumer America!

  134. Wonder who's getting the squeeze here, I'm sure someone is.

  135. Trump threw a monkey wrench into it because he could. I'd also look to see where his investments are.

  136. Tariffs on steel, wining results: US Steel stock price $14.84 today --1 year ago $39.23

  137. Trump’s got that Midas touch.

  138. Narcissists don't do win-win. They do win-lose, and end up with lose-lose.

  139. The Senate Republicans need to stop aiding and abetting Trump's treason. They need to do their constitutional duty and stop Trump's destructive tariff ploy. PROSECUTE RUSSIAGATE!

  140. DJT is so polarizing that he'd be controversial to some if he had a sure fire cure for flat feet. The truth is, China has been a cheater and thief on the world stage for a couple of decades at this point. Someone needed to stand up to this. Our gutless allies won't. The question with basically anything trump does remains however. Is what he's doing and how he's doing it a good idea? Unfortunately Even the trump unbiased, have no idea.

  141. “The biggest threat to global fortunes has become the intensifying conflict between the two largest economies on earth, the United States and China,” the article claims. This conflict started with the 2007-9 American economic collapse, the economy-historians Ferguson & Schularick claim. FERGUSON & SCHULARICK: “For a time, it seemed like a marriage [between the U.S. & China was] made in heaven. Yet, like many another marriage between a saver and a spender, Chimerica was not destined to last. We believe the financial and economic crisis of 2007-9 has put the marriage on the rocks.”

  142. A question I have always had during these trade war times between the US and China is: if China is our foe, then why are so many Chinese and other foreign entities allowed to buy up anything they choose? How can we be at (trade) war with China when so many Chinese own so many Residential and Commercial Real Estate propertied in the US and my other country of Canada? It is my understanding that a Canadian or American cannot as easily do the same thing in China, not at all. If trade is going to be put on the table like this then perhaps foreign ownership should be, too. This is not a concern centered around racism, not at all, but one about reciprocity and, in the case of expensive cities like Toronto, Vancouver, Seattle, etc. a step toward lessening the impact of expensive housing markets. Too many people with good jobs cannot afford home ownership compared to this acquisitive Investor Class, largely from Mainland China.

  143. @Chris Canuck I think well to do in China view certain desired area of the US and Canada as a "bail out" option if things get ugly im their home country. There was, to my knowledge, no collerally during the cold war as Russians wern't buying say, residential real estate on the west coast.

  144. Let’s go back to the end of Bush jr. and jump to the end of Obama. Can’t wait to see the end of President mentally and emotionally challenged .

  145. China’s foreign exchange reserves at US $3.1 TRILLION in April are the world’s largest. China has a significant war-chest to endure any difficulty, even a trade war with the US owing to Trump’s tariffs. China Foreign Exchange Reserves https://tradingeconomics.com/china/foreign-exchange-reserves The self-appointed Deal-Maker in Chief has learned nothing from his business failures. He lost one billion in business losses over ten years to 1994 and went bankrupt four times. The self-appointed Negotiator in Chief is a fundamentally lazy performer who is long on threats but short on delivery. His lack of intelligence on the trade file, or any file, is breathtaking !!! But none of the comments of revulsion and horror expressed by concerned citizens, responsible media or in the NYT register with the Twitter in Chief. He takes advice from no one, believes that he is above reproach and is always right on anything and everything. What do you do with someone who is digging a hole to drag everyone down to doom? You take away the shovel.

  146. @Gerry O'Brien, He is influenced by Fox news.

  147. It is the only policy I support from Trump. China has to stop their bad trade practice. Also we have to contain China strategically. Their hands are all over the world and their intentions are not good. So NY times, please stop supporting China for the sake of opposing Trump for everything

  148. @Joe When you say China's "intentions are not good," are you referring to specific goals of China that are an direct threat to the moral fabric of the world or do you just mean that their goal is anything other than the US's continued global domination? Because we certainly have our hands all over the world and our President has very clearly stated his intentions as "America First" which is by definition not in the best interests of the world at large. I have no issue with wanting American policy to protect American interests first and foremost. However, your position seems to be that hurting China should be a goal unto itself rather than a likely byproduct of improving our own position. That is a position with which I do have an issue. It would also seem to put you in the position of complaining that the NYT is "supporting China for the sake of opposing Trump on everything" while you support Trump just for the sake of opposing China.

