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Trump's $60billion tariff toward China tech goods will hurt foreign component [Copy link] 中文

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Post time 2018-4-3 04:06:11 |Display all floors
This post was edited by tenderloin at 2018-4-3 04:07

China buy alot of components from US, Korea, Taiwan for its tech goods currently.

Trump's tariffs will shoot himself at the foot. Hurting himself

With exception to Huawei,
China semiconductor components won't be ready for another 3 to 4 years.

Haha, funny tariff!!

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Post time 2018-4-4 07:56:50 |Display all floors
This post was edited by markwu at 2018-4-4 07:58

U.S. Announces Tariffs on $50 Billion of China Imports
Wall Street Journal \ April 3 2018

WASHINGTON—The Trump administration detailed plans for steep tariffs it will impose on some $50 billion of imports from China unless it makes big trade and investment concessions soon, a broadside that represents the U.S.’s most powerful challenge in decades to Beijing’s economic practices.

The imports targeted for 25% levies reached across the U.S. economy, from high-tech industries like medicine, aviation and semiconductor machinery to intermediate goods like machinery and chemicals, as well as such consumer standards as dishwashers, snow plows and motorcycles, according to the U.S. Trade Representative.

None of the tariffs goes into effect immediately.  Instead, U.S. companies have until May 22 to raise objections to them, with a public hearing on the issue scheduled for May 15.  USTR has been trying to create a list that would maximize harm to China and minimize disruption to U.S. industry and consumers.  USTR said the tariff impact is comparable to the harm caused by Beijing’s pressure on U.S. companies to transfer technology against their will.

Early reaction from the high-tech industry was negative.

“If history is any indication, these proposed tariffs will not work and will be entirely counterproductive,” said Dean Garfield, president of the Information Technology Industry Council. “Tariffs penalize U.S. consumers by increasing prices on technology products and will not change China’s behavior.”

U.S. companies have increasingly complained that Beijing is using regulations and market pressure to force them to do business in China via joint ventures and then transfer important technology to their Chinese partner. But they worry that tariffs on Chinese goods will make matters worse. That’s because their costs would rise and they could become subject to retaliation from Beijing.

The U.S. government is pushing ahead anyway. Washington worries that Chinese cyber espionage and unfair government subsidization are helping China leapfrog technology and eventually can put the U.S. at a disadvantage militarily.

“We intend to get along with China, but we have to do something very substantial about the trade deficit,” President Donald Trump said earlier in the day. “I campaigned on that, I talked about that.”

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Post time 2018-4-4 08:24:20 |Display all floors
and some comments by WSJ readers:

We seem to forget that U.S. manufacturers have looked abroad to manufacturer their products at the least cost. Why? To maximize their profit and earnings per share, therein satisfying the expectations of their shareowners. Resulting in a trade imbalance.

It's interesting to note that Art. I Sec. 8 of the Constitution defines that  Congress has the responsibility to lay and collect "imposts," e.g., tariffs.

However, over time Congress abdicated that responsibility to the president given its inability to effectively function in that regard. So, we've got what we've got. Congress needs to do their job as prescribed by the Constitution and return the levying of tariffs to Congress.  (Grant Hooper)

Well another 400 points down tomorrow I guess, 500 if we get some morning tweets. (Wayne Gregersen)

Jobs go where the cost of labor is lowest.  You should know that.  The only way, in which new factories will be competitive, is if they are so heavily automated, that their labor costs are low.  That means a pitiful handful of factory jobs for the Trump voters.  

Test your memory.  Does anyone remember when Trump told China that Trump would put trade issues on the shelf, if China would enforce the UN embargo of North Korea?  Now Trump thinks that he does not need China's help with NK, because he and Rocket Man are buddies.  So Trump declares a trade war on China.  But can you think further ahead than Trump can?

What happens if the NK summit meeting comes to nothing, and the nukes remain?  (Michael Quick)

A totally junk story ...are we going to let all our jobs be taken over by China .....there has to be a balance and we are not getting it.  The US has got to stop pricing ourselves out of the job market by stupid taxation and the unions have got to be pulled back or allow “right to work” legislation.  (Ken Cosgrove)

Let's look at the pure political aspects. China will retaliate with proportional tariffs but I'm estimating that they will probably cave in and make concessions, hopefully ending this nascent tariff war before summer. That could be a difficult path, depending on unknown details. If Trump fails, the economic damage could be profound. If he succeeds, it could bolster him in November.

As much as I dislike Trump's economic policies, I've been reading complaints that China has forced American companies to effectively hand over their American IP assets when doing business in China.

The real question for the stock market is how much volatility and damage to stock valuations will occur before we return to full trade with China. Then there's the bigger danger that Trump may not accept it if American companies protest the tariffs in the their May talks with him.

