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Trump's Trade War Escalates as China Retaliates with 34% Tariffs

178 points by Anon84 2y ago

llm_nerd 2y ago
Many American tech leaders helped usher in a Trump presidency in the belief that he could be their strongman protecting them from meddling foreign governments: No more EU levying fines or China making demands, they thought, or else Donald would target them with punitive tariffs! They had the mob boss on their side and this was their time to trample the world. Zuckerberg explicitly stated this in his Rogan interview. Pretty funny how that turned out. American tech is going to be on a carousel of ass kickings. The fines and punitive measures are going to be coming at a torrential clip, and of course the US economy is going to be in for an extremely rough few years, and tech is the first thing that sees budget cuts. Quite aside from the entire industry being gut punched by the stupidest tariff regime in human history. Art of the Deal
- throw0101c 2y ago
  > Art of the Deal Reminder that Trump had no part in writing the book: * https://en.wikipedia.org/wiki/The_Art_of_the_Deal https://en.wikipedia.org/wiki/The_Art_of_the_Deal More seriously, this 2018 article from Indiana University negotiations professor David Honig has (re-)popped in recent months: > Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you’re fighting over who gets how many pieces. In Trump’s world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins. > The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don’t have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over. […] > One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you’re going to pay his whole bill or demand a discount, you don’t have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won’t agree to do the cabinets in your next casino, and you’re going to have to find another cabinet maker. > There isn’t another Canada. […] > Trump has the same weakness politically. For every winner there must be a loser. And that’s just not how politics works, not over the long run. * https://medium.com/@davidhonig_67081/distributive-bargaining-in-an-integrative-world-1593a7c6ffe2 https://medium.com/@davidhonig_67081/distributive-bargaining... * https://blogs.iu.edu/keep/distributive-negotiation-vs-integrative-negotiation/ https://blogs.iu.edu/keep/distributive-negotiation-vs-integr... * https://www.pon.harvard.edu/daily/negotiation-skills-daily/negotiation-skills-expanding-the-pie-integrative-bargaining-versus-distributive-bargaining/ https://www.pon.harvard.edu/daily/negotiation-skills-daily/n...
- mnky9800n 2y ago
  It seems there’s a lot of money to be made if you are willing to navigate eu business rules to build European copies of American technology companies. Like I have thought about starting a European based, European values cloud data science platform. There’s a lot of people who would simply want to move away from azure, Google, etc. even though Europe can sometimes be draconian and highly segmented.
tgeorge 2y ago
https://archive.ph/QrBwf https://archive.ph/QrBwf
drumhead 2y ago
No Hyper-economy, like China or the EU is going to stand about and take what seems like economic intimidation from the US. All the unaffiliated nations are going to be collateral damage in this clash of the economic titans. The best thing everyone can do is maintain low tariffs and try and strike free trade deals with each other. But the consequeces of Trumps Trade war are going to be disasterous for smaller developing nations and their economies. We'll see more poverty, more political instability, civil wars, coups and other unpleaseant activities. The USA will probably get higher inflation while the rest of the world sees lower inflation if not deflation. We'll have to find a way of getting through this window of misfortune to the other side, where I suspect we'll all be poorer and less free.
- hello_moto 2y ago
  And billionaires are still going to be rich. I hope one day USA wakes up and realize the solution is wealth tax to these billionaires
  - morkalork 2y ago
    A wealth tax isn't the only solution, it's just the more civilized option that's in everyone's best interest
  - electriclove 2y ago
    Like what Norway did? https://www.theguardian.com/world/2023/apr/10/super-rich-abandoning-norway-at-record-rate-as-wealth-tax-rises-slightly https://www.theguardian.com/world/2023/apr/10/super-rich-aba...
    - sparkle_fish 2y ago
      Yes, why not? To the best of my knowledge Norway is still thriving. Ideally more countries would get on board with such ideas and there will be fewer palpable places for them to relocate to. From the article, “The model in Norway is that everyone should contribute relevant to ability and therefore those that have a greater ability to pay taxes, should pay a little more.” This seems more than fair, particularly while failing tax systems are leading to unprecedented levels of inequality.
akmarinov 2y ago
Wonder whether Americans or the Chinese can weather tough times better. Chinese don’t get to protest or voice dissent and Americans can’t be bothered to
- naveen99 2y ago
  Both sides just survived covid in their own ways. There was suffering though, just like there will be again.
- alephnerd 2y ago