  149. @Joe Pulling out of the TPP gave China tremendous leverage.

  150. What you don’t understand is that US manufacturing and China are entangled. Hurt China, hurt USA

  151. Now Trump is threatening tariffs on German car companies again. German car companies that employ thousands of American workers across our country. German car companies building cars in South Carolina and Alabama. Those companies also employ thousands of Americans through associated vendors and contractors. And he'll get a pass from the new GOP. The GOP that now supports anything Trump wants, including trade wars and exploding deficits.

  152. Time for an article on inflation.

  153. The NYT leaves out a step between trade deal about to be signed and Trump imposes tariffs; the Chinese renegade on parts of the deal. I understand the anti-Trump all the time reporting style of the NYT but this is over the top.

  154. @mkmthi, there was no reneging. US side has termed it so to make China look to be a guilty party. Lieu He and Lighthizer negotiated. They are not the final authority. Approval of the terms rest with Mr. Xi and Mr. Trump. When Chinese translation was presented to Mr. Xi,he rejected the removal of subsidies to state owned companies. Chine is a communist country and Mr. Xi is life long communist. He couldn't agree on change of fundamental principles of communism. This is what Mr He, chief Chinese negotiator, said in press conference: no compromise on matter of principles. It is the same as if China ask US govt to take over Apple as a condition of trade agreement. It will be absurd. Not sure what USA is aiming at: negotiate trade terms or change the nature of Chinese economy?

  155. @mkm Renegade? Seriously? Which “parts”?

  156. The Chinese never agreed in the first place

  157. There's no question that China has been ripping off products, technology, and trademarks. We innovate, and they steal it. For that they should be held accountable. The question is whether tariffs will change that. Their society is not a paragon of transparency, and corruption is baked-in to their government at every level. Even worse than ours. Can tariffs move that needle? Much of their industry is predicated on intellectual property theft. One thing that never seems to come up: it's not just China that dumps product. It's our own corporations that close up shop and move their manufacturing overseas. The questions are: What can be done to move manufacturing back to the US? Can US companies and consumers even afford to pay the difference? And do US workers really want to work in factories? I don't think people aspire to do that unless they are out of options. Not any more.

  158. @Scott Cole You misread China if you think corruption is "baked-in to their government." The Communist Party wields power in a way that we might consider corrupt if our government started behaving the same way, but it's just a different way of governing. And it's working rather well. We're so used to thinking our way is the only way...

  159. @Scott Cole, depends on the factory. Not all factory jobs involve handling pig intestines making pork chops or dog food. Plants like the ones GM are shuttering we're considered excellent jobs, good benefits, good pay, overtime, etc.

  160. @Scott Cole Is China stealing our IP or are US companies willingly handing over their IP as a cost of doing business in China? Apple does't have to use China as their factory.

  161. Flyover people think this is great -- they're losing money on the deal but like the way Trump acts tough. They think it's all a big TV show.

  162. @Jim Bob - The left leaning crowd in San Francisco and Palo Alto are very happy to have Trump defend their intellectual property rights.

  163. China holds $2 trillion in US treasuries. I wonder how that’s going to play out.

  164. @Doug Lowenthal their currency is pegged to the USD. If they decide to sell a lot of that, I wonder how that’s going to play out

  165. So Trump thinks that if HIS best deal ever gets done, things will return to "normal". Or what he would like normal to be? I don't see his proposal doing anything to bring millions of jobs back to the US [which we don't have the people to fill anyway]. Maybe we'll be able to protect some of our technology, but it can be a thin line between "having" to share it with someone, and wanting to share it with a specific partner. Meanwhile, there will be new uncertainty over most everything in hundreds of areas that Trump has played with. While ignoring pesky little facts, such as: "Long-term forecasts from the Department of Agriculture project that the American soybean export market won't recover to last year's levels until 2024".

  166. @John Hanzel - Yesterday, I saw some reporter talking to a farmer asking about this soybean issue. The farmer said he was only going to grow corn this year because there was no market. I distinctly remember grandpa teaching me as a kid that we plant half the farm in corn, the other half in soybeans. Next year, you plant the soybeans where the corn was growing and the corn where the soybeans grew. If not, you will eventually deplete the soil.