In the meantime, the stock market is headed for a royal beating. Once it slips below support, it could become a lasting bear market.  (Perry Eoveno)

Look at pure poltical aspects...Trump only has a few months left to claim a victory...If I were China, I won't make concession, at least not in 2018... (Yichuan Liu)

Good point. China might avoid negotiation until after the mid-term elections in order to sabotage the GOP in November. Oh the drama for the stock market! (Perry Eoveno)

Trump is desperately looking to claim a win... China knows that (Yichuan Liu)

In a better world, we might solve the IP problem, we might all win and have economic and cultural peace. But with Trump, there is no stability or grass roots togetherness. He's quick on the trigger. (Perry Eoveno)

Economists pretty much agree on the two most of important reasons why the US has lost manufacturing jobs:

1. The main reason is displacement through technological advances.  This is true for all advanced economies.

2. Labor cost in the US (and other advanced economies) is much higher than in China.  Unless you want to lower wages dramatically, this cost advantage will persist.  Before China, it was Japan, in the future it will be South Korea and others.

That is not to say that there are issues with intellectual property theft and import barriers on some products.  But a trade war will not fix those.  Restricting trade MUST lead lower wages and/or higher prices.  

Trump is dumb and always has been dumb.  Tomorrow he will declare that 1+1=3 and that the fake news media has manipulated people for thousands of years to think that 1+1=2.  Five minutes later, a headline will appear on on Fox saying that the "President" is a genius and has proven mathematics wrong.  Many commenters will write that Hillary was responsible for teaching wrong maths to our children.  (Martin Lettau)

Again: Protectionism = stagnation & inefficiency
Protectionism is a WEAK & INEFFECTIVE strategy - alwayshas been & always will be! (Glenn Kelley)

The "average" person in China genuinely regards the government as doing what is good for the country and they see it as something that makes their life better.  I'm not making that up, that's pretty much the way they see it.  They are mostly bewildered at why the US does the things it does in the way they do it.  And, they will blame the government if something goes really wrong.  They aren't ignorant about that.  Mostly, they are concerned about making a living, and if China "cheats" a little in trade, they don't see that as being a big deal.

... It's not just cost.  it's also the supply chain for components.  Southern China has been the center for that.  Alot of the components are not even made in the US.  They never have been since alot of this production started after China was open for business.

This thing reminds me of what I heard a person from North Vietnam say about the war with the US.  He said, fighting a war with the US is like subduing an intruder who breaks into your house in the night.  You may subdue him, but when you turn the lights on, everything in the house is smashed.  A trade war with China may be "easy to win" as far as Trump is concerned, but our "houses" are going to get smashed in the process.  What kind of "winning" is that?  (John McKay)

And the cost to train and education, etc. I won't consider assembling iphone a easy task that can be done by "slave labors"  (Yichuan Liu) help you understand this concept is very simple.....a Tariff is a tax on the goods that other countries ship into the USA.....the problem is that it’s the American people who pay the ready to pay more taxes? (Alan Lanctot)


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Post time 2018-4-4 08:34:04 |Display all floors
This post was edited by markwu at 2018-4-4 08:47

Trump administration targets $50 billion in Chinese electronics, aerospace and machinery goods with tariffs
Washington Post \ April 3 2018

The Trump administration Tuesday unveiled a list of about $50 billion in Chinese electronics, aerospace and machinery products it plans to hit with steep tariffs, the latest move in a deepening U.S.-China trade conflict.

The new 25 percent import taxes are designed to penalize China for discriminatory policies that the United States says puts its companies at a disadvantage in the Chinese market. President Trump has complained that the Chinese government forces U.S. companies to surrender their proprietary technology in return for access to local customers and steals other trade secrets via cybertheft.

Trump’s latest protectionist move threatens to upend global supply chains for corporations such as Apple and Dell, raise prices for American consumers who have grown accustomed to inexpensive electronics, and aggravate tensions between the world’s two largest economies.

“The pain will be very visible and the potential gains will be very abstract. The administration hasn’t prepared the U.S. for the downsides of a trade war,” said Brad Setser, a former White House economist in the Obama administration.

The Chinese Embassy said Tuesday that it “strongly condemns and firmly opposes” the U.S. action. “As the Chinese saying goes, it is only polite to reciprocate. The Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against U.S. products in accordance with Chinese law,” the embassy said in a statement.

With just seven months before congressional elections, a worsening trade war with China could pose a political challenge for the president, who promised his supporters he would overhaul U.S. trade policy to benefit American workers.

Voters disapproved of Trump’s handling of trade policy by 54 percent to 34 percent in the latest Quinnipiac University poll, with only Republicans and white voters without a college education backing his tariff offensive.

In acting, the president swept aside opposition from business groups such as the U.S. Chamber of Commerce and the National Association of Manufacturers, which agree that China’s mercantilist policies must be confronted but fear the consequences of a tit-for-tat trade conflict.