  It will suck on both sides, but the majority of American households can weather a $2-4k blow over the next year as supply chains react. Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly. Most of Latin America being placed at the lower end of the announcement means manufacturers who used to be competitive until China Shock set around 2014-16 can be cost competitive again. Other large markets like India, UK, and Vietnam are negotiating as well and India expects as Bilateral Trade Agreement to be closed by Aug-Oct.
  - deleted 2y ago
    [deleted]
  - josefresco 2y ago
    > $2-4k blow over the next year as supply chains react. It's gonna take a lot longer, and cost Americans a lot more money for "supply chains to react" and move manufacturing to the US.
    - alephnerd 2y ago
      Manufacturing isn't returning to the US due to these tariffs. Just like before the tariffs, the US is still too expensive. On the other hand, it has killed cost-competitiveness for Chinese exports directly from China or via transshipment from Vietnam. The tariff regime has now made Latin America (Brazil, Colombia), Turkiye, Philippines, parts of the EU (Poland, Czechia, Romania), and India cost competitive. And NAFTA/USMCA exemptions still remain and this was something Congress pushed back HARD on to ensure.
tonetheman 2y ago
Not sure why anyone would trust someone who has bankrupted 6 companies personally and directly to make any choices on the economy.
boxed 2y ago
How is it retaliation to destroy your own economy by making the same bad life choices? Isn't actual retaliation to just ignore the entire thing and thank the US for the extra percentage points in advantage you got for free?
- n4r9 2y ago
  Not if this doesn't actually destroy their economy and gives them even more percentage points. Also the USA has imposed tariffs on almost everyone whereas China has specifically targeted the USA with tariffs. They have much more scope to re-source their imports.
- morsecodist 2y ago
  If you assume the US tariffs are unchangeable then you would be right but the hope of retaliatory tariffs is that they will get the US to update it's tariffs in response to the economic harm caused. It will also harm China of course but I would imagine they hope the harm caused to the US will reduce the tariffs and leave China better off in the long run. This is not totally unreasonable, the US is ostensibly more sensitive to the economic conditions of it's citizens so one could imagine China outlasting the US in this game of chicken.
  - UncleEntity 2y ago
    I asked the google and it appears a big chunk of Chinese imports are agricultural products. Farmers not having a market to sell their products into isn't such a good thing for any administration so they seem to have a bunch of leverage on this point alone.
    - bitshiftfaced 2y ago
      China can hit American farmers, but their overall trade surplus is $295 billion. The US has much more leverage.
      - n4r9 2y ago
hubraumhugo 2y ago
Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated and will probably cause the prices of drugs and treatments in the USA to skyrocket.
- stabbles 2y ago
  31% tariffs on Switzerland will be felt.
  - alephnerd 2y ago
    Pharma is exempted from the tariffs regime, but in that list it should also be the EU and India as well. Most medicaments in the US are sourced from EU (Ireland, Germany, Netherlands), EFTA (Switzerland as you rightfully noted as well as Denmark), and India
    - deleted 2y ago
      [deleted]
- alephnerd 2y ago
  > Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated Pharma along with semiconductors is still exempted. The biggest hit this has is on textiles and apparel as those were industries that have almost no NAFTA/USMCA presence anymore. Electronics will be a mixed bag as most US origin electronics assembly was already returning to Mexico due to Zero COVID in China (20-23) and Vietnam (20-21), or moving to India (26% tariff) and Malaysia (20% tariff)
- makingstuffs 2y ago
  Wait, they can go up more!? I remember thinking prices for really basic medication in the States was insanely expensive — something which costs $0.50 in Europe would cost $3+ in Target n co
apawloski 2y ago
Just yesterday people were trying to convince me that price hikes were good and would benefit Trump’s base. Now JP Morgan is predicting a global recession. I cannot fathom how this is good for America. It just feels like a colossal own-goal that will weaken America on the global scale. Americans will suffer in a recession. And it was by choice that this administration put us here. Is there any recourse?
- krapp 2y ago
  >Is there any recourse? Nope. The avalanche has begun, it's too late for the pebbles to regret their vote.
  - stoneman24 2y ago
    Thanks for the great B5 quote. The vast majority of us are just minor pebbles in trump’s grand experiment, just trying to find a quiet place to avoid all the noise and nightmares. The SV mantra of “Move fast and break things” is not something that you really should apply to entire economic systems. Someone will probably profit but it’s not going to be the average American citizen ( or citizen of any other country)
- Spooky23 2y ago
  Hope you have an opportunity to vote again, and that the coup is unsuccessful this time.
- FirmwareBurner 2y ago
  >Now JP Morgan is predicting a global recession. Good thing JP Morgan's predictions were never wrong /s Edit: to those who downvoted, do you have any arguments to contradict my statement and would you put your money into JP's predictions? Go ahead, I'll wait.
  - tim333 2y ago
