U.S. and China announce new tariffs in escalation of trade war

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President Trump followed through Friday on his threat to crack down on China for its “very unfair” trade practices, imposing a 25 percent tariff on $50 billion in Chinese imports.

Beijing quickly responded. In a late-night statement, China’s Ministry of Commerce said it would impose trade barriers of the “same scale and the same strength.”

The Chinese government said Trump’s tariffs were “damaging” relations and “undermining the world trade order.”

U.S. and Chinese officials in recent weeks had made progress on a deal that involved up to $70 billion in additional purchases of American products. But the Chinese offer was now “invalid,” the statement said.

Chinese officials, who had signaled their intention to retaliate if Trump went through with his tariff threats, are targeting the president’s supporters in farm states and the industrial Midwest.

Anticipating the Chinese response, the president said the United States would “pursue additional tariffs,” raising the specter of the tit-for-tat trade war that business leaders and many congressional Republicans fear.

In a short White House statement, the president said the import tax would apply to “goods from China that contain industrially significant technologies.”

Friday’s action follows an administration report in March that complained China had forced foreign companies to surrender their technology secrets in return for market access and had pilfered other advanced U.S. technologies through a campaign of cybertheft and investment in Silicon Valley start-ups.

“These practices . . . harm our economic and national security and deepen our already massive trade imbalance with China,” Trump said.

The United States last year ran up a $375 billion deficit in goods trade with China, a figure the president blames on Chinese trade barriers. Most economists say the gap is the result of broader forces such as Americans’ low savings rate.

On April 6, the administration published a proposed list of 1,333 products targeted for tariffs. After hearing objections from business groups, U.S. Trade Representative Robert E. Lighthizer dropped 515 items and added 284 new ones.

As a result, the tariffs will be imposed in two steps. On July 6, customs officers will begin collecting the tax on an initial basket of goods valued at $34 billion, which were on the initial list. The Office of the U.S. Trade Representative (USTR), meanwhile, will field comments on the new items on the list, valued at $16 billion.

“These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs,” the president said.

USTR also plans to establish a process for U.S. companies to request permission to continue importing the targeted items on a duty-free basis, if no alternative suppliers exist.

The Chinese government is pursuing a $300 billion program of subsidies to enable its companies to dominate next-generation technologies such as artificial intelligence, robotics and quantum computing, upping the stakes for Trump’s efforts to preserve U.S. technological secrets.

China has a history of targeting industries such as steel or solar energy for growth, which results in excessive investment by its state-led firms. That, in turn, swamps global markets, driving prices to unsustainable levels and making it all but impossible for private companies to compete, a senior administration official said.

Unless the United States can somehow force China to change its industrial policies, American companies will lose out in a range of advanced technology markets, the official said.
“This is not market capitalism,” the official said, speaking anonymously to brief reporters. “These are state policies where they are targeting certain industries.”
Trump’s complaints about China’s trade practices are shared by many business leaders. But there is little support for using import taxes, which are paid by Americans, as a tool against the Chinese.
“Imposing tariffs places the cost of China’s unfair trade practices squarely on the shoulders of American consumers, manufacturers, farmers and ranchers. This is not the right approach,” said Tom Donohue, president and chief executive of the U.S. Chamber of Commerce.
The U.S. announcement comes at a complex juncture in U.S.-China relations.
Following a summit in Singapore between Trump and North Korean leader Kim Jong Un, Secretary of State Mike Pompeo stopped in Beijing for meetings with President Xi Jinping and other top Chinese leaders.

On Thursday, Pompeo thanked Xi for China’s help with North Korea and even wished the Chinese president a happy birthday.

But at a news conference with China’s foreign minister, Wang Yi, tension over trade was clear. Pompeo said the U.S. trade deficit with China is still too high, and Wang called for Washington to make a “wise choice” on tariffs.

After Trump’s statement Friday, Lu Xiang, a trade expert at the Chinese Academy of Sciences in Beijing, warned that relations between the two countries were heading to their lowest point since China began its economic reforms in the late 1970s.

“This is like holding up a pistol, putting the finger on the trigger,” he said of Trump’s actions. “It’s just one step away from pulling the trigger and firing the pistol. It’s a very dangerous and sensitive moment now.”

by David J. Lynch and Emily Rauhala/WAPO

Posted by The NON-Conformist

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China Hits Back On Trade Dispute, Slapping Tariffs On 128 U.S. Products

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Imported nuts from the United States are displayed for sale at a supermarket in Beijing, Monday, April 2, 2018. China raised import duties on U.S. pork, fruit and other products Monday.

Andy Wong/AP

China announced late Sunday that it would retaliate for the Trump administration’s tariffs on steel and aluminum by imposing its own import charges on a list of 128 U.S. goods, including agricultural products ranging from fruit to frozen pork.
The new tariffs, which China’s Ministry of Finance says begin on Monday, add fuel to what many economists fear is a burgeoning trade war between the two economic superpowers.
Beijing said it was suspending its obligations to the World Trade Organization to reduce tariffs on U.S. goods and would instead impose a 15 percent tariff on 120 U.S. goods, including fruit.
On pork and seven other products, the duty would be 25 percent, the Ministry of Commerce said, according to Xinhua news agency.

