Trump’s trade war hurting US economy - Page 3 - World Affairs - Chinadaily Forum
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Trump’s trade war hurting US economy   [Copy link] 中文

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Post time 2018-8-1 12:52:09 |Display all floors
Boston101 Post time: 2018-8-1 07:08
What the heck are you guys talking about? Unemployment is at its lowest in years and the US economy  ...

You are the one telling lies!  American farmers and consumers were on TV complaining about how badly the tariffs are hurting them; and the governors of Arkansas,Wisconsin, Ohio etc too were seen on TV expressing their concern at the tariffs affecting their states.  Think tanks came out in droves to condemn Trump for recklessly imposing tariffs that end up hurting Americans!  So, who is lying?  Staistics can mislead; that's what happens to you when you rely on them!

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Post time 2018-8-1 19:56:18 |Display all floors
pnp Post time: 2018-8-1 12:52
You are the one telling lies!  American farmers and consumers were on TV complaining about how bad ...

The farmers say it could hurt them. So far only the price has dropped. As I said before, there are only so many soybeans in the world. If China doesn't buy them, someone else will.

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Post time 2018-8-1 23:41:08 |Display all floors
pnp Post time: 2018-8-1 12:52
You are the one telling lies!  American farmers and consumers were on TV complaining about how bad ...

Lol... Us is not hurting economically at all.

Not only do we have the lowest unemployment rate since like 2005 but we just grew at 4.1% last quarter. So we are doing as well as we'd like in growth and employment. GO TRUMP GO!

Farmers will find someone else to sell their beans too and even if they don't their losses will be nothing compared to China's.

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Post time 2018-8-2 10:02:43 |Display all floors
2.  Minnesota is the third largest producer of soybeans in the US.  The crop accounts for 30 percent of the state's agricultural exports. The state shipped more than $2 billion worth of soybeans abroad in 2016. More than half went to China.

The following are excerpts from the April 5, 2018 article, by Star Tribune staff writers Jim Spencer and Tom Meersman, under the headline "Minnesota has millions at stake as China targets soybeans" at startribunedotcom.

(Begin excerpts)
WASHINGTON – Minnesota’s 2018 soybean crop lost $152 million in value in the commodities futures market hours after China threatened Wednesday to place a 25 percent tariff on soybeans imported from the United States.

Commodity futures are in constant flux, the state’s soybean farmers know. But they also see a serious threat should actions ever replace words.

“If the futures price drops 40 cents a bushel on talk, what’s it going to do if this really happens?” asked Bill Gordon, who grows 1,000 acres of soybeans a year on his farm near Worthington.

As the U.S. and China move closer to a trade war, no one involved with Minnesota’s leading agricultural export wants to find out.

“Soybeans are the big dog in the room,” University of Minnesota grain market economist Ed Usset explained. “China will import more soybeans this year than our entire country produced four years ago.”

Minnesota is the nation’s third largest producer of soybeans. The crop accounts for 30 percent of the state’s agricultural exports. The state shipped more than $2 billion worth of soybeans abroad in 2016. More than half went to China.

There are other Minnesota-made products on China’s newly announced list of U.S. products that face 25 percent tariffs in retaliation for President Donald Trump’s plan to place punitive taxes on 1,300 kinds of Chinese imports to America. But none put the state’s economy at more risk than a punitive levy on a little yellow protein-rich bean....

But the Minnesota Soybean Growers Association is so upset that it issued a statement Wednesday “calling on the White House to reconsider the tariffs that led to this retaliation.”

Minnesota-based Cargill urged both countries to “get to the negotiating table to constructively address their concerns with each other in a time-bound manner.”

“The impact of trade conflict between the world’s two largest economies could lead to a destructive trade war with serious consequences for economic growth and job creation,” Cargill said.

Four state legislators — Sen. Torrey Westrom, R-Elbow Lake; Rep. Rod Hamilton, R-Mountain Lake; Sen. Bill Weber, R-Luverne; and Rep. Paul Anderson, R-Starbuck — who lead the agriculture committees in St. Paul issued a joint statement, warning that “foreign tariffs on products like soybeans and pork could be devastating to farmers already struggling with low commodity prices, and threaten Minnesota families, jobs, exports, and our economy.”....

Bob Worth, a 65-year-old soybean farmer in Lake Benton, lived through a trade battle that became more than a war of words when President Jimmy Carter took on the Russians in the late 1970s. “That hurt us significantly,” Worth said. “We lost exports and the value of commodities fell.”

It took years for Worth’s farm to recover....

If the threats turn into actual tariffs, Naeve* said “crazy things” will begin to happen.

“The beans will end up going somewhere,” Naeve added, “but the more we have to shuffle around and swap and do more logistics and transloading and shipping, every one of those things just bites into the price and nibbles away 5 and 10 and 20 and 50 cents a bushel here and there.”

For people such as Mike Petefish, dragging agricultural commodities — especially soybeans — into a trade war makes no sense. The 33-year-old president of the Minnesota Soybean Growers Association farms 5,000 acres of soybeans and corn with his father and his wife.

“Ag is one of the few areas where we have a trade surplus,” Petefish said. “Exporting more soybeans would seem to be an answer.”