    JP Morgan are actually saying a 60% chance. So you can't really say they were right or wrong.
lenerdenator 2y ago
I hate to say it: this might be the thing that actually screws his movement. Biden was uninspiring but ultimately did okay on a few things. The things that screwed him were inflation - some of which was Trump's fault - and his mental state, which can happen to anyone at that age. The inflation followed Harris in her run, as people were fondly remembering 2017-2019 and the era of lower prices. They thought putting Trump back in office would reverse the trend. Well, now he's drastically kicking prices up left and right with no end in sight. It's not even macroeconomic factors doing this like it was with COVID; it's purely the strokes of his pen. The bottom line is the ultimate thing that matters in American politics, as it is everywhere. The talk about democracy, institutions, rights, etc. are all window dressing. "It's the economy, stupid", and it's getting noticeably worse. Of course, I could also be totally wrong like everything else has been for the last 10 years when it comes to predicting the downfall of that tyrant.
- heisgone 2y ago
  No doubt Lutnick and Bessent are taking crazy risks with their strategy. If they are to be believed, their plan is to have a recession at the begining of the term to get long term bond price lower and refinance the debt. By their own account, they outright said to Trump things aren't going to be good until 2028. So, I guess we have to prepare for a few years of crap. Let's hope it doesn't trigger a depression that would need government bailout to save the economy.
  - jpster 2y ago
    What’s worrisome is, if they’re planning on things to suck until 2028, that is precisely when the next presidential election is supposed to happen. Suppose he feels like he must have 4 more years, to take credit for the V-shaped recovery, and not go out like a loser? Suppose he declines to step down?
    - UncleEntity 2y ago
      They're already talking about how he can have a third term, 22nd amendment be damned.
ai_is_great 2y ago
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oldpersonintx 2y ago
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sandworm101 2y ago
>> Trump's Trade War That might be how it is understood locally, but on an international scale this is quickly moving from "Trump's" to "America's" trade war. Various levels of US government have had opportunity to weigh in, but have generally acquiesced to the recent tariff policies. Calling this a "trump problem" wont fly much longer. This is now American trade policy.
- Herring 2y ago
  Yeah 1) He won the popular vote. His support actually increased the 2nd time around, and 2) He should be in a tiny jail cell right now, what was Biden doing for 4 years? This isn’t going away even if he leaves office in 4 years (which is looking unlikely).
  - kashunstva 2y ago
    > He should be in a tiny jail cell right now, what was Biden doing for 4 years? Not causing a global financial crisis, mainly. But vis-a-vis his predecessor’s recurrent criminality, it’s hard to imagine what his options were, considering the capture of the remaining branches of government. Well, that, and the Constitution.
    - tim333 2y ago
      With hindsight Biden should maybe have encouraged the Jan 6th prosecution to happen less than four years after the event.
- jajko 2y ago
  [flagged]
djha-skin 2y ago
I'm kinda happy about this. Our farmers in Utah lobby so hard for water, then use it to grow alfalfa which they sell to China because they can sell it there for more money than it can be sold locally. It boils my circuits that they ask for our precious water -- to which they have historically had an obvious right, growing our food -- and then basically ship it overseas. Keep the crops at least sold in the US, and hopefully to other Utahns who have a hard time buying alfalfa because China inflates the price. 80% of our water goes to farmers here. I'm glad of it when they grow wheat and sell it to us, but not when it gets exported. These tariffs will hopefully help with that.
- whycome 2y ago
  But youve clearly defined what the problem is. Is a tariff the solution?
  - yladiz 2y ago
    It’s not the only solution, but it is one, as we saw back in the first Trump administration and their tariffs on, and the resulting counter tariffs from, China. It will almost certainly dramatically reduce demand for crops like this from the US, which will lead to less farmers (as many leave the business or go bankrupt) and ultimately less water usage by the farmers.
    - Trasmatta 2y ago
      What does US farmers going bankrupt solve?
      - pixl97 2y ago
        I believe you may have some reading comprehension problem with what they laid out? At least in the parents posters mind that less farm exports leads to less water usage. Hence bankrupt farmers solves things like aquifers going empty and lakes draining leavings environmental disasters. Now, how it actually works out in the end may be different, but the concept doesn't seem completely broken at first appearance.
josefritzishere 2y ago
My work is raising prices about 25% just based on the asumption. Apologies to the customers.
- nickthegreek 2y ago
  Prices are going up on everything. As a customer, I will be buying less products. Apologies to the Employees who will be losing their jobs over reduced profits.
reedjosh 2y ago
34% additional. AFAICT they already charged 34%. Does that put us at 68%?
