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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

Israel Relaxes Abortion Restrictions in Response to U.S. Supreme Court Ruling

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The reforms follow similar moves by France and Germany as leaders across the political spectrum denounce the court’s decision.


Health Minister Makes Announcement

Israel is easing access to abortion in response to the U.S. Supreme Court’s repeal of Roe v. Wade, Nitzan Horowitz, the country’s health minister and head of the small left-wing Meretz party, announced Monday.

“The U.S. Supreme Court’s move to deny a woman the right to abortion is a dark move,” he said in the announcement, “oppressing women and returning the leader of the free and liberal world a hundred years backward.”

The new rules, approved by a majority in the parliamentary committee, grant women access to abortion pills through the universal health system. Women will be able to obtain the pills at local health centers rather than only hospitals and surgical clinics.

The new policy also removes the decades-old requirement for women to physically appear before a special committee that must grant approval to terminate a pregnancy.

While women will still need to get approval, the process will become digitized, the application form will be simplified, and the requirement to meet a social worker will become optional.

The committee will only conduct hearings in the rare case it initially denies the abortion procedure.

Israel’s 1977 abortion law stipulates four criteria for termination of pregnancy: If the woman is under 18 or over 40, if the fetus is in danger, if the pregnancy is the result of rape, incest, or an “illicit union,” including extramarital affairs, and if the woman’s mental or physical health is at risk.

All of the changes will take effect over the next three months.

The World Reacts

Politicians across the political spectrum from Canadian Prime Minister Justin Trudeau to British Prime Minister Boris Johnson have denounced the U.S. Supreme Court’s decision since it was announced Friday.

On Saturday, French Prime Minister Elisabeth Borne expressed support for a bill proposed by parliament that would enshrine the right to an abortion in the country’s constitution.

“For all women, for human rights, we must set this gain in stone,” she wrote on Twitter. “Parliament must be able to unite overwhelmingly over this text.”

Germany scrapped a Nazi-era law prohibiting the promotion of abortion Friday, just hours before the U.S. Supreme Court ruling.

In Israel, abortion is a far less controversial issue than it is for Americans. Around 98% of people who apply for an abortion get one, according to the country’s Central Bureau of Statistics.

Part of the reason for Israel’s relatively easy access to abortion is that many residents interpret Jewish law to condone, or at least not prohibit, the procedure.

In the United States, several Jewish organizations including the American Jewish Committee, Hillel International, and the Women’s Rabbinic Network have expressed opposition to the court ruling, and some Jews have protested it as a violation of their religious freedom.

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

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Flight Deporting Refugees From U.K. to Rwanda Canceled at Last Hour

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The United Nations High Commissioner for Human Rights said the U.K.’s asylum policy sets a “catastrophic” precedent.


Saved By The Bell

The inaugural flight in the U.K. government’s plan to deport some asylum seekers to Rwanda was canceled about an hour and a half before it was supposed to take off Tuesday evening.

A last-minute legal intervention by the European Court of Human Rights (ECHR) halted the flight. Tuesday’s flight originally included 37 people, but after a string of legal challenges that number dwindled to just seven.

In its ruling for one of the seven passengers, a 54-year-old Iraqi man, the court said he cannot be deported until three weeks after the delivery of the final domestic decision in his ongoing judicial review proceedings.

Another asylum seeker, a 26-year-old Albanian man, told The Guardian he was in a “very bad mental state” and did not want to go to Rwanda, a country he knows nothing about.

“I was exploited by traffickers in Albania for six months,” he said. “They trafficked me to France. I did not know which country I was being taken to.”

A final domestic effort to block the flight in the Court of Appeals failed on Monday. The High Court will make a ruling on the asylum policy next month.

Britains Divided by Controversial Policy

U.K. Home Secretary Priti Patel spoke to lawmakers after the flight was canceled, defending the asylum policy and saying preparations for the next flight will begin immediately.

“We cannot keep on spending nearly £5 million a day on accommodation including that of hotels,” she said. “We cannot accept this intolerable pressure on public services and local communities.”

