D grader Trump's most clever idea to win trade wars is tariff. This is the only weapon he knows to win trade wars easily as he claimed. Now his own republican senators and congressmen are turning against him. Internationally, his allies and trade partners in Europe, Japan, South Korea, Taiwan, Canada and Mexico, to name a few, are furious and threaten to retaliate. You hike, we hike.
On the ground, how is the tariff going to affect the average Americans and the farmers in simple terms? America is importing 70% of its consumer goods from China. When Trump raises tariff by say 25%, China would continue to sell the item at $2 or whatever. No change. China does not and has no reason to increase the price of its products. It is American importers that will be paying the 25% tariff, and this will be passed to the average Americans who will have to pay 25% higher price for the same stuff.
The only way the American consumers can avoid paying the 25% is for the importers to find an alternative source of supply for the same item at the same price. Product substitution. If only the importers can find alternative suppliers. If not, they would still have to buy from China at the same price and add on the 25% tariffs. It is as simple as that.
The same formula can be apply the other way to American farmers exporting goods to China. They would still be selling their produces at the same price. But Chinese importers would be paying the tariff hike, say 25%, and pass the hike to the Chinese consumers. So, the Chinese consumers too would have to pay more for their farm products.
Alternatively, the Chinese importers would look for alternative suppliers for the same products at the same price. If they can find the suppliers, they did not have to pay for the 25% tariff. Fortunately there are plenty of suppliers out there for farm produces and at cheaper prices. So Chinese importers would simply buy from alternative sources, leaving the American farmers with all their stocks and produces with no buyers. Many American farmers are going to go bust.
The clever tariff weapon will hurt the pockets of American consumers by as much as what the tariff is. The retaliatory tariffs imposed by China or other countries affected, will not hurt the Chinese consumers, and other consumers if they can find alternative suppliers. Period.
The Americans should thank genius Trump for having to pay more, and the American farmers should also than him for all their produces unsold and left in the barns or to rot. Life will go on as normal for the Chinese consumers and the consumers around the world.
This is how D grader Trump going to make America great again.
12 comments:
Mr Red Bean, you've been too kind to the orange LOSER. He's definitely a F grader, both figuratively and metaphorically.
Only the daft hillbillies would think a D or F grader can save America and Make America Great Again. But can't blame them as everyone in Capitol Hill or in the White House is as good or as dumb as the Orange Loser.
This "tariffs" thingy also remind me of the medicine cost in sinkieland. Did our G also applied the "tariffs" on medicine imported?? Otherwise why is it that the same medicine cost much lower in other countries than in sinkieland. We all know our "coe = tariffs", car may not be a necessity, but medicine is.
When they refused to remove GST on basic necessities like rice, bread, salt and sugar, what more can you expect?
The USA lies about China's overcapacity, Trump cheats his own voters about the benefits of tariffs, and steals from his own voters in the process, with added taxes masquerading as tariffs that is going to hurt China.
The irony is Trump may be a D grader, but he is also a bullshitter, a fraudster and a failed businessman, being bankrupted six time. What does that say about his voters?
Trump has a lot of experience bankrupting his companies. This experience can be put to good use in bankrupting the USA. He is really very good at this.
Got eyes no see, got ears no listen, got mouth no say. Just follow Trump into more bankruptcies. Did I hear that bankruptcies are easy to come about?
Trump said trade wars are easy to win. Tariffs are the most wonderful invention for him to use against others. And bankruptcies are his greatest achievements. What say you?
No one does it better to become bankrupt than Trump.
"Never correct an enemy when they are making a mistake". This advice is worth its weight in gold.
The way I look at it, the USA is actually clueless as to how to deal with China's rise. Trade wars are not easy to win as Trump gloated. Tariffs are counterproductive for sure. Sanctions on technology will make China more self-reliant and bad for business for USA, Japanese and South Korean chipmakers. Who will be the winners and who the losers are not yet decided, and too early to gloat about easy to win.
Trump had been subsidizing USA farmers when China retaliated against USA agriculture like soya beans during his first term. Now China has found alternative sources for soya beans like Brazil and Russia, which means that China no longer needs to buy from USA farmers, making those subsidies futile. How easy is winning trade wars for Trump is something that has never materialized.
As we go along, the USA had been throwing subsidies to attract chip makers to set up base in USA, with Biden just carrying on the same self-defeating policies initiated by Trump during his first term. When China becomes self-reliant on chips, what will become of all the subsidies thrown at the semiconductor industry? The same as what happens with farmers now.
Trump's tariff threat against Mexico is backfiring even before its implementation. He had been called out for lying and even threatened by the Mexican leader twice already. Trump's ego has been badly bruised by a non other than a woman. Will he be bragging about easily winning the tariff war? I will not at all be surprised.
China retaliates against latest US chip restrictions
China has banned shipments to the US of several “dual-use” minerals and metals used in semiconductor manufacturing and military applications, as Beijing retaliates against the latest chip restrictions unveiled by the Biden administration on Monday.
China’s commerce ministry on Tuesday said it would not permit the export of dual-use items related to gallium, germanium, antimony and superhard materials to the US, and that it would implement stricter controls for graphite-related items.
“The US has broadened the concept of national security, politicising and weaponising trade and technology issues, and abused export control measures,” it said in a statement.
“In order to safeguard national security . . . China has decided to strengthen export controls on dual-use items to the US,” it added, noting that the measures would be effective immediately.
The embargoed minerals and metals are used in the production of semiconductors and batteries, as well as in military and communications equipment components. Beijing had already been tightening controls on their export in response to western chip sanctions.
China produces 98 per cent of the world’s supply of gallium and 60 per cent of germanium, according to the US Geological Survey.
Washington on Monday imposed a range of new sanctions designed to slow the development of China’s semiconductor industry. There were tougher restrictions on the export of critical semiconductor manufacturing tools and a ban on the export of advanced high bandwidth memory (HBM) chips — a crucial component in artificial intelligence products — to the country.
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