- deleted 2y ago
  [deleted]
erelong 2y ago
[flagged]
- rjtavares 2y ago
  You can't be serious... It's like arguing against the expression "Putin's war in Ukraine" because Ukraine retaliated with drones.
  - erelong 2y ago
    Wikipedia calls it "China–United States trade war"... would this be thought to be inaccurate?
    - rjtavares 2y ago
      Wikipedia also calls Putin's war "Russo-Ukrainian War". I have no problem with either name. That's the point.
- sgc 2y ago
  This has to be a clumsy attempt at a willfully deceptive comment, right? The aggressor starts the war, but the defender will not sit by idly. They must fight back. Do you somehow think only China will do this? The US is about to get its comeuppance in a very painful way.
- kashunstva 2y ago
  > Kinda weird to call it this You do realize how this began?
  - erelong 2y ago
    A growing trade deficit with China not respecting "intellectual property" and other such things?
incomingpain 2y ago
When obama brought in his affordable healthcare, one of the big issues he discovered was that healthcare in the usa depends almost entirely on exports from china. the other issue at the same time for the democrats was that they were losing middle american votes because the globalists shipped those jobs overseas. There has been bipartisan support to exit globalism since; and it is over obviously. Obama, Biden, and Trump have all be making major changes to exit. Without the need for global trade, the usa is also no longer world police. They have instead condensed their blue water navies down to super carrier groups that will project power into specific spots like yemen/houthis for example. The usa rather abruptly switched from trying to sustain stability over the world to the opposite; they benefit from causing chaos elsewhere because backhome stability will be attractive to investors. Welcome to how trade always was; we usually had our navies trading bullets and not goods. China isn't ready and these retaliatory tariffs will only punish themselves. https://www.usni.org/magazines/proceedings/2020/february/chinas-navy-will-be-worlds-largest-2035 https://www.usni.org/magazines/proceedings/2020/february/chi...
ty6853 2y ago
What economist is advising Trump? Can we read their game plan somewhere?
- mraniki 2y ago
  https://en.m.wikipedia.org/wiki/Peter_Navarro https://en.m.wikipedia.org/wiki/Peter_Navarro
  - bamboozled 2y ago
    specifically America’s chronic and ever-expanding trade deficit — says that America is the globe’s biggest trade loser and a victim of unfair, unbalanced, and nonreciprocal trade" Finally the source of “we’ve been treated unfairly” is revealed?
    - Aloisius 2y ago
      Eh. Not really. Trump has been espousing the same mercantilist zero-sum game view about trade since the 1980s. He simply picked an economic advisor who shares his views.
      - bamboozled 2y ago
        Well that's why I put a question mark on the end of my sentence :) Thanks.
mppm 2y ago
One thing that I'd like to inject into this discussion, is that the nominal trade imbalance is not the only relevant figure, and maybe not the most important one. For many goods, there is a very strong disconnect between the market value (the lowest price you can offer a group of suppliers competing against each other) and what one might call, for lack of a better word, true value (the price you'd be willing to pay if you had no alternatives). For luxury goods, these are often nearly the same, while basic goods might have a 5x difference and antibiotics could well have 1000x. When this is taken into account, the trade between the West on the one hand, and China and Russia on the other, is not unbalanced by a factor of 2, but more like 20. The West receives a huge amount of energy, manufactured products, chemical precursors, electronics, technological supplies, medical supplies and basic medicines. And in return they send champaigne, BMWs, branded clothing, intellectual property, and yes, some aircraft and photolithography machines. The effect of this has already been demonstrated once with the mostly unsuccessful sanctions against Russia, but would be felt ten-fold if there were a major disruption of trade between China and the West. China is at a point in their development, where they really could walk away from trading with the West if they really had to, but the Western economies would likely be sent into shock by such a step. Not that I think this is likely to happen, but I do get the feeling that the new tariffs are mostly giving China a leg-up towards full economic independence, while onshoring the US industry will be a very long and painful process.
- bathtub365 2y ago
  I’m not sure what you mean by “the West” in this context. No one besides the US are unilaterally raising tariffs on China. The US stands alone in this and the rest of us are fine to keep trading with China while whatever agenda is being pursued by the US regime.
  - mppm 2y ago
    I'm just making a general point, since the trade between China and the EU is qualitatively similar to China-US. And while the EU is anti-Trump at the moment, I do not think it is beyond aggressive economic action against China for political reasons, if nothing else. (And let's not forget about the new tariffs on Chinese electric cars).
ChrisArchitect 2y ago
Earlier: https://news.ycombinator.com/item?id=43580289 https://news.ycombinator.com/item?id=43580289

