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“It's time for a Trade War” said President Dumb aka Cadet Bone Spurs


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Author Topic: “It's time for a Trade War” said President Dumb aka Cadet Bone Spurs  (Read 691 times)
Kiwithrottlejockey
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« Reply #25 on: April 07, 2018, 03:20:40 pm »


from the print edition of the Los Angeles Times....

There’s no ‘pot of gold’ at the end of a trade war

By DANIEL GRISWOLD | Friday, April 06, 2018

China may put tariffs on $12 billion of American soybeans, more than half of the U.S. export of this product. — Photograph: Associated Press.
China may put tariffs on $12 billion of American soybeans, more than half of the U.S. export of this product. — Photograph: Associated Press.

AMID our escalating trade war with China this week, President Trump's top economic advisor, Larry Kudlow, tried to assure investors that, despite roiling stock markets, a “pot of gold” lies at the end of the dispute. But the brinkmanship on both sides is more likely to cost Americans a pot of gold in disrupted trade and lost economic opportunity.

The spat between the world's two largest trading nations started last month with U.S. tariffs on steel and aluminum; China responded with tariffs on $3 billion worth of U.S. exports. This week's round two — over Chinese appropriation of U.S. intellectual property — marks an exponential escalation, with each side first threatening tariffs on $50 billion of the other's exports. On Thursday, Trump told the U.S. Trade Representative to look for $100 billion more.

The risks for Americans are clear and present. Although the people of China certainly will pay, so too will millions of American farmers, ranchers, manufacturing workers and consumer households. The most immediate casualties will be U.S. exporters. China bought $130 billion worth of U.S. goods in 2017, making it the third-largest market for our exports, behind only Canada and Mexico.

Nobody appreciates that reality more than American farmers. China is poised to slap tariffs on $12 billion of U.S. soybean exports, representing more than half of total U.S. exports of the crop. That will come on top of retaliatory duties China already has imposed on fruits, nuts and wine — actions that hit California producers especially hard.

U.S. industry will also suffer. Already in the crosshairs of Chinese retaliation are U.S. exports of $6 billion in motor vehicles and $16 billion worth of civilian aircraft. In a double whammy to U.S. industry, our own government is threatening to impose 25% tariffs on a range of industrial goods and machinery imported from China. Those imports enable U.S. companies to remain competitive and keep assembly of final products here in the United States. Combined with a 30% jump in domestic steel prices brought on by the administration's earlier steel tariffs, U.S. manufacturing companies are facing a cost squeeze that threatens to disrupt supply chains and employment.

Despite promises from the Trump administration, these tariffs will not “fix” the trade deficit. If the Chinese earn fewer dollars selling into the U.S. market, they will have fewer dollars to buy U.S. exports; both imports and exports will then fall. The Chinese also will have fewer dollars to buy U.S. Treasury bonds, which will lead to higher long-term borrowing costs for Uncle Sam and the rest of us.

A trade showdown won't necessarily fix the underlying complaint about intellectual property either. There is no precedent in U.S. history for using this level of tariff threats to successfully wrest concessions from a major commercial partner. Three decades ago, the U.S. got tough with Japan over similar issues but never came close to threatening the kind of sweeping duties the Trump administration is talking about today. Japan was also a different kind of negotiating partner, a democracy and a more accommodating ally. An authoritarian and nationalistic China is less likely to back down.

A more promising and less risky strategy would be to press the U.S. case in the World Trade Organization, the inter-governmental body formed to resolve trade disputes. The United States has brought a number of WTO cases against China, prevailing in almost all of them, and the Chinese government changed its policies as a result. Japan, the EU and other Western economic powers that share our complaints against China and could join the U.S. in pressing its case. Instead, it's China that has just approached the WTO with its complaint about our steel and aluminum tariffs.

Another more constructive strategy for the United States would be to re-join the Trans-Pacific Partnership. This trade agreement with 11 other Pacific Rim nations contains strong intellectual-property protections that provide a stark alternative to China's lax approach. More broadly, the Trump administration could deescalate its hostile trade rhetoric against our allies such as Canada, Mexico and the EU, making it easier for these countries to unite in demanding Chinese reforms.

Like Japan in the 1990s, China is in transition to a more advanced economic state in which developing and protecting intellectual property will be crucial. If China wants to continue to attract foreign direct investment, it would be in its own interest to reform its domestic laws to protect the intellectual property of all companies, domestic and foreign-owned.

A full-blown escalation of tariffs is not in the interest of either the United States or China. Contrary to the much-referenced tweet by Trump, trade wars are not good nor are they easily won, as we may soon learn at great cost.


__________________________________________________________________________

Daniel Griswold is co-director of the Program on the American Economy and Globalization at the Mercatus Center and George Mason University.

http://enewspaper.latimes.com/infinity/article_share.aspx?guid=6b8dae99-2ab8-47fa-aab4-3b15dc1c5ea1
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« Reply #26 on: April 07, 2018, 03:22:30 pm »


from the Los Angeles Times....

Beijing responds forcefully to Trump's escalating threats,
raising risks of all-out trade war


By DON LEE, JIM PUZZANGHERA and JAMES F. PELTZ | 3:30PM PDT — Friday, April 06, 2018

Chinese Ministry of Commerce spokesman Gao Feng said China would fight the U.S. “at any cost” after President Trump proposed additional tariffs on $100 billion of Chinese goods. — Photograph: Andy Wong/Associated Press.
Chinese Ministry of Commerce spokesman Gao Feng said China would fight the U.S. “at any cost” after President Trump proposed
additional tariffs on $100 billion of Chinese goods. — Photograph: Andy Wong/Associated Press.


WITH President Trump upping the ante in his trade fight and Beijing showing no signs of backing down, the two nations entered a new phase of escalated tensions that already have rocked financial markets and set off deepening worries of a trade war that could undermine global growth.

In what has become a high-stakes game of economic poker, China on Friday responded defiantly to Trump's threat the previous night to slap tariffs on another $100 billion in imported Chinese goods on top of $50 billion in products announced earlier. China's Commerce Ministry quickly vowed to fight the new tariffs “at any cost” with a full slate of unspecified counter-measures.

It was the sharpest and latest in a series of tit-for-tat actions that, so far, have been mostly threats and warnings of retaliation. And officials on both sides left open the possibility of negotiations that could avoid tariffs and other protectionist measures from being erected.

But Treasury Secretary Steven T. Mnuchin on Friday acknowledged the potential of a trade war, and Trump's top economic advisor, Larry Kudlow, said that “Trump is not just using tariffs as a negotiating card” and is prepared to use them.

“I don't like to use tariffs, but sometimes you have to use tariffs to bring countries to their senses,” Kudlow said, even as he sought, unsuccessfully, to calm markets and individuals by emphasizing that the U.S. is still months away from enacting the tariffs against China and that there were “all kinds of back-channel discussions going on” between the two nations.

Trump said on Friday that investors might feel “a little pain” because of his trade actions against China, and the stock market quickly proved him right.

The Dow Jones industrial average plunged 572.46 points, or 2.3%, the Dow's worst percentage drop in two weeks and, at its low Friday, the blue-chip average had plummeted 767 points, or 3.1%.

It ended a seesaw week on Wall Street in which prices gyrated widely as investors grappled with how much the trade dispute could escalate and thus hinder economic growth, corporate earnings and consumer spending.

Trump administration officials insisted that the American economy remained on strong footing, but job growth moderated in March and a trade conflict will almost certainly prove costly for both the U.S. and China, as well as the world economy.

The year had begun with major economies hopeful about what analysts saw as a rare period of synchronized global growth, but there have been recent declines in world manufacturing confidence, noted economists at Barclays Bank.

“Ongoing trade-war uncertainty leads us to recommend shifting away from risk assets,” the economists said.

Trade tensions have been building for weeks, slowly at first with Trump imposing tariffs on Chinese solar panels and then on roughly $4 billion of Chinese steel and aluminum, the latter penalties justified in the name of U.S. national security.

Earlier this week, the Trump administration issued a list of about $50 billion in Chinese products such as semiconductors and machine tools that would be hit with 25% penalties for alleged intellectual property theft and unfair technology transfer policies.

Beijing reacted swiftly by announcing its own list of American-made goods, including cars, aircraft and soybeans, that would be subject to import taxes of a similar amount.

Trump, apparently angered by Beijing's dollar-for-dollar threat of retaliation, said “China has chosen to harm our farmers and manufacturers.”

In a statement, he added, “China's illicit trade practices — ignored for years by Washington — have destroyed thousands of American factories and millions of American jobs.”

Trump's economic team piled on the criticisms throughout Friday.

“The problem here is China, not Trump,” said Kudlow, complaining of what he called decades of “illegal practices” by China that violate World Trade Organization rules. “They're a first-world country now and they have to act like a first-world country and they have to play by the rules,” he said.

U.S. Trade Representative Robert Lighthizer said the president's proposal to increase China tariffs was “an appropriate response,” although he made clear that any additional tariffs, like the earlier ones announced, would not take effect immediately. The tariffs would first be subject to a 60-day public comment and hearing period.

Even so, the intensifying rhetoric and threats from both sides have left many exasperated.

“Hopefully the president is just blowing off steam again, but if he's even half-serious, this is nuts,” said Senator Ben Sasse (Republican-Nebraska). “He's threatening to light American agriculture on fire. Let's absolutely take on Chinese bad behavior, but with a plan that punishes them instead of us. This is the dumbest possible way to do this.”

House Ways and Means Committee Chairman Kevin Brady (Republican-Texas) called for both sides to resolve their differences in talks. “The deliberation period announced by the president gives the U.S. and China a long-overdue opportunity to resolve this serious trade dispute,'' he said in a statement. "It is in both of our countries' interest — and frankly, the world's — to find a new path forward on unfair trade practices.”

Businesses and investors remained hopeful of negotiations but were nonetheless bracing for a potentially long standoff.

“As both China and the U.S. try to gain concessions from each other in the ongoing trade talks, the back-and-forth between the two countries on tariff threats is not likely to end soon,” said the Fung Group, a Hong Kong-based firm involved in trading, logistics and retailing.

Including Trump's latest threat, China could end up being hit with tariffs on $150 billion of goods, or about 30% of all Chinese exports to the U.S. China will be hard-pressed to match tariffs on that level of goods because it's more than 100% of what China currently imports from the U.S. in merchandise.

But that apparent advantage for the Trump administration could end up being a Pyrrhic victory, especially for U.S. companies that have production or sales in China.

For all of the difficulties and obstacles operating in China, many are there because of the country's large and growing market, and a trade war would do serious damage to their business, particularly if Beijing pulls out its full arsenal by tightening regulations, increasing inspections, and just making life very difficult for them.

Some of the biggest losers on Friday were giant multi-national companies with considerable sales to China. Caterpillar Incorporated fell 3.3%, Boeing Company dropped 3.1% and General Electric Company lost 2.8%.

But the selloff was across the board, with particularly big losses in the aerospace and defense, financial, healthcare and retail industries. The NYSE/FANG+ index, which tracks the market's largest technology stocks, fell 2.4%.

Trump earlier had noted “the market's gone up 40%, 42% — so we might lose a little bit of it — but we're going to have a much stronger country when we're finished.”

He apparently was referring to how the Dow Jones industrials had soared 45% from election day, November 8, 2016, until it hit a record high of 26,616.71 on January 26.

But the Dow now has fallen 10% from that peak, the point at which Wall Street calls a pullback a “correction”.


__________________________________________________________________________

Don Lee and Jim Puzzanghera reported from Washington; James Peltz reported from Los Angeles.

• Don Lee covers the U.S. and global economy out of Washington, D.C. for the Los Angeles Times. Since joining the L.A. Times in 1992, he has served as the Shanghai bureau chief and in various editing and reporting roles in California. He is a native of Seoul, Korea, and graduated from the University of Chicago.

• Jim Puzzanghera writes about business and economic issues from the Los Angeles Times' Washington, D.C., bureau. He joined the L.A. Times in 2006 and won the paper's Editor's Award in 2009 for coverage of the financial crisis. He has worked in the nation's capital since 1998 and is a two-time National Press Club award winner for Washington coverage. A Northwestern University graduate, he previously worked for the San Jose Mercury News, Newsday and the St. Petersburg Times.

• James F. Peltz has covered nearly every aspect of national business news — including corporate America, Wall Street and global economic matters — for more than 25 years in Los Angeles and New York for the Los Angeles Times. He also spent nine years on the L.A. Times' Sports staff, where he mainly wrote about auto racing and major league baseball. Peltz graduated from UCLA and earned a master's degree in journalism from the University of Colorado.

http://www.latimes.com/business/la-fi-trump-china-tariffs-20180406-story.html
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« Reply #27 on: April 07, 2018, 10:33:19 pm »


from The New York Times....

EDITORIAL: Putting Trump's Trade Bombast to the Test

The president's rhetoric suggests he's moving America toward a trade war with China.
But what will he actually do?


By THE EDITORIAL BOARD | 7:55PM EDT — Friday, April 06, 2018

Illustration: Michael George Haddad.
Illustration: Michael George Haddad.

PRESIDENT TRUMP's recent threat to escalate his trade skirmish with China into a full-scale trade war is a foolish gambit with little historical precedent. It is also hard to take seriously, given how quickly Mr. Trump changes his mind and how rarely and clumsily he tends to follow through on tough talk.

Mr. Trump said on Thursday that he wants to slap tariffs on an additional $100 billion in Chinese imports in response to Beijing's plan to retaliate against an earlier American proposal that was aimed at $50 billion in Chinese goods. The president also said he was seeking ways to protect American farmers hurt by Chinese retaliation — a move that could result in fresh trade fights with other countries as they seek to defend their farmers from subsidized American grain.

If you're confused or shocked by these announcements, you are not alone. Most experts say that a trade war between the world's two largest economies would hurt American businesses, farmers and workers whose profits and livelihoods depend in part on commerce with China. That's probably why the Standard & Poor’s 500-stock index fell more than 2 percent on Friday.

Historians say there is little precedent for Mr. Trump's direct and forceful targeting of China. The last time a president used trade policy to hurt specific nations was when Thomas Jefferson and Congress restricted trade with Britain and France in the early 1800s, said Douglas Irwin, an economics professor at Dartmouth College who recently published a history of American trade policy. Those trade battles ended up leading to the War of 1812. “We haven't seen anything like this in centuries,” he said.

Even the infamous Smoot-Hawley tariffs that Congress enacted in 1930 were put in place to protect struggling domestic industries and farmers, not to penalize specific countries. Of course, those tariffs did not quite work as intended, because other countries moved to shield their own economies by raising tariffs, too. Experts now believe those trade policies probably exacerbated the Great Depression.

Mr. Trump's bombast is so odd that it has scrambled the usual politics of trade. Many Republican lawmakers, including those who support him on most issues, have come out strongly against him on trade. For example, Pat Roberts, a senator from Kansas, said the impact of the president's threats against China was “disconcerting”, and Senator Charles Grassley of Iowa said American farmers and ranchers “would bear the brunt of retaliation” by China. At the same time, Mr. Trump has won praise from some Democrats, like Senator Sherrod Brown of Ohio, who are opposed to many other Trump policies.

The big question now is what Mr. Trump will actually do. Some officials — like Larry Kudlow, the former cable-TV pundit who recently became the top economic adviser in the White House — are trying to tamp down talk of a trade war, and say the administration is using the threat of tariffs to get China to the negotiating table. To Mr. Kudlow's way of thinking, the Trump strategy is similar to how President Ronald Reagan got Japan to voluntarily limit exports to the United States in the 1980s by threatening to impose steep tariffs.

There is a strong case to be made that the United States needs to do all it can to get Chinese officials to change economic policies that have hurt American businesses and workers. For example, officials in Beijing have forced foreign businesses to transfer technology to local joint-venture partners as a condition of doing business in China. China for many years also artificially depressed the value of its currency, the renminbi, against the dollar to make its clothes, electronics and other products more affordable to American consumers.

But it is hard to see this administration striking an effective and comprehensive deal with China. That's because Mr. Trump and his officials seem incapable of putting in the time and hard work required to hammer out such agreements with other countries or political adversaries. They have also displayed little of the finesse and diplomacy needed to strike international deals.

Consider, for example, the trade deal the administration struck with South Korea last month. Experts say that it will do little to increase American exports to that country and will only modestly reduce imports to the United States. A day after formally announcing that agreement, Mr. Trump said he might delay it in an effort to pressure North Korea to reach a deal on its nuclear weapons. That about-face would no doubt make other countries reluctant to reach an agreement with this president — they could never be sure if a deal was a deal.

Or take the North American Free Trade Agreement, which the Trump administration has been renegotiating for months. American officials have apparently walked back from some of their most aggressive demands in recent talks, The New York Times recently reported. Those changes might make it easier to get agreements with Canada and Mexico. But they could leave many domestic groups disappointed with Mr. Trump — as were many of the workers at Carrier whose jobs he claims to have saved early in his presidency but who were eventually laid off anyway. Some Democratic lawmakers, American labor unions and other groups that theoretically support Mr. Trump's tougher trade policies are worried that their priorities, like a provision requiring Mexico to improve labor rights for factory workers, will not be included in a new trade agreement.

