To paraphrase Yoda in the Star Wars prequels there, appropriate because our current government is a fantasy with strange-colored puppets and doesn't make a lot of sense. Despite the notion last month of Beijing coming to the negotiating table in response to Trump's belligerence, China has instead gone full bore on trade retaliation that will quickly begin to harm US farmers and growers and is calling Trump's bluff completely.
China says it's rolling out new tariffs on U.S. meat, fruit and other products as retaliation against taxes approved by President Trump on imported steel and aluminum.
The Chinese finance ministry says in a statement that the new tariffs begin Monday.
The announcement follows through on warnings Chinese officials have made for several weeks in an escalating trade dispute with the United States.
China's Customs Tariff Commission is increasing the tariff rate on eight imported U.S. products, including pork, by 25 percent. It's also imposing a new 15 percent tariff on 120 imported U.S. commodities, including fruits.
The tariffs mirror Mr. Trump's 25 percent charge on imported steel and 15 percent hike on aluminum. Mr. Trump's tariffs are partly a response to complaints that Beijing steals or pressures foreign companies to hand over technology.
Again, agriculture in Trump states are going to be hurt the most. Right now the damage is limited to about $3 billion a year, but remember that Trump already wants $50-60 billion in yearly sanctions against China and there will be more coming in the months ahead. It's a full-scale trade war if Trump continues, and Republicans will pay dearly for it in November.
Meanwhile, Beijing is hitting us where it really counts: Chinese real estate investment has all but vanished in West Coast states.
Chinese companies have been among the biggest commercial real estate investors in the