- 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)
2,700 Tonnes of Ammonium Nitrate Stash Linked to Beirut Explosion
- Tuesday’s massive explosion in Beirut has left at least 135 dead and 5,000 injured.
- The tragedy is suspected to have been caused by a detonation of more than 2,700 tons of ammonium nitrate that was improperly stored in a warehouse.
- Officials at the port are currently set to be placed under house arrest pending an investigation into the cause of the explosion. Records show officials knew that the nitrate was there and that it was dangerous but still did nothing for years.
- The damage is severe, with 300,000 people being displaced and damage potentially costing $5 billion.
What We Know
Lebanese officials are looking for answers after a massive explosion in Beirut killed at least 135 people and injured 5,000 on Tuesday.
“There are no words to describe the catastrophe,” President Michel Aoun said of the tragedy.
Lebanon’s Interior Minister told a local television station that right now, it appears that the blast was caused by the detonation of more than 2,700 tons of ammonium nitrate. The ammonium nitrate, which is used in fertilizer and bombs, had been seized from a cargo ship and was being improperly stored in a warehouse. Records show that officials knew the nitrate was being stored there and was dangerous but failed to act.
Current reports indicate that a fire at a nearby warehouse may have ignited the nitrate, but the cause of the fire is unknown. An investigation into the explosion is still underway.
“As head of the government, I will not relax until we find the responsible party for what happened, hold it accountable and apply the most serious punishments against it,” Prime Minister Hassan Diab said in a statement.
Sources told Aljazeera that the country’s cabinet is going to place port officials under house arrest pending the investigation. It is unclear how many officials this will involve or what their roles at the port were.
The State of Lebanon
The damage the blast has caused is catastrophic, leaving an estimated 300,000 people displaced. The governor of Beirut estimates that the country could be facing between $3-5 billion dollars in damage.
The explosion was strong enough to be felt in Cyprus, which is around 150 miles away from Beirut. Several hospitals were also damaged to the point that they could not take in new patients. Many of those hospitals were already treating COVID-19 patients as the country is dealing with a spike in cases.
Just last week, the country reimposed coronavirus lockdowns because of a case surge. Hospitals are already struggling to handle the pandemic and lack personal protective equipment and other tools to combat it. The new influx of injured people from the explosion is now putting hospitals at capacity.
This comes at a time of dire economic hardship for Lebanon as well. The country currently has an unemployment rate of 33% and 45% of the country living below the poverty line, according to Business Insider. Tensions with the government and leadership are already high because of this.
“Many blame the ruling elite who have dominated politics for years and amassed their own wealth while failing to carry out the sweeping reforms necessary to solve the country’s problems,” BBC News explained. “People have to deal with daily power cuts, a lack of safe drinking water and limited public healthcare.”
Recovery efforts are underway. The Lebanon Red Cross has set up first-aid stations to help people with non-critical injuries and has sent in ambulances and Emergency Medical Technicians.
Countries across the globe are also pitching in. French president Emmanuel Macron will be going to Lebanon himself, while hise country is sending medical equipment, rescue teams, and other aid. The President of the European Council also said that the EU is ready to help however they can..
Israel, Jordan, Russia and Egypt are among the many other countries that have pledged or already sent assistance. President Donald Trump also said that United States is ready to help and called the explosion a “terrible attack.” However, at this time, officials have not called this an attack.
Celebrities are also getting involved in recovery efforts. Singer Dua Lipa has been sharing donation links and news articles on Instagram and is encouraging her followers to help however they can.
“Please if you are able and healthy to donate blood please do!!!” she wrote. “Beirut needs your help. There are people in critical conditions!”
Pop star Ariana Grande also tweeted out several links for donations and sent her condolences to the country.
Likewise, model Bella Hadid shared information about the blast and encouraged people to donate money or blood if possible.
See what others are saying: (Associated Press) (Reuters) (Aljazeera)
Four Students Arrested, 12 Protest Leaders Barred from Elections in Hong Kong National Security Law Crackdown
- Four Hong Kong student activists were arrested Wednesday for “secession” over a social media post.
- Notably, this is the first police crackdown outside of street protests since implementation of China’s national security law on June 30.
- Hours later, the Hong Kong government barred 12 pro-democracy leaders from running in upcoming elections—including four incumbents.
- Despite the national security law supposedly not being retroactive, several of those candidates were barred over concerns stemming from their past actions.
Four Students Arrested for “Secession”
China began enacting harsh crackdowns under its new national security law on Wednesday, beginning with the arrests of four student activists who are being accused of inciting “secession” after making a post on social media.
That news was shortly followed by the announcement that 12 pro-democracy candidates seeking seats within the city’s legislature, the Legislative Council, have been barred from upcoming elections in September.
Reportedly, the students who were arrested range from ages 16 to 21. Notably, outside of street protests, these are the first arrests that have been enacted using the national security law since it went into effect on June 30.