Mr. Trump has dramatically raised the stakes on trade with his brash pronouncements about tariffs. But there's little cause to hope he and his team can deliver the big economic gains that they argue can come only from such a combative approach.


https://www.nytimes.com/2018/04/06/opinion/trump-trade-china.html
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« Reply #28 on: April 07, 2018, 10:39:10 pm »


from The New York Times....

More Jobs, Faster Growth and Now, the Threat of a Trade War

Trade War Fears Dull Fed Chief's Focus on Health of Economy: In his inaugural speech,
the new Fed chairman tried to focus on the strength of the economy
even as a spiraling tariff battle with China spooked investors.


By BEN CASSELMAN and JIM TANKERSLEY | 8:16PM EDT — Friday, April 06, 2018

Jerome H. Powell, the new Federal Reserve chairman, on Friday visited a Chicago incubator for industrial start-ups, highlighting the role of manufacturing in the recovery. — Photograph: Lyndon French/The New York Times.
Jerome H. Powell, the new Federal Reserve chairman, on Friday visited a Chicago incubator for industrial start-ups, highlighting
the role of manufacturing in the recovery. — Photograph: Lyndon French/The New York Times.


THE rapidly escalating trade conflict with China has up-ended the prevailing economic dynamic of falling unemployment and faster growth, leaving policymakers and investors scrambling to figure out the way forward.

The threat of a trade war loomed over Jerome H. Powell's inaugural speech as Federal Reserve chairman on Friday in Chicago, even as he tried to focus attention on the fundamental strength of the American economy. Financial markets fell Friday morning after President Trump's latest salvo against China, then tumbled further after Mr. Powell indicated that the Fed saw no imminent need to adjust its outlook. The Standard & Poor's 500-stock index ended the day down 2.2 percent, closing a turbulent week.

And there was uncertainty in Washington, where lawmakers, lobbyists and even White House officials struggled to discern how much of Mr. Trump's move was policy and how much was bluster.

The president acknowledged that the trade friction could take a toll. “I'm not saying there won’t be a little pain,” he said in a radio interview on Friday. “But we're going to have a much stronger country when we're finished.”

The concern over trade was evident at Mr. Powell's appearance before the Economic Club of Chicago. The Fed chief did not mention tariffs in his speech, but in a question-and-answer session afterward, they were the first topic raised.

The Fed chief, who took his post in February, said it was “too early to say” what impact the dueling trade measures would have. “We don't know the extent to which the tariffs will actually come into effect and, if so, how big will that effect be and what will the timing of it be,” Mr. Powell said. But he made it clear that the Fed would watch closely for any sign that the trade dispute was knocking the recovery off course.

The trade tensions complicate what was already a tricky task for the Fed. Hundreds of billions of dollars in tax cuts and spending increases risk fueling inflation, as do wage pressures from a robust labor market. The government's monthly jobs report on Friday, while more subdued than in recent months, still pointed to a healthy employment picture.

Yet policymakers are wary of acting too aggressively to slow the economy at a time when wage growth has been tepid. The Fed's response has been gradual interest-rate increases.

A trade war could act as a drag on economic growth, forcing the Fed to be even more cautious. But tariffs could also raise consumer prices by limiting cheap imports from China and other countries. That could increase the risk that the Fed will lift rates too quickly, choking off the recovery.

“There's an immediate, knee-jerk reaction to tighten policy more,” said Ellen Zentner, chief United States economist for Morgan Stanley.

The latest escalation between the United States and China came on Thursday evening, when Mr. Trump said he was considering tariffs on an additional $100 billion of Chinese imports. That came on top of the tariffs on steel and aluminum imposed last month and those on $50 billion in Chinese goods that he proposed in recent days. China has responded with its own new tariffs.

It is not clear whether Mr. Trump will make good on his latest threats. Larry Kudlow, Mr. Trump's new top economic adviser, has sought to portray the tariffs as an opening bid in a negotiating process with China, and he told reporters on Friday that “there are all kinds of back-channel discussions going on.”

But Mr. Trump's Treasury secretary, Steven Mnuchin, indicated that tensions had reached a more combustible level. “There is the potential of a trade war,” Mr. Mnuchin said during Friday on CNBC. “There is a level of risk that we could get into a trade war.”

The trade upheaval threatens to undermine an American economy that is at its strongest point since the financial crisis struck a decade ago. Employers have added jobs for 90 consecutive months, by far the longest streak on record; the unemployment rate, at 4.1 percent, is the lowest since 2000.

“The labor market has been strong, and my colleagues and I on the Federal Open Market Committee expect it to remain strong,” Mr. Powell said on Friday, referring to the Fed's policy group.


Imported soybeans being unloaded in Nantong, China. In response to President Trump's trade salvos, China proposed new tariffs on American soybeans, which could hurt farmers already struggling with low prices for their crops. — Photograph: Agence France-Presse/Getty Images.
Imported soybeans being unloaded in Nantong, China. In response to President Trump's trade salvos, China proposed new tariffs
on American soybeans, which could hurt farmers already struggling with low prices for their crops.
 — Photograph: Agence France-Presse/Getty Images.


Wage growth, weak for much of the recovery, ticked up in March, and Mr. Powell said he expected the gains to continue in the months ahead. And while workers would, without a doubt, like to see their pay rise more quickly, the gradual pace is comforting for some investors, who have been watching for any hints that the economy is overheating.

In his speech, Mr. Powell said the Fed saw “other signs of economic strength,” citing “steady income gains, rising household wealth and elevated consumer confidence,” which he said would continue to support consumer spending.

Other economists agreed, saying that the recently passed tax and spending measures give the economy added momentum. A full-blown trade war might be enough to short-circuit the recovery, they said, but isolated tariffs — even large ones — most likely are not.

Certain categories are more vulnerable. Among the retaliatory moves announced by China are new tariffs on soybeans, which could hurt American farmers already struggling with low prices for their crops.

The nation's factories, a sector that Mr. Trump has championed, have become a bright spot in the recovery — a development Mr. Powell underlined on his Chicago visit by touring an incubator for industrial start-ups. But Mr. Trump's tariffs could force manufacturers to pay more for materials, and China's countermeasures could hurt their overseas sales.

Just the prospect of tariffs — even before they begin to take a direct bite — could hurt the economy if it makes corporate executives reluctant to invest.

Becky Frankiewicz, president of ManpowerGroup, a staffing firm, said she was already hearing from clients that they are more hesitant to commit to major projects, at least until they see whether this week's skirmishes develop into an all-out trade war.

“We're not seeing the impact directly of tariffs yet, but we would say there's pretty broad conservatism as a result,” she said.

Mr. Powell said Fed policymakers, too, were conscious of concerns from corporate executives.

“We did hear from a number of business leaders around the country that changes in trade policy had become a bit of a risk to the medium-term outlook,” Mr. Powell said in the question-and-answer session.

Continued turmoil in financial markets could begin to hurt spending, especially among higher earners, who are more likely to own stocks. Ms. Zentner said surveys suggested that some high-income consumers had already become more pessimistic as markets have become more volatile.

“It's starting to affect those groups, whose spending is more tied to the stock market,” Ms. Zentner said. “If they simply pause their spending or become more prudent in their spending because of market volatility, it drags down consumer spending in the aggregate.”

The effect of all this on the Fed's thinking won't be clear until the next policy meeting on May 1 and 2. Fed officials raised interest rates by a quarter of a percentage point at their most recent meeting, in March, to a range of 1.5 percent to 1.75 percent. Officials indicated that they considered the economy and labor market healthy, and that they expected to raise rates twice more this year and three times in 2019.

Mr. Powell, like his predecessor, Janet L. Yellen, cast that gradual series of increases as a carefully planned strategy to ensure that the Fed will not need to raise rates abruptly in the event of a steep rise in inflation. But he also cautioned that policymakers could change course if necessary.

“Our views about appropriate monetary policy in the months and years ahead will be informed by incoming economic data and the evolving outlook,” Mr. Powell said. “If the outlook changes, so will monetary policy. Our over-arching objective will remain the same: fostering a strong economy for all Americans — one that provides plentiful jobs and low and stable inflation.”


__________________________________________________________________________

• Ben Casselman writes about economics and other business topics for The New York Times, with a particular focus on stories involving data. He previously served as chief economics writer for the data-journalism web site FiveThirtyEight, and before that as a reporter for The Wall Street Journal. Mr. Casselman won a Loeb Award in 2011 for his coverage of the Deepwater Horizon disaster in the Gulf of Mexico, and was part of a team that was a finalist for the Pulitzer Prize for national reporting. A graduate of Columbia University, Mr. Casselman lives in New York with his wife.

• Jim Tankersley covers economic policy for The Washington Post. Before joining The Post, he wrote for National Journal, covering the breakdown in American job creation, the decline in economic mobility and the failure of policy makers to adapt to an increasingly complex set of global economic challenges. He has also worked at the Tribune Washington Bureau, the Toledo Blade, the Rocky Mountain News and The Oregonian. Jim and a colleague at the Toledo Blade won the 2007 Livingston Award for Young Journalists for their “Business as Usual” series of stories revealing the true roots of Ohio's economic decline. He was also part of the “Coingate” team at the Toledo Blade that was a finalist for the Pulitzer Prize.

https://www.nytimes.com/2018/04/06/business/economy/economy-trade-war-china-trump-tariffs-fed.html
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« Reply #29 on: April 07, 2018, 10:39:22 pm »


from The New York Times....

U.S. and China Play Chicken on Trade, and Neither Swerves

How far will trade threats go? It may just be a start — victory could be difficult to verify, much less
achieve, as the U.S. protests Beijing's effort to re-tool Chinese industries for the 21st century.


By KEITH BRADSHER | 8:37PM EDT — Friday, April 06, 2018

China wants to create a commercial aircraft maker to rival Boeing or Airbus. — Photograph: Carlos Lemos/Reuters.
China wants to create a commercial aircraft maker to rival Boeing or Airbus. — Photograph: Carlos Lemos/Reuters.

SHANGHAI — At the heart of the intensifying trade dispute between the United States and China is a fundamental question: Which country is more willing to endure short-term pain for the long-term gain of playing a leading role in high-tech industries.

China has embarked on an aggressive and expensive plan to re-tool its economy for the future as it moves to dominate in robotics, aerospace, artificial intelligence and more. President Trump has said China's approach relies on unfair and predatory practices, and on stolen American technology. And even as Chinese leaders say they want to avoid a trade war, they are staunchly defending their plans and showing little sign of backing down.

Mr. Trump's threat to sharply escalate the administration's tariffs on Chinese imports — a threat he reiterated on Friday — shows that neither side has yet gone far enough to persuade the other to compromise. Bigger and broader tariffs may be necessary to get China's attention.

“The administration, if it's serious, better be prepared for much more,” said Derek Scissors, resident scholar at the American Enterprise Institute.

China's $300 billion plan for government assistance, Made in China 2025, calls for helping cutting-edge industries by providing low-interest loans from state-controlled banks, guaranteeing large market shares in China and offering extensive research subsidies. The goal is to help Chinese firms acquire Western competitors, develop advanced technology and construct immense factories with considerable economies of scale.

It is an agenda that China would probably go to great lengths to protect. “We will not start a war — however, if someone starts a war, we will definitely fight back,” Gao Feng, the commerce ministry spokesman, said at a news conference in Beijing on Friday. “No options will be ruled out.”

For the United States, victory in such a war would be difficult to verify, much less achieve.

China could say it plans to ease back on government support. But that could be difficult to quantify because of the country's opaque political system and the state's control of information.

China could back off from rules that favor local competitors and require American companies to share technology if they want access to the Chinese market. For example, foreign automakers face pressure to transfer electric-car technology to their local partners, and foreign technology companies are increasingly required to submit to security reviews. Foreign businesses have long complained that many of the rules they must follow are unwritten.


China wants to dominate cutting-edge industries like electric cars. — Photograph: Gary Cameron/Reuters.
China wants to dominate cutting-edge industries like electric cars. — Photograph: Gary Cameron/Reuters.

China's government-financed campaign is already paying off in some ways. Drive into downtown Shanghai from Pudong International Airport and you pass a seemingly endless series of huge hangars and vast, glass-walled design centers, all part of the country's effort to create a commercial aircraft manufacturing giant to rival Boeing or Airbus. Travel to factory districts in Shanghai and on the outskirts of many other Chinese cities and you see enormous, newly built factories ready to churn out electric cars, the batteries they use and other components.

Proving that the Chinese government unfairly supports the effort could be difficult, however.

The United States could press its argument with the World Trade Organization, which oversees global trading rules and prohibits big loans from government-controlled banks at artificially low interest rates. But the W.T.O. requires many contracts and government documents to prove cases, evidence that can be hard to get in a tightly controlled country like China.

Even when the W.T.O. rules against China, persuading the country to comply can be challenging. One such ruling, involving China's restrictions on foreign electronic payment systems, was issued nearly six years ago. China is still mulling how it will comply — despite numerous complaints from the Obama administration and more recent nudges from the Trump administration.

So the United States has turned to tariffs. That means it is using a 1980s tool to address an industrial policy issue that is already shaping the 21st century.

Mr. Trump's top trade official, Robert Lighthizer, was a deputy United States trade representative under President Ronald Reagan. The tariffs that Mr. Lighthizer threatened against Japan in those days are among the same ones he is wielding now. But the two periods differ in two big ways.

One is that Japan depended on the United States in the '80s for military protection from the Soviet Union. China, by contrast, is an increasingly assertive global rival, sending naval vessels to the Baltic Sea and building a naval base in East Africa.

The second major difference between then and now is that the European Union deeply resented the tariffs of the 1980s, and Mr. Trump's use of them could make it difficult to persuade European officials to present a united front. In response to American tariffs, Beijing could simply shift business from American companies like Boeing and Ford to European rivals like Airbus and Daimler.

Chinese officials dispute the American accusations about their unfair trade practices. They say Mr. Trump's tariffs violate W.T.O. rules, and they dispute claims that China forces American companies to hand over technology. As for Made in China 2025, Chinese officials say the plan is only guidance, not a government directive — and that foreign companies are free to participate, too.


China is already a major force in solar panels. — Photograph: China Network/Reuters.
China is already a major force in solar panels. — Photograph: China Network/Reuters.

In China's current industrial policy, the Trump administration sees an extension of how the country has already come to dominate one major industry of the future: solar power.

Mr. Trump himself is no fan of solar panels. He has spoken enthusiastically about coal, not renewable energy, throughout his campaign and his presidency. But the solar power industry is one of the biggest success stories so far in China's efforts involving advanced industries.

The United States played a central role in developing solar panels and manufacturing them until a decade ago. Around then, the Chinese government decided to finance a lavish expansion of the sector. State-controlled banks lent tens of billions of dollars at low interest rates despite the high-profile bankruptcies of solar manufacturers.

Chinese firms now produce three-quarters of the world's solar panels. Most American and European companies have closed factories, and many have become insolvent. China's success in producing solar panels has given Beijing a blueprint for seizing the lead in a long list of other high-tech industries.

Many foreign companies are caught between China's industrial ambitions and Washington's efforts to stop them, including major aerospace companies and car-makers. The conflict may spread: Made in China 2025 could create major competitors to General Electric and Intel, and to companies outside the United States like Siemens and Samsung.

Tariffs could hurt such companies if the United States and China follow through on their plans. They also risk losing their competitiveness if Beijing succeeds in subsidizing the creation of large Chinese rivals in their industries.

Boeing, for example, could be hit by American tariffs on civilian aircraft parts it buys from Avic, a state-controlled Chinese military and aviation company — required purchases if the company, which is based in Chicago, wants to sell planes in China. China, in turn, is pushing a consortium that includes Avic to become a Boeing rival. Boeing, like other multi-national companies, has refrained from endorsing or criticizing the tariffs.

“Although our members are unhappy with retaliatory tariffs being used,” said Kenneth Jarrett, the president of the American Chamber of Commerce in Shanghai, “there is a belief that greater pressure has to be brought to bear on China.”


__________________________________________________________________________

Ailin Tang contributed research for this article.

• Keith Bradsher is the Pulitzer Prize-winning Shanghai bureau chief for The New York Times, having reopened the Shanghai bureau on November 14th, 2016. He has previously served as the Hong Kong bureau chief and the Detroit bureau chief for The Times. Before those postings, he was a Washington correspondent for The Times covering the Federal Reserve and international trade, and a New York-based business reporter covering transportation and telecommunications for The Times. Born in 1964, Mr. Bradsher received a degree in economics from the University of North Carolina at Chapel Hill, where he was a Morehead Scholar. He received a master's degree in public policy with a concentration in economics from the Woodrow Wilson School at Princeton University. Prior to joining The New York Times, Mr. Bradsher wrote for the Los Angeles Times from 1987 until 1989.