  167. It's now a tri-polar world, the US, China and the EU. If you count Russia, there are four centers of power. All with different national and security interests and culture. We have to get used to this and cooperate and compromise more.

  168. @Patrick No, it is still three. Putin is pulling the puppet strings in the White House.

  169. Everyone talks about IP theft and state subsidized industry in China. No one likes to talk about all the benefits of trade. The fact is importing from China makes products a lot cheaper. Not a little cheaper but a lot cheaper. That's good for low and middle income families who received very little benefit from the Trump tax cuts which only helped the rich and large corporations. And there's an easy way to stop IP theft: stop doing business in China! The only reason companies transfer IP is because these same greedy US corporations want access to the Chinese market. I am constantly amazed at how the average American can't seem to act in their own best interests. They will suffer the brunt of these tariffs and still cheer for Trump as he continues to weaken their healthcare, does nothing to contain global warming and piles on more debt for future generations to worry about. If that's what a capitalist society produces then maybe we need to revisit our love affair with capitalism.

  170. @Jay Companies are sending IP to China to produce cheaper goods for US domestic consumption. You are arguing both sides of that scenario.

  171. and guns, and religious fundamentalism, and the other levers Republicans use to hoodwink voters into shooting themselves in the foot.Make America Grift Again.

  172. @MK That's not correct at all. China is not the only country that can produce cheap goods. Labor costs are lower in Vietnam, Cambodia and dozens of other countries. Shipping costs are lower from Mexico and Latin America. So why did all the American companies set up shop in China and surrender their IP to Chinese firms? No one had a gun to their head. It's because that market has over a billion consumers and better growth prospects. Just facts.

  173. If US-China trade is about 400 billion and tariffs are around 25%, that’s 100B dollars. But the US economy is 20 Trillion. We’re talking half a percent on the US scale and much less on the world scale. Why does this matter so much for growth?

  174. @JR Because a large portion of the S&P 500 companies get their revenues from abroad, mainly china.

  175. Recite the mantra: trade wars are good, and easy to win! So much winning.

  176. History is a good guide to the consequences of tariff war. In 1930 USA raised tariffs to protect the domestic market under Smoot-Hawley Act. Rest of the world retaliated. The result was recession all over the world. George Santayana said it well: those who forget the past are condemned to repeat it. World economy will slow down including that of USA. We will learn the hard way.

  177. @s.khan Well, we will need another FDR to bail us out. Dumb Donnie won't get a single vote in farm country. So there's that.

  178. China's economic growth is artificial and state subsidized, because failure to provide economic growth opens the question of political repression in the neatly balanced equation of the CCP: "politics ours, economics, yours." We are complicit in retarding Chinese political progress while also injuring our own workers by allowing these trade-distorting goods into our economy to take away our manufacturing jobs. Will it hurt now? Yes. But--like stare decisis--the best think to do is not persist in error because it might hurt, but rip the bandage off. Yes, the "globalized" will continue yabbering about the benefits of "free trade." But, amidst all that cacophony, they never will tell us how you make sure free trade is FAIR trade.

  179. This week I assigned my 6th grade students to study the Boxer Rebellion (1900). When the western imperial nations attempted to force the Chinese to accept their religion and unfair trade agreements, the Boxer Rebellion was born. Tens of thousands of Chinese came from the north to attack the European invaders they called "barbarians". Although advanced western weaponry eventually quelled the uprising, this conflict remains fervent in Chinese education. Unlike my students, Trump doesn't study history and doesn't listen to knowledgeable advisors who disagree with his "gut feel". Unlike Trump, my students will learn why the Chinese will resist Trump and his demand they change their form of government to suit Trump supporters & those US corporations who, apparently, cannot compete with the amazing progress China is making. My students will also learn why the cost of goods their families require is about to rise.

  180. @History 101- Bravo to you for helping your students to understand the history of China in those darkest hours of its long history. I hope all students everywhere have the desire to learn history, future leaders would be more informed and the world would be a better place.

  181. @History 101 Learned about the Boxer Rebellion in Marine Corp Boot Camp. Dan Daly alone probably killed a couple hundred of those Boxer Rebellers with a machine gun as they tried to storm his encampment. I seriously doubt it is a factor in what is happening today though.

