China Retaliates With Tariffs on $60 Billion of U.S. Goods
- China announced that they will impose tariffs on $60 billion worth of U.S. goods just days after the U.S. announced it will impose tariffs on $200 billion worth of Chinese goods.
- After months of trade negotiations between the U.S. and China, the U.S. escalated tensions once more, claiming that China was backing out of key parts of the trade deal.
- Many experts believe the increased U.S. tariffs will hurt U.S. consumers and the economy, despite President Trump’s claims that they will only hurt China.
China Bites Back
China announced Monday that they will raise tariffs on $60 billion worth of U.S. goods, a move that came as a response to the Trump administration’s decision Friday to impose tariffs on $200 billion worth of Chinese goods.
The Trump administration’s efforts targets existing tariffs by raising taxes on those $200 billion worth of Chinese goods from 10 percent to 25 percent. Though it has not been formally announced, President Donald Trump also plans on placing new tariffs on essentially all goods imported from China, according to a statement from U.S. Trade Representative Robert Lighthizer.
“The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China,” Lighthizer’s statement said, “Which are valued at approximately $300 billion.”
China responded to this by announcing that starting June 1, they will raise their tariffs as high as 25 percent on U.S. goods that used to be taxed at 10 percent. The tariffs will apply to nearly 5,000 U.S. goods, and the steepest tariffs will apply to animal products, seasonings, live plants, a range of fruits and vegetables, and more.
While the new tariffs appear to be somewhat of a numbers game on the surface, it begs the question: What does this mean for the bigger picture?
There are two main implications here. First, what these new tariffs mean for the ongoing trade war between the U.S. and China; And second, what impact the Chinee tariffs will have on the U.S. economy and U.S. consumers.
Trade War Implications
Trump has long accused the Chinese government of hurting off U.S. consumers and businesses by stealing intellectual property from the U.S, unfairly subsidizing domestic companies, and flooding international markets with cheap goods causing U.S. companies to go out of business.
Since January 2018, the two countries have seen an ongoing cycle of the U.S. imposing tariffs on Chinese goods, and China responding by doing the same. All of this has amounted to what is essentially a tit-for-tat trade war.
However, in December, the escalation seemed to slow when the two countries agreed to negotiate a trade deal. For months, it seemed like China and the U.S. could reach an agreement. Then, despite numerous claims from Trump and his administration that the talks were going well, Trump decided to raise the tariffs last week amid highly anticipated negotiations.
Trump has argued that U.S. and Chinese negotiators failed to reach a deal during trade talks last week because China had backed out of major parts of the deal. China denied these accusations, saying they just wanted to renegotiate parts of the deal that they believe infringe on Chinese sovereignty.
Despite the recent escalation, the deal is still not off the table. Neither the U.S. tariffs nor China’s go into effect immediately. As noted above, China’s tariffs go into place on June 1, and the Trump administration structured its tariff increase so that they will not go into effect for a few more weeks, giving both sides time to negotiate.
The question that remains then is whether or not they can reach an agreement. Numerous Chinese officials have said they wish to resume trade negotiations, a point that was reiterated in the Chinese Finance Ministry’s official statement announcing their retaliatory tariffs.
“The Chinese side hopes that the US will return to the correct track of bilateral economic and trade consultations and work together with China to move toward each other and strive to reach a mutually beneficial and win-win agreement on the basis of mutual respect,” the statement said.
Trump for his part expressed his desire to negotiate a deal, but also appeared to threaten China in a series of tweets Monday, writing “China will be hurt very badly if you don’t make a deal”
Impact on the U.S. Economy
Trump also tweeted Monday morning saying that there is “no reason for the U.S. Consumer to pay the Tariffs.”
“There will be nobody left in China to do business with. Very bad for China, very good for USA! […] China should not retaliate-will only get worse!” He continued in the same thread.
That brings us to the second implication these tariffs have, which is the impact on the U.S. economy. As he said in those tweets, Trump has repeatedly argued that the tariffs will hurt China and not U.S. consumers.
In the same thread of tweets, Trump said consumers could mitigate the financial hit caused by the tariffs by buying American-made products or products manufactured in countries that are not subject to the tariffs, like Vietnam.
However, both trade experts and business groups have said Trump often is wrong in his characterization of how tariffs work. Tariffs are taxes paid by U.S. companies to buy foreign products, which means those taxes are not paid by China, but companies like manufacturing firms and other producers that need Chinese products.
When taxes are imposed, it makes Chinese products more expensive. However, it does not lower demand for those products from U.S. companies that need those Chinese goods to operate, and now have to pay more.
This specifically includes U.S. agriculture companies, which have already been hit by the new penalties, prompting a $12 billion bailout from Trump last year. Trump has said he will seek an additional $15 billion in from U.S. taxpayers to give to farmers.
All of this to say that the tariffs imposed by the U.S, can end up hurting U.S. companies and economic growth in the U.S. as well as China. This was a point that was made by Trump’s National Economic Council Director Larry Kudlow, who contradicted Trump last night in an interview with Chris Wallace, the host of Fox News Sunday.
“It’s not China that pays tariffs,” Wallace said. “It’s the American importers, the American companies that pay what, in effect, is a tax increase and oftentimes passes it on to U.S. consumers.”
“Fair enough,” Kudlow responded. “In fact, both sides will pay. Both sides will pay in these things.”
U.S. investors are also worried about the impact of the tariffs.
“The costs of U.S. tariffs have fallen entirely on U.S. businesses and households, with no clear reduction in the prices charged by Chinese exporters,” Goldman Sachs analysts wrote a note to investors on Monday. “The effects of the tariffs have spilled over noticeably to the prices charged by U.S. producers competing with tariff-affected goods.”
