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China Retaliates With Tariffs on $60 Billion of U.S. Goods

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  • 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)

International

U.K. Court Rules Julian Assange Can Be Extradited to U.S.

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The judgment overrules a lower court decision that blocked the WikiLeaks founder’s extradition on the grounds that his mental health was not stable enough to weather harsh conditions in the American prison system if convicted.


New Developments in Assange Extradition Battle

A British court ruled Friday that WikiLeaks founder Julian Assange can be extradited to the United States to face charges of violating the Espionage Act that could land him in prison for decades.

Prosecutors in the U.S. have accused Assange of conspiring with former army intelligence analyst Chelsea Manning in 2010 to hack into a Department of Defense computer network and access thousands of military and diplomatic records on the wars in Afghanistan and Iraq.

The information obtained in the hack was later published by WikiLeaks in 2010 and 2011, a move U.S. authorities allege put lives in danger.

In addition to a charge of computer misuse, Assange has also been indicted on 17 espionage charges. Collectively, the charges carry a maximum prison sentence of 175 years.

The Friday decision from the High Court overturns a lower court ruling in January, which found that Assange’s mental health was too fragile for the harsh environment he could face in the U.S. prison system if convicted.

Notably, the January ruling did not determine whether or not Assange was guilty. In fact, District Judge Vanessa Baraitser explicitly rejected the defense’s arguments that the charges against him were politically motivated and that he should be protected under freedom of press.

However, she agreed that the defense had provided compelling evidence that Assange suffers from severe depression and that the conditions he could face in the U.S. prison system were “such that it would be oppressive to extradite him to the United States of America.”

The U.S. appealed the ruling, arguing that Assange’s mental health should not be a barrier to extradition and that the psychiatrist who examined him had been biased. 

In October, the Biden administration vowed that if Assange were to be convicted, he would not be placed in the highest-security U.S. prison or immediately sent to solitary confinement. Officials also said that the native Australian would be eligible to serve his sentence in his home country.

High Court Ruling

The High Court agreed with the administration’s arguments in its ruling, arguing that the American’s assurances regarding the conditions of Assange’s potential incarceration were “sufficient.” 

“There is no reason why this court should not accept the assurances as meaning what they say,” the ruling stated. “There is no basis for assuming that the USA has not given the assurances in good faith.”

Assange’s fiancé, Stella Moris, said in a statement that his legal team would appeal the decision to the British Supreme Court at the “earliest possible moment,” referring to the judgment as a “grave miscarriage of justice.”

The Supreme Court will now decide whether or not to hear the case based on if it believes the matter involves a point of law “of general public importance.” That decision may take weeks or even months.

If the U.K. Supreme Court court objects to hearing Assange’s appeal, he could ask the European Court of Human Rights to stay the extradition — a move that could set in motion another lengthy legal battle in the already drawn-out process.

Assange and his supporters claim he was acting as an investigative journalist when he published the classified military cables. They argue that the possibility of his extradition and prosecution represent serious threats to press freedoms in the U.S.

U.S. prosecutors dispute that Assange acted as a journalist, claiming that he encouraged illegal hacking for personal reasons.

See what others are saying: (The New York Times) (NPR) (The Washington Post)

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International

Early Data Indicates Omicron is More Transmissible But Less Severe

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The studies come as Pfizer and BioNTech claim that preliminary research shows a third shot of their COVID vaccine appears to provide sufficient protection against the new variant, but two doses alone may not.


More Information About Omicron

Several preliminary studies published in recent days appear to show that the new omicron COVID-19 variant may be more transmissible but less severe than previous strains.

One recent, un-peer-reviewed study by a Japanese scientist who advises the country’s health ministry found that omicron is four times more transmissible in its initial stage than delta was.

Preliminary information in countries hit hard by omicron also indicates high transmissibility. In South Africa —  where the variant was first detected and is already the dominant strain — new COVID cases have more than doubled over the last week.

Health officials in the U.K. said omicron cases are doubling every two or three days, and they expect the strain to become dominant in the country in a matter of weeks.

In a statement Wednesday, World Health Organization Director Tedros Adhanom Ghebreyesus said that while early data does seem to show high transmissibility, it also indicates that omicron causes more mild cases than delta.

Centers for Disease Control and Prevent Director Rochelle Walensky echoed that sentiment, telling reporters that of the 40 known omicron cases in the U.S. as of Wednesday, nearly all of them were mild. One person has been hospitalized so far and none have died.

Studies on Vaccine Efficacy 

Other recent studies have shown that current COVID vaccines are effective at preventing severe illness and death in omicron patients, and boosters provide at least some added protection.

On Wednesday, Pfizer and BioNTech announced that laboratory tests have shown a third dose of their COVID-19 vaccine appears to provide sufficient protection against the omicron variant, though two doses may not.

According to the companies, researchers saw a 25-fold reduction in neutralizing antibodies for omicron compared to other strains of the virus for people who had just two Pfizer doses. 

By contrast, samples from people one month after they had received a Pfizer booster presented neutralizing antibodies against omicron that were comparable to those seen against previous variants after two doses.

Still, Pfizer’s chief executive also told reporters later in the day that omicron could increase the likelihood that people might need a fourth dose earlier than previously expected, which he had initially said was 12 months after the third shot.

Notably, the Pfizer research has not yet been peer-reviewed, and it remains unclear how omicron will operate outside a lab, but other studies have had similar findings.

See what others are saying: (The New York Times) (Bloomberg) (NBC News)

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40 Camels Disqualified From Beauty Contest After Breeders Inject Their Faces With Botox

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The animals were barred from competing for $66 million in prizes at this year’s King Abdulaziz Camel Festival in Saudi Arabia.


Camels Booted From Beauty Contest

More than 40 camels were disqualified from a beauty contest in Saudi Arabia this week after judges found artificial enhancements in their faces, marking the biggest crackdown on contestants in the competition to date.

The animals were competing for $66 million in prizes at the King Abdulaziz Camel Festival, a month-long event that is estimated to include around 33,000 camels.

However, according to The Guardian, they were forced out of the contest when authorities found that breeders had “stretched out the lips and noses of the camels, used hormones to boost the animals’ muscles, injected heads and lips with Botox to make them bigger, inflated body parts with rubber bands, and used fillers to relax their faces.”

Those types of alterations are banned since judges look at the contestant’s heads, necks, humps, posture, and other features when evaluating them.

An announcement from the state-linked Saudi Press Agency said officials used “specialized and advanced” technology to detect tampering.

“The club is keen to halt all acts of tampering and deception in the beautification of camels,” the SPA report added before warning that organizers would “impose strict penalties on manipulators.”

While it’s unclear what that actually entails, this isn’t the first time people have tried to cheat in this way.

In 2018, 12 camels were similarly disqualified from the competition for injections in their noses, lips, and jaw.

See what others are saying: (Insider) (The Guardian) (ABC News)

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