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US-China relations near new low amid trade battle (copy)

John Deere agricultural machinery made by Deere & Co. sits staged for transport May 10 near cranes at the Port of Tacoma in Tacoma, Washington. U.S. and Chinese negotiators resumed trade talks Friday under increasing pressure after President Donald Trump raised tariffs on $200 billion in Chinese goods and Beijing promised to retaliate.

It’s no wonder some people are confused about the tariff issue since the president, who is raising them on Chinese and Mexican imports without input from Congress, continues to lie about who ultimately pays them.

In the case of tariffs on Chinese goods he said, “They’re paid for mostly by China, by the way, not us.”

Wrong. Tariffs are taxes on imports paid by the companies that buy the goods. The payments are paid to the U.S. Customs and Border Protection at the point of entry. If, for example, Walmart buys 10,000 widgets from China with the 25% tariff Donald Trump has imposed, and each widget costs $4, then Walmart has to pay $10,000 to Customs to cover the tariff and $40,000 to the Chinese seller for the widgets.

If anyone thinks Walmart or any other American business will just cough it up without raising prices for customers, they’re delusional. The price consumers pay for the widget most likely will be 25% higher than it was before the tariffs were enacted. That’s a lot of money considering how many products we get from China.

According to a 2018 study by economists at the Federal Reserve Bank of New York, Princeton University, and Columbia University, “The full incidence of the tariff falls on domestic consumers, with a reduction in U.S. real income of $1.4 billion per month.” Since that study was done almost a year before the next tariff increases, the losses to Americans will be much worse than that.

CNBC reported on May 16, “The combined $72 billion in revenue from all the president’s tariffs ranks as one of the biggest tax increases since 1993, according to CNBC analysis of data from the Treasury Department.” That’s revenue paid to the government by American consumers, not by other countries.

Also, many American manufacturers rely heavily on parts and raw materials from China and Mexico. A May 24 article in Time stated that several American companies have announced layoffs and closings because of Trump’s earlier tariffs, “The CEO of Kent International wrote that the tariffs have stopped him from expanding his domestic bicycle manufacturing operations, because of rising duties on imported parts. A South Carolina plant that assembled televisions using Chinese parts said last year it was shutting down because of the tariffs. The Beer Institute, which represents 6,000 brewers and 2.2 million American jobs, said that about 6% of the cost of beer is the aluminum used in cans, and predicted that higher aluminum tariffs could cost 20,000 American jobs.”

But that’s not all this president is inflicting on Americans. Countries subject to the high tariffs will retaliate, as they have in the past, and stop buying American products that other countries will be happy to sell them. That, too, will hurt American manufacturers and, of course, their workers. Countries also retaliate by raising tariffs on American-made goods which makes our products more expensive and in less demand if they can get the same products from other countries.

In fact, because of the earlier tariffs Trump put on China, they’re now buying all the soybeans they need from Brazil and Russia, as well as increasing their own production. A Feb. 21 article in the conservative Wall Street Journal, “A surprise winner from the U.S.-China trade spat: Russian soybean farmers,” confirmed that Russia’s soybean farmers are profiting and U.S. soybean farmers are suffering from the trade war Trump has imposed with China. Vladimir Putin is very happy his country helped elect Trump.

If the president ever bothered to read anything on the subject, or listen to credible economists, the U.S. Chamber of Commerce, Wall Street investors and representatives of American manufacturers, he would know that. But, since he thinks he’s smarter than everyone else, he refuses to listen.

Instead, he’s doubling down. He just declared he’ll raise the tariffs on Mexican produce and manufactured goods by 5% a month until they reach 25% unless Mexico stops the immigrants who cross Mexico to seek asylum in the U.S.

He’s also removing India from the preferential trade program, known as the Generalized System of Preferences, which gave India easier access to U.S. markets and lowered duties on goods we import from them. That will result in higher prices Americans pay for fabrics, washing machines, solar cells, jewelry, auto parts, agricultural products and other goods we get from India.

Where are most of the GOP members of Congress who represent American manufacturers, workers and farmers? They’re hiding under their desks with their hands over their ears, hoping their faithful constituents won’t notice that they’re too cowardly to confront a president who is ignorant about almost everything and cares about no one but himself.

So, plant a big garden, learn how to preserve food, and be prepared to pay more for almost everything. Oh, and vote in 2020.

Pat Nash has lived in the Baraboo area, off and on, for more than

35 years. Contact her at patnash5149@gmail.com.

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