Investors clearly responded Monday when U.S. stocks fell by triple digits. The S&P 500 and the Dow saw their worst day since Jan. 3, while the Nasdaq had its biggest drop this year. Stocks closed with major market averages falling by over two percent.
See what others are saying: (The Washington Post) (The Wall Street Journal) (Fox Business)
95-Year-Old Woman Dies After Police Tases Her in Nursing Home
The officer involved was suspended with pay and charged with assault.
A 95-year-old Australian woman whom police tasered in a nursing home last week has reportedly died from her injuries.
Clare Nowland, who had dementia and required a walking frame to stand up and move, was living at the Yallambee Lodge in Cooma in southeastern Australia.
At about 4:15 a.m. on May 17, police and paramedics responded to a report of a woman standing outside her room with a steak knife.
They encountered Nowland, then reportedly tried to negotiate with her for several minutes, but she didn’t drop the knife.
The five-foot-two, 95-pound woman walked toward the two officers “at a slow pace,” police said at a news conference, so one of them tasered her.
She fell to the floor and reportedly suffered a fractured skull and a severe brain bleed, causing her to be hospitalized in critical condition.
Nowland passed away in a hospital surrounded by her family, the New South Wales police confirmed in a statement today.
After a week-long investigation, the police force also said that the senior constable involved would appear in court next week to face charges of recklessly causing grievous bodily harm, assault occasioning actual bodily harm, and common assault.
NSW police procedure states that tasers should not be used against elderly or disabled people absent exceptional circumstances.
Following the incident, community members, activists, and disability rights advocates expressed bewilderment and anger at what they called an unnecessary use of force, and some are now questioning why law enforcement took so long to prosecute the officer involved.
See what others are saying: (Reuters) (The New York Times) (CNN)
U.K. Police Face Backlash After Arresting Anti-Monarchy Protesters
London Mayor Sadiq Khan said that some of the arrests “raise questions” and “investigations are ongoing.”
The Public Order Act
A controversial protest crackdown law in the U.K. is facing criticism after dozens of anti-monarchy protesters were arrested during the coronation ceremony in London over the weekend.
The law, dubbed the “Public Order Act” was passed roughly a week ahead of the coronation for King Charles III. It gives police more power to restrict protesters and limits the tactics protesters can use in public spaces. It was condemned by human rights groups upon its passing, and is facing a new round of heat after 52 people were arrested over coronation protests on Saturday.
In a statement, the Metropolitan Police said protesters were arrested for public order offenses, breach of the peace and conspiracy to cause a public nuisance. The group said it gave advance warning that its “tolerance for any disruption, whether through protest or otherwise, will be low and that we would deal robustly with anyone intent on undermining the celebration.”
It is currently unclear how many of those arrested were detained specifically for violating the Public Order Act, however, some of those arrested believe the new law was used against them.
“Make no mistake. There is no longer a right to peaceful protest in the UK,” Graham Smith, the CEO of anti-monarchy group Republic tweeted after getting arrested. “I have been told many times the monarch is there to defend our freedoms. Now our freedoms are under attack in his name.”
An Attempt to “Diminish” Protests
During a BBC Radio interview, Smith also said he believes the dozens of arrests were premeditated.
“There was nothing that we did do that could possibly justify even being detained and arrested and held,” Smith claimed.
“The whole thing was a deliberate attempt to disrupt and diminish our protest.”
Yasmine Ahmed, the U.K. Director of Human Rights Watch, also tweeted that the arrests were “disgraceful.”
“These are scenes you’d expect to see in Russia not the UK,” she wrote.
When asked about the controversy, Prime Minister Rishi Sunak told reporters officers should do “what they think is best” in an apparent show of support for the Metropolitan Police.
For his part, London Mayor Sadiq Khan said he is looking into the matter.
“Some of the arrests made by police as part of the Coronation event raise questions and whilst investigations are ongoing, I’ve sought urgent clarity from Met leaders on the action taken,” Khan tweeted.
See what others are saying: (The Guardian) (CNN) (The Washington Post)
Foreign Nationals Make Mad Dash out of Sudan as Conflict Rages
The conflict’s death toll has surpassed 420, with nearly 4,000 people wounded.
As the 10-day-long power struggle between rival generals tore Sudan apart, foreign governments with citizens in the country scrambled to evacuate them over the weekend.
On Sunday, U.S. special forces landed in the capital Khartoum and carried out nearly 100 American diplomats along with their families and some foreign nationals on helicopters.
An estimated 16,000 Americans, however, remain in the country and U.S. officials said in a statement that a broader evacuation mission would be too dangerous.
Christopher Maier, the assistant secretary of defense for special operations and low-intensity warfare, said in a statement that the Pentagon may assist U.S. citizens find safe routes out of Sudan.
“[The Defense Department] is at present considering actions that may include use of intelligence, surveillance and reconnaissance capabilities to be able to observe routes and detect threats,” he said.
Germany and France also reportedly pulled around 700 people out of the country.
More countries followed with similar efforts, including the United Kingdom, Italy, Spain, the Netherlands, Canada, China, Saudi Arabia, Lebanon, and Indonesia.
Yesterday, a convoy carrying some 700 United Nations, NGO, and embassy staff drove to Port Sudan, a popular extraction point now that the airport in Khartoum has closed due to fighting.
Reports of gunmen prowling the capital streets and robbing people trying to escape, as well as looters breaking into abandoned homes and shops, have persuaded most residents to stay indoors.
Heavy gunfire, airstrikes, and artillery shelling have terrorized the city despite several proposed ceasefires.
Over the weekend, the reported death toll topped 420, with nearly 4,000 people injured, though both numbers are likely to be undercounted.