Instead, the president’s trade policy has put at risk the very voters who delivered him to the White House.

“Trump,” said Petefish, “has to know that most of his base lies in rural America.”  (End excerpts)

* Seth Naeve is a University of Minnesota Extension soybean agronomist.
"Will a failed businessman-turned-president, who mismanaged and bankrupted four of his own companies, repeat history by bankrupting his country and even the entire world?" – Reedak

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Post time 2018-8-2 11:30:18 |Display all floors
3.  Winter Nie is the regional director of Southeast Asia and Oceania for IMD Business School.  He opined that the result of a US-Sino trade war would be "an economic war of attrition that China is infinitely better positioned to win".  The following are excerpts from Winter Nie's December 22, 2016 article headlined "Why America Would Lose a Trade War With China" at fortunedotcom.

(Begin excerpts)
...If Trump were to impose the 35% to 45% tariffs that he talked about in his campaign, the situation could evolve quickly into a total rupture. But there are a number of intermediate stages that might be painful to both the Chinese and to American companies, but would still leave open trade in certain areas that both sides consider critical. What is certain is that a complete rupture would hurt American companies and China as well, though America will likely be the bigger loser.

....Trump is entering uncharted waters. The danger is in thinking that talking tough to China will produce positive results. It won’t. From Beijing’s perspective, international trade takes a second seat to internal politics. Chinese President Xi Jinping’s top priority is to maintain political stability. He cannot lose face in his relations with a new administration in Washington and hope to retain power at home. He especially cannot deal with an American president who the Chinese feel fails to show proper respect for China itself. And, now that China has emerged as the world’s second most powerful economy, he really doesn’t have to.

A trade war would be problematic, but it would not be a disaster for China, mainly because the U.S. needs China more than vice versa. Twenty years ago, the situation might have been different. China was dramatically underdeveloped, and it wanted access to Western technology and manufacturing techniques. China has most of what it needs now, and what it doesn’t have it can easily obtain from vendors outside the U.S. While the American market looked enticing a few decades ago, it is relatively mature, and today the newer emerging market countries have become much more interesting to Beijing.

Although a good deal of American high tech equipment is manufactured in China, the lion’s share of the profits go to the American companies that designed the equipment. If that were to stop, American companies would be hurt more than Chinese manufacturers.

The fastest growing markets for the best items China produces, like laptop computers and cell phones, are in developing regions such as India, Latin America, and Africa. In contrast, China itself is a market that the U.S. can hardly ignore. By the end of 2015, Chinese consumers bought 131 million iPhones. The total sales to U.S. customers during the same period stood at only 110 million. And iPhones are only a small part of U.S. exports. Boeing, which employs 150,000 workers in the U.S., estimates that China will buy some 6,810 airplanes over the next 20 years, and that market alone will be worth more than $1 trillion.

Were Trump to start a trade war, the most immediate effects would probably be felt by companies like Walmart, which import billions of dollars of cheap goods. The prices on almost all of these items would quickly skyrocket beyond the reach of the lower economic brackets—not because of manufacturing costs, but because of the tariffs. The result would be an economic war of attrition that China is infinitely better positioned to win.

China’s foreign currency reserves now stand at more than $3 trillion. In contrast, the U.S. has foreign exchange reserves that hover at around $120 billion. Trump’s tariffs would automatically trigger penalties against the U.S. in the World Trade Organization (WTO), and might even lead to the WTO’s collapse, which would lead to higher tariffs against U.S. exports. While it might take a while for that to happen, the turmoil would be catastrophic for American business and employment. China, on the other hand, would emerge relatively unscathed.

In fact, the importance of the U.S.-China relationship is already being challenged by other players. Apple’s iPhone sales in China are running into competition from local Chinese manufacturers, and Samsung is more than happy to fill any void that the Chinese can’t deal with. Likewise, the Chinese would happily shift their trillion dollars in future aircraft purchases to Airbus a European firm that is already building a plant in China to finish assembly of large, twin-aisle jets. As for automobiles, most Chinese would just as soon drive a Mercedes, BMW, or Lexus as a Ford.

Trump’s abandonment of existing U.S. trade agreements would accelerate China’s displacement of America as the world’s leading economic power. Both China leading economic experts hope that won’t happen quite yet, but almost anything is possible.  (End excerpts)
"Will a failed businessman-turned-president, who mismanaged and bankrupted four of his own companies, repeat history by bankrupting his country and even the entire world?" – Reedak

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Post time 2018-8-2 16:38:18 |Display all floors
Boston101 Post time: 2018-8-1 19:56
The farmers say it could hurt them. So far only the price has dropped. As I said before, there are ...

" So far only the price has dropped"

That's why they are hurting and complaining!  China has shifted to buying from Brazil.

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Post time 2018-8-3 05:50:36 |Display all floors
4.  The following are excerpts from the July 12, 2018 article headlined "Trump trade war pain: Small U.S. firms hit by import, export tariffs as years of efforts go down the drain" at japantimesdotcodotjp.

