Just as the trade talks with China were set to wrap up, it seems the fires of the trade war were rekindled with a tweet.
On Sunday, May 5, President Donald Trump tweeted his plan to increase tariffs against China, mere days before a planned meeting between U.S. and Chinese trade negotiators in Washington, D.C.
The pair of tweets read:
“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
“….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
According to the Associated Press and DTN’s Washington Insider, Trump’s threats were spurred by “a downbeat assessment of the state of the talks” between the two countries, delivered by U.S. Trade Representative Bob Lighthizer. Trump described China as having “broke the deal” during a Florida rally on Wednesday, likely referring to numerous edits and reversals on key issues China made to a draft trade agreement that was delivered to the U.S. on Friday, May 3.
According to Reuters, the document “was riddled with reversals by China that undermined core U.S. demands,” including deleting commitments to address issues like theft of intellectual property, forced technology transfers, and currency manipulation.
China responded to Trump’s threat by announcing like-kind retaliatory tariffs against the U.S., saying they would be implemented following the implementation of the increased U.S. tariffs. This has been the Chinese pattern demonstrated throughout this conflict.
Chinese trade negotiators were scheduled to be in Washington, D.C. on Thursday and Friday last week to continue talks. No outcomes of those talks were announced as of press time.
Who really pays?
Despite the president’s claims that China has been paying the tariffs, economists ranging from academia, industry, and even the government’s own ranks have stated repeatedly that tariffs are paid by U.S. importers of foreign goods. The Associated Press reported that U.S. manufacturers dependent on foreign material, retailers, and other importers have been charged more than $15 billion in the last year, according to federal data, as a result of the tariff war against China.
Though agriculture has not been mentioned in most discussions of the China situation, the tariffs’ impact on U.S. ag is ongoing.
“We’re not in a good way at all,” said Sen. Pat Roberts (R-KS), chairman of the Senate Agriculture Committee, during a lunch meeting with Vice President Mike Pence on Tuesday, according to the Associated Press.
“There’s a lot of feeling in ag country that we’re being used as pawns in this whole business,” Roberts said, but added, “We will benefit tremendously if we get a good deal, so we’re hanging in there with the president.”
In late July 2018, the USDA announced and later began distributing payments to certain producers judged to have been negatively impacted by international retaliatory tariffs against U.S. tariffs, including those from China. The aid package provided up to $12 billion, including $4.7 billion in direct payments to producers.
Beef producers were not eligible for the direct payments. — WLJ