Beijing had warned last month that it was considering the tariffs on a range of products. It seems to have followed that script. Other items include wine and nuts, as well as aluminum scrap.

The ministry said the U.S. had “seriously violated” the free-trade principles in the WTO rules.

“China’s suspension of some of its obligations to the United States is its legitimate right as a member of the World Trade Organization,” the Chinese finance ministry said in a statement, according to Reuters.

The differences between the two countries should be resolved through dialogue and negotiation, the statement added.

The salvo from China follows the U.S. imposition of tariffs of 25 percent on steel and 10 percent on aluminum that were initially applied to several trading partners. However, the European Union, Argentina, Australia, Brazil, Canada, Mexico and South Korea have all since been temporarily exempted, while the White House has threatened further tariffs on China.

Last month, President Trump set in motion a further $60 billion in tariffs on Chinese imports to punish Beijing over the “theft” of intellectual property.

The South China Morning Post writes:

“… Beijing has so far held fire against major agricultural products such as soybeans or major industries such as aerospace giant Boeing – items that state-run daily Global Times suggests should be targeted.

The nationalistic newspaper said in an editorial last week that China has ‘nearly completed its list of retaliatory tariffs on US products and will release it soon.’

‘The list will involve major Chinese imports from the US,’ the newspaper wrote, without saying which items were on the document.”

By Scott Neuman/NPR

Posted by The NON-Conformist

Charles Koch blasts Trump’s steel and aluminum tariff plan

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Billionaire conservative megadonor Charles Koch slammed President Donald Trump’s announced plans to impose fresh tariffs on steel and aluminum imports in a Washington Post op-ed, arguing that such policies would do far more harm than good for the U.S., both economically and culturally.

Image: Bo Rader/The Wichita Eagle via AP Photo

“Just as the United States benefits from the ideas and skills that opportunity-seeking immigrants bring with them, free trade has been essential to our society’s prosperity and to people improving their lives,” Koch wrote in his op-ed, published online Wednesday night. “Countries with the freest trade have tended to not only be the wealthiest but also the most tolerant. Conversely, the restriction of trade — whether through tariffs, quotas or other means — has hurt the economy and pitted people against each other.

“Without a doubt, those who can least afford it will be harmed the most. Having just helped consumers keep more of their money by passing tax reform, it makes little sense to take it away via higher costs,” Koch wrote.

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Five myths about why the South seceded

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One hundred fifty years after the Civil War began, we’re still fighting it — or at least fighting over its history. I’ve polled thousands of high school history teachers and spoken about the war to audiences across the country, and there is little agreement even about why the South seceded. Was it over slavery? States’ rights? Tariffs and taxes?

As the nation begins to commemorate the anniversaries of the war’s various battles — from Fort Sumter to Appomattox — let’s first dispense with some of the more prevalent myths about why it all began.

1. The South seceded over states’ rights.

Confederate states did claim the right to secede, but no state claimed to be seceding for that right. In fact, Confederates opposed states’ rights — that is, the right of Northern states not to support slavery.

On Dec. 24, 1860, delegates at South Carolina’s secession convention adopted a “Declaration of the Immediate Causes Which Induce and Justify the Secession of South Carolina from the Federal Union.” It noted “an increasing hostility on the part of the non-slaveholding States to the institution of slavery” and protested that Northern states had failed to “fulfill their constitutional obligations” by interfering with the return of fugitive slaves to bondage. Slavery, not states’ rights, birthed the Civil War.

South Carolina was further upset that New York no longer allowed “slavery transit.” In the past, if Charleston gentry wanted to spend August in the Hamptons, they could bring their cook along. No longer — and South Carolina’s delegates were outraged. In addition, they objected that New England states let black men vote and tolerated abolitionist societies. According to South Carolina, states should not have the right to let their citizens assemble and speak freely when what they said threatened slavery.

A Confederate flag is still flying on the grounds of South Carolina’s state capitol, even after a white gunman was accused of killing nine black churchgoers at an AME church in Charleston, S.C. Here’s a closer look at why the flag isn’t at half-staff or even off the grounds completely. (Jorge Ribas/The Washington Post)

Other seceding states echoed South Carolina. “Our position is thoroughly identified with the institution of slavery — the greatest material interest of the world,” proclaimed Mississippi in its own secession declaration, passed Jan. 9, 1861. “Its labor supplies the product which constitutes by far the largest and most important portions of the commerce of the earth. . . . A blow at slavery is a blow at commerce and civilization.”

The South’s opposition to states’ rights is not surprising. Until the Civil War, Southern presidents and lawmakers had dominated the federal government. The people in power in Washington always oppose states’ rights. Doing so preserves their own.

