By on May 8, 2019

The United States made good on a threat to impose higher tariffs on a new raft of Chinese goods Wednesday, days after the the People’s Republic reportedly backtracked on nearly every element of a draft trade deal hammered out by the two countries.

The 25 percent tariff officially hits $200 billion worth of Chinese goods on Friday, according to a Federal Register notice. As we told you yesterday, U.S. trade representatives reportedly took issue with China’s reluctance to change its laws to protect the intellectual property rights of U.S. companies.

According sources who spoke to Reuters, China returned the draft trade deal last Friday — which the U.S. expected to sign at some point this week — with edits made to “all aspects” of the agreement. To the U.S. team, China had reneged on all of its promises.

Top of mind for the team, including U.S. Trade Representative Robert Lighthizer, was seeing legal reform in China to end the practice of forced technology transfers. Companies that do business in that market put themselves at risk of stolen intellectual property that then places the company at a competitive disadvantage.

From Reuters:

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

“This undermines the core architecture of the deal,” said a D.C. source with knowledge of the talks.

President Donald Trump first threatened new tariffs on Sunday. On Wednesday, he took to Twitter to suggest China is playing a game, hoping to one day negotiate a deal with a more lenient Democratic administration.



The White House hopes the new tariffs, poised to hit China at 12:01 a.m. on May 10th, prompts a second U-turn from its trade adversary. Chinese Vice Premier Liu He is scheduled to land in Washington, trade delegation in tow, on Thursday in an attempt to salvage the talks.

[Source: Reuters (via Global News)] [Image: General Motors]

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29 Comments on “Backtrack Blowback: U.S. Makes It Official, Imposes Steep Tariffs on $200 Billion of Chinese Goods...”

  • avatar

    So is the Envision going to die?

    • 0 avatar

      We can only dream. In reality, nothing will change and China will continue to bend us over, regardless of any political posturing by any one administration. They have a long-term view that makes them able to win, while we only care about what is right in front of our face.

      • 0 avatar

        True. China having laws doesn’t mean anything. They also have a constitution that says “citizens of the People’s Republic of China enjoy freedom of speech, of the press, of assembly, of association, of procession, and of demonstration.” They also have a robust system of prison camps for political prisoners who attempt to exercise any of these freedoms.

        China typically agrees to one thing in writing, and then does what it wants. Then calls you stupid for believing them in the first place.

  • avatar

    One of the many, many things Fat Donny fails to realize is that tariffs do *not* ‘fill US coffers’. They just cost consumers more. Companies subject to tariffs pass the costs on as increased prices. An even bigger problem is that other competing manufacturers raise their prices to close to the level of the goods being subjected to tariffs (because of, you know, capitalism and their need to maximize profits and shareholder returns, and because they can).

    Take a hypothetical situation where hamburgers sell for $5, both at chains and local places. Now tariffs are placed on the chains, and their burgers now cost $10. Are the local places going to keep their prices at $5? No. They’re going to raise them to, say, $9.

    The consumer *always* pays in the end.

    • 0 avatar

      “Are the local places going to keep their prices at $5?”

      Depends on the elasticity.

    • 0 avatar

      So, you are saying let’s do nothing ??

      Let’s just bend over and take it ??

    • 0 avatar

      I think your analysis is too polarized. So don’t buy a Chinese toaster, buy one made in Vietnam or Thailand. The American toaster will have to remain competitively priced. Better than seeing our advanced bagel-toasting technologies in the hands of the Chinese via forced technology transfer.

      • 0 avatar

        Btw, good luck finding a US-made toaster on the market. I searched in vain for one and could only find second hand retro units. Everything is made overseas.

        Instead we’re saving for a Dualit toaster hand-built in the UK, but it ain’t cheap. 400 CAD vs 40 CAD for a Chinese unit. We will vote with our wallet.

      • 0 avatar

        Rent-seekers are more mendacious than you can imagine. When Trump raised tariffs on foreign washing machines, not only did American companies raise their washing machine prices to match, they also raise dyer prices, even though dryer tariffs did not rise.

        These tariffs are not taxes on Chinese goods; they are taxes om Americans who buy them. Sure, decreased sales hurts the Chinese, but it hurts Americans directly. $200B in tariffs? That’s a $200B tax increase on Americans.

        Study after study has shown that tariffs cost 5-10 times as much as the jobs saved. IOW, you could save as many jobs with fewer taxes if you used ordinary taxes instead of the inefficient tariffs.

        • 0 avatar

          Prices on US washing machines were artificially suppressed by trying to remain competitive in pricing with dumped and subsidized foreign inputs. Foreign producers weren’t selling in a foreign market. The tariffs simply corrected prices to where they are supposed to be.

          • 0 avatar

            When I tell my European friends about our washing machine prices, they are absolutely shocked. Why are prices for Bosch and Electolux in Europe 1/4 of what they we pay for Whirlpool in the US?

          • 0 avatar

            Probably because, like cars, Americans are buying way more washing machine than they need, with every possible feature. If Europe is anything like Asia, people are buying tiny washing machines suitable for tiny apartments. Meanwhile, I bought my mother a large made-in-Ohio Maytag for about $450 a year ago.