__________________________________________________________________________

Related to this topic:

 • China's Plan to Build Its Own High-Tech Industries Worries Western Businesses

 • Goldman Sachs's China Deal Prompts Questions About Country's U.S. Investment

 • China's Technology Ambitions Could Upset the Global Trade Order


https://www.nytimes.com/2018/04/06/business/us-china-trade-endgame.html
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« Reply #30 on: April 09, 2018, 11:19:55 pm »


from The New York Times....

Europe Caught in the Middle as Trump Threatens China

The United States is Europe's biggest trading partner, but China is closing fast.
If a trade war breaks out, neutrality may not be an option.


By JACK EWING | 12:05AM EDT — Monday, April 09, 2018

Some European companies, like the German carmaker BMW, manufacture in the United States and export to China. Their sales would suffer if China slaps tariffs on American goods. — Photograph: Christof Stache/Agence France-Presse/Getty Images.
Some European companies, like the German carmaker BMW, manufacture in the United States and export to China. Their sales would suffer
if China slaps tariffs on American goods. — Photograph: Christof Stache/Agence France-Presse/Getty Images.


FRANKFURT — One is a good customer, a military ally, and an old friend, although lately its behavior has been erratic.

The other is also a good customer and despite a few spats and some lingering mistrust, it's getting to be a more lucrative and dependable business partner all the time.

Which side would you choose?

That more or less sums up the dilemma confronting Europe as it watches the escalating conflict between its two biggest trading partners, the United States and China.

The United States is Europe's biggest market for exports like cars and other goods, not to mention a NATO ally. But China is big, too — and getting ever bigger.

The Trump administration has also threatened the institutions that govern global relationships, calling NATO obsolete and stoking trade tensions. So China no longer automatically seems like the less reliable partner.

European leaders were largely silent after President Trump threatened to impose another $100 billion in tariffs on Chinese goods. But watching from a safe distance as China and the United States argue is not an option for Europe. Its economy is too deeply entwined with both.

“What can they do in terms of staying out of the crossfire?” said Adam Slater, lead economist at Oxford Economics in Britain. “Not a lot.”

Although Mr. Trump's threats are aimed at China, Europe is certain to suffer collateral damage if the president follows through. A spiraling war of tariffs and counter-tariffs would interfere with the global flow of raw materials and components for manufactured goods, disrupting the European economy. And some European companies, like the German carmaker BMW, manufacture in the United States and export to China. Such companies would see their sales suffer if China were to slap tariffs on American goods.

The mere threat of a trade war has already unsettled financial markets and made it more difficult for companies to raise money, Benoît Coeuré, a member of the executive board of the European Central Bank, said on Friday. “None of this supports growth and employment,” Mr. Coeuré said at a conference in Cernobbio, Italy.


The Piraeus Container Terminal in Athens is operated by the Chinese state-owned shipping company Cosco. In recent years, Chinese investors have snapped up European assets including Greek ports, German machinery companies and a 10 percent stake in the automaker Daimler. — Photograph: Angelos Tzortzinis/The New York Times.
The Piraeus Container Terminal in Athens is operated by the Chinese state-owned shipping company Cosco. In recent years, Chinese investors
have snapped up European assets including Greek ports, German machinery companies and a 10 percent stake in the automaker Daimler.
 — Photograph: Angelos Tzortzinis/The New York Times .


The disruption to world trade comes at an unfortunate time for Europe. Recent economic indicators suggest that the Continent's recovery, after a decade of crisis, is losing momentum. Industrial production in Germany shrank 1.6 percent in February, according to official data published this week.

But European leaders' biggest fear may be that Mr. Trump's belligerent approach to trade will destroy the post-war system for resolving conflicts, which involved getting all the parties together in one room. Mr. Trump has already succeeded in forcing countries to beg for individual exemptions to steel and aluminum tariffs, bypassing the World Trade Organization, the usual forum for trade disputes.

“He has created an environment to divide countries,” said André Sapir, a senior fellow at Bruegel, a research organization in Brussels. “Maybe we will remember that 2017 was the last year of the functioning of the multilateral system.”

It's possible Europe might enjoy a few short-term benefits as China and the United States duke it out. If, for example, China were to raise tariffs on Boeing airliners, its European rival Airbus could step into the breach. But positive effects of that sort are not likely to outweigh the risks.

European companies have invested far more in the United States over the years than they have in China. But increasingly, China is where the action is. Germany's total trade with China, exports and imports together, is already bigger than it is with the United States. And China is the biggest single market for companies like Volkswagen, Europe's largest carmaker.

China is also where more German companies are putting their money.

In a poll published on Thursday, 39 percent of German companies questioned said they planned to invest in China this year, up from 37 percent in 2017. The number who said they planned to invest in North America dropped to 35 percent, from 37 percent, according to a survey by the Association of German Chambers of Commerce and Industry.

Even so, Europe remains wary of China's intentions. Though European leaders use tamer rhetoric, they share some of Mr. Trump's concerns about unfair competition from Chinese companies that receive government subsidies. They worry that Chinese companies are stealing European technology, and accumulating too much economic power.

In recent years, Chinese investors have snapped up European assets including Greek ports, German machinery companies and a 10 percent stake in the automaker Daimler. The Chinese government's “Made in China 2025” campaign, a plan to dominate cutting-edge industry, is a threat to German companies who supply precision machinery that the Chinese companies are not yet able to manufacture themselves.

Leaders in Brussels, Berlin and Paris have called for tighter scrutiny of Chinese acquisitions in Europe, though it is unclear how tough they will be.


A blast furnace in Salzgitter, Germany. Europe's most immediate preoccupation is to resolve its own trade disputes with Mr. Trump. The European commissioner for trade is negotiating with the U.S. commerce secretary about winning a permanent exemption from tariffs on steel and aluminum imports. — Photograph: David Hecker/European Pressphoto Agency/via Shutterstock.
A blast furnace in Salzgitter, Germany. Europe's most immediate preoccupation is to resolve its own trade disputes with Mr. Trump.
The European commissioner for trade is negotiating with the U.S. commerce secretary about winning a permanent exemption
from tariffs on steel and aluminum imports. — Photograph: David Hecker/European Pressphoto Agency/via Shutterstock.


At the same time, Europe and the United States have been through a lot together, most notably the Cold War. Both are multi-party democracies with free market economies, unlike China's one-party autocracy. And European and American historical and cultural ties go back centuries.

Still, a trade war could push Europe closer to China.

Europe's most immediate preoccupation is to resolve its own trade disputes with Mr. Trump. Cecilia Malmstrom, the European commissioner for trade, is negotiating with Wilbur Ross, the United States commerce secretary, about winning a permanent exemption from tariffs on steel and aluminum imports. A temporary exemption to the tariffs expires on May 1.

Ms. Malmstrom and other European leaders have also made plain their unhappiness with what they see as Mr. Trump's crusade to undermine the World Trade Organization as the arbiter of trade conflicts. They may see China as a potential ally in efforts to preserve the W.T.O., of which China is also a member.

“The E.U. believes that measures should always be taken within the World Trade Organization framework which provides numerous tools to effectively deal with trade differences,” a spokesperson for the European Commission said in a statement.

For the moment, there is little Europe can do but hope that Mr. Trump's bluster is just a tactic to win concessions from China, and that no trade war will break out. There are few other good options.

Mr. Sapir of Bruegel argues that, longer term, Europe should push for reforms of the trade body to respond to American criticism that the organization is too slow moving, and has failed to curb unfair competition by China. Mr. Trump is unlikely to take much interest in fixing the global trade regime rather than ignoring it, Mr. Sapir said, but it's still worth a try.

“That is the only structural solution,” Mr. Sapir said. “Otherwise we will always be caught in between.”


__________________________________________________________________________

• Jack Ewing writes about business, banking, economics and monetary policy from Frankfurt, and sometimes helps out on terrorism coverage and other breaking news. Mr. Ewing joined The International Herald Tribune, now the international edition of The New York Times, in 2010. Previously, he worked for a decade at BusinessWeek magazine in Frankfurt, where he was European regional editor. He first came to Europe in 1993 as a German Marshall Fund journalism fellow in Brussels, and wound up staying permanently. Mr. Ewing won a New York Times publisher's award in 2011 for coverage of the European debt crisis. He is the author of Faster, Higher, Farther: The Volkswagen Scandal, published in 2017 by W.W. Norton.

__________________________________________________________________________

Related to this topic:

 • Trump Aims New Threat at China as Mnuchin Warns of Trade War

 • U.S. and China Play Chicken on Trade, and Neither Swerves

 • U.S. Exempts Some Allies From Tariffs, but May Opt for Quotas

 • Wary of China, Europe and Others Push Back on Foreign Takeovers


https://www.nytimes.com/2018/04/09/business/europe-trump-trade-china.html
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« Reply #31 on: April 26, 2018, 02:58:34 pm »


from the print edition of the Los Angeles Times....

Chinese tech initiative now a focus of trade war

U.S. views the Made in China 2025 plan as a central threat.

By JESSICA MEYERS | Wednesday, April 25, 2018

Workers prepare for the World Robot Conference in Beijing last year. “Made in China 2025” aims to transform the country from a labor-intensive economy into one focused on products like robots and electric cars. — Photograph: Fu Ting/Associated Press.
Workers prepare for the World Robot Conference in Beijing last year. “Made in China 2025” aims to transform the country from a labor-intensive economy
into one focused on products like robots and electric cars. — Photograph: Fu Ting/Associated Press.


BEIJING — China unveiled its plan to dominate the world's most crucial technologies with little international fanfare, another vague, guiding principle in the labyrinth of Communist Party bureaucracy.

Three years later, it's at the core of a trade dispute with Washington that threatens to upend the global economy.

Made in China 2025” is a blueprint for transforming the country from a labor-intensive economy that makes toys and clothes into one that engineers advanced products like robots and electric cars. The Trump administration views it as an attempt to steal U.S. technology and control cutting-edge industries.

Officials aimed to temper the initiative this month when they announced potential tariffs on $50 billion in goods. But Chinese leaders consider the plan key to the country's development and refuse to alter its course.

“China is trying to achieve a clear goal and America wants to stop it,” said Andrew Polk, cofounder of Trivium/China, a Beijing research firm. “And that's where the competition is.”

Here's what Made in China 2025 is all about and what it means for the trade war:


What's the objective?

The plan funnels billions into 10 industries, including biopharmaceuticals, aerospace and telecom devices. It calls for 70% of related materials and parts to be made domestically within a decade. A separate document details China's strategy to lead in artificial intelligence by 2030.

Officials modeled Made in China 2025 after a German initiative called Industrie 4.0, which envisions greater automation in manufacturing and “intelligent factories” that operate with wireless sensors. They didn't have much choice. The world's biggest population is aging and rising wages are sending low-tech factories to other countries.

“The labor supply is decreasing,” said Ashley Qian Wan, China economist for Bloomberg Economics in Beijing. “And that's going to be a big problem for China.”


China developed its first bullet train last year, the Fuxing, which can reach a top speed of 248 mph. Engineers have also built the first Chinese jetliner. — Photograph: Visual China Group.
China developed its first bullet train last year, the Fuxing, which can reach a top speed of 248 mph. Engineers have also built the first Chinese jetliner.
 — Photograph: Visual China Group.


Why does China care about this so much?

When President Kennedy vowed in 1961 to send a man to the moon, more than 30 million people in China had just starved to death. People's Republic founder Mao Tse-tung closed universities for a decade whereas researchers in Silicon Valley invented the internet. China sees itself as simply trying to catch up.

The country developed its first bullet train last year, a vehicle with a maximum speed of 248 mph named Fuxing, or rejuvenation. Engineers also built the country's first homegrown jetliner, an initial step toward filling Beijing's crowded airport with planes from China rather than America's Boeing or Europe's Airbus.

Officials portray the initiative as transparent and open to foreign companies. They dispel notions that it will monopolize domestic markets. America's dismissal of the plan reinforces a party narrative that the U.S. seeks to undermine China's resurgence.

“We have good reasons to question the legality and legitimacy of many actions taken by the U.S. on the grounds of national security, like its plan to impose high tariffs on many industries of Made in China 2025,” Chinese Foreign Ministry spokeswoman Hua Chunying told reporters this month. “Clearly, they are targeting something else.”


Why is the U.S. concerned about it?

The Trump administration frets about the way China aims to achieve its 2025 ambitions. American businesses have long complained about the sacrifices they make to operate in the world's largest market, including requirements to partner with domestic companies and hand over trade secrets.

Officials fear these techniques will make it impossible for U.S. companies to compete in the world's most critical fields. They also worry massive Chinese government subsidies will lead to a global glut of products that push down prices and hurt U.S. businesses.

“There are things China listed and said, ‘We're going to take technology, spend several hundred billion dollars, and dominate the world’,” U.S. Trade Representative Robert Lighthizer told senators at a March hearing. “And these are things that if China dominates the world, it's bad for America.”


A bank employee counts 100-yuan notes in Lianyungang, in eastern China's Jiangsu province. — Photograph: Agence France-Presse/Getty Images.
A bank employee counts 100-yuan notes in Lianyungang, in eastern China's Jiangsu province. — Photograph: Agence France-Presse/Getty Images.

A U.S. report on China's intellectual property theft — which led to the most recent potential tariffs — mentioned the plan more than 100 times. Officials are exploring ways to restrict Chinese investment in key industries. The U.S. recently banned ZTE, China's second-largest maker of telecom equipment, from buying U.S. technology.

“Consensus is growing in Washington that the U.S. is in a race with China for technical leadership,” Arthur Kroeber, managing director of Beijing research firm Gavekal Dragonomics, said he recently told clients. And some, he added, think that “economic cold war is the answer.”


Is the Trump administration right?

President Xi Jinping recently told a room full of global investors that China would further open its economy. Officials last week said they would phase out rules that require automakers like General Motors to find a local partner before opening factories in China. They plan to end foreign ownership requirements on electric vehicle makers this year.

This wouldn't mark the first time authorities vowed to shed their protectionist shield. The European Union Chamber of Commerce in China complained last year that foreign businesses were suffering from “promise fatigue”.

The problem is China's high-tech ambitions include “plans to use instruments such as subsidized credit and market access restrictions,” said David Dollar, a senior fellow at the Brookings Institution and former U.S. Treasury official in China. “It makes sense for the U.S. to oppose this practice.”

But Chinese officials see an irony in efforts that try to maintain America's chokehold on innovation. Hua, the Foreign Ministry spokeswoman, likened the U.S. to a “bully — only it can have high tech and others cannot.”

Neither side looks willing to bend. Recent talks to de-escalate the trade dispute reportedly collapsed over the 2025 plan.

“China views the overall system as inherently unfair because it was created by the current dominant power,” Trivium/China's Polk said. “America should stop complaining and start designing its own industrial policy to counter China.”


__________________________________________________________________________

Kemeng Fan, Gaochao Zhang and Nicole Liu in the L.A. Times' Beijing bureau contributed to this report.

• Jessica Meyers is a freelance journalist based in Beijing. She is Asia special correspondent for the Los Angeles Times, the Boston Globe, Politico, the Dallas Morning News and other news media organisations.

http://enewspaper.latimes.com/infinity/article_share.aspx?guid=f4657cb8-1584-44e4-b3a6-af3170c0c0f9
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« Reply #32 on: May 01, 2018, 01:59:39 pm »


from The New York Times....

China Is Set to Take a Hard Line on Trump's Trade Demands

Beijing sees its economy as robust enough to defy U.S. tariff threats, potentially
leaving Washington with no choice but to escalate or back down.


By KEITH BRADSHER | 3:05PM EDT — Monday, April 30, 2018

A container port in China’s eastern province of Shandong. The Trump administration wants Beijing to curb its $300 billion plan to bankroll China's push into advanced technologies. — Photograph: Reuters.
A container port in China’s eastern province of Shandong. The Trump administration wants Beijing to curb its $300 billion plan to bankroll
China's push into advanced technologies. — Photograph: Reuters.


BEIJING — Staking an assertive negotiating stance, China says it will refuse to discuss President Trump's two toughest trade demands when American officials arrive in Beijing this week, potentially derailing the high-level talks.

The Chinese government is publicly calling for flexibility on both sides. But senior Beijing officials do not plan to discuss the two biggest requests that the Trump administration has made over the past several months, according to people involved in Chinese policymaking. Those include a mandatory $100 billion cut in America's $375 billion annual trade deficit with China and curbs on Beijing's $300 billion plan to bankroll the country's industrial upgrade into advanced technologies like artificial intelligence, semiconductors, electric cars and commercial aircraft.

The reason: Beijing feels its economy has become big enough and resilient enough to stand up to the United States.

A half-dozen senior Chinese officials and two dozen influential advisers laid out the Chinese government's position in detail during a three-day seminar that ended here late on Monday morning. The officials and most of the advisers at the seminar gave an overview of China's economic policies, including an in-depth review of the country's trade policy, to make sure China's stance would be known overseas. All of the officials and most of the advisers at the seminar insisted on anonymity because of diplomatic sensitivities.