“If history is any indication, these proposed tariffs will not work and will be entirely counterproductive. Tariffs penalize U.S. consumers by increasing prices on technology products and will not change China’s behavior,” said Dean Garfield, chief executive of the Information Technology Industry Council, which represents companies such as Apple, Dell, IBM and Google. “Instead, the administration should act consistent with international obligations and work with other countries to address systemic issues with China.”

The Office of the U.S. Trade Representative released a list of 1,300 proposed tariff increases, but set a 30-day period for receiving comments from affected businesses. That pause leaves an opening for the sort of negotiated settlement that business groups favor.

In compiling the list, U.S. officials used algorithms to identify products that benefited from China’s state-directed campaign of technology acquisition while eliminating those whose inclusion would disrupt the U.S. economy.

The list was drafted to achieve “the lowest consumer impact,” according to Robert E. Lighthizer, the U.S. trade representative. So, clothing and toys were excluded.

But Rick Helfenbein,chief executive of the American Apparel and Footwear Association, said that machinery used to make footwear or clothing will be hit with tariffs. “This would directly raise costs on domestic manufacturers and impact our ability to grow Made in USA,” he said in a statement.

Parts for trash compactors, molds for the manufacture of semiconductors, motors, generators, cassette players, smart cards and high-definition color video projectors dotted the list along with items such as rocket launchers and torpedoes.

The administration’s estimate of $50 billion of affected Chinese imports is designed to balance the harm to the U.S. economy from China’s technology practices and “to obtain elimination of China’s harmful acts, policies and practices,” Lighthizer wrote in a statement accompanying the tariff list.

Douglas Irwin, author of “Clashing Over Commerce: A History of U.S. Trade Policy,” said Trump’s action is one of the largest trade moves in more than three decades. In previous episodes, the United States has wielded tariffs as a tool to compel Japan or the European Union to negotiate trade conflicts, he said.

But both the E.U. and Japan were U.S. allies that shared a market orientation while China is a strategic adversary commanding a state-led economy.

“It’s an enormous retaliation relative to what we were doing with Japan in the 1980s,” said Irwin, an economics professor at Dartmouth College. “The chances of it not working out well is much higher in this case than it was with the E.U. and Japan.”

Beijing earlier this week imposed tariffs on about $3 billion in American goods, in response to separate U.S. import levies on steel and aluminum. That has kept the commercial conflict between the two economic giants contained.

But if China responds to this latest tariff action on a dollar-for-dollar basis, it could damage more than one-third of total U.S. exports to China and Hong Kong, said Setser, a senior fellow for international economics at the Council on Foreign Relations.

The United States shipped more than $130 billion in goods to China last year, plus an additional $40 billion to Hong Kong, much of which flows through the port city to the mainland.

Chinese action of that magnitude would impose substantial costs on both China’s economy and that of the United States.

U.S. farm groups are especially worried about being caught in the crossfire. China’s response to Trump’s steel and aluminum tariffs landed hardest on the agricultural sector, including products such as fruit, wine and pork.

Future Chinese action is likely to hit the farm belt even harder. The United States exported $12.4 billion worth of soybeans to China last year, according to the U.S. Agriculture Department, down almost 13 percent from the year earlier as Chinese buyers began turning to alternative suppliers such as Brazil.

In Evansville, Ind., Joe Steinkamp, 52, raises soybeans and white corn on a 1,500-acre plot his family has farmed for 100 years. He exports about one-third of his soybean crop to China, so if the Chinese shun American suppliers, he risks losing around $170,000 in annual income.

“We’re all about trade with China. We spent the last 25 years building that trade relationship,” Steinkamp said. “I appreciate the president looking out for our entire country. We just don’t want soybeans to be the fall guy and take all the punches from the Chinese.”

(and ...1,202 comments followed)

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Post time 2018-4-4 08:54:26 |Display all floors
This post was edited by markwu at 2018-4-4 08:57

Donald Trump threatens tariffs on Chinese industrial goods                                                                        

Duties of25% planned for products ranging from robots and trains to snowblowers

Financial Times UK \ April 3 2018

The Trump administration revealed plans for a 25 per cent tariff on 1,333 Chinese products ranging from industrial robots to locomotives in retaliation for what it said had been decades of state-backed intellectual property theft by Beijing.

The list released on Tuesday covers imports worth some $50bn last year and represents the most aggressive US trade response to China’s actions since President Richard Nixon normalised diplomatic relations in the 1970s.

Although the tariffs are unlikely to go into effect for several weeks, the US announcement prompted an immediate threat of retaliation by China, raising fears of a trade war between the world’s two largest economies.

The move follows the release of the results of an investigation into Beijing’s intellectual property practices that President Donald Trump ordered last year. It also comes as Mr Trump says the US has begun negotiations with Beijing aimed at reducing the US’s $375.2bn trade deficit in goods with China.