2. Secession was about tariffs and taxes.

During the nadir of post-civil-war race relations — the terrible years after 1890 when town after town across the North became all-white “sundown towns” and state after state across the South prevented African Americans from voting — “anything but slavery” explanations of the Civil War gained traction. To this day Confederate sympathizers successfully float this false claim, along with their preferred name for the conflict: the War Between the States. At the infamous Secession Ball in South Carolina, hosted in December by the Sons of Confederate Veterans, “the main reasons for secession were portrayed as high tariffs and Northern states using Southern tax money to build their own infrastructure,” The Washington Post reported.

These explanations are flatly wrong. High tariffs had prompted the Nullification Controversy in 1831-33, when, after South Carolina demanded the right to nullify federal laws or secede in protest, President Andrew Jackson threatened force. No state joined the movement, and South Carolina backed down. Tariffs were not an issue in 1860, and Southern states said nothing about them. Why would they? Southerners had written the tariff of 1857, under which the nation was functioning. Its rates were lower than at any point since 1816.

3. Most white Southerners didn’t own slaves, so they wouldn’t secede for slavery.

Indeed, most white Southern families had no slaves. Less than half of white Mississippi households owned one or more slaves, for example, and that proportion was smaller still in whiter states such as Virginia and Tennessee. It is also true that, in areas with few slaves, most white Southerners did not support secession. West Virginia seceded from Virginia to stay with the Union, and Confederate troops had to occupy parts of eastern Tennessee and northern Alabama to hold them in line.

However, two ideological factors caused most Southern whites, including those who were not slave-owners, to defend slavery. First, Americans are wondrous optimists, looking to the upper class and expecting to join it someday. In 1860, many subsistence farmers aspired to become large slave-owners. So poor white Southerners supported slavery then, just as many low-income people support the extension of George W. Bush’s tax cuts for the wealthy now.

Second and more important, belief in white supremacy provided a rationale for slavery. As the French political theorist Montesquieu observed wryly in 1748: “It is impossible for us to suppose these creatures [enslaved Africans] to be men; because allowing them to be men, a suspicion would follow that we ourselves are not Christians.” Given this belief, most white Southerners — and many Northerners, too — could not envision life in black-majority states such as South Carolina and Mississippi unless blacks were in chains. Georgia Supreme Court Justice Henry Benning, trying to persuade the Virginia Legislature to leave the Union, predicted race war if slavery was not protected. “The consequence will be that our men will be all exterminated or expelled to wander as vagabonds over a hostile earth, and as for our women, their fate will be too horrible to contemplate even in fancy.” Thus, secession would maintain not only slavery but the prevailing ideology of white supremacy as well.

4. Abraham Lincoln went to war to end slavery.

Since the Civil War did end slavery, many Americans think abolition was the Union’s goal. But the North initially went to war to hold the nation together. Abolition came later.

On Aug. 22, 1862, President Lincoln wrote a letter to the New York Tribune that included the following passage: “If I could save the Union without freeing any slave, I would do it; and if I could save it by freeing all the slaves, I would do it; and if I could save it by freeing some and leaving others alone, I would also do that. What I do about slavery and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union.”

However, Lincoln’s own anti-slavery sentiment was widely known at the time. In the same letter, he went on: “I have here stated my purpose according to my view of official duty; and I intend no modification of my oft-expressed personal wish that all men every where could be free.” A month later, Lincoln combined official duty and private wish in his preliminary Emancipation Proclamation.

White Northerners’ fear of freed slaves moving north then caused Republicans to lose the Midwest in the congressional elections of November 1862.

Gradually, as Union soldiers found help from black civilians in the South and black recruits impressed white units with their bravery, many soldiers — and those they wrote home to — became abolitionists. By 1864, when Maryland voted to end slavery, soldiers’ and sailors’ votes made the difference.

5. The South couldn’t have made it long as a slave society.

Slavery was hardly on its last legs in 1860. That year, the South produced almost 75 percent of all U.S. exports. Slaves were worth more than all the manufacturing companies and railroads in the nation. No elite class in history has ever given up such an immense interest voluntarily. Moreover, Confederates eyed territorial expansion into Mexico and Cuba. Short of war, who would have stopped them — or forced them to abandon slavery?

To claim that slavery would have ended of its own accord by the mid-20th century is impossible to disprove but difficult to accept. In 1860, slavery was growing more entrenched in the South. Unpaid labor makes for big profits, and the Southern elite was growing ever richer. Freeing slaves was becoming more and more difficult for their owners, as was the position of free blacks in the United States, North as well as South. For the foreseeable future, slavery looked secure. Perhaps a civil war was required to end it.

As we commemorate the sesquicentennial of that war, let us take pride this time — as we did not during the centennial — that secession on slavery’s behalf failed.

James W. Loewen/Opinion/washingtonpost

Posted by The NON-Conformist

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