It is not clear what will happen when the two sides sit down this week or whether either will find a reason to waver. Still, the Chinese and American positions are so far apart that China's leaders are skeptical the two sides can find common ground by the end of this week. They are already raising the possibility that Chinese officials may fly to Washington a month from now for further talks.

“I don't expect a comprehensive deal whatsoever,” said Ruan Zongze, the executive vice president of the China Institute of International Studies, which is the policy research arm of China's Foreign Ministry. “I think there is a lot of game playing here.”

Beijing is frustrated with Mr. Trump's threats to impose tariffs on $150 billion in Chinese goods and dismayed by suggestions in the West that China has a weak bargaining position. Chinese officials think the country's one-party political system and President Xi Jinping's enduring grip on power — particularly after the repeal of presidential term limits in March — mean that China can outlast the United States and Mr. Trump in any trade quarrel.

The Chinese government believes Mr. Trump's background as a businessman means that at some point he will agree to a deal. Seminar participants also reaffirmed previous Chinese trade policy offers to further open the country's financial and automotive sectors, though not in ways that would impact China's industrial modernization program, called Made in China 2025. They also suggested that China would be willing to tighten its intellectual property rules so as to foster innovation within China as well as protect foreign technologies from counterfeiting and other illegal copying.

China is insisting that the parameters of any negotiations be limited, and that the tariff threat be removed before a final deal can be struck.

Chinese officials have reached out to Treasury Secretary Steven Mnuchin, who has reacted positively to China's overtures in the auto and financial sectors. Mr. Mnuchin, a former Goldman Sachs executive who will be on the Trump administration’s team in Beijing later this week, has sought to calm investors worried that the rhetoric between Washington and Beijing could break out into a full-blown trade war.

China's position is that the bilateral trade imbalance arises from differences in savings rates. Households in China save roughly two-fifths of their income. Americans, on average, save almost nothing. So money from China tends to flow to the United States, buying factories, technology companies, real estate and more, and Americans in turn spend much of that money to buy goods from China. Many economists in the United States, including some at the Treasury, share that view.

By contrast, many trade lawyers, lawmakers on both sides of the aisle and Mr. Trump contend that the trade deficit stems to a large extent from unfair practices, including cheap loans by state-controlled banks to exporters.


A worker making carbon fiber on a production line in Lianyungang, in China's Jiangsu province. The material is used in aerospace and other applications. The Chinese government is frustrated with Mr. Trump's threats to impose tariffs on $150 billion in Chinese goods. — Photograph: Agence France-Presse/Getty Images.
A worker making carbon fiber on a production line in Lianyungang, in China's Jiangsu province. The material is used in aerospace and other
applications. The Chinese government is frustrated with Mr. Trump's threats to impose tariffs on $150 billion in Chinese goods.
 — Photograph: Agence France-Presse/Getty Images.


China is ready to discuss shrinking the $375 billion annual trade deficit. But it wants to do so by buying more high-tech American goods. Washington has long blocked such deals because of concerns that they may have military value. China is also willing to buy more oil, natural gas, coal and other goods from the United States, and to help finance the extra pipelines and other infrastructure that would be needed to move them to China.

A senior Chinese government official said that Beijing is unwilling to negotiate with the United States on any curbs on Made in China 2025, which includes large-scale government assistance to favored industries in advanced-technology manufacturing. China perceives the American demands as an attempt to stop China's economic development and technological progress, the senior Chinese official said.

Germany and other countries also have industrial policies, and the United States has not objected to them, he added. American and European officials have argued that those policies elsewhere are much narrower and less ambitious.

Other advisers and officials said that the United States had misunderstood the Made in China 2025 industrial policy. They expressed hope that it might be possible to resolve differences by explaining the program better and making very small tweaks to it — a stance that still may not appease the Trump administration.

The Chinese government is not simply throwing money, land and other resources to favored industries like robotics, artificial intelligence, semiconductors and aircraft manufacturing, they said. China is engaged instead, they contended, in a carefully thought-out program that measures potential profits for each dollar of investment. So China's program bears some resemblance, they said, to private sector investment programs in the West.

One subject was repeatedly and conspicuously avoided by all officials throughout the seminar, even when advisers occasionally speculated about it: whether China might someday try to link trade disputes to national security issues.

China has been deeply involved in international pressure on North Korea to give up its nuclear weapons and ballistic missiles, an issue of high importance to the Trump administration. Beijing also wants to someday assert control of Taiwan, a self-governing democracy that Beijing regards as a renegade territory.

Tsinghua University's new Academic Center for Chinese Economic Practice and Thinking organized the seminar, which was held at Tsinghua and two other venues in western Beijing. President Xi graduated from Tsinghua, which is in Beijing and is China's top university, and he has filled much of the senior ranks of his government with Tsinghua professors and graduates.

In some respects, the hard stance struck by Chinese officials reflects a hardening of public attitudes in China.

In mid-April, the United States barred American companies from selling their wares to a Chinese telecom equipment maker, ZTE. The move is seen as potentially crippling to the Chinese company, which needs American chips and software to power the smartphones and equipment it sells around the world.

Washington officials cited ZTE's repeated violations of sanctions against Iran and North Korea, but many in China saw it as a reminder by the United States that sizable sectors of the Chinese economy still rely on American-made goods. Much of the Made in China 2025 policy is aimed at reducing that dependence.

The ZTE case “has changed a lot of Chinese people's opinion,” said Mr. Ruan, of the China Institute of International Studies. “In the past, people saw us as interdependent.”


__________________________________________________________________________

Chris Buckley contributed reporting to this story.

• Keith Bradsher is the Pulitzer Prize-winning Shanghai bureau chief for The New York Times, having reopened the Shanghai bureau on November 14th, 2016. He has previously served as the Hong Kong bureau chief and the Detroit bureau chief for The Times. Before those postings, he was a Washington correspondent for The Times covering the Federal Reserve and international trade, and a New York-based business reporter covering transportation and telecommunications for The Times. Born in 1964, Mr. Bradsher received a degree in economics from the University of North Carolina at Chapel Hill, where he was a Morehead Scholar. He received a master's degree in public policy with a concentration in economics from the Woodrow Wilson School at Princeton University. Prior to joining The New York Times, Mr. Bradsher wrote for the Los Angeles Times from 1987 until 1989.

__________________________________________________________________________

Related to this topic:

 • White House Considers Restricting Chinese Researchers Over Espionage Fears

 • U.S. Allies Brace for Trade War as Tariff Negotiations Stall

 • The U.S.-China Trade Conflict: How We Got to This Point


https://www.nytimes.com/2018/04/30/business/china-trump-trade-talks.html
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« Reply #33 on: May 05, 2018, 07:45:46 pm »


from The New York Times....

U.S.-China Trade Talks End With Strong Demands, but Few Signs of a Deal

American officials called for shrinking the trade gap with China and curbing
Beijing's plan to use government support to upgrade its economy.


By KEITH BRADSHER | 7:46PM EDT — Friday, May 04, 2018

The United States delegation in Beijing for trade talks on Friday included Treasury Secretary Steven Mnuchin, center left, and Commerce Secretary Wilbur Ross, center right. — Photograph: Nicolas Asfouri/Agence France-Presse/Getty Images.
The United States delegation in Beijing for trade talks on Friday included Treasury Secretary Steven Mnuchin, center left, and Commerce Secretary Wilbur Ross, center right.
 — Photograph: Nicolas Asfouri/Agence France-Presse/Getty Images.


BEIJING — Senior Chinese and American officials concluded two days of negotiations on Friday with no deal and no date set for further talks, as the United States stepped up its demands for Chinese concessions to avert a potential trade war.

The American negotiating team, which included Treasury Secretary Steven Mnuchin and the United States trade representative, Robert E. Lighthizer, headed for the airport after the talks and did not release a statement. But a list of demands that the group took into the meeting called for reducing the United States' trade gap with China by $200 billion over the next two years and a halt on Chinese subsidies for advanced manufacturing sectors.

The demands, which spread on Chinese social media and were confirmed by a person close to the negotiations, suggested that both sides hardened their positions this week despite the two days of talks. Senior Chinese officials and their advisers were also sending a deliberate message to the West that the days of Beijing being conciliatory were over, and that China was staking out its own position in the negotiations.

The person close to the negotiations insisted on anonymity because of diplomatic sensitivities.

The extensive list of United States trade demands was unexpectedly sweeping, and showed that the Trump administration has no intention of backing down despite Beijing's assertive stance in the last few days. “The list reads like the terms for a surrender rather than a basis for negotiation,” said Eswar Prasad, an economics professor at Cornell University.

Here are the highlights of the demands:

China must …


  • Cut its trade surplus by $100 billion in the 12 months starting in June, and by another $100 billion in the following 12 months.

  • Halt all subsidies to advanced manufacturing industries in its so-called Made In China 2025 program. The program covers 10 sectors, including aircraft manufacturing, electric cars, robotics, computer microchips and artificial intelligence.

  • Accept that the United States may restrict imports from the industries under Made in China 2025.

  • Take “immediate, verifiable steps” to halt cyber-espionage into commercial networks in the United States.

  • Strengthen intellectual property protections.

  • Accept United States restrictions on Chinese investments in sensitive technologies without retaliating.

  • Cut its tariffs, which currently average 10 percent, to the same level as in the United States, where they average 3.5 percent for all “non-critical sectors.”

  • Open up its services and agricultural sectors to full American competition.

The United States also stipulated that the two sides should meet every quarter to review progress.

Chinese officials put the talks in a positive light. “The two sides agreed that a sound and stable China-U.S. trade relationship is crucial for both, and they are committed to resolving relevant economic and trade issues through dialogue and consultation,” Xinhua, the official news agency, said soon after the talks ended.

But the negotiations also highlighted key differences — and the American delegation's tight-lipped departure from Diaoyutai, the park-like enclosure of guesthouses where the talks were held, suggested that the two sides had made little headway in solving them.

Before the trade talks began, people involved in China's policy-making said, Beijing was willing to act on some concessions previously laid out by President Xi Jinping. Among the most notable was a willingness to make it slightly easier for foreign automakers and financial services companies to compete in China.

But China has its own demands. Beijing wants the United States to relax restrictions on exports of high-tech commercial products that may have military applications. During the trade talks here this week, Chinese officials also took issue with the penalties that American officials imposed last month on ZTE, a Chinese telecommunications company, for repeatedly violating United States sanctions on Iran.

The Commerce Department banned all shipments of American wares to ZTE, including chips and other equipment that are essential to many of the company's products. The move appears to have strengthened China's resolve to continue its drive for self-sufficiency and to curb imports in various high-tech fields.

China's push to upgrade its technology accounts for many of its disagreements with the United States. The American document reiterated Trump administration calls for a broad halt of Chinese subsidies to manufacturers in advanced technology industries. And Chinese officials have defended the Made in China 2025 program as essential to upgrading the economy and have said they would not agree to any limits on the Made in China program.

Beijing has said it would be willing to reduce some trade barriers, but only if the United States also lowered trade barriers. Chinese officials particularly object to American limits on the export of high-tech goods that have both civilian and military applications, contending that these restrictions prevent sizable potential exports.

They also objected to United States demands for a specific cut in the bilateral surplus. Li Gang, the vice president of the Commerce Ministry's research and training institute, said in a separate interview last month that a $100 billion cut in the surplus was “impossible.” China's surplus has been widening lately as the United States economy grows fairly strongly and takes in more imports.

The Commerce Department announced on Thursday in Washington that the trade imbalance with China had widened slightly in March compared with the same month a year ago, although it narrowed slightly compared with February, possibly for seasonal reasons.

The lack of a deal this week, as well as the failure to schedule further talks right away, does not rule out the possibility that Chinese negotiators will visit the United States next month for further talks. One possibility that American officials have considered is whether China might send Vice President Wang Qishan, who is close to Mr. Xi, on a follow-up trip.

So far, the Chinese side has been led by Liu He, a Politburo member who is also the vice premier for finance, trade and technology.

Trade experts have been saying for weeks that Chinese officials would like to resolve the dispute with the United States so that they can go back to focusing on issues closer to home.

“That's the immediate problem, because it's a headache for them that's distracting from a very pressing domestic agenda,” said Christopher K. Johnson, a former C.I.A. officer who analyzed China and now holds the Freeman Chair in China Studies at the Center for Strategic and International Studies.

The Beijing talks were unlikely to result in a comprehensive deal, but experts said they could still be a first step toward reaching some sort of accord.

“There's no way our team is going to risk signing up to something without getting back here and making sure that Trump is happy with it first,” Mr. Johnson said. “Maybe there's also some optics where Trump wants to be seen standing with Wang Qishan and striking the deal.”

“I think we're still several jumps down the track from that.”


__________________________________________________________________________

Chris Buckley contributed reporting to this story.

• Keith Bradsher is the Pulitzer Prize-winning Shanghai bureau chief for The New York Times, having reopened the Shanghai bureau on November 14th, 2016. He has previously served as the Hong Kong bureau chief and the Detroit bureau chief for The Times. Before those postings, he was a Washington correspondent for The Times covering the Federal Reserve and international trade, and a New York-based business reporter covering transportation and telecommunications for The Times. Born in 1964, Mr. Bradsher received a degree in economics from the University of North Carolina at Chapel Hill, where he was a Morehead Scholar. He received a master's degree in public policy with a concentration in economics from the Woodrow Wilson School at Princeton University. Prior to joining The New York Times, Mr. Bradsher wrote for the Los Angeles Times from 1987 until 1989.

• A version of this article appears in print on Friday, May 5, 2018 in the New York edition of The New York Times with the headline: “No Trade Deal With China As Talks End”.

https://www.nytimes.com/2018/05/04/business/china-us-trade-talks.html
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« Reply #34 on: June 23, 2018, 11:50:10 am »


from The Seattle Times....

Still the apple of their eyes?

Trump tariffs will harm farmers in Washington counties that voted for Trump.

By DAVID HORSEY | 9:44AM PDT — Friday, June 22, 2018



THE Trump administration is slapping steep tariffs on goods from a wide range of countries, from Canada and Mexico to China and Europe. President Trump argues that this will be good for American workers — a dubious theory at best — but the tit-for-tat trade war the tariffs are enflaming will hurt American exporters and consumers. Particularly hard hit will be farmers and ranchers in Washington state whose livelihood depends on selling products to foreign buyers. Ironically, rural voters have been among Trump's biggest fans. They may now be losing their enthusiasm.

__________________________________________________________________________

• See more of David Horsey's cartoons at The Seattle Times HERE.

https://www.seattletimes.com/opinion/still-the-apple-of-their-eyes
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« Reply #35 on: June 26, 2018, 11:13:24 pm »


from The Washington Post…

Factory workers aren't getting what Trump promised

If only Congress had the will to carry out its constitutional responsibility.

By CATHERINE RAMPELL | 7:50PM EDT — Monday, June 25, 2018

Harley-Davidson announced on Monday that it will move more of its production overseas because of European tariffs levied in response to U.S. tariffs. — Photograph: Drew Angerer/Getty Images.
Harley-Davidson announced on Monday that it will move more of its production overseas because of European tariffs levied in response to U.S. tariffs.
 — Photograph: Drew Angerer/Getty Images.


FACTORY WORKERS and FARMERS are slowly learning that President Trump's fanatical protectionism — plus Congress's economic absenteeism — has left them painfully unprotected.

That's not what Trump promised them, of course.

A little more than a year ago, Trump invited executives and union representatives from Harley-Davidson to the White House. There he vowed that the motorcycle manufacturer would flourish under his economic stewardship.

“Thank you, Harley-Davidson, for building things in America,” he said. “And I think you're going to even expand — I know your business is now doing very well and there's a lot of spirit right now in the country that you weren't having so much in the last number of months that you have right now.”

This week, Harley-Davidson became among the highest-profile casualties of Trump's escalating trade wars.

Trump's steel and aluminum tariffs had already raised the company's input costs, because those metals are among the primary raw materials it purchases. Worse, the European Union last week “punched back” against those metal tariffs with retaliatory counter-tariffs of its own, including an additional 25 percent tax on Harley-Davidson motorcycles shipped from the United States.

On Monday, the company announced that it had no choice but to shift more of its production out of the United States.

Harley-Davidson, whose U.S. factories are in Wisconsin, Missouri and Pennsylvania, is hardly the only firm buckling under the weight of Trump's brilliant trade deal-making. Don't take it from out-of-touch East Coast elites like me; check out all the coverage from local papers and other news organizations around the heartland, documenting the damage.

In Missouri, the nation's last remaining major nail producer has lost half its business in the past two weeks, laid off dozens of workers and may be out of business around Labor Day. All thanks to Trump's steel tariffs, which have sharply raised its input costs.

In Florida, orange growers fear a drop-off in demand due to retaliatory tariffs on OJ shipped to China and the European Union.

In Iowa, soybean, corn and pork producers fret about the hundreds of millions of dollars in sales they stand to lose from retaliatory duties on their exports to China, Mexico and the E.U.

