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

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2 years ago

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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)

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International

Canadian Catholic Priest Says Residential Schools Survivors Lied About Abuse

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22 hours ago

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July 29, 2021

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The Roman Catholic Church is facing considerable backlash across Canada for its treatment of indigenous peoples in the residential school system, along with its subsequent efforts to downplay the problem.

Priest Sparks Outrage

Father Rheal Forest was put on forced leave Wednesday following remarks he made over a weeks-long period starting July 10 in which he doubted victims of the country’s infamous residential school system.

Residential schools were a system of schools largely for indigenous children that were mostly run by the Catholic Church with federal government funding. The schools were notoriously cruel and long faced allegations that children had been abused or went missing under their care.

To date, over 1,300 unmarked graves have been found at four former residential schools across Canada, a fraction of the over 130 that used to exist.

Forest, of the St. Boniface archdiocese in Winnipeg, was standing in for a couple of weeks while the main priest at his church was away. During that time, Forest told parishioners that victims of the residential schools, particularly those sexually abused, had lied.

“If [the victims] wanted extra money, from the money that was given to them, they had to lie sometimes — lie that they were abused sexually and, oop, another $50,000,” he said.

“It’s kind of hard if you’re poor not to lie.”

In that same sermon, he also added that during his time with Inuit groups in the north of the country, most had allegedly said they appreciated the residential school system. Instead, he said they blamed any abuses on lay people working at the facilities rather than priests or nuns.

Forest’s comments drew a ton of backlash, prompting the archdiocese to place Forest on leave. A spokesperson for the archdiocese said that the institution “completely disavow” Forest’s comments, adding, “We very much regret the pain they may have caused to many people, not least of course Indigenous people and, more specifically, survivors of the Residential School system.”

Overall, the archdiocese has attempted to apologize to indigenous communities for its part in the residential school system, with Archbishop Albert Legatt saying in a video that the way forward was by “acknowledging, apologizing, and acting” on terms set by indigenous groups.

Church Allegedly Kept Money From Victims

Forest’s views and subsequent dismissal aren’t the only public relations scandal the Roman Catholic Church faces in Canada.

According to documents obtained by CBC News, the Church spent over a decade avoiding paying out money to survivors per a 2005 agreement. At the time, it, alongside the protestant churches that also ran some residential schools, agreed to pay an amount to victims of the schools in the tens of millions.

Instead, according to an internal summary of 2015 court documents, the Catholic Church spent much of that money on lawyers, administration, a private fundraising company, and unapproved loans. It seems that some of this was technically legal, such as a promise to give tens of millions back via “in-kind” services; however, there was no audit completed to confirm that these services actually happened or to prove the alleged value of the services. This led to doubts about whether or not they were done effectively.

The Catholic Church was unique among the signatory churches in the 2005 agreement with its efforts to avoid paying victims. All of the other denominations paid out their sums many years before without issues.

While priests such as Father Forest have supported the Church, there has been internal backlash. Father André Poilièvre, a Saskatoon priest and Order of Canada recipient, said the Church’s actions are “scandalous” and “really shameful,” adding, “It was a loophole. It might be legal, but it’s not ethical.”

With these latest revelations, widespread anger at the Church has triggered allegations that indigenous groups are behind a spree of church burnings across the country.

The entire situation is likely going to continue to smolder as a government commission set up to investigate the schools estimates there will be thousands of more unmarked graves found across Canada.

See what others are saying: (CBC News) (The Guardian) (CTV News)

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International

Tokyo Sets Back-to-Back Records for Number of Daily COVID-19 Cases

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2 days ago

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July 28, 2021

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Some positive cases were detected among people attending the Olympic Games, including a handful of athletes.

Cases Going Up

The Tokyo Olympic Games found itself in more controversy on Wednesday after Tokyo experienced a record number of daily COVID-19 cases for the second day in a row.

On Tuesday, the city recorded 2,848 new cases of the virus, passing the 2,500 daily new case threshold for the first time since the pandemic began. Then on Wednesday, it shattered the record again with 3,177 new COVID-19 cases.

At least 155 of those new cases were detected among people attending the Games, including a handful of athletes, which contrasts Prime Minister Suga Yoshihide’s promise that the Olympics wouldn’t be hit with the virus. The spike in new cases has largely been attributed to the delta-variant, something that many countries are dealing with around the world.

Nishimura Yasutoshi, a Japanese economic minister, told a parliamentary panel this week that COVID-19 cases are expected to continue rising for at least a few days. He also explained that many people may have delayed getting tested last week due to holidays, therefore inflating total daily new case numbers.

Governors in prefectures around Tokyo have moved to ask the government for states-of-emergency, which Tokyo is already under.

Doubts About Government Response

The prime minister said in a press conference on Tuesday that “the government has secured a new drug that reduces the risk of serious illness by 70 percent,” adding, “we have confirmed that this drug will be used thoroughly from now on.”

However, he never actually mentioned what drug he was referencing.

“In any case, under these circumstances, I would like to ask the people to avoid going out unnecessarily and to watch the Olympics and Paralympics on TV,” Suga continued.

He also stressed that canceling the Olympics amid the outbreak was completely out of the question, although there have been continued calls from the public and opposition lawmakers for just that.

Beyond refusing to cancel the Games, Suga is facing backlash for refusing to enact strict state-of-emergency protocols. Currently, the measures in Tokyo are almost all voluntary and consist of asking people to stay home, along with requesting restaurants that serve alcohol to completely close and telling all others to shut down by 8 p.m.

See what others are saying: (Reuters) (NPR) (The Wall Street Journal)

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International

First Person Charged Under Hong Kong National Security Law Found Guilty of Terrorism and Inciting Secession

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3 days ago

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July 27, 2021

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Dozens more are awaiting trial for breaking the controversial National Security Law, which is aimed at protecting Chinese sovereignty at the cost of basic freedoms within Hong Kong.

First Conviction Under National Security Law

The first person to be charged under Hong Kong’s extremely controversial National Security Law was found guilty of his crimes Tuesday morning.

A judge ruled that Tong Ying-kit was guilty of both terrorism and inciting secession after the 24-year-old failed to stop at a police checkpoint while on his motorcycle last July, which resulted in him eventually riding into police. At the same time, he was carrying a flag that said “Liberate Hong Kong, Revolution of Our Times.”

According to Justice Esther Toh, that phrase alone was capable of inciting others to commit succession, she also that added that Tong understood that the flag had secessionist meaning in an effort to set aside doubts that Tong understood the flag’s inherent meaning.

Yamini Mishra, Amnesty International’s Asia-Pacific Regional Director said,“The conviction of Tong Ying-kit is a significant and ominous moment for human rights in Hong Kong.”

“Today’s verdict underlines the sobering fact that expressing certain political opinions in the city is now officially a crime, potentially punishable by life in jail,” she added.

More Convictions Expected Sparking Fear Over Erosion of Rights

A long string of convictions will likely follow Tong’s, as over 100 people have been arrested under the ambiguous law that criminalizes many forms of freedom of expression under the guise of protecting Chinese sovereignty. Of those arrested, 60 are currently awaiting trial, including dozens of pro-democracy politicians who have been accused of subversiveness for their calls to block the government’s agenda in the legislature.

That has drawn particular concern among international critics who fear the precedent that will be set once it’s clear to politicians that failing to rubber-stamp the Communist Party’s agenda will result in prison terms.

It’s widely expected that as more people are found guilty, the few remaining protections of the city’s Basic Law, a British common law-inspired mini-constitution, will be completely eroded.

See what others are saying: (The New York Times) (CNN) (BBC)

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