178 points by Anon84 2y ago

Many American tech leaders helped usher in a Trump presidency in the belief that he could be their strongman protecting them from meddling foreign governments: No more EU levying fines or China making demands, they thought, or else Donald would target them with punitive tariffs! They had the mob boss on their side and this was their time to trample the world. Zuckerberg explicitly stated this in his Rogan interview. Pretty funny how that turned out. American tech is going to be on a carousel of ass kickings. The fines and punitive measures are going to be coming at a torrential clip, and of course the US economy is going to be in for an extremely rough few years, and tech is the first thing that sees budget cuts. Quite aside from the entire industry being gut punched by the stupidest tariff regime in human history. Art of the Deal

throw0101c 2y ago
> Art of the Deal Reminder that Trump had no part in writing the book: * https://en.wikipedia.org/wiki/The_Art_of_the_Deal https://en.wikipedia.org/wiki/The_Art_of_the_Deal More seriously, this 2018 article from Indiana University negotiations professor David Honig has (re-)popped in recent months: > Distributive bargaining always has a winner and a loser. It happens when there is a fixed quantity of something and two sides are fighting over how it gets distributed. Think of it as a pie and you’re fighting over who gets how many pieces. In Trump’s world, the bargaining was for a building, or for construction work, or subcontractors. He perceives a successful bargain as one in which there is a winner and a loser, so if he pays less than the seller wants, he wins. The more he saves the more he wins. > The other type of bargaining is called integrative bargaining. In integrative bargaining the two sides don’t have a complete conflict of interest, and it is possible to reach mutually beneficial agreements. Think of it, not a single pie to be divided by two hungry people, but as a baker and a caterer negotiating over how many pies will be baked at what prices, and the nature of their ongoing relationship after this one gig is over. […] > One of the risks of distributive bargaining is bad will. In a one-time distributive bargain, e.g. negotiating with the cabinet maker in your casino about whether you’re going to pay his whole bill or demand a discount, you don’t have to worry about your ongoing credibility or the next deal. If you do that to the cabinet maker, you can bet he won’t agree to do the cabinets in your next casino, and you’re going to have to find another cabinet maker. > There isn’t another Canada. […] > Trump has the same weakness politically. For every winner there must be a loser. And that’s just not how politics works, not over the long run. * https://medium.com/@davidhonig_67081/distributive-bargaining-in-an-integrative-world-1593a7c6ffe2 https://medium.com/@davidhonig_67081/distributive-bargaining... * https://blogs.iu.edu/keep/distributive-negotiation-vs-integrative-negotiation/ https://blogs.iu.edu/keep/distributive-negotiation-vs-integr... * https://www.pon.harvard.edu/daily/negotiation-skills-daily/negotiation-skills-expanding-the-pie-integrative-bargaining-versus-distributive-bargaining/ https://www.pon.harvard.edu/daily/negotiation-skills-daily/n...
mnky9800n 2y ago
It seems there’s a lot of money to be made if you are willing to navigate eu business rules to build European copies of American technology companies. Like I have thought about starting a European based, European values cloud data science platform. There’s a lot of people who would simply want to move away from azure, Google, etc. even though Europe can sometimes be draconian and highly segmented.

tgeorge 2y ago

https://archive.ph/QrBwf https://archive.ph/QrBwf

drumhead 2y ago

No Hyper-economy, like China or the EU is going to stand about and take what seems like economic intimidation from the US. All the unaffiliated nations are going to be collateral damage in this clash of the economic titans. The best thing everyone can do is maintain low tariffs and try and strike free trade deals with each other. But the consequeces of Trumps Trade war are going to be disasterous for smaller developing nations and their economies. We'll see more poverty, more political instability, civil wars, coups and other unpleaseant activities. The USA will probably get higher inflation while the rest of the world sees lower inflation if not deflation. We'll have to find a way of getting through this window of misfortune to the other side, where I suspect we'll all be poorer and less free.

hello_moto 2y ago
And billionaires are still going to be rich. I hope one day USA wakes up and realize the solution is wealth tax to these billionaires
- morkalork 2y ago
  A wealth tax isn't the only solution, it's just the more civilized option that's in everyone's best interest
- electriclove 2y ago
  Like what Norway did? https://www.theguardian.com/world/2023/apr/10/super-rich-abandoning-norway-at-record-rate-as-wealth-tax-rises-slightly https://www.theguardian.com/world/2023/apr/10/super-rich-aba...
  - sparkle_fish 2y ago
    Yes, why not? To the best of my knowledge Norway is still thriving. Ideally more countries would get on board with such ideas and there will be fewer palpable places for them to relocate to. From the article, “The model in Norway is that everyone should contribute relevant to ability and therefore those that have a greater ability to pay taxes, should pay a little more.” This seems more than fair, particularly while failing tax systems are leading to unprecedented levels of inequality.