Hoosiers worry about the fate of those same sectors, plus the chemical, transportation equipment and machinery industries that are being targeted for Chinese tariffs. And Indiana automotive-part and orthopedic-joint manufacturers will now face higher input costs thanks to Trump's steel tariffs.

In Kentucky, bourbon distillers are losing business with distributors, who are frightened off by retaliatory tariffs across many of our trading partners.

Similar stories apply to Wisconsin cheesemakers and MRI manufacturers. And Ohio auto and auto-parts manufacturers, brewers and appliance makers.

It is no coincidence that so many Trump-voting areas will suffer. That's because of two unfortunate developments.

First is our businessman-in-chief's baffling lack of sophistication about supply chains. He still does not seem to understand that placing tariffs on intermediate goods such as steel and aluminum will hurt the downstream manufacturers that purchase those materials and that employ an order of magnitude more Trump Country workers than the U.S. steel and aluminum industries do.

Second is the much more strategic retaliation by our furious trading partners, which are deliberately targeting industries located in politically sensitive areas.

Trump's approval ratings among Republicans remain strong. But as these tariffs and counter-tariffs steamroll across Trump Country, supporters may eventually get tired of all this “winning”.

The question is: When will Congress?

It is Congress, after all, that the Constitution actually empowers to “regulate Commerce with foreign Nations”. Yet over the past eight decades, the legislative branch has delegated more and more of its trade-regulating authority to the executive branch.

This turn of events, which began just a few years after Congress had sparked a worldwide trade war with its disastrous Smoot-Hawley Tariff Act, at first seemed like a good idea. It looked like the best way to streamline and depoliticize trade negotiations in service of a more liberalized international market — which Congress knew benefitted the increasingly hegemonic United States.

The problem, of course, is that periodically presidents have abused this power. And none have done so more than Trump, who ludicrously argues that tariffs on Canadian steel and German cars are necessary on national security grounds.

Congress certainly has the ability to claw back some of the trade powers it gave away to the White House. It has, in fact, on occasion. But with rare exceptions, Republican legislators are too fearful of an angry Trump tweet today to prevent the wholly foreseeable economic misfortunes that will befall their own constituents tomorrow.


__________________________________________________________________________

Catherine Rampell is an opinion columnist at The Washington Post. She frequently covers economics, public policy, politics and culture, with a special emphasis on data-driven journalism. She is also a political and economic commentator with CNN. Before joining The Post, she wrote about economics and theater for The New York Times. Rampell has received the Weidenbaum Center Award for Evidence-Based Journalism and is a Gerald Loeb Award finalist. She grew up in southern Florida and graduated Phi Beta Kappa from Princeton University.

__________________________________________________________________________

Related to this topic:

 • VIDEO: Trump meets with executives from Harley-Davidson in Washington

 • VIDEO: Trump on tariffs: If countries retaliate, ‘they're making a mistake’

 • The first layoffs from Trump's tariffs are here

 • Trump says he's ‘surprised’ Harley-Davidson is moving work overseas after tariffs take effect

 • Robert J. Samuelson: We're going to lose this trade war

 • Catherine Rampell: Trump is waging a trade war in the dumbest way possible

 • The Washington Post's View: Trump’s proposed ‘chicken tax’ on auto imports is a very bad idea

 • Max Boot: Imposing tariffs is stupid policy


https://www.washingtonpost.com/opinions/factory-workers-arent-getting-what-trump-promised/2018/06/25/725d7c92-78b4-11e8-aeee-4d04c8ac6158_story.html
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« Reply #36 on: June 26, 2018, 11:14:48 pm »


Isn't that fucking hilarious, eh?

Stupid retards who voted for Trump are the first to lose their jobs because of other countries retaliating against Trump's trade war.

Yep.....fucking hilarious alright! That'll teach those dumbarse Trump supporters.






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« Reply #37 on: June 27, 2018, 06:31:10 am »

you are such a sick retard get help seems like you're fucked in your head

trump is fucking up the evil empire
bring on the civil war
time to perge out the corrupt commie deep state sickophants

great job trump
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« Reply #38 on: June 27, 2018, 05:07:39 pm »


from The Washington Post…

To Trump, Harley's tariff decision is a personal — and unexpected — betrayal

President Trump lashed out at Harley-Davidson on Tuesday over the company’s
decision to move some production outside the United States.


By DAVID J. LYNCH and PHILIP RUCKER | 7:34PM EDT — Tuesday, June 26, 2018

A man drives away on his Harley-Davidson motorcycle after picking it up from a service garage on Monday in Queens. — Photograph: Drew Angerer/Getty Images.
A man drives away on his Harley-Davidson motorcycle after picking it up from a service garage on Monday in Queens. — Photograph: Drew Angerer/Getty Images.

PRESIDENT TRUMP lashed out at Harley-Davidson on Tuesday over the company's decision to move some production outside the United States, calling it “the beginning of the end” for the iconic motorcycle maker and threatening to respond with punishing taxes.

In a fusillade of tweets beginning shortly after 7 a.m., the president accused the company of using European tariffs as an excuse for manufacturing changes it already had planned; erroneously said Harley had shifted operations from a Kansas City, Missouri, plant to Thailand; and demanded that its famous bikes “never be built in another country-never!”

White House aides say the president feels betrayed by the American manufacturer's decision to move some production offshore to avoid becoming embroiled in Trump's trade war with Europe.

His aggrieved tweetstorm — echoed in subsequent comments at the White House — made it clear that he took Harley's action personally. But the outburst also reflected a president grappling with the effect of policies he expected to produce a more favorable outcome, say trade experts.

Trump's tariffs on steel and aluminum will cost Harley up to $20 million this year, with European Union retaliation adding perhaps an additional $45 million, the company said.

Trump's sudden feud with Harley — an American manufacturer he feted at the White House just last year — pitted a company driven by financial calculation against a businessman president who takes a deeply idiosyncratic and emotional view of global commerce.

In one Tuesday tweet, Trump suggested that Harley was motivated by a hidden agenda, writing: “Harley must know that they won't be able to sell back into the U.S. without paying a big tax!” Harley has announced no such plans.

“It reveals his misunderstanding or lack of knowledge about the way global supply chains work and the way production works,” said Philip Levy, a White House economist in the George W. Bush administration. “There's no evidence that the president's very unorthodox approach to trade negotiations is achieving any results — other than more protectionism.”

While the president complained on Tuesday about Europe's trade barriers, he has not pursued negotiations toward a new treaty that might have eliminated those facing Harley. The E.U. and Japan, meanwhile, have concluded a trade partnership that will give Harley's Japanese rivals better access to the European market.

Trump also withdrew the United States from a Pacific trade accord that would have cut tariffs in key Asian markets, a move Harley said forced it to open the plant in Thailand to serve fast-growing markets nearby.

The president's ire at the Milwaukee-based company, famous for heavy motorcycles known as “hogs,” had its origins in Trump's belief that he and his heartland supporters share a unique bond with the company.

“I don't think he's a bike guy. The wind in the hair is not going to work. But that is a demographic of the country that he relates to, guys who ride Harleys,” Barry Bennett, a former Trump campaign adviser, said of the president.




Trump was aboard Marine One late on Monday afternoon, flying over the Potomac River toward Joint Base Andrews in Maryland, when he pecked out a tweet accusing Harley of becoming “the first to wave a White Flag” in his blossoming trade war with Europe.

The president then boarded Air Force One to South Carolina, where he held an especially raucous campaign rally. Joining him for the flight was Peter Navarro, director of the White House Office of Trade and Manufacturing Policy and arguably the administration's most outspoken advocate of its “America First” trade stance.

The plane circled over West Columbia, South Carolina, for 57 minutes waiting out a thunderstorm, giving the president, Navarro and the other aides on board ample time to absorb the news coverage about Harley. Onstage, Trump gave a shout out to “the great Peter Navarro,” adding playfully that he “does like tariffs.”

In his freewheeling speech, Trump said nothing about Harley but described the United States as being ripped off by its trading partners.

Tearing into Germany, he said, “They send Mercedes, they send BMWs, they send everything; we tax them practically nothing.”

The president did not mention that BMW is one of South Carolina's largest employers, manufacturing its popular X-series SUV there.

Trump last year welcomed Harley executives and workers to the White House, celebrating the company for making its products in the United States. The company still makes most of its motorcycles at plants in Pennsylvania and Wisconsin.

Trump feels betrayed by Harley's decision, believing that the company leveraged his political brand to sell more bikes following a 2017 White House event that featured the president mixing it up with executives and workers, according to one person familiar with the president's thinking who spoke on the condition of anonymity to reveal private discussions.

“Harley-Davidson is using that as an excuse,” Trump said of the European tariffs. “I don't like that, because I've been very good to Harley-Davidson, and they used it as an excuse. And I think that the people that ride Harleys are not happy with Harley-Davidson, and I wouldn't be, either.”

With motorcycle sales slumping in the United States, Harley has been eager to expand its overseas business. The company has plants in India, Brazil and Australia, where production for its European customers will eventually move.

The new plant in Thailand, expected to begin production later this year, will serve customers in Asia. The plant in Kansas City that Trump wrongly said would see its work shifted there actually is being closed as part of a reshuffling that will move production to York, Pennsylvania. The move involves a net loss of about 350 jobs.

“We see tremendous opportunity, particularly in Southeast Asia. And the investment in the plant in Thailand to get around the egregious tariffs and duties is a part of accessing a very important market,” chief executive Matthew Levatich told investors in an April conference call.




European retaliation for Trump's metals could add up to $45 million to Harley's costs this year, which works out to an extra $2,200 for the average motorcycle and explains why the company is shifting production of bikes bound for Europe to a foreign facility.

Harley's net income has slid for three consecutive years; last year's $594 million in profits were down nearly 30 percent from 2014.

Aides said Trump tried to communicate a broader message — or threat — with his Tuesday tweets: Companies should grow their businesses in America.

“The president's overarching message is: Bet on America; we're a strong economy; we have the best workers; we have the best regulatory tax,” a senior White House official said. “He's telling Harley-Davidson and the rest of the world, if you make decisions to go elsewhere, it's going to be a problem for their business.”

Trump's angry insistence that Harley's products should be made in the United States is at odds with his own record as a businessman. His branded products — clothing, vodka, home goods and hotel amenities — were manufactured in at least 12 countries outside the United States, including China, Mexico and Indonesia, according to a 2016 Washington Post analysis of publicly available data.

Likewise, Ivanka Trump, the president's daughter and unpaid White House adviser, sourced her company's products exclusively from low-wage factories in countries such as Bangladesh, Indonesia and China, The Post found.

Trump's stated goal of increasing opportunities for American factory workers is at odds with his zero-sum view of how corporations should operate, said Matthew Slaughter, dean of Dartmouth College's Tuck School of Business. Multinationals that expand abroad, such as Harley, typically add jobs to their U.S. operations, he said.

“I believe he is earnestly committed to helping workers at Harley-Davidson and elsewhere,” said Slaughter, a White House economist in the George W. Bush administration. “Yet the policy proposals reflect a fundamental misunderstanding about how many jobs in America are connected to the world.”


__________________________________________________________________________

David J. Lynch joined The Washington Post in November 2017 from the Financial Times, where he covered white-collar crime. He was previously the cybersecurity editor at Politico and a senior writer with Bloomberg News, focusing on the intersection of politics and economics. Earlier, he followed the global economy for USA Today, where he was the founding bureau chief in both London and Beijing. He covered the wars in Kosovo and Iraq, the latter as an embedded reporter with the U.S. Marines, and was the paper's first recipient of a Nieman fellowship at Harvard University. He has reported from more than 60 countries.

Philip Rucker is the White House Bureau Chief for The Washington Post. He previously has covered Congress, the Obama White House, and the 2012 and 2016 presidential campaigns. Rucker also is a Political Analyst for NBC News and MSNBC. He joined The Post in 2005 as a local news reporter.

__________________________________________________________________________

Related to this topic:

 • VIDEO: Trump's Harley-Davidson controversy, explained

 • Trump threatens Harley-Davidson with taxes ‘like never before’ and predicts its eventual collapse


https://www.washingtonpost.com/business/economy/to-trump-harleys-tariff-decision-is-a-personal--and-unexpected--betrayal/2018/06/26/a662c718-796d-11e8-aeee-4d04c8ac6158_story.html
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« Reply #39 on: June 28, 2018, 03:15:18 pm »

meanwhile

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« Reply #40 on: June 28, 2018, 03:47:50 pm »


from The Washington Post…

Harley-Davidson: The oddity of the ‘America First’ president
bashing a classic American brand


Trump aims his ire at an American staple that has weathered the Model T, the Depression and trade wars.

By KYLE SWENSON | 5:17AM PDT — Wednesday, June 27, 2018

A biker rides his Harley-Davidson motorcycle at a parade in June 2018. — Photograph: Fabian Bimmer/Reuters.
A biker rides his Harley-Davidson motorcycle at a parade in June 2018. — Photograph: Fabian Bimmer/Reuters.

GO HUNTING for the Harley-Davidson origin story, and you'll end up in the black smoke and workshop tinkering of the early 1900s. But the true jumping-off point for understanding the modern American motorcycle manufacturer is May 6, 1987 — the day the Gipper blessed the brand.

Wearing a light-colored suit as he bounced up a platform at the company's plant in York, Pennsylvania, President Ronald Reagan stood before a factory floor jammed with assembly-line workers, the Los Angeles Times reported at the time. He was there to deliver a limited-government victory speech.

Five years earlier, Harley-Davidson was in a corporate tailspin because of intense competition from Japanese manufacturers dominating the U.S. market. In 1983, the Reagan administration imposed five years of limited tariffs on Japanese bikes. The assist helped Harley-Davidson's management re-tool the company. In 1987, the company was ready to again take on the Japanese competition alone. The company was the only U.S. motorcycle brand left standing.

“American workers don't need to hide from anyone,” Reagan told the crowd, the L.A. Times reported. But the president, a free-trade hawk, walked an interesting line in his speech. While praising the “breathing room” the tariffs allowed the company to get back on its feet, he argued against further protections.

“Our trade laws should work to foster growth and trade, not shut it off,” Reagan said. “And that is what is at the heart of our fair-trade policy: opening foreign markets, not closing ours. The idea of going to mandatory retaliation and shutting down on presidential discretion in enforcing our trade laws is moving toward a policy that invites, even encourages, trade wars.”

The workers — many still fearing what international competition would do to their jobs later — were silent, according to the L.A. Times.

Now the famous U.S. brand is again the target of presidential focus — this time with a much different intensity. On Tuesday, President Trump criticized Harley-Davidson after the company's decision to shift some production overseas because of the administration's aggressive trade policy. As The Washington Post has reported, Trump's steel and aluminum tariffs will cost Harley-Davidson $20 million, the company says. Retaliatory tariffs could cost an additional $45 million.

In tweets, the president lashed out at Harley-Davidson, saying the company — a brand he has embraced in the past — was using the tariffs as an excuse to take away U.S. jobs. The bikes, Trump stated, should “never be built in another country-never!”

“If they move, watch, it will be the beginning of the end — they surrendered, they quit!” Trump wrote. “The Aura will be gone and they will be taxed like never before!”

Trump's ire at a quintessentially American brand is noteworthy. So much of the history of Harley-Davidson — a company started by the sons of immigrants in what we now call the Rust Belt — is wrapped up in the same concerns dominating the White House, including trade wars, broad-stroke nationalism, celebrity and image maintenance.

In the late 1800s, motorcycles were a gag.

As Darwin Holmstrom writes in his book Harley-Davidson: The Complete History, gasoline-powered bicycles were unwieldy at the century's start because of the size of the engines — more a “carnival freak” than an actual mode of transportation, according to Holmstrom. In 1895, an entrepreneur named Edward Joel Pennington showed off his curious “Motor Cycle” on a street in Milwaukee. Neighbors rushed to watch. Two 14-year-olds who lived nearby may have been in the crowd, Holmstrom speculates: William S. Harley and Arthur Davidson.

By the early 1900s, lighter-weight engines made motorcycles a more feasible product. Harley and Davidson worked on designs and built bikes, eventually selling their first models in 1903. According to the company, the two tinkered on their early designs in a 10-by-15-foot wooden shed behind the Davidson house. “Harley-Davidson Motor Company” was scrawled on the workshop's door.

Demand was high enough in 1906 for the friends to build a small factory in their Milwaukee neighborhood, Holmstrom writes. A year later, they officially incorporated the company bearing their names.

Harley-Davidson showed early on that the company could easily slip from one identity to another.

As Yahoo reported in March, the motorcycles were originally designed as a primary mode of transportation for riders. Starting in 1908, however, Henry Ford's affordable Model T began dominating that market. Harley-Davidson pivoted, pitching its products not as your ride to work or for daily errands but as a leisure craft. According to Yahoo, the company worked to start riding clubs for owners. In the cash-heavy 1920s, motorcycles were another activity of the rich.