“Our relationship is very good with China, and we intend to keep it that way,” Mr Trump told reporters on Tuesday. “But we have to do something to seriously relieve that trade deficit.”He also pointed to the theft of intellectual property by China that he said “probably is in the neighbourhood of $200bn to $300bn”.

“We have a very, very powerful country,” Mr Trump said. “But we have to do something on trade with certain countries. And, obviously, China is the leader in terms of deficits. We’ve never had a situation where a country — nor has there ever been in history a situation where a country has done that to another country.”

The list of targeted products ranges from vaccines and other medicines to snowblowers, golf carts, electric cars, jet engines, nuclear reactor parts, guns and other military weapons. It also includes many agricultural tools and components such as LED lights and video displays that US companies may use as parts.  Excluded were consumer products such as clothes and shoes.   

In a statement the Chinese embassy in Washington condemned the Trump administration’s list and vowed to retaliate.

“Such unilateralistic and protectionist action has gravely violated fundamental principles and values of the WTO [World Trade Organization].  It serves neither China’s interest, nor [the] US interest, even less the interest of the global economy,” the embassy said.

“As the Chinese saying goes, it is only polite to reciprocate. The Chinese side will resort to the WTO dispute settlement mechanism and take corresponding measures of equal scale and strength against US products in accordance with Chinese law.”

Robert Lighthizer, the US trade representative, said in a statement that the list of products was designed to target Chinese industrial policies, including President Xi Jinping’s “Made in China 2025” call to establish a world-leading presence in sectors such as robotics and high-speed rail.

But Mr Lighthizer said the list had been refined to remove products that would cause disruptions to the US economy or harm US consumers.

Though Mr Trump and top aides have vowed to follow through with the tariffs, Mr Lighthizer said his office would take public comments for 30 days and hold a public hearing on May 15.

That means any tariffs are unlikely to go into force before the end of May or early June.China has already vowed to respond in kind to US trade actions.

On Monday, China unveiled retaliatory duties on US food imports including pork, fruit, nuts and wine of up to 25 per cent as a response to the Trump administration’s new tariffs on steel and aluminium imports.

If China responds to the new round of tariffs by targeting the same amount of US trade, almost half of the record $130bn in exports to China last year could be exposed to retaliatory duties.

This has worried American farmers, particularly producers of commodities such as soybeans, of which the US exported $12.6bn to China in 2017.

Max Baucus, a former senator from Montana and US ambassador to China who now serves as the co-chairman of the lobby group Farmers for Free Trade, said farmers were being “squeezed from all sides” by the Trump administration’s attack on China.

“First, the tariffs the US announced today will make the [agricultural] equipment and inputs they rely on more expensive. Then they will face new tariffs on their exports when China retaliates,” Mr Baucus said.

“American farmers are watching this daily trade escalation closely, and they are worried.”

US business groups have called for the Trump administration to rethink its plan for tariffs, arguing that while they shared its concerns about China’s intellectual property regime the White House plan amounted to new taxes on US consumers and businesses.

“The administration is rightly focused on restoring equity and fairness in our trade relationship with China. However, imposing taxes on products used daily by American consumers and job creators is not the way to achieve those ends,” said Myron Brilliant, the head of international affairs at the US Chamber of Commerce.

Edward Alden, a senior fellow at the Council on Foreign Relations, said the list released on Tuesday was light on consumer products but would likely draw an angry reaction from some US manufacturers dependent on inputs from China.

“This is not going to hit your average Walmart customer very hard,” he said.  

But “a lot of it looks like intermediate inputs into manufacturing and that is going to generate a very strong reaction and undercuts a lot of the core goal of the Trump administration to restore US manufacturing”.

The 25 per cent tariff also stood in contrast to the 100 per cent or higher duties that the Reagan and other administrations imposed on goods from Japan in the 1980s and 1990s.

That, Mr Alden said, could result in raising prices for US companies rather than blocking Chinese imports altogether.

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Post time 2018-4-4 20:59:23 |Display all floors
Ceciliamistress Post time: 2018-4-4 02:18
Isn't it SIMPLE of the current 'We have no choice' situations between the U.S. & Chinese government? ...

We must also be mindful that newcomers are creations of western propagandists.
If capitalism promotes innovation and creativity then why aren't scientists and artists the richest people in a capitalist nation?

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Post time 2018-4-4 21:14:47 |Display all floors
Ceciliamistress Post time: 2018-4-4 05:11
Who's barking there, what for, for whom?  Please take away your pet home dear owner of the noisy dog ...

Newcomer, you are making about as much sense as any western propagandist on this forum.
Who's ghost are you?
If capitalism promotes innovation and creativity then why aren't scientists and artists the richest people in a capitalist nation?

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