akmarinov 2y ago

Wonder whether Americans or the Chinese can weather tough times better. Chinese don’t get to protest or voice dissent and Americans can’t be bothered to

naveen99 2y ago
Both sides just survived covid in their own ways. There was suffering though, just like there will be again.
alephnerd 2y ago
It will suck on both sides, but the majority of American households can weather a $2-4k blow over the next year as supply chains react. Congress stepping in to exclude Canada and Mexico and the NAFTA exemption cushions the blow significantly. Most of Latin America being placed at the lower end of the announcement means manufacturers who used to be competitive until China Shock set around 2014-16 can be cost competitive again. Other large markets like India, UK, and Vietnam are negotiating as well and India expects as Bilateral Trade Agreement to be closed by Aug-Oct.
- deleted 2y ago
  [deleted]
- josefresco 2y ago
  > $2-4k blow over the next year as supply chains react. It's gonna take a lot longer, and cost Americans a lot more money for "supply chains to react" and move manufacturing to the US.
  - alephnerd 2y ago
    Manufacturing isn't returning to the US due to these tariffs. Just like before the tariffs, the US is still too expensive. On the other hand, it has killed cost-competitiveness for Chinese exports directly from China or via transshipment from Vietnam. The tariff regime has now made Latin America (Brazil, Colombia), Turkiye, Philippines, parts of the EU (Poland, Czechia, Romania), and India cost competitive. And NAFTA/USMCA exemptions still remain and this was something Congress pushed back HARD on to ensure.

tonetheman 2y ago

Not sure why anyone would trust someone who has bankrupted 6 companies personally and directly to make any choices on the economy.

boxed 2y ago

How is it retaliation to destroy your own economy by making the same bad life choices? Isn't actual retaliation to just ignore the entire thing and thank the US for the extra percentage points in advantage you got for free?

n4r9 2y ago
Not if this doesn't actually destroy their economy and gives them even more percentage points. Also the USA has imposed tariffs on almost everyone whereas China has specifically targeted the USA with tariffs. They have much more scope to re-source their imports.
morsecodist 2y ago
If you assume the US tariffs are unchangeable then you would be right but the hope of retaliatory tariffs is that they will get the US to update it's tariffs in response to the economic harm caused. It will also harm China of course but I would imagine they hope the harm caused to the US will reduce the tariffs and leave China better off in the long run. This is not totally unreasonable, the US is ostensibly more sensitive to the economic conditions of it's citizens so one could imagine China outlasting the US in this game of chicken.
- UncleEntity 2y ago
  I asked the google and it appears a big chunk of Chinese imports are agricultural products. Farmers not having a market to sell their products into isn't such a good thing for any administration so they seem to have a bunch of leverage on this point alone.
  - bitshiftfaced 2y ago
    China can hit American farmers, but their overall trade surplus is $295 billion. The US has much more leverage.
    - n4r9 2y ago

hubraumhugo 2y ago

Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated and will probably cause the prices of drugs and treatments in the USA to skyrocket.

stabbles 2y ago
31% tariffs on Switzerland will be felt.
- alephnerd 2y ago
  Pharma is exempted from the tariffs regime, but in that list it should also be the EU and India as well. Most medicaments in the US are sourced from EU (Ireland, Germany, Netherlands), EFTA (Switzerland as you rightfully noted as well as Denmark), and India
  - deleted 2y ago
    [deleted]
alephnerd 2y ago
> Pharma products were previously tariff-free under a WTO agreement that is based on the principle that life-saving items shouldn't face any tariffs. Looks like this exemption is now also being eliminated Pharma along with semiconductors is still exempted. The biggest hit this has is on textiles and apparel as those were industries that have almost no NAFTA/USMCA presence anymore. Electronics will be a mixed bag as most US origin electronics assembly was already returning to Mexico due to Zero COVID in China (20-23) and Vietnam (20-21), or moving to India (26% tariff) and Malaysia (20% tariff)
makingstuffs 2y ago
Wait, they can go up more!? I remember thinking prices for really basic medication in the States was insanely expensive — something which costs $0.50 in Europe would cost $3+ in Target n co

apawloski 2y ago

Just yesterday people were trying to convince me that price hikes were good and would benefit Trump’s base. Now JP Morgan is predicting a global recession. I cannot fathom how this is good for America. It just feels like a colossal own-goal that will weaken America on the global scale. Americans will suffer in a recession. And it was by choice that this administration put us here. Is there any recourse?

krapp 2y ago
>Is there any recourse? Nope. The avalanche has begun, it's too late for the pebbles to regret their vote.
- stoneman24 2y ago
  Thanks for the great B5 quote. The vast majority of us are just minor pebbles in trump’s grand experiment, just trying to find a quiet place to avoid all the noise and nightmares. The SV mantra of “Move fast and break things” is not something that you really should apply to entire economic systems. Someone will probably profit but it’s not going to be the average American citizen ( or citizen of any other country)
Spooky23 2y ago
Hope you have an opportunity to vote again, and that the coup is unsuccessful this time.
FirmwareBurner 2y ago
>Now JP Morgan is predicting a global recession. Good thing JP Morgan's predictions were never wrong /s Edit: to those who downvoted, do you have any arguments to contradict my statement and would you put your money into JP's predictions? Go ahead, I'll wait.
- tim333 2y ago
  JP Morgan are actually saying a 60% chance. So you can't really say they were right or wrong.