A second market helped Harley-Davidson outlive the Depression: the military. The company's cycles had been used early on by various armies. According to Yahoo, Harley-Davidson survived the bottomed-out 1930s in part because of military shipments to Japan. When World War II ripped the world apart, the company was busy producing bikes for the Allies.

The postwar years were when Harley-Davidson stepped fully into the identity that's now welded completely to the brand: the outlaw.

Motorcycle clubs — favored by World War II veterans eager for a jolt of adrenaline after combat — started up in the 1950s. Thanks to screen time in movies such as 1953's The Wild One and 1969's Easy Rider, as well as reports of the leather-clad mayhem tied to groups such as the Hell's Angels, the myth of the Harley-mounted, anti-social misfit stuck in the social consciousness. Whether feared or revered, Harley-Davidson riders — bulling down the street with the V-twin engine's unmistakable roar — became American fixtures.

And yet the outlaw image would also set Harley-Davidson on a path to economic disaster. Honda's own motorcycles were portrayed in ads as a clean, nice alternative to the Harley-Davidson's social menace. In 1959, the Japanese manufacturer sold 1,700 bikes in the United States. By 1970, after Harley-Davidson had become the highway's bad boy, Honda was selling 500,000.

Other overseas competitors began piling into the stateside market. Harley-Davidson's then-president, John Davidson, a descendant of one of the company's founders, would eventually accuse companies such as Honda of “dumping” products in the United States.

“The Japanese established production schedules that were much higher than mid-Seventies demand for their products,” Davidson once said. “They chose the U.S. to unload their excess production.”

The company's own mismanagement did not help its business at the time.

“‘We were being wiped out by the Japanese because they were better managers,” executive Vaughn Beals explained to Fortune in 1989. “It wasn't robotics, or culture, or morning calisthenics and company songs — it was professional managers who understood their business and paid attention to detail.”

But the company executed another skillful identity change in the 1970s that would eventually help refurbish its image in bold red, white and blue strokes.

Feeding off the patriotic energy soaking the country for the Bicentennial, the company released a “Liberty Edition” bike in 1976 featuring patriotic coloring, the Statue of Liberty, and “Born Free” inscribed on the frame, Yahoo reported.

The new line suggested that the brand's toughness and edginess were not anti-social values but inherent to American identity. That association had fully stuck by the time Reagan cheered the company's resurgence in 1987 after the tariffs were dismantled.

“As you've shown again, America is someplace special,” Reagan told the crowd of workers. “We're on the road to unprecedented prosperity in this country — and we'll get there on a Harley!”

Harley-Davidson's recent years have been difficult, leaving the company vulnerable to the global chaos Trump's trade policy may spark. As BikeBandit.com has reported, the motorcycle riders are getting grayer: In 2016, the median age for U.S. motorcyclists was 47. In 1990, it was 32. In January, the company's postings showed worldwide retail had fallen 6.7 percent in 2016, with U.S. sales dropping 8.5 percent.

Yet the brand's iconography has been resilient to bad sales before. It's one of the few U.S. companies hooked so firmly to the national identity.


__________________________________________________________________________

Kyle Swenson is a reporter with The Washington Post's Morning Mix team. Prior to joining The Post in 2017, he covered South Florida for the New Times Broward-Palm Beach. His reporting on the criminal justice system and features have won several national awards, including the Sigma Delta Chi award from the Society of Professional Journalists and the Salute to Excellence Award from the National Association of Black Journalists. In 2015 he was a finalist for the Livingston Award for Young Journalists. His first book, Good Kids, Bad City: A Story of Race and Wrongful Conviction in America's Rust Belt will be published by Picador USA in September 2018.

https://www.washingtonpost.com/news/morning-mix/wp/2018/06/27/harley-davidson-can-the-quintessential-american-brand-ride-out-trumps-tweet-storms
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« Reply #41 on: June 28, 2018, 04:41:35 pm »


from The Washington Post…

Harley Davidson: What Trump-supporting owners say
about the president's fight with the company


Harley-Davidson owners are caught in fight between the brand they love
and the president they support in the wake of a brewing global trade war.


By DAN SIMMONS | 11:38AM EDT — Wednesday, June 27, 2018

Bob Franz, 76, of Milwaukee, Stacey Sklidum, 49, of Dousman, Wisconsin, and Marc Skildum, 48 of Dousman, Wisconsin. — Photograph: Dan Simmons/for The Washington Post.
Bob Franz, 76, of Milwaukee, Stacey Sklidum, 49, of Dousman, Wisconsin, and Marc Skildum, 48 of Dousman, Wisconsin.
 — Photograph: Dan Simmons/for The Washington Post.


MILWAUKEE — Marc Skildum is an avid supporter of President Trump who raises alpacas in nearby Dousman, Wisconsin, and rides Electra Glide Ultra Classics with his wife, Stacey. But he doesn't share the president's outrage that Harley-Davidson, headquartered here for 115 years, is moving work overseas to get around Trump's brewing global trade war.

“It's business,” said Skildum, 48, visiting the company's museum near downtown Milwaukee. “If they can expand overseas and save money, you do it. Trump himself would do it, I feel.”

After Harley announced on Monday it would shift work overseas to avoid the fallout from Trump's aluminum and steel tariffs and Europe's retaliatory tariffs, the president repeatedly criticized the company, threatening it with severe taxes and predicting the decision could represent the “beginning of the end” for the brand.

“Harley-Davidson should stay 100% in America, with the people that got you your success,” Trump said in his latest tweet on the subject on Wednesday. “I've done so much for you, and then this. Other companies are coming back where they belong! We won't forget, and neither will your customers or your now very HAPPY competitors!”

Yet a visit to a motorcycle repair shop and the museum here on Wednesday revealed that Harley customers might not be willing to choose between the president they support and the motorcycle company they love. The company said the retaliatory tariffs by the European Union would increase the cost of its motorcycles by an average of $2,200 in European markets if they were made in the United States.

Supporters of the president, who made up the majority of riders surveyed, continue to back him, though with caveats.

“He gets himself into all these squabbles that he shouldn't,” such as this one with Harley, said Jeff Polak, a 54-year-old from Milwaukee who rides a 2013 Harley FLTRU Road Glide. “I don't support that.”

But he doesn't blame the president's tariffs for Harley's decision to set up more manufacturing operations abroad.

“I think Harley has been planning this for years,” he said. The tariffs presented the company with an easy way to explain the move, he reasoned.

Harley has built both an enduring brand and a near-peerless reputation for high-quality American craftsmanship, a reputation that Trump himself once celebrated. In February 2017, shortly after his inauguration, Trump joined company executives on the front lawn of the White House, holding it up as an example of a U.S. company that would benefit and expand thanks to Republican policies on tax and trade.

The company's relationship with its home town has been largely unblemished, and a massive party will be held in Milwaukee over Labor Day weekend to celebrate its 115th anniversary. Groups from San Diego; Seattle; Portland, Maine; and Fort Lauderdale, Florida; will ride in on the company's motorcycles, converging in what the company calls “the motherland” of Milwaukee.

But some here have soured a bit and fought back against the company's mystique. Jim Mead, a retired Milwaukee man, quit high school for a job on the Harley-Davidson assembly line in 1968 but stopped riding the company's motorcycles a few years ago in favor of an Indian-brand bike. He doesn't buy the company's stated rationale for the overseas move.

“Using the tariffs as an excuse to move offshore is weak at best,” he said. “Anyone who knows anything about Harley-Davidson knows that they have been using non-American products in their bikes for years. They have had plans for this move long before Donald Trump started taking a hard line on the trade imbalance.”

An unwavering Trump supporter, Mead said his moves on trade make sense.

“The president is, in my opinion, doing exactly what he should do to correct the imbalance and bad deals on trade that haven't been addressed ever,” he said.


Bob Franz, 76, of Milwaukee, Wisconsin says Harley-Davidson doesn't have a choice about moving some of their production overseas. — Photograph: Dan Simmons/for The Washington Post.
Bob Franz, 76, of Milwaukee, Wisconsin says Harley-Davidson doesn't
have a choice about moving some of their production overseas.
 — Photograph: Dan Simmons/for The Washington Post.


Bob Franz didn't vote for Trump, sitting out the election entirely, and doesn't support his tariffs. You'd be hard-pressed to find a more avid Harley supporter. In his younger days, he rarely met weather not suitable for riding a Harley. One day, it was 40 degrees below zero. He drove to work in his native Milwaukee on his three-wheeled motorcycle, wearing insulated layers beneath and above his black leather riding jacket. The bike's engine kept his legs toasty. It was comfortable, he said. Now 76, he still puts about 100 miles a week on his 2002 Road King, but takes winters off.

Like many in the city where Harley-Davidson got its start, Franz not only rides the company's motorcycles but also worked there, as a mechanic for a decade in the 1960s. The pending move to overseas manufacturing can't be avoided because of the tariffs, he said.

“I don't think they have any other choice,” Franz said. But it won't work in the long term, he said. He pointed to the company's sale in 1969 to American Machine and Foundry (AMF). AMF moved some manufacturing overseas, he said, which only created problems because factory hands weren't used to making Harleys. Quality suffered, the company's finances went south and a group of 12 investors that included Willie G. Davidson, grandson of company co-founder William A. Davidson, bought the company back in 1981.

“You start sending stuff overseas, and nothing works,” Franz said. “History repeats itself. I've seen it happen. In a couple of years it will all be back in Milwaukee.”

On that point, Stacey Skildum, a strong Trump supporter, agrees.

“Made in America,” she said, raising her hands in a celebratory pose. “Buy American. Support your country. Support your neighbor who needs a job.”

Trump's tariffs make that possible.

“They aren't designed to punish,” she said. “It's if you want the privilege [to bring goods to U.S. markets], you have to pay for it.”


__________________________________________________________________________

• Dan Simmons is a former senior editor with Milwaukee Magazine. He is now a Milwaukee-based freelancer and a frequent contributor to The Washington Post.

https://www.washingtonpost.com/business/economy/trump-himself-would-do-it-harley-owners-on-trumps-fight-with-company/2018/06/26/2f22c0f0-79a8-11e8-93cc-6d3beccdd7a3_story.html
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« Reply #42 on: June 28, 2018, 09:14:31 pm »



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« Reply #43 on: June 29, 2018, 12:09:45 pm »


from The Washington Post…

Don't blame Harley-Davidson for making a smart business decision

The president's pledge to negotiate strong trade agreements is smart,
but imposing tariffs against U.S. allies caused a self-inflicted wound.


By REID RIBBLE | 5:18PM EDT — Thursday, June 28, 2018

The logo for Harley-Davidson on the floor of the New York Stock Exchange. — Photograph: Richard Drew/Associated Press.
The logo for Harley-Davidson on the floor of the New York Stock Exchange. — Photograph: Richard Drew/Associated Press.

I RIDE MOTORCYCLES. I'm partial to Harley-Davidson motorcycles because I'm from Wisconsin, home of the company's headquarters, but also because I have fond memories of riding my Harley with many friends, when I was a member of Congress, during the annual Rolling Thunder event in Washington to honor military veterans.

I understand Harley-Davidson's recent decision to move production of its motorcycles for sale in the European Union to plants outside the United States. It wasn't a surprise — that's what just about any company would do when faced with a 25 percent tariff imposed by the E.U. in response to President Trump's trade agenda. Companies must be nimble or they lose market share, and Europe is Harley-Davidson's second-largest market after the United States. The tariff would have added an average of more than $2,000 to the cost of a Harley in Europe, no doubt damaging the company's market share, which is difficult and expensive to regain. Critics, including the president, nonetheless attacked Harley-Davidson for its decision.

Who is right in this debate? A president who says he wants to negotiate better trade deals for everyone, or a company with a business to run but no say in those negotiations? Both sides have a point.

Trump needs to understand that businesses seek the most efficient and cost-effective manner to deliver goods and services. If they sell their products in other countries, they will try to minimize additional taxes to keep prices competitive. That is a basic element of trade.

The United States does not have a formal trade agreement with the E.U. Nor does it have one with China. Absent formalized trade agreements, trade deficits are significantly likelier to occur in countries with more-open markets, as in the United States. Reaching a trade agreement with the E.U., instead of getting into a tariff war, would address Trump's overriding concern about trade deficits — and would be good for companies such as Harley-Davidson. But it should be noted that, broadly speaking, there really is nothing wrong with trade deficits. They send a signal that consumers like both products and pricing. They're also evidence of superior purchasing power — testimony to America's affluence and size. Yet some smaller, less affluent countries, including Canada, purchase more goods and services from us than we do from them. (Contrary to the president's deficit complaints, the U.S. Trade Representative reported a trade surplus of $8.4 billion with Canada in 2017.)

Yes, trade agreements produce a mix of winners and some losers. In the aggregate, each side wants more wins than losses. That's how it works. The fact that some industries in the United States have had losses in past trade agreements has made many people, including the president, skeptical about the quality of those agreements.

But the United States overall has mostly been a big winner. As Bloomberg News noted in May, U.S. manufacturing output, in inflation-adjusted terms, "is more than twice what it was back in 1979, when manufacturing employment peaked." Sure, there are fewer manufacturing jobs today, but that's mostly caused by automation and American ingenuity, not losses to foreign competition. In today's hot U.S. economy, a shortage of workers, not unemployment, is the problem.

Trump campaigned on fixing bad trade agreements. He focused especially on the trade deficit with China. In the past and continuing to this day, China has cheated in the marketplace by dumping products such as paper, steel and solar panels on the U.S. market to drive down prices and put competitors out of business. The president's efforts to persuade China to change its practices are justifiable.

The Harley-Davidson matter is altogether different. It's a self-inflicted wound. Tariffs prompt retaliatory tariffs, and they serve only to tax consumers. The company has been manufacturing motorcycles in the United States for more than a century, and riders around the world understandably want to ride these enjoyable machines. Should Harley-Davidson have waited to see what would result from trade negotiations, hoping tariffs would be abandoned? Not many businesses would. The one thing I know for sure is businesspeople want two things: certainty and low taxes. No one, including Trump, should demonize a company for taking steps to secure its own future.


__________________________________________________________________________

Reid Ribble, a former U.S. congressman from Wisconsin (2011-2017), is the chief executive officer of the National Roofing Contractors Association.

__________________________________________________________________________

Related to this topic:

 • VIDEO: Trump to Harley-Davidson: ‘Don't get cute’

 • ‘Don't get cute’: Trump is really sore about Harley-Davidson's perceived lack of loyalty to him

 • Fact Checker: President Trump announces a major U.S. Steel expansion that isn't happening


https://www.washingtonpost.com/opinions/dont-blame-harley-davidson-for-making-a-smart-business-decision/2018/06/28/2166d3b0-7ae9-11e8-80be-6d32e182a3bc_story.html
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« Reply #44 on: July 01, 2018, 12:32:17 pm »


from the print edition of the Los Angeles Times…

Canada imposes tariffs of its own

Ottawa responds to Trump’s taxes with duties on $12.6 billion of U.S. products.

By THE ASSOCIATED PRESS | Saturday, June 30, 2018

Foreign Minister Chrystia Freeland visits steelworkers at a Stelco plant in Hamilton, Ontario. In response to U.S. tariffs on Canadian goods, she said, “We will not escalate, and we will not back down.” — Photograph: Peter Power/Canadian Press.
Foreign Minister Chrystia Freeland visits steelworkers at a Stelco plant in Hamilton, Ontario. In response to U.S. tariffs on Canadian goods, she said,
“We will not escalate, and we will not back down.” — Photograph: Peter Power/Canadian Press.


TORONTO — Canada announced billions of dollars in retaliatory tariffs against the U.S. on Friday in a tit-for-tat response to the Trump administration's duties on Canadian steel and aluminum.

Prime Minister Justin Trudeau's government released the final list of items that will be targeted beginning July 1. Some items will be subject to taxes of 10% or 25%.

“We will not escalate, and we will not back down,” Canadian Foreign Minister Chrystia Freeland said.

The taxes on items including ketchup, lawn mowers and motor boats affect $12.6 billion worth of U.S. goods.

“This is a perfectly reciprocal action,” Freeland said. “It is a dollar-for-dollar response.”

She said her government had no other choice and called the tariffs regrettable.

Many of the U.S. products were chosen for their political rather than economic impact. For example, Canada imports just $3 million worth of yogurt from the U.S. annually, and most of it comes from one plant in Wisconsin, the home state of GOP House Speaker Paul D. Ryan. That product will now be hit with a 10% duty.

Another product on the list is whiskey, which comes from Tennessee and Kentucky, the latter of which is the home state of Republican Senate leader Mitch McConnell.

Freeland also said Canada was prepared if President Trump escalates the trade war. “It is absolutely imperative that common sense should prevail,” she said. “Having said that, our approach from Day One of the NAFTA negotiations has been to hope for the best but prepare for the worst.”

Trump has explained the steel and aluminum tariffs by saying imported metals threatened the United States' national security — a justification that countries rarely use because it can be so easily abused. He also is threatening to impose another national security-based tariff on imported cars, trucks and auto parts. That threat could be a negotiating ploy to restart talks on the North American Free Trade Agreement.