As far as specifically why they were arrested, in a press conference last night, Senior Superintendent Steve Li Kwai-wah said that all four students are believed to be part of an online group that pledged to fight for Hong Kong independence.
Li went on to say they “posted about the establishment of a new party” that would promote pro-independence ideals “using any means possible” in an attempt to build a “Republic of Hong Kong.”
“We have to enforce the laws even if the crimes are committed on the internet,” he added. “Don’t think you can escape from the responsibility in cyberspace and commit crimes.”
According to Li, police also seized their computers, phones, and other documents.
While police declined to say what group the students were a part of or even give their names, pro-independence group StudentLocalism said on Facebook that one of the people who was arrested is Tony Chung, the group’s former leader.
Chung disbanded the group’s operations in Hong Kong pretty much immediately after Beijing passed this national security law for the city; however, it’s still been active on social media, and activists are reportedly working overseas.
All four of the students who were arrested appear to also have ties to another organization, the Initiative Independence Party. Their activity with that group might actually be why they were arrested.
Police have already executed ten arrests during street protests under the new national security law. Of those, they’ve charged one person.
As far as whether these students will be charged, according to a police source who spoke with the South China Morning Post, police will likely seek legal advice from the Hong Kong Department of Justice. From there, they will decide whether those suspects will ultimately be charged or released on bail.
Activists Speak Out On Student Arrests
Despite it long being expected that China would eventually target online dissent, criticism of this move was still potent.
“That four young people could potentially face life imprisonment on the basis of some social media posts lays bare the draconian nature of the national security law,” Amnesty International’s Asia Pacific Regional Director Nicholas Bequelin said in a statement.
The idea that anybody can now be jailed for expressing their political opinion on Facebook or Instagram will send a chill throughout Hong Kong society,” he added. “No one should be arrested solely for expressing an opinion that is contrary to that of the government.”
On Twitter, prominent activist Nathan Law, who fled the city earlier this month, said, “So students are arrested because of a SOCIAL MEDIA POST. Bloody hell. How vulnerable a country is to be afraid of a post by a group of teenagers.”
The arrests have also resulted in condemnation from the Human Rights Watch. The group’s China Director described them as a “gross misuse of this draconian law (which make) clear that the aim is to silence dissent, not protect national security.”
That director, Sophie Richardson, also said the arrests “raise chilling concerns of a broader crackdown on political parties” as September’s legislative elections approach.
12 Candidates Barred From Elections
Ironically enough, Richardson’s concern came true just hours later when the Hong Kong government announced that 12 pro-democracy candidates running for seats in LegCo have now been disqualified from doing so.
For its part, the government argued that those candidates can’t stand for candidacy because
their political positions would be at odds with the basic law of Hong Kong. For example, they have advocated for democratic reforms and have objected to the national security legislation.
Those candidates include Joshua Wong and Gwyneth Ho, who were both front-runners in an unofficial democratic primary held earlier this month. Notably, that list also includes four incumbents.
LegCo contains 42 pro-Beijing lawmakers scattered across 70 total seats. Citizens themselves are only allowed to directly elect representatives in 35 seats while the other half is indirectly elected through interest groups. Hong Kong is also led by Chief Executive Carrie Lam, who is backed by Beijing and has been frequently criticized as being a “puppet” for the mainland.
Unsurprisingly, Beijing has said it supports these disqualifications. The Hong Kong government has also since said that more disqualifications could follow.
Three pro-democracy lawmakers—Alvin Yeung, Dennis Kwock, and Kenneth Leung—were told they were barred from re-election because of previous calls for the United States to impose sanctions on those responsible for rights abuses in Hong Kong.
As Yeung and Kwok pointed out, those pushes mainly happened in August and September—months before the national security law went into effect. The national security law, on paper, indicates that it cannot be applied retroactively.
Still, election officials have argued that candidates’ past actions and remarks reflect their true intentions, meaning they can still be barred from running.
International Outrage to Barring Candidates
Wong was also barred in a similar fashion. That decision was made even though he disbanded his pro-democracy party, Demosisto, hours before the national security law went into effect. On Monday, he also pledged to no longer lobby for foreign sanctions against Hong Kong.
Nonetheless, the Hong Kong government has cited previous statements made directly by him and his party as a reason for barring him.
“Beijing has staged the largest-ever assault on the city’s remaining free election,” Wong said on Twitter.
“In the letter of government, they have nearly screened all my posts, co-eds, interviews and statements for cooking up excuses for disqualification. Under the surveillance of secret police, I have been trailed by unknown agents, let alone the growing risk of being assault[ed].”
“However, after a whole year of resistance, Hongkongers will not surrender.”
Internationally, the qualifications have also received condemnation from a number of lawmakers in different countries.
In the U.S., Sen. Marco Rubio (R-Fl.) called the disqualifications “outrageous,” saying this move shows “the Chinese Communist Party’s determination to remake the city in its image.”