          • 0 avatar

            “Supposed to be”? What is this magic you speak of? Who sets these “supposed to be” prices?

          • 0 avatar
            James Charles

            I just bought a 7kg fully programmable washing machine at Aldi for $299 AUD ($210 USD).

            I bought a dishwasher at Aldi for the same price and they’re guaranteed for 3 years and made in China.

          • 0 avatar

            Supposed to be = fair market prices not undercut by dumped or subsidized competition.

    • 0 avatar
      Art Vandelay

      Assuming all of the burger chains are using Beed subject to the tariff. That likely isn’t the case.

    • 0 avatar
      James Charles

      I agree.

      People who think the tariffs are taxing the Chinese are living in a dream.

      Who are paying those taxes? The American consumer, not China.

      It does cost China US exports, but not taxes.

      “And the jobs, they ain’t goin back to ‘murica”. They are moving elsewhere, Vietnam another Communist nation, so Trump is doing great, not.

      Oddly the rest of the world which is 80% of the global economy is still dealing with China, so in the end the biggest loser will be the US.

      Its sad to see relics managing the US, living in the past. For the US to be as great as it was in the past most of the world needs to be destroyed by war and third world.

  • avatar

    Agreed. First they will toast our bagels, then they will come for our sourdough.

  • avatar

    I hate it when companies red line contracts at the last minute. Usually by that point you are so far down the road you have no choice but to take most of the changes. Every once in awhile it’s significant enough to say No Deal. God it feels fantastic then.

  • avatar

    I think it’s GREAT! The Chinese Taxed and Tariffed the hell out of American-made goods AND stole intellectual property for decades, and the President is now doing to China what they did to America. GO TRUMP!

    • 0 avatar

      “ll second that

    • 0 avatar
      SCE to AUX

      +1. Intellectual property is a big deal, and it’s time to draw a line in the proverbial sand. But the Democrats will find a way to say it doesn’t matter.

      • 0 avatar

        How many Democrats actually possess intellect?

        Don’t misunderstand my question because I started life as a Democrat in a two-union household. My mom and dad belonged to different unions.

        But once they had their fill of the Democrat/union experience, they sought different work and dropped the whole union thanggg.

        I WAS a Republican from 1965 – 1985, a period that coincided with my military career, but I declared myself free of political influence as soon as I retired from the military, thus being able to vote for the most qualified candidate regardless of political party line.

    • 0 avatar
      James Charles

      The US did the same to the EU in the 19th Century and became the best at mass production. That’s what made America Great.

      The Chinese are almost emulating the US. Biggest, mostest, morest.

      I don’t like the Chinese government, but remember, like the US the Chinese will be hard to budge. The Chinese on a PPP basis have a larger economy than the US and the Chinese have a lot of opportunity for the country to develop, the US doesn’t. Competition its called, being a bully seldom wins.

      Maybe Trump should learn about teamwork and leadership with other nations.

      • 0 avatar

        “Maybe Trump should learn about teamwork and leadership with other nations.”

        I can’t speak for him or his administration but from what has come to light about him before and after his election, he has NEVER been a team player, instead forging and slogging his way forward and ahead, taking every advantage he could, where he could (as in tax breaks, write-offs, law suits, defaults) He destroyed people who stood in his way. Just look at Atlantic City.

        Hence his motto, “never give up, never give in….” You may have heard the drill.

        I find Trump’s approach refreshing, a 180-degree change from the apologists and appeasers that have governed the US since Ronald Reagan.

        Trump is GREAT for America. Where the previous administration has brought America down, Trump is building UP America. He certainly has ensured the financial well-being of me and mine for generations to come. Really.

        It’s true that Ronald Reagan was the consummate Diplomat best expressed in his “Mr. Gorbachev, tear down this Wall” speech. Who could refuse that approach?

        Trump is no Diplomat. Trump is no politician. Trump tells it like it is. Trump stands up for Americans!

        Trump is effective!

  • avatar

    Even Walmart couldn’t change Trump’s mind. Expect to pay more for everything plastic.

  • avatar
    James Charles

    I think the Trump administration and his clingons need to exercise caution with negotiations.

    Trump is losing support across the world with some of his ridiculous and odd tactics. Trump is giving the Chinese a freer reign in becoming more dominant. The techniques Trump employs might appeal to the nostalgic deadwood of US society, the has been generation and Nationalists.

    Trump is a bully and those who support his practice will be the first to blame the world for the US not advancing.

    Look at Huawei, even the EU will not support Trump amd Huawei just leap froged Apple in size.

    Bloomberg had a great piece today on what the US needs to do to challenge the Chinese. Become apart of more multilateral trade blocks to counter the Chinese. This makes sense as the US can better influence other nations. But, taxing your close allies unfairly and considering them a security risk will drive them away.

    Like Trumps businesses he’s going to fnck the US, the only difference is bankruptcy laws for countries doesn’t exist.

    The Chinese will respond to the EU, Japan, other Asian nations and the US is they act as one. But Trump’s naive vision that the US can unilaterally survive is doomed for failure.

    We’ll Trump is giving the Chinese a helping hand in the long run.

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