Freeland said there were no grounds for further U.S. tariffs in response to Canada’s actions.

Canadians are particularly worried about auto tariffs because the industry is crucial to their economy. Freeland said such tariffs would be “absurd” because the North American auto industry is highly integrated and parts made in Canada often go to cars made in the U.S. and then sold back to Canadians. “Any trade action is disruptive on both sides of the border,” she said.

Freeland said an “intensive phase” of NAFTA renegotiations will resume quickly after Sunday's election in Mexico.

“I don't think we'll see any reaction from the Trump administration. They are prepared for this,” said Dan Ujczo, a trade lawyer in Columbus, Ohio. “Candidly, the Canadian retaliation is a drop in the bucket compared to the retaliation that we're going to see from China and elsewhere.”

Ujczo doubts Trump will announce auto tariffs because that would be a “red line for the U.S. Congress” before the mid-term election. He said hearings for possible auto tariffs are in late July.

“I don't think Congress right now is expected to get engaged until after the mid-term election. They've given the president a long leash and will continue to do so. The auto tariffs would disrupt that. It would change the calculus,” he said.

The Canadian government also announced $1.5 billion in subsidies for Canada's steel and aluminum industries.


http://enewspaper.latimes.com/infinity/article_share.aspx?guid=5c7d4b3e-f355-4749-acc2-41c61beb1f5e
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« Reply #45 on: July 01, 2018, 12:43:41 pm »


from the print edition of the Los Angeles Times…

U.S. duties: double edged sword; carmakers push back on tariffs

In a global supply chain, tariffs can cause ‘damage on ourselves’, economist says.

By MATTHEW CAMPBELL | Saturday, June 30, 2018

Foxconn Chairman Terry Gou, right, and President Trump in Wisconsin on Thursday. — Photograph: Brendan Smialowski Agence France-Presse/Getty Images.
Foxconn Chairman Terry Gou, right, and President Trump in Wisconsin on Thursday. — Photograph: Brendan Smialowski Agence France-Presse/Getty Images.

IN IMPOSING SWEEPING TARIFFS, President Trump is betting he can give domestic companies a boost while beating back foreign competitors. The problem is figuring out which one is which.

About 40% of the cars and trucks that General Motors Company sells in the U.S. this year, for example, will be imported, according to researcher LMC Automotive. On Friday, the Detroit-based automaker warned the Trump administration that the imposition of tariffs could force it to cut jobs.

Decades of ever-freer trade and cross-border mergers have led to the domination of many industries by a handful of multinationals dependent on easy flows of raw materials, parts and labor. Non-American companies such as Daimler and Siemens now assemble many of their products inside the U.S., but often use a large number of imported components, blurring the line between domestic and international operations.

Those companies have invested hundreds of billions — if not trillions — of dollars on the assumption that the wheels of global commerce will continue to turn with increasing ease. But Trump appears determined to upend all that, even if he doesn't fully understand the ramifications. He's even threatening to withdraw from the 164-member World Trade Organization, the cornerstone of cross-border business, Axios reported on Friday, citing people familiar with the matter.

“This is a 1980s trade policy in a 21st century world,” said Diane Swonk, chief economist of Grant Thornton in Chicago. “We operate in a global supply chain now. It's not possible to punish other countries through trade without inflicting damage on ourselves.”

The president has argued that the tariffs are needed to create a “level playing field” between the U.S. and countries he says have benefited disproportionately from current trading arrangements.

In a speech 0n Thursday, he lamented having “been very much taken advantage of” as a country, saying: “We've lost our companies. We've lost our jobs. They build a product; they send it in.”

The White House is rapidly turning Trump's tough rhetoric into reality. Unless the president backtracks, the U.S. on July 6 will impose levies on $34 billion of Chinese imports, many of them parts used by domestic manufacturers of products such as power turbines and marine engines.

China will impose countervailing tariffs the same day, less than a week after Canada does the same in reaction to U.S. restrictions on steel and aluminum.

Trump's views on trade, like many of his political positions, were formed in a different era. Thirty years ago, on Oprah Winfrey's talk show, he complained about the U.S. letting “Japan come in and dump everything.” Japanese companies, he continued, “come over here, they sell their cars, their VCRs. They knock the hell out of our companies.”

Replace Japan with China and swap VCRs for iPhones, and the comments sound identical to ones he made on the 2016 campaign trail and repeatedly since.

But the picture has become considerably more complicated in the intervening decades. Germany's Siemens, for example, has 50,000 U.S. workers and generates revenue of about $23 billion there, including $5 billion from exports.

Or take Toyota Motor Corporation, the world's second-largest automaker and a symbol of Japanese industrial might. In the U.S., Toyota makes more than a million cars a year and has 10 plants. Those factories are the core of a U.S. operation that employs about 136,000 people, but they're also dependent on components sourced overseas for reasons of cost or availability.

“Whether it's possible for companies to source components entirely from within the U.S. will vary widely sector by sector,” David Dollar, a senior fellow at the Brookings Institution, said Friday. “In some cases, maybe they'll be able to find a substitute, but it will almost always cost more, so then that company's product is less competitive.”

About 70% of the parts in a U.S.-built Camry, the country's top-selling car, come from domestic suppliers. Toyota on June 27 said that Trump's threatened 25% tariff on automotive imports would add $1,800 to the price of each sedan.

On Friday, GM joined in the pushback, issuing a stern warning that it could shrink U.S. operations and cut jobs if tariffs are applied to imported vehicles and auto parts.

“The threat of steep tariffs on vehicle and auto component imports risks undermining GM's competitiveness against foreign auto producers by erecting broad brush trade barriers that increase our global costs, remove a key means of competing with manufacturers in lower-wage countries and promote a trade environment in which we could be retaliated against in other markets,” GM said in comments submitted to the Commerce Department.

The carmakers' warnings of the dangers of tit-for-tat tariffs were just two of many. German lighting manufacturer Osram Licht's shares plunged 22% on Thursday after the company announced a weaker outlook because of trade tensions. Even hoteliers are starting to fret. Radisson Hospitality CEO John Kidd said the tariff dispute could depress business travel to China.

Trump has made wooing foreign companies to expand U.S. manufacturing a priority, deeming it evidence that he's making good on promises to restore economic vitality to struggling regions.

On Thursday, he traveled to Wisconsin to celebrate the groundbreaking of a $10-billion assembly plant for Foxconn Technology Group, the Taiwanese iPhone contractor's first major U.S. facility.

Trump hailed the construction of a plant he said would be “the 8th wonder of the world” as an endorsement of his policies. “We have a lot of things going in the United States,” he said. But not far is the headquarters of one of the first American casualties of Trump's trade war: Harley-Davidson Incorporated.

The legendary motorcycle maker says it's having to move more manufacturing overseas as a result of retaliatory EU tariffs, a decision that surprised Trump. “I've done so much for you, and then this,” the president tweeted.

Even Foxconn is concerned. Its chairman, Terry Gou, said last week that a U.S.-China trade war is the biggest challenge facing the company.

Trying to create a situation in which U.S. manufacturers could get by largely without foreign components would be futile, said Sarah Fowler, an economic analyst at consulting firm Oxford Analytica. “It's the degree of specialization, the number of factories you’d need and the number of competences to make all the different parts,” Fowler said. “The cost that implies is just not realistic.”

Trump's singular focus on reviving manufacturing is, in some ways, at a right angle to the true nature of the U.S. economy. Service industries employ more than 10 times as many Americans — about 125 million — as manufacturing does, according to the Bureau of Labor Statistics. The figure includes about 19 million jobs in healthcare and social assistance, almost 16 million in leisure and hospitality and 16 million in retail.

Services include most of America's corporate stars, including Alphabet Incorporated and Goldman Sachs Group Incorporated, and are unquestionably globally competitive: The country exported about $255 billion more in services than it imported last year. (The total shortfall in goods and services was $552 billion last year.)

Even by Trump's standards, the rules of global trade may be working just fine when it comes to the industries that employ most Americans.


__________________________________________________________________________

• Matthew Campbell is a senior reporter at Bloomberg.

http://enewspaper.latimes.com/infinity/article_share.aspx?guid=aaaefa21-f650-44e8-8056-b7c9dc93dfa3
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« Reply #46 on: July 07, 2018, 12:17:20 pm »


SNIGGER…









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« Reply #47 on: July 08, 2018, 01:32:52 pm »


from The New York Times…

Trump Starts a Trade War, but the Path to Success Remains Unclear

President Trump has said that trade wars are “easy to win,” but the question
is whether he has a plan to achieve the results he wants.


By ANA SWANSON and NEIL IRWIN | 7:05PM EDT — Saturday, July 06, 2018

President Trump has said that trade wars are “easy to win”. Now that he has started one with China, it remains to be seen what his strategy is. — Photograph: Gabriella Demczuk/for The New York Times.
President Trump has said that trade wars are “easy to win”. Now that he has started one with China, it remains to be seen what his strategy is.
 — Photograph: Gabriella Demczuk/for The New York Times.


WASHINGTON D.C. — The United States and China hit each other with punishing tariffs on Friday as the two nations tipped into a long-feared trade war that is only expected to escalate.

President Trump has said that trade wars are “easy to win.” Now, as he opens a global skirmish with allies and adversaries alike, the question is whether he has a plan to achieve the results he wants or whether he is heading into a costly and futile clash without resolution.

The president appears to be betting that threatening trading partners like China, the European Union, Mexico and Canada with tariffs will eventually force them to bend to the United States.

His strategy is being buoyed by a strong economy that is giving Mr. Trump more latitude to impose tariffs that might otherwise pose too much risk. Job growth was strong in June, according to a new government report, as employers added 213,000 net new jobs and the unemployment rate rose as more people entered the labor market and began looking for work. Manufacturing job growth was particularly robust.

Those numbers are backward-looking, but there is little reason to think that the initial batch of tariffs will knock the entire economy off course. The $34 billion worth of Chinese goods subject to tariffs, and an equivalent retaliation by China, is tiny compared to the $20 trillion United States economy. Global stock markets largely shrugged off the trade war on Friday.

But the tariffs are still inflicting pain on some industries in particular, including farmers and small manufacturers who have long supported Mr. Trump. And with little sign of a negotiated resolution between the United States and China — or any other trading partner — the conflict threatens to escalate, eventually affecting hundreds of billions of dollars of additional products.

“Trump's soundest argument in his election campaign was that he would not waste American lives and treasure in pointless wars of choice,” Adam Posen, the president of the Peterson Institute for International Economics, wrote in March in an op-ed article. “His launching a trade war would prove, however, to be his economic Afghanistan — costly, open-ended, and fruitless.”

On Friday, the Trump administration took its most aggressive step yet as it imposed tariffs on $34 billion worth of Chinese goods, including medical devices and airplane parts, and threatened billions of dollars more in the coming months. The Chinese immediately responded with tariffs on an equal volume of American soybeans, pork, automobiles and other products.

Mexico, Canada and the European Union have similarly retaliated against Mr. Trump's steel and aluminum tariffs and have threatened to push back if the president moves ahead with his threat to place a 20 percent tariff on imported cars and car parts.

The president and his advisers insist that history is on their side and that Mr. Trump's approach will yield better results than years of diplomatic niceties, including bilateral talks with the Chinese, that have produced bad deals for the United States.

“We have the worst trade deals in the world. We lose money with everybody,” Mr. Trump said last week. “Every country is calling every day, saying, let's make a deal, let's make a deal. It's going to all work out.”

His approach has garnered support from certain corners of American industry, particularly sectors that have seen significant job losses connected to China's rise.

“These aren't the first shots of a new ‘trade war’,” Scott Paul, the president of the Alliance for American Manufacturing, which represents steelworkers and manufacturers, said on Thursday in a Twitter post. “China's been conducting a highly effective war on American workers,” he said, adding that the “difference now is that we are systematically pushing back.”


Workers moving aluminum at a factory in China. — Photograph: Agence France-Presse/Getty Images.
Workers moving aluminum at a factory in China. — Photograph: Agence France-Presse/Getty Images.

But many of Mr. Trump's supporters say they are unsure, exactly, how the trade war will work out, given the escalating threats emanating from the White House and the lack of a clear strategy toward resolving the president's differences with the United States' trading partners.

Mr. Trump's steel and aluminum tariffs had barely gone into effect before he upped the ante and threatened auto tariffs on those same allies, pushing trade relations with Europe and Canada to their rockiest point in decades. With China, the president's advisers have vacillated between asking Beijing to purchase more American products to lower the United States' trade deficit and pushing for more substantive economic reforms. And talks to revise the North American Free Trade Agreement with Canada and Mexico remain stalled over deep differences with the United States.

If the conflict with China is not resolved soon, Mr. Trump has threatened to place tariffs on nearly everything China exports to the United States, in addition to tightening Chinese investments in the United States and limiting visas for Chinese citizens. While many supporters describe the president's bold statements as a negotiating tactic, talks between the Chinese and the United States have faltered for now, with no additional discussions in sight.

“There is no apparent plan,” said Daniel Price, a managing director of Rock Creek Global Advisors, an advisory firm, and a former trade official in the George W. Bush administration. “The administration has given no indication what the off-ramp is or what their objectives are.”

“Trump is treating trade policy as though it were a real estate deal, where the goal is to beat your opponent, step on his throat and humiliate him,” said Daniel Ikenson, the director of trade policy studies at the Cato Institute.

Even if it works and nations like China blink, Mr. Ikenson said, “the cost to that will be trust in the U.S., and it will encourage other governments to behave this way when their backs are against the wall.”

Many farmers and manufacturers remain staunch supporters of Mr. Trump. But their faith is starting to waver as tariffs take effect and they feel the impact of reduced market access and higher costs.

“I would just like the administration to be clear, at least with us, on the goal,” said Jay Hollowell, the mayor of Helena-West Helena, Arkansas, an area that produces soybeans, which are now being heavily taxed by China. “Is it to lower trade deficits with other countries like China, or is it to protect American industries?”

“People's livelihoods are on the line here,” Mr. Hollowell added.

For now, the current trade measures affect a small portion of the economy and come at a time of economic strength, giving Mr. Trump more latitude to take the type of aggressive measures that, in weaker economic times, would provide a drag on the economy much more quickly.

Businesses have been warning for months that tariffs will cause them to scale back on hiring and investment, and pass higher prices on to consumers. But those effects are not evident in the data, so far.

Oxford Economics, for example, calculated that the tariffs with China would shave only 0.1 percent off both American and Chinese gross domestic product in the next two years, though that would rise to 0.3 percent if the Trump administration follows through on threats to expand the tariffs to $200 billion worth of goods.


Chinese investors monitoring stock prices on Friday. — Photograph: Mark Schiefelbein/Associated Press.
Chinese investors monitoring stock prices on Friday. — Photograph: Mark Schiefelbein/Associated Press.

But tariffs could still cause plenty of trouble in specific sectors and industries, even if the levies do not provide a significant drag on overall economic growth.

For example, soybean futures prices have fallen 15 percent since May 25 in anticipation of the Chinese retaliatory tariffs. With a stiff tax on soybean imports, American farmers will face lower demand from overseas and a hit to their incomes. Those farmers, in turn, would spend less on equipment and materials, which could eventually trickle through to the broader economy.

John Heisdorffer, a soybean grower from Keota, Iowa, and the president of the American Soybean Association, said he and others in the industry had spent years trying to develop markets in China that were now being closed with the stroke of a pen. “My son, who farms with me, is going to spend the rest of his lifetime trying to get that back, and that scares the hell out of me,” Mr. Heisdorffer said.

The United States trade representative said on Friday that it would allow American companies to apply for exclusions to the tariffs if the product they need to import is not available outside China, or if the tariffs on it would cause “severe economic harm.”

Some of the products involved in earlier phases of the Trump administration's trade battles offer evidence of how American consumers may eventually be affected.

In January, the president announced new tariffs on imported washing machines. Since then, the price of laundry equipment is up 10 percent, according to the Bureau of Labor Statistics.

And the administration has either entered or threatened to enter trade wars on multiple fronts at the same time, compounding the risks. A tariff on automobile imports that is in the works, for example, could expand the dollar value of goods the United States places tariffs on by tenfold and set off a new wave of retaliation that endangers companies that export to Europe, Japan, South Korea and elsewhere.

Leaders of the Federal Reserve appear concerned that this overlay of risk in the economy could dampen investment spending, according to minutes of a June policy meeting released on Thursday. Fed officials “noted that uncertainty and risks associated with trade policy had intensified and were concerned that such uncertainty and risks eventually could have negative effects on business sentiment and investment spending.”

The economy appears strong enough to withstand the relatively moderate tariffs that have already been put in place. The question is what will happen if things continue to escalate to eventually encompass hundreds of billions or even trillions of dollars worth of goods.

“If we get up to a trillion dollars in the cross hairs, then that means we're talking about 25 percent of trade in goods,” Mr. Ikenson said. “People will begin to notice that.”