“It makes us less safe as a nation because those who come here illegally do not have the regularized checks or even the regularized status, and because evil people-smuggling gangs use the proceeds of their ill-gotten gains to fund other appalling crimes that undermine the security of our country,” she continued.

The United Nations High Commissioner for Human Rights, Filippo Grandi, told CBC the policy sets a “catastrophic” precedent.

“We believe that this is all wrong,” he said. “This is all wrong. I mean, saving people from dangerous journeys is great, is absolutely great. But is that the right way to do it? Is that the right, is that the real motivation for this deal to happen? I don’t think so. I think it’s… I don’t know what it is.”

An Iranian asylum seeker in a British detention center who was told to prepare for deportation before being granted a late reprieve was asked by ABC whether he ever thought the U.K. would send him to Africa.

“I thought in the U.K. there were human rights,” he said. “But so far I haven’t seen any evidence.”

The Conservative government’s plan was announced in April, when it said it would resettle some asylum seekers 4,000 miles away in Rwanda, where they can seek permanent refugee status, apply to settle there on other grounds, or seek asylum in a safe third country.

The scheme was meant to deter migrants from illegally smuggling themselves into the country by boat or truck.

Migrants have long made the dangerous journey from Northern France across the English Channel, with over 28,000 entering the U.K. in boats last year, up from around 8,500 the year prior. Dozens of people have died making the trek, including 27 who drowned last November when a single boat capsized.

See what others are saying: (BBC) (The Guardian) (CNN)

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Ryanair Draws Outrage, Accusations of Racism After Making South Africans Take Test in Afrikaans

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Afrikaans, which is only spoken as a first language by around 13% of South Africa, has not been the country’s national language since apartheid came to an end in 1994.


Airline Won’t Explain Discrimination

Ryanair, Europe’s largest airline, has received widespread criticism and accusations of racism after it began requiring South African nationals to complete a test in Afrikaans to prove their passport isn’t fraudulent.

The airline told BBC the new policy was implemented because of “substantially increased cases of fraudulent South African passports being used to enter the U.K.”

Among other questions, the test asks passengers to name South Africa’s president, its capital city, and one national public holiday.

Ryanair has not said why it chose Afrikaans, the Dutch colonial language that many associate with white minority rule, for the test.

There are 11 official languages in South Africa, and Afrikaans ranks third for usage below Zulu and IsiXhosa. Only around 13% of South Africans speak Afrikaans as their first language.

“They’re using this in a manner that is utterly absurd,” Conrad Steenkamp, CEO of the Afrikaans Language Council, told reporters. “Afrikaans, you have roughly 20% of the population of South Africa understand Afrikaans. But the rest don’t, so you’re sitting with roughly 50 million people who do not understand Afrikaans.”

“Ryanair should be careful,” he continued. “Language is a sensitive issue. They may well end up in front of the Human Rights Commission with this.”

Ryanair’s policy only applies to South African passengers flying to the United Kingdom from within Europe, since it does not fly out of South Africa.

The British government has said in a statement that it does not require the test.

Anyone who cannot complete the test will be blocked from traveling and given a refund.

Memories of Apartheid Resurface

“The question requiring a person to name a public holiday is particularly on the nose given that SA has a whole public holiday NEXT WEEK commemorating an historic protest that started in response to language-based discrimination,” one person tweeted.

South African citizen Dinesh Joseph told the BBC that he was “seething” with anger when asked to take the test.

“It was the language of apartheid,” he said, adding that it was a trigger for him.

Officials in the country were also surprised by Ryanair’s decision.

We are taken aback by the decision of this airline because the Department regularly communicates with all airlines to update them on how to validate South African passports, including the look and feel,” South Africa’s Department of Home Affairs said in a statement.

Any airline found to have flown a passenger with a fake passport to the U.K. faces a fine of £2,000 from authorities there. Ryanair has also not said whether it requires similar tests for any other nationalities.

Many people expressed outrage at Ryanair’s policy and some told stories of being declined service because they did not pass the test.

See what others are saying: (The Washington Post) (BBC) (Al Jazeera)

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