He then called on the Trump administration to “push back and hold officials accountable.”
Secretary of State Mike Pompeo has also urged Hong Kong to move forward with its Sept. 6 election as planned. That comes after concerns that the government may delay the election for one year because of the coronavirus pandemic.
Pro-democracy supporters, however, have accused the pro-Beijing lawmakers of trying to stifle an election that could yield a first-ever majority for pro-democracy lawmakers.
On Thursday, the Hong Kong government responded to criticism, saying, “There is no question of any political censorship, restriction of the freedom of speech, or deprivation of the right to stand for elections as alleged by some members of the community.”
See what others are saying: (Aljazeera) (South China Morning Post) (The New York Times)
Global Coronavirus Cases Hit 16 Million as Recovered Countries See New Spikes
- Global coronavirus cases hit 16 million on Sunday, with new cases continuing to pop up all around the world.
- The U.S. leads with the highest amount of coronavirus cases by far with over 4.2 million— nearly a quarter of all cases worldwide.
- While the cases continue to increase in hard-hit countries like the U.S., Brazil, and India, other countries in Asia and Europe that had previously curbed the virus are now seeing new spikes.
- On Monday, China reported its highest new cases since April, and Australia recorded its highest new cases ever. In Spain, cases have more than tripled since the country ended its lockdown, prompting concerns about a second wave in Europe.
The global number of reported coronavirus cases officially hit 16 million on Sunday, adding another one million in the course of just four days.
The number of coronavirus cases in the world is now nearly twice the population of New York City. Even then, the actual number is expected to be much higher because of a lack of testing, unreported cases, and concerns that some countries are downplaying or underreporting numbers.
Countries all over the world are seeing alarming spikes, but the U.S. still leads in the highest cases and deaths. Right now, the U.S. accounts for nearly one-quarter of all reported cases with than 4.2 million, meaning that roughly one out of every four coronavirus cases are in the U.S.
The U.S. has also reported nearly 147,000 deaths, making up roughly one out of every five coronavirus-related deaths in the world.
Last week, the U.S. reported over 1,000 coronavirus-related deaths a day for four days straight, marking the highest death counts since late May. According to the New York Times, deaths are increasing in 25 states and Puerto Rico. Cases are increasing in 32 states, Puerto Rico, and D.C.
Last week, California officially overtook New York and became the state with the highest number of confirmed cases, reporting over 452,000 total cases as of Monday. Over the weekend, Florida also surpassed New York as the state with the second-highest case count.
On Monday, John Hopkins reported 423,855 cases in Florida, which is notable because even though Florida’s count is still less than California’s, California has nearly double the population of Florida.
Spikes in Other Countries
The U.S. is not the only country that has been seeing increases in coronavirus cases.
Brazil, which has the second-highest number of cases with over 2.4 million, has also been experiencing spikes. According to reports, Saturday marked the fourth day in a row that Brazil reported more than 50,000 new cases, breaking its previous weekly record with 321,623 new cases.
On Sunday, India, which has the third-biggest case count, reportedly recorded its highest single day of confirmed cases so far with more than 50,000, pushing up the country’s total to over 1.4 million.
However, in addition to the countries that have already been experiencing swells over the last few weeks, countries that had previously curbed the virus are also beginning to see new spikes.
On Monday, China recorded its highest number of new cases since April with 61. According to reports, almost all of the cases are centralized in the northwestern region, though there have been regional clusters.
In response, some regional authorities have declared “wartime mode” lockdown measures to combat the virus.
Hong Kong, which had largely controlled transmission, has also recently imposed its toughest coronavirus restrictions yet as spikes continue. The city has reportedly recorded over 1,000 infections since the beginning of the month, which accounts for nearly half of the total recorded cases total since the virus first arrived there in late January.
Other Asian countries that had previously curbed the virus are also seeing spikes as well, like South Korea, which reported a four-month high on Saturday with 113 new cases— many of which were imported.
Over the weekend, North Korea also locked down a city near its border with South Korea after officials reportedly found someone who may have been infected with the virus. If true, the individual would mark North Korea’s first confirmed reported case.
However, it is not just Asian countries that had previously cut transmission and are now seeing increases. Australia, which still has strict lockdown measures and other restrictions in parts of the country, had its deadliest day on Sunday with ten fatalities. On Monday, the country broke its previous record for the highest number of daily cases of at least 549.
In Europe, Spain’s caseload has reportedly tripled in the weeks since the country rolled back restrictions, prompting the United Kingdom to respond Saturday by placing restrictions on travelers from Spain, requiring them to self-isolate for 14 days.
However, Spain’s leaders have insisted it is not experiencing a second wave and that it is still safe to visit. Still, the undeniable spikes have brought concerns over a European second wave.
Those concerns will also likely raise new questions about travel within Europe, where many countries have reopened their economies and are encouraging tourists despite the fact that many tourist-heavy countries like Spain, as well as France and Germany, are now seeing new spikes.