__________________________________________________________________________

Ana Swanson writes about trade and international economics for The New York Times. She previously covered trade, the Federal Reserve and the economy for The Washington Post.

Neil Irwin is a senior economics correspondent for The New York Times, where he writes for The Upshot, a N.Y. Times site for analysis of politics, economics and more. He is the author of The Alchemists: Three Central Bankers and a World on Fire, about the efforts of the world’s central banks to combat the global financial crisis, published by the Penguin Press in 2013. Mr. Irwin was previously a columnist at The Washington Post and an economics editor of its Wonkblog site. As a beat reporter covering economics and the Federal Reserve, he led The Post's coverage of the financial crisis and the government's response to it. Mr. Irwin has an M.B.A. from Columbia University, where he was a Knight-Bagehot Fellow in Economics and Business Journalism, and his undergraduate studies were at St. Mary's College of Maryland. He has often appeared on television analyzing economics topics, including on “PBS NewsHour” and CNBC.

• A version of this article appears in The New York Times on July 7, 2018, on Page A1 of the New York print edition with the headline: “Trade War Rises, and Trump Plan Remains a Puzzle”.

__________________________________________________________________________

Related to this topic:

 • Trump's Trade War With China Is Officially Underway


https://www.nytimes.com/2018/07/06/us/politics/trump-trade-war-unclear-outcome.html
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« Reply #48 on: July 08, 2018, 02:24:57 pm »


from the print edition of the Los Angeles Times…

New tariffs take effect in trade battle: Soybeans embody chaos
of U.S.-China trade fight


The U.S. and China show no indication of talks as levies are slapped on exports from both sides.

By DON LEE | Saturday, July 07, 2018

SHANGHAI — The tariffs that the United States and China slapped on each other's exports on Friday intensified a trade battle that has a strong risk of roiling financial markets, chilling consumer confidence and seriously harming the global economy.

After President Trump followed through on his threat to apply 25% levies on $34 billion of Chinese products, mostly machinery and industrial parts, Beijing accused the United States of “launching the largest trade war in economic history.” It fired back with dollar-for-dollar tariffs mainly on American farm products and other foods.

There was no indication of new talks between the two sides.

Soybeans topped the list of newly taxed items — and they illustrate how deeply U.S. and Chinese producers and consumers have come to depend on each other.

Some ships from the Pacific Northwest bound for China with tons of soybeans have already been rerouted to Europe or Southeast Asia, analysts here said. Chinese officials, meanwhile, have been pulling out all the stops to encourage domestic farmers to plant more soybeans, so far with mixed results.

“China needs soybeans, and the U.S. needs the Chinese market,” said Jiang Boheng, an analyst with Luzheng Futures Company in eastern China's Shandong province. “It's a lose-lose situation.”

On the whole, the tariffs and retaliatory tariffs amount to penalties totaling $17 billion, a tiny amount given the size of the two economies, which have a combined gross domestic product of roughly $30 trillion.

Nonetheless, the duties will hurt sales and disrupt supply chains for some industries and businesses. More worrisome, the latest actions and the increasingly heated rhetoric from both sides have raised alarms of a drawn-out fight that could take a toll on both economies and spill over to the rest of the world.

Any fallout thus far appears to be muted as American economic growth surged in the second quarter. Job creation hasn't dimmed. On Friday the government said the nation added a solid 213,000 jobs in June.

China's economy is expected to expand at a still-rapid pace of about 6.8% this year, even as investments and production have decelerated and the government has clamped down on excessive lending.

The U.S. and China are the two largest economies in the world and have periodically had trade clashes, but Trump and hard-liners in his administration are insisting that Beijing pay for years of what they see as unfairly taking advantage of America's open markets and know-how.

China's tariffs are targeting agricultural and food products, including grains, tobacco and whiskey, products largely from states that backed Trump and home to influential GOP lawmakers. The U.S. duties are aimed at hitting China's supply chain and intermediate parts supporting the country's high-tech manufacturing.

U.S. businesses and congressional Republicans have increasingly urged Trump to back away from applying broad-based tariffs, calling instead for negotiations and enlisting the help of other trading partners to put pressure on Beijing.

Trump, however, has alienated America's closest allies such as Canada and the European Union by assessing tariffs on steel and threatening to tax imported cars. The president has made punitive duties, or the threat of them, his instrument of choice to tackle America's trade deficits and force Beijing to open markets and abandon policies such as requiring foreign firms to form joint ventures and essentially hand over technology secrets to do business in China.

On Thursday, Trump threatened to slap duties on all $500 billion of goods imported from China. Chinese officials have repeatedly vowed that they will stand firm and take comprehensive measures to protect the interests of China and its people. And Chinese President Xi Jinping and others have sought to woo European and other countries to back Beijing's push against what it sees as Trump's unilateral protectionism.

“I think the Chinese are digging in for what they see as a protracted battle with the U.S.,” said David Loevinger, an analyst for TCW Emerging Markets Group in Los Angeles and formerly a senior Treasury Department official for China affairs.

Loevinger, who was in China the last two weeks gauging the thinking and mood of businesses and government officials, said it was clear that the trade fight had awakened the Chinese to the country's “dependency on the U.S. as a supplier, market and banker that leaves them too vulnerable.”

The result, he and others said, is that China has begun to accelerate efforts to build up domestic capabilities and to diversify where China buys its products.

“It would be a mistake for American companies to think they're the unique providers of goods and services,” said Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai.

Although China has been rebalancing its economy and today is much less dependent on trade, the country still counts on the U.S. and other foreign countries for critical components and technologies.

That was evident in the case of telecommunications giant ZTE, which was paralyzed after the Trump administration initially prohibited American firms from selling parts to ZTE for violating certain U.S. sanctions. Trump later eased the restrictions after ZTE agreed to pay a large fine and overhaul its management with oversight by an American team.

Trump is betting that he has the upper hand in a trade fight with China because the United States buys or imports nearly four times as much in products from China as it exports to the Asian country.

But the reality is more complex: Over the last three decades, the two economies have become interconnected, with many American firms dependent on China's supply chains and large domestic market.

Soybeans provide a prime example. U.S. farmers shipped about $14 billion worth of soybeans to China last year, accounting for more than half of their global exports. American soybeans, in turn, made up about 30% of China's total soybean consumption.

As valuable as China's market is for the U.S., American soybeans have helped fill China's vital need for the grain, used for animal feed and for oil and human consumption. A Chinese saying goes, “Take a day without meat, but not a day without beans.”

But starting on Friday, U.S. soybeans entering China face an extra 25% tariff on top of the 3% duty assessed on all imported soybeans. The threat of tariffs already has cost American farmers as soybean prices have fallen and Chinese orders have virtually stopped in recent weeks.

Instead China has been buying more from Brazil and Argentina, among other sources. And on July 1, Beijing dropped the 3% duty for soybean imports from Bangladesh, India, Laos, South Korea and Sri Lanka, to encourage those countries to export more to China.

At the same time, government officials in China's northeast Heilongjiang province, the heart of China's soybean production, have doubled subsidies to farmers for replacing corn with soybean, to make up for the anticipated shortfall as American supplies shrink.

Corn has been much more profitable, while soybeans have been a break-even or money-losing crop in recent years. And for some farmers, the government's push for more soybean planting wasn't exactly welcomed.

“We couldn't make money from that. We even couldn't sell out the previous soybeans,” said He Yongdong, 35, of Kedong County, his voice tinged with resentment. “I'm still keeping the soybeans harvested in 2017. I've not got back the money I invested in last May.”

Yet others like Chang Gengguo, who works with Longshu Farmers Cooperative in Wangkui County, sounded like a foot soldier responding to a battle call from government.

He said that even before provincial government officials came to his village to sell them on the new subsidy policy, he had made up his mind to grow more soybeans. And at the end of the sowing season, Chang said, he added 25% to the 400 acres of soybeans he had originally planned to grow. The extra subsidy, he said, was nice but beside the point.

“Even though we couldn't make money from soybeans, we still want to do that. It's for the interests of the country,” he said.

But even with increased domestic production, more purchases from other countries and a shift to alternatives like rapeseed, farm industry experts say China still can't do without more soybeans from the U.S.

On Friday, Chinese agricultural company stocks rose sharply as investors saw potential benefits to domestic farms from import limitations, said Monica Tu, a soybean market specialist at Shanghai JC Intelligence Company. But that may prove short-lived, she said.

“We are concerned about supplies for next year.”


__________________________________________________________________________

• Don Lee covers the U.S. and global economy out of Washington, D.C. Since joining the Los Angeles Times in 1992, he has served as the Shanghai bureau chief and in various editing and reporting roles in California. He is a native of Seoul, Korea, and graduated from the University of Chicago.

http://enewspaper.latimes.com/infinity/article_share.aspx?guid=7c00adf1-2333-4d66-aab9-99be32b10b24
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« Reply #49 on: July 08, 2018, 03:18:05 pm »


from the print edition of the Los Angeles Times…

Victims of trade war back Trump: Town supports Trump, if not his tariffs

More workers in this Missouri town could lose their jobs due to tariffs, but they don't blame their president.

By JENNY JARVIE | Saturday, July 07, 2018

President Donald J. Trump's steel tariffs have raised the price of nails made in Poplar Bluff, Missouri, leading to the loss of 60 jobs from the factory in June. — Photograph: Bill Greenblatt/Agence France-Presse/Getty Images.
President Donald J. Trump's steel tariffs have raised the price of nails made in Poplar Bluff, Missouri, leading to the loss of 60 jobs from the factory in June.
 — Photograph: Bill Greenblatt/Agence France-Presse/Getty Images.


POPLAR BLUFF, MISSOURI — Jimmie Coffer, a machine programmer at the nation's largest nail-making plant, voted for Donald Trump partly because he was confident he would bring manufacturing jobs back to America.

So the 39-year-old factory worker was shocked last month when 60 of his co-workers were laid off after the Trump administration imposed a 25% tariff on the steel his company imports from Mexico. Now, as his bosses cut back hours and warn that they may have to let 200 more workers go in the coming weeks, he worries he may lose his job as a result of the president's policies.

But Coffer is still gung-ho about Trump.

“I support him 100%,” he said last week. “In fact, I'd like to shake his hand. He's doing a great job.”

Across Poplar Bluff, a struggling town of about 17,000 in a remote pocket of southeast Missouri, many residents are reluctant to criticize Trump as they grapple with the prospect that their community could be one of the trade war's first casualties.

“Most workers are behind Trump, no matter what,” said Diane Brogdon, 54, a machine operator who has worked for the nail manufacturer for 12 years.

Trump won 79% of the vote here in Butler County and, while many were surprised to discover the tariffs are hurting their town, they still believe he's on the right track and firmly support his goal of pouring life back into dilapidated manufacturing communities — even if they end up losers.

“It's just one big mess,” said Brogdon, who fears she may struggle to keep the large brick home she bought just a few months ago. “He's looking at the big picture, and I understand that. But he's got to stop and look at the small towns around here that are really going to get hurt.”

For Mid Continent Steel and Wire, which does business as Mid Continent Nail Corporation, the crisis began on June 1, when the Trump administration imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union as part of its strategy of boosting American manufacturers.

Founded in 1987 by two local brothers and taken over in 2012 by a Mexican company, Mid Continent imports 70% of its steel from Mexico. When the tariffs forced the company to raise prices 19% to cover higher costs, orders plummeted. Within two weeks, the company had idled one of its production plants and laid off dozens of contract workers.

“You would think as long as houses are being built and pallets are being made we would be secure,” said Sean Hughey, 51, a machine shop supervisor who has worked for the company for eight years. “All of sudden, it just came to a crashing halt.”

Hughey still backs Trump, even as he worries that if the company shuts down, he will not be able to make his $800 monthly mortgage or come up with $700 a month for payments on his Dodge pickup, Chrysler sedan and Harley-Davidson Street Fighter.

“I feel like maybe the tariff policy might have been just a tad misguided, you know?” he said. “Maybe they didn't think it through.”


Mid Continent Nail Corporation, now Mexican-owned, is the second-largest employer in Poplar Bluff, Missouri. — Photograph: Bill Greenblatt/Agence France-Presse/Getty Images.
Mid Continent Nail Corporation, now Mexican-owned, is the second-largest employer in Poplar Bluff, Missouri.
 — Photograph: Bill Greenblatt/Agence France-Presse/Getty Images.


Last week, officials at Mid Continent took pains to praise the president as they ran a full-page ad in the local newspaper, telling Trump in an open letter that 500 jobs here are in jeopardy and urging him to save the company.

“More than any president in our time, you have shown compassion for U.S. manufacturing workers,” the letter began. “It is in your power to keep our plants running and save our jobs.”

The company has requested exclusions from the tariff, but the Commerce Department has a backlog of over 20,000 requests. So far, it has issued 42 exclusions.

As Mid Continent pleads for relief, local officials have been conspicuously silent about the fate of hundreds of assembly line workers. The mayor, city manager and City Council members did not respond to phone calls or emails about the potential closure of the town's second-largest employer.

“You won't get a lot of people speaking around here,” warned Steve Halter, president of the local Chamber of Commerce, as he declined to comment.

As a steady stream of workers stopped at the Munch-N-Pump gas station near the nail plant last week for sodas, cigarettes and sausage-and-cheese biscuits, they said supervisors had told them not to talk to the media.

Yet there is fear that hundreds of workers could be laid off, a potentially staggering blow to a town where a quarter of the population lives in poverty and the median household income is just $31,675.

“It's really going to hit the community hard,” said RayAnna Krogstad, a 28-year-old supermarket clerk, as she grabbed a Mountain Dew. “There are already job issues as it is, and a bunch of people flooding the market…. Some of them might be homeless by October.”

Others accused the company of exaggerating the risks to workers and blamed the firm for importing steel from Mexico.

“Mass layoffs? I don't believe it's going to happen,” said Randy Wade, 42, a supervisor for a local vending company, rolling his eyes as he filled a cup with Coca-Cola at the soda fountain.

“If they're going to do business in Mexico, they kind of deserve it,” he added. “They need to deal with Americans.”

Some were reluctant to publicly question Trump's policies, afraid they'd be harassed on social media. Others were suspicious that the media — and their Democratic U.S. senator, Claire McCaskill — had descended on the town only to score points at the president's expense.


Senator Claire McCaskill (Democrat-Missouri), right, criticized Trump's tariffs when she toured the plant last week. — Photograph: Bill Greenblatt/Agence France-Presse/Getty Images.
Senator Claire McCaskill (Democrat-Missouri), right, criticized Trump's tariffs when she toured the plant last week.
 — Photograph: Bill Greenblatt/Agence France-Presse/Getty Images.


McCaskill, who is facing a tough re-election bid this year, was scathing about the Trump administration's handling of tariffs when she toured the nail plant last week.

“It's chaotic, and there's some incompetence involved,” she told company officials. “They're chasing your customers into China's arms…. It just doesn't make any sense whatsoever.”

Some companies across the country have celebrated the tariffs — U.S. Steel has announced plans to reopen two blast furnaces in Illinois, adding approximately 800 jobs — but trade experts say that overall, the measures are likely to bring more job losses than gains.

The Tax Foundation, an independent non-profit tax policy group, estimates about 48,500 jobs will be lost as a result of the tariffs imposed on imports of steel, aluminum, washing machines, solar panels and $50 billion worth of Chinese goods. If Trump presses ahead with further tariffs, and other nations retaliate, it predicts 342,000 jobs could be lost.

Already, other businesses in Missouri are feeling the ripple effects of Mid Continent's slowdown. A local packaging company that provides boxes for the nail plant announced last week that it had laid off four temporary employees.

Conspiracy theories and rumors also have spread. Some locals theorize the company's Mexican owners have long planned to relocate south of the border and are using the tariffs as an excuse to finally leave. (Company officials do not rule out relocating to Mexico, where they could buy steel and export finished nails back to the U.S. without tariffs, but say they are committed to remaining in Poplar Bluff.)

“This has nothing to do with tariffs — or Trump,” Mark Orton, owner of Bluff Barber Shop, said as he dabbed shaving foam on a customer's face. “It's smoke and mirrors. This Mexican company is just trying to blame Trump.”

His client, a red-headed factory worker who declined to give his name, blamed politicians and newspapers for “banging on” Trump.

“They can't say anything nice about him,” he said. “If Trump ran into a burning building to pull out children, they'd say he's hurting firefighters.”

Brogdon, asked whether she would rethink her support for Trump if she lost her job at the nail plant, said probably not. The tariffs ultimately would be good for the nation — even if they left her unemployed.

“Overall, he's done good,” she said. “I'm not going to be selfish just because of me.”


__________________________________________________________________________

• Jenny Jarvie is a freelance writer and reporter living in Atlanta, Georgia. She has worked as a staff reporter, then more recently as a special correspondent for the Los Angeles Times and the Sunday Telegraph in London. She was born in London in 1975, has a masters in English Literature and Philosophy from the University of Glasgow and is a past winner of the Catherine Pakenham Award for the most promising young female writer in Britain.

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