  182. Trump — the man who made millions disappear — should be made to attend one of your classes! Then he might actually learn something.

  183. just a few simple observations: Trump is a man who managed to go bankrupt running gambling casinos, and even his staunch supporters allow that almost his every utterance is a threat, a lie, or an ignorant misstatement. Bolton is the architect of one of America's most disasterous foreign wars, which also had predictably disasterous consequences. Pence is a fundamentalist religious fanatic. Barr has always believed America needs a king with almost unlimited powers. Congressional Republicans are too cowed by the idea of losing their seats on the gravy train that they have abdicated their Constitutional responsibilities. my country, 'tis of thee.

  184. I suppose we could only run on Obama's good will making for so long...

  185. Well, looks like his trade war succeeded in getting the Mueller report out of the headlines. The idea that he wants impeachment proceedings is absurd—he is willing to go to war with Iran to avoid that outcome. I blame Congress for not being more aggressive to check this terror.

  186. @BlueBird - It sure seems lie they are debating which shoes to wear to the hearings rather than just slam the gavel down already and get something done.

  187. I find Trump repulsive with his uncontrolled vulgarity and recklessness, ignorance, racism, xenophobia, hatred he spews and violence that he promotes. He is not the president of the USA. Trump is the usurper! Tariffs on Chinese products are in good part an expression of the above. However, China is the 800 pound gorilla that is just as destructive as US but in different ways. China needs growth and stability because history shows that its dangers come from within, when upheavals get out of control. But, as we are entering a new phase of human existence where our very existence is threatened by our insatiable appetite for consumer products (hence more growth) which invariably leads to an ever greater threat to our extinction, we are in peril. These being said, perhaps by accident such a trade war will compel us the reassess the current economic models, based on economic growth and force us to tackle yet another issue, overpopulation. Unless we do this, we will push nature beyond the breaking point, and we will contemplate the irreversible human extinction along with that of million other species. Nature does not care for US and China bickering over trade, nor over the increased price of o dishwasher or some extra, more or less needless products that we must have. The game for survival is manifest; perhaps this trade squabble will accidentally trigger the much needed awareness that we must survive first, in order to consume - much less - in the future!

  188. Why would Mr. Goodman portray the war China has waged on the US, for decades, as something like both countries inflicting pain on each other. How reductive. China has for so many years behaved like a cheap thief, disragading clear and standard laws that everyone knows are important to follow. They are theives that have been caught with the goods right in their hands. And now, finally, we have a president who has the guts and brains and experience to call them out and change the relationship to a more honest one. If China believes that achieving world domination can be secured behaving this way -- they are wrong. It will never happen. Too bad for them. Could have been interesting.

  189. @Len How has China actually waged war on the US? Seems more like Russia is engaged in cyber attacking our elections than China, although I bet China is listening too? IF so, please get Trump's tax returns.

  190. @Len "the guts and brains and experience to call them out" To whom are you referring? As for "a more honest one", does Dumb Donnie know the meaning of the word "honest"? He lost a billion and a half in nine years on one lie after another. Some "stable genius".

  191. Looks like another 15 Billion dollar taxpayer funded welfare check heading to US farmers to keep a few more out of bankruptcy.

  192. @Jacquie - Isn't that "Socialism" ? I put the word into quotes because these days it seems the word means just about anything anyone wants it to mean. Its a shame phones and computers don't have access to the Merriam-Webster dictionary.

  193. How can the economy be said to have been improving when the external costs of climate change, species mass extinction, not to mention general air pollution are not factored in?

  194. I enjoy villifying Moron Trump as much as you do. But beware, most Democratic candidates mouth similar protectionist drivel because they are afraid of unions. NAFTA created far more jobs than it cost; TPP with the US as a driver would have done the same, with better labor and environmental protections, and would have given us a geopolitical center of gravity in the Pacific. But even Hillary cratered to try to peel off a few Berner diehards. Now we are alone. Good night and good luck.

  195. Trump is a destroyer. He hasn’t done a single positive thing for the country since he was elected.

  196. @Doug Lowenthal He is doing more standing up to China than the last three presidents combined.