(Begin excerpts)
NEW YORK – Time and effort have gone down the drain for Steve Gould, who is scrambling to find new customers for his gin, whiskey and other spirits since the United States has taken a tough stance on trade issues.

Before the European Union retaliated against new U.S. tariffs with taxes of its own, Gould expected revenue from the EU at his Golden Moon Distillery in Colorado to reach $250,000 or $350,000 this year. Now he’s concerned that European exports will total just $25,000. Golden Moon already saw an effect when then-candidate Donald Trump made trade an issue during the 2016 campaign. Gould lost one of his Mexican importers and an investor, as overseas demand for small-distiller spirits was growing.

“We’ve lost years of work and hundreds of thousands of dollars in building relationships with offshore markets,” says Gould, who’s hoping to find new customers in countries like Japan.

President Donald Trump’s aggressive trade policies are taking a toll on small U.S. manufacturers. The president has imposed tariffs of 25 percent on steel and 10 percent on aluminum imports from most of the world, including Europe, Mexico and Canada, driving up costs for companies that rely on those metals. And he has slapped 25 percent taxes on $34 billion in Chinese imports in a separate trade dispute, targeting mostly machinery and industrial components so far. Trump’s tariffs have drawn retaliation from around the world. China is taxing American soybeans, among other things; the European Union has hit Harley-Davidson motorcycles and Kentucky bourbon; Canada has imposed tariffs on a range of products — from U.S. steel to dishwasher detergent.

More businesses could be feeling the pain as the trade disputes escalate — the administration on Tuesday threatened to impose 10 percent tariffs on thousands of Chinese products, including fish, apples and burglar alarms. And China responded with a tariff threat of its own, although it didn’t say what U.S. exports would be targeted.

Small businesses are particularly vulnerable to tariffs because they lack the financial resources larger companies have to absorb higher costs. Large companies can move production overseas — as Harley-Davidson recently announced it would do to escape 25 percent retaliatory tariffs in Europe. But “if you’re a small firm, it’s much harder to do that; you don’t have an international network of production locations,” says Lee Branstetter, professor of economics and public policy at Carnegie Mellon University’s Heinz College.

Shifting manufacturing away from items that use components that are being taxed is also harder since small businesses tend to make fewer products, he says. And if tariffs make it too expensive to export to their current markets, small companies may not be able to afford the effort of finding new ones.

Small business owners have been growing more confident over the past year as the economy has been strong, and they’ve been hiring at a steady if not robust pace. But those hurt by tariffs are can lose their optimism and appetite for growth within a few months.

“They have narrow profit margins and it’s a tax,” says Kent Jones, an economics professor at Babson College. “That lowers their profit margins and increases the possibility of layoffs and even bankruptcies.”

Bertram Yachts is one company finding it trickier to maneuver. The U.S. has put a 25 percent tariff on hundreds of boat parts imported from China, where most marine components are made. And European countries have imposed a 25 percent tariff on U.S.-made boats. Last year, Bertram exported about a third of its boats, with half going to Europe.

“We have been squeezed on both sides,” says Peter Truslow, CEO of the Tampa, Florida-based boat maker.

Truslow doesn’t know how the tariffs will affect the company’s sales and profits, but dealers he’s spoken to in Europe have already gotten cancellations on boats that run into the millions of dollars. Bertram plans to try to build up its strong U.S. business and seek more customers in countries that aren’t involved in trade disputes with the U.S. including Japan and Australia.

Still, the company’s growth and job creation stand to slow. “It’s probably going to be more about a reduction in hiring than it is about layoffs,” Truslow says.

The ripples are being felt across the industry, says Tom Dammrich, president of the National Marine Manufacturers Association trade group. He estimates there are about 1,000 manufacturers, almost all small or mid-size businesses, and says some parts can only be bought from China.

Matt Barton’s metal fabrication company, which makes custom replacement parts for farm equipment, outdoor signs and people who race hot rods, is paying its suppliers up to 20 percent more for metals than it did a year ago.

Prices had actually soared as much as 40 percent months ago amid expectations of U.S. tariffs on aluminum and steel. They have since steadied, but are expected to remain high for three to six months. Barton’s Pittsboro, Indiana-based company, The Hero Lab, is absorbing part of the increases. Some racing customers are still delaying orders.

“What they budgeted to cost $1,000 now is now $1,200 or $1,500,” Barton says. “They’re pushing their orders back four to six weeks, waiting for a few more paychecks to come in.”

Jeff Schwager’s cheese company, Sartori, is selling products to Mexico at break-even prices because of that nation’s retaliatory 25 percent tariff. Twelve percent of the Plymouth, Wisconsin-based company’s revenue comes from exports, which is the fastest-growing segment of the business.

Sartori and its Mexican importer are each absorbing half the costs of the tariff. Schwager, the CEO, doesn’t see leaving the Mexican market as an option.

“If you lose space on the grocery store shelf, or you’re taken out of recipes in restaurants, that take years to get back,” he says. He hopes the trade dispute can be resolved and tariffs rolled back....  (End excerpts)
"Will a failed businessman-turned-president, who mismanaged and bankrupted four of his own companies, repeat history by bankrupting his country and even the entire world?" – Reedak

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