lenerdenator 2y ago

I hate to say it: this might be the thing that actually screws his movement. Biden was uninspiring but ultimately did okay on a few things. The things that screwed him were inflation - some of which was Trump's fault - and his mental state, which can happen to anyone at that age. The inflation followed Harris in her run, as people were fondly remembering 2017-2019 and the era of lower prices. They thought putting Trump back in office would reverse the trend. Well, now he's drastically kicking prices up left and right with no end in sight. It's not even macroeconomic factors doing this like it was with COVID; it's purely the strokes of his pen. The bottom line is the ultimate thing that matters in American politics, as it is everywhere. The talk about democracy, institutions, rights, etc. are all window dressing. "It's the economy, stupid", and it's getting noticeably worse. Of course, I could also be totally wrong like everything else has been for the last 10 years when it comes to predicting the downfall of that tyrant.

heisgone 2y ago
No doubt Lutnick and Bessent are taking crazy risks with their strategy. If they are to be believed, their plan is to have a recession at the begining of the term to get long term bond price lower and refinance the debt. By their own account, they outright said to Trump things aren't going to be good until 2028. So, I guess we have to prepare for a few years of crap. Let's hope it doesn't trigger a depression that would need government bailout to save the economy.
- jpster 2y ago
  What’s worrisome is, if they’re planning on things to suck until 2028, that is precisely when the next presidential election is supposed to happen. Suppose he feels like he must have 4 more years, to take credit for the V-shaped recovery, and not go out like a loser? Suppose he declines to step down?
  - UncleEntity 2y ago
    They're already talking about how he can have a third term, 22nd amendment be damned.

ai_is_great 2y ago

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oldpersonintx 2y ago

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sandworm101 2y ago

>> Trump's Trade War That might be how it is understood locally, but on an international scale this is quickly moving from "Trump's" to "America's" trade war. Various levels of US government have had opportunity to weigh in, but have generally acquiesced to the recent tariff policies. Calling this a "trump problem" wont fly much longer. This is now American trade policy.

Herring 2y ago
Yeah 1) He won the popular vote. His support actually increased the 2nd time around, and 2) He should be in a tiny jail cell right now, what was Biden doing for 4 years? This isn’t going away even if he leaves office in 4 years (which is looking unlikely).
- kashunstva 2y ago
  > He should be in a tiny jail cell right now, what was Biden doing for 4 years? Not causing a global financial crisis, mainly. But vis-a-vis his predecessor’s recurrent criminality, it’s hard to imagine what his options were, considering the capture of the remaining branches of government. Well, that, and the Constitution.
  - tim333 2y ago
    With hindsight Biden should maybe have encouraged the Jan 6th prosecution to happen less than four years after the event.
jajko 2y ago
[flagged]

djha-skin 2y ago

I'm kinda happy about this. Our farmers in Utah lobby so hard for water, then use it to grow alfalfa which they sell to China because they can sell it there for more money than it can be sold locally. It boils my circuits that they ask for our precious water -- to which they have historically had an obvious right, growing our food -- and then basically ship it overseas. Keep the crops at least sold in the US, and hopefully to other Utahns who have a hard time buying alfalfa because China inflates the price. 80% of our water goes to farmers here. I'm glad of it when they grow wheat and sell it to us, but not when it gets exported. These tariffs will hopefully help with that.

whycome 2y ago
But youve clearly defined what the problem is. Is a tariff the solution?
- yladiz 2y ago
  It’s not the only solution, but it is one, as we saw back in the first Trump administration and their tariffs on, and the resulting counter tariffs from, China. It will almost certainly dramatically reduce demand for crops like this from the US, which will lead to less farmers (as many leave the business or go bankrupt) and ultimately less water usage by the farmers.
  - Trasmatta 2y ago
    What does US farmers going bankrupt solve?
    - pixl97 2y ago
      I believe you may have some reading comprehension problem with what they laid out? At least in the parents posters mind that less farm exports leads to less water usage. Hence bankrupt farmers solves things like aquifers going empty and lakes draining leavings environmental disasters. Now, how it actually works out in the end may be different, but the concept doesn't seem completely broken at first appearance.

josefritzishere 2y ago

My work is raising prices about 25% just based on the asumption. Apologies to the customers.

nickthegreek 2y ago
Prices are going up on everything. As a customer, I will be buying less products. Apologies to the Employees who will be losing their jobs over reduced profits.