  197. @True Norwegian Obama spearheaded the TPP, which would have economically constrained China. Trump killed it.

  198. Sounds like once again, Putin duped Trump into doing his dirty work for him.

  199. Trump will never be satisfied if there is any peace or sanity on this planet. He seeks to destroy everything and claim he is the savior of mankind. This is the view of a severely mentally damaged psychopath who, because of the ignorance of many who falsely call themselves Americans and unquestionable Russian election meddling, snuck into the WH by the hair on his head. If we let this happen in 2020, we are not only more stupid than ever but toast. So far Trump has done NOTHING to stop Russia, and we are already in the election cycle. This is TREASON, plain and simple, and the Republicans endorse it. THAT should make it very clear that they must not be allowed to govern any longer and must be held accountable.

  200. What do you mean "would soon" be paying higher prices? Have you bought a roll of aluminum foil lately?

  201. We already know from his tax losses (last weeks news) that our president is a TERRIBLE person and a terrible businessman.

  202. Thank God something is threatening growth! These madmen who spur on and on this carbon-based economy will be the destruction of all we hold dear.

  203. The Great Depression began in part after nations raised tariffs one after another and international trade collapsed. The current Oval Office occupant may go down echoing not just Nixon in corruption but also Hoover in bringing down the economy. BTW, whatever happened to the Republican stance against taxes? What are tariffs if not taxes? I hear crickets from Republican members of Congress who normally go into spasms at the whisper of anything resembling a tax.

  204. The "bright shiny" story of Trump losing money on Trump Tower this week is a side show compared to the real money he and his allies are making through trade-war comments that distort and game global financial markets. On Monday, such markets declined by over $1 trillion following the President's twitter comments. The next day, remarks by the president and administration officials led to massive market recoveries. Given the sheer scale of the market swings, the orchestration of Trump's words coupled with advance trading positions likely set up for personal interest, could easily generate $10s of billions of earnings in two days. Losses by Trump from real estate investments pall in comparison when he has the power to game the world's financial markets. When Trump leaves office, the first thing he will probably do is pay someone to write a book by him called "How to become a Trillionaire".

  205. Most Americans love to accuse China for being unfair in its trading practice. Few will acknowledge the fact that the US companies that entered into China to grow their businesses know full well what they are agreed to. They were not forced to do businesses in China as these angry people seem to believe. Like contracts we sign here (any country), whether or not we read the fine prints at the bottom of the agreement is no excuse for us to cry foul later. But I keep reading comments after comments all accusing China for playing dirty, unfair, blah, blah, blaming China for all the ills in our economy. Can we accuse the credit cards’ issuer for fraud? for cheating? Forcing us to pay more when we are late for payments? After all, it is us who signed the agreements for the items we want to begin with. So can we take the credit card companies, mortgage /banks, and car dealerships and many others to court and demand for better terms when there were no one forced us to sign the contracts in the first place?

  206. @Dan You are right - no one held a gun to the head of the US companies that went into China. But over the course of time a number of things happened. Our deficit with China grew exponentially AND we started to see China copy our technology blueprint from the "forced" technology transfer which these US companies who went into China initially agreed to. However, when their own patents were used to create homegrown Chinese companies - a clear breach of the contract - which then competed with those same US companies globally, there was a problem of cheating right there. Next - despite China having (during this time) become the world's economic super power and enjoying a First world status kept gaming the WTO rules to their advantage to affect global trade - that became another problem. Finally, despite our bending over backwards to allow Chinese companies access to our large economy, they stifled our entry into their country. Yes that helped them create Baidu, WeChat and Alibaba among many other companies. Protectionism was initiated by China first not by us.

  207. China, if you are listening, continue the trade war with the U.S. until after the 2020 elections. I realize that it will cause a lot of financial distress to farmers and workers in the U.S. and all around the world, including Canada, but it will guarantee the end of Trump and his destabilizing effect on the world. A lot of pain for an immeasurable gain!

  208. I am Canadian living in a farming community and have finished examining this week's chicken entrails and found no heart. The Collapse of Globalism and the Reinvention of the World is a book written and first published by Canadian historian, philosopher and according to Time Magazine prophet, John Ralston Saul in 2005. China and the USA have not been stellar in their leading the world's economy. The absence of a heart in today's oracle chicken tells me that maybe our world has a chance and maybe if China and the USA engage in mutual economic destruction we might have leadership that understands sustainability is far more important than growth.

  209. I beg to differ. USA is entitled, just like any other country would be, to change its approach to trade if it thinks it is hurting them, either currently or in the future. It is unfair to call it a trade war, and it is apparently unfair and downright insulting to call it Trump's trade war as the liberals thoroughly enjoy saying. A large part of this country agrees that something needs to be done and he went with what he went with, hopefully it will bear fruit. It is in our best interest to rebalance the trade with China and it hurts for a short while (hopefully), so be it. The idea is to bring the brighter future for all and not for the selected few, in the top 1%, you know, for those who always win.

  210. @ss Not sure what liberals are causing this trade war. This IS Trumps doing. Who is actually calling for the rise in tariffs to thwart China's trade policy? It looks like the working class is now paying for the tax cut through higher prices from these Tariffs.

  211. @ss, the fallacy in your comment is that, just because something needs to be done about Chinese unfair trading practices, does not mean this tariffs war is the right solution. Obama negotiated the TPP with numerous countries. While it had it's flaws, it is not only more effective than a tariff war but also it does not hurt consumers and many farmers and producers in the meantime. Soybean farmers here have probably lost most of their market forever. How would you feel if the solution to a national problem destroyed your business? And furthermore, what do you think about Trump's payments to these farmers? That is Chavez-like socialism if I have ever seen it. Paying farmers to compensate them for the damage your own governmental decision caused them. I take it you do not have a problem with this kind of socialism.

  212. @ss Neither you nor Trump has offered a coherent argument for why the trade imbalance hurts us, much less why it is worth the costs that the trade war inflicts. Parroting "1 percent" is no substitute for analysis. And if i isn't a short war, painful only to others than your self, what then, cap?

  213. t is America that will lose a trade war not China nor the rest of the world. At the core, America's strength rests solely on the international standing of the "Green Back". If the US dollar is abandoned America's economic, military, and political power fails. All the signs are there for a Global dumping of the dollar as the world's reserve currency. Consider the facts: 1) America is addicted to debt, and it is only the world's willingness to hold American debt that underpins this addiction and America's economy. 2) The World's willingness to transact in US dollars is in large part tied to the settlement of commercial debt attributable to trade with the US. Trumps abandonment of the international trading order makes the global need for US dollars significantly less. 3) As Trump has weaponized trade so too China may weaponize currency and financial holdings. Consider what happens to the value of the US dollars and US interest rates if China were to dump its T-Bills and US dollar holdings. Conventional wisdom says that this will never happen. It's argued that such a step would be an act of self-harm for China. To which I reply really? In the age of Trump inflicting self-hard is the default policy. Given America's desire for extraterritoriality dumping US dollars has the additional benefit of removing non-US transactions that are nevertheless transacted in US dollars away from US jurisdiction and law enforcement. America should take note.

  214. @The Eyewitness Maybe. I agree that the numerous tariff and trade sanctions Trump has imposed might just do that. But we start with such a dominant position, it would take Trump another term to end the U.S. dollar as the world's currency. If he is re-elected, we will then face a greenback apocalypse.

  215. @NYC299 I don't agree. The US now faces China, the EU, Canada, Mexico and a host of other countries what are aligned against America in terms of its protectionism. An obvious weapon for these states is to dump the dollar. If we truly are now in a trade war, these states have nothing to lose in acting against the dollar.

  216. Translation: Things were getting better for the rich once again but now things are swinging back in favour of the workers of the world and that's completely unacceptable.

  217. "At the center of trouble sits China, the world’s most populous country." No, at the center of trouble strides the Colossus, Colossal Failure rather, of Jamaica estates.

  218. I just bought something made out of steel and aluminum for around $300 that was made in China. The comparable USA-made version (in terms of design, construction and materials) would have cost me $1200.

  219. @Syliva Yeah, when that steel and aluminium item stops working, falls apart or blows up you will know why it was so much cheaper. Not to mention the 'design' was most likely stolen from another company that did the R&D to come up with it.

  220. @Syliva - Isn't Trump known for using Chinese steel in his projects?