reedjosh 2y ago

34% additional. AFAICT they already charged 34%. Does that put us at 68%?

deleted 2y ago
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erelong 2y ago

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rjtavares 2y ago
You can't be serious... It's like arguing against the expression "Putin's war in Ukraine" because Ukraine retaliated with drones.
- erelong 2y ago
  Wikipedia calls it "China–United States trade war"... would this be thought to be inaccurate?
  - rjtavares 2y ago
    Wikipedia also calls Putin's war "Russo-Ukrainian War". I have no problem with either name. That's the point.
sgc 2y ago
This has to be a clumsy attempt at a willfully deceptive comment, right? The aggressor starts the war, but the defender will not sit by idly. They must fight back. Do you somehow think only China will do this? The US is about to get its comeuppance in a very painful way.
kashunstva 2y ago
> Kinda weird to call it this You do realize how this began?
- erelong 2y ago
  A growing trade deficit with China not respecting "intellectual property" and other such things?

incomingpain 2y ago

When obama brought in his affordable healthcare, one of the big issues he discovered was that healthcare in the usa depends almost entirely on exports from china. the other issue at the same time for the democrats was that they were losing middle american votes because the globalists shipped those jobs overseas. There has been bipartisan support to exit globalism since; and it is over obviously. Obama, Biden, and Trump have all be making major changes to exit. Without the need for global trade, the usa is also no longer world police. They have instead condensed their blue water navies down to super carrier groups that will project power into specific spots like yemen/houthis for example. The usa rather abruptly switched from trying to sustain stability over the world to the opposite; they benefit from causing chaos elsewhere because backhome stability will be attractive to investors. Welcome to how trade always was; we usually had our navies trading bullets and not goods. China isn't ready and these retaliatory tariffs will only punish themselves. https://www.usni.org/magazines/proceedings/2020/february/chinas-navy-will-be-worlds-largest-2035 https://www.usni.org/magazines/proceedings/2020/february/chi...

ty6853 2y ago

What economist is advising Trump? Can we read their game plan somewhere?

mraniki 2y ago
https://en.m.wikipedia.org/wiki/Peter_Navarro https://en.m.wikipedia.org/wiki/Peter_Navarro
- bamboozled 2y ago
  specifically America’s chronic and ever-expanding trade deficit — says that America is the globe’s biggest trade loser and a victim of unfair, unbalanced, and nonreciprocal trade" Finally the source of “we’ve been treated unfairly” is revealed?
  - Aloisius 2y ago
    Eh. Not really. Trump has been espousing the same mercantilist zero-sum game view about trade since the 1980s. He simply picked an economic advisor who shares his views.
    - bamboozled 2y ago
      Well that's why I put a question mark on the end of my sentence :) Thanks.

mppm 2y ago

One thing that I'd like to inject into this discussion, is that the nominal trade imbalance is not the only relevant figure, and maybe not the most important one. For many goods, there is a very strong disconnect between the market value (the lowest price you can offer a group of suppliers competing against each other) and what one might call, for lack of a better word, true value (the price you'd be willing to pay if you had no alternatives). For luxury goods, these are often nearly the same, while basic goods might have a 5x difference and antibiotics could well have 1000x. When this is taken into account, the trade between the West on the one hand, and China and Russia on the other, is not unbalanced by a factor of 2, but more like 20. The West receives a huge amount of energy, manufactured products, chemical precursors, electronics, technological supplies, medical supplies and basic medicines. And in return they send champaigne, BMWs, branded clothing, intellectual property, and yes, some aircraft and photolithography machines. The effect of this has already been demonstrated once with the mostly unsuccessful sanctions against Russia, but would be felt ten-fold if there were a major disruption of trade between China and the West. China is at a point in their development, where they really could walk away from trading with the West if they really had to, but the Western economies would likely be sent into shock by such a step. Not that I think this is likely to happen, but I do get the feeling that the new tariffs are mostly giving China a leg-up towards full economic independence, while onshoring the US industry will be a very long and painful process.

bathtub365 2y ago
I’m not sure what you mean by “the West” in this context. No one besides the US are unilaterally raising tariffs on China. The US stands alone in this and the rest of us are fine to keep trading with China while whatever agenda is being pursued by the US regime.
- mppm 2y ago
  I'm just making a general point, since the trade between China and the EU is qualitatively similar to China-US. And while the EU is anti-Trump at the moment, I do not think it is beyond aggressive economic action against China for political reasons, if nothing else. (And let's not forget about the new tariffs on Chinese electric cars).

ChrisArchitect 2y ago

Earlier: https://news.ycombinator.com/item?id=43580289 https://news.ycombinator.com/item?id=43580289