  221. The short answer – no, global commerce will not stop because of this. The long answer, He hit the steel importers with a 25% additional duty, and Aluminum with 10%, and the industry is busier than ever. He hit China with a first list of products to carry an additional 25% duty, and the trade did not end. Then he hit them again with a second list, and it did not end, he hit them again with a third list, and imports is busier than ever. He is planning to hit them again in late summer with a fourth list. I am going to guess that world trade will not end then either. Truth is the duty rates had been reduced to near 0 pretty much all across the book, this is simply the landlord realizing your rent has not been adjusted in decades. Ok so the Dollar Store will become the Two Dollar store. One could only wish manufacturing in the USA and other countries would flourish as a cheaper solution. It might happen. The country is reaping tons of cash over this, and China is doing the same, it will not end. And World Trade will keep on chuging along. I’ve been in this business 20+ years. I am sure I will be in in until I retire in 20+ more.

  222. @AutumnLeaf Except that numerous countries have done free trade deals without us (CPTPP, EU-Canada, EU-Mexico, EU-Japan, and, in a few months, China-East Asia's RCEP). Our exports will have to compete with other countries' tariffless goods. We start with our own giant free trade zone, and it is being squandered.

  223. The Moscow hotel deal was for Trump to Make Russia Great Again. The president -- if there was something lower than lower case I'd use that -- had to do something.

  224. I hold the Republican Party responsible for the last 20 very difficult years. 9/11/2001 presented us with an assault on our nation and our rights. There were a variety of responsible ways to respond. The George W Bush administration primarily chose the worst solutions: *Creating a case for war against a country that had nothing to do with the attack; *Waging said war with no plan to manage the peace; alienating all possible allies within Iraq, leading to a prolonged and bloody quagmire; *Two tax cuts for the wealthy, and a abdication of duty to oversee the SEC and the banking system; *A financial crash so large that it almost brought down the entire world economy; During the Obama Presidency: *The cultivation of the “grass roots” Tea Party movement to shift the blame for the crash to Dems and Obama; *Intransigence bordering on treason by Mitch McConnell and the GOP Senate; *The constant campaign to undermine the affordable health care act; *The fostering of racism and hatred with the Birther movement. During Trump: *Honestly, where to begin? Tax cuts the nation can’t afford; alienating almost all of our European allies; tariff wars without an end game or plan; war mongering vs Iran; pulling out of TPP and the Paris environmental agreement; ruining any sense of commonality that once defined Americans. House Democrats, if you don’t step up soon, you will be every bit as culpable as Trump and the GOP. It’s past time to act!

  225. Contracting economy for USA and China might be a good thing. Less money and less resources for war, billionaires, pollution, conspicuous consumption, Republican justifications and MAGA destructive fantasies. It's not all bad.

  226. The cynical part of me believes that Trump is probably calling on a few loyal and well heeled followers and telling them he's going to announce tarriffs, and they should short the market, and also tell them that a few days later that he'll recant the tarriffs he just announced on all automobiles, so that his buddies will make a killing in the market and fund his reelection campaign.

  227. @Matthew You got that right. Short....cover. Then wait for the next false announcement and go long. Wait another week for the next false alarm and short again. Question is....who is handling Trump's account. Remember, he didn't put his assets in a blind trust like all the other recent presidents. He still holds his assets including his trading accounts.

  228. We, the US, created the monstrous China that we are complaining about today. I had, over the years, manufacturer reps saying things like “see this device, no way we can manufacture it here and sell it at that price, had to make it in China.” We (Congress) made it easier to move a factory to China than stay here, hence loss of jobs. Now, we are not ready to reverse course, but the current president believes if he can rub China ‘s nose in it, they will yield big, or is it biggly. China, is no saint, but they just can’t trust 45. I don’t blame him, because some of us don’t either.

  229. Highly recommend today's "The Daily" podcast. Puts China in context.

  230. I can never understand why is it that everyone thinks that the Global economy or the economy of a nation has always to grow. Why can't it stay where it is. People are producing goods, and others are consuming them and there is a steady state. If one nation is going to grow by making more stuff then someone else must shrink if there aren't more consumers... and then why would there be more consumers? Is the population continuously growing to consumer more? And are those additional people capable of more buying... it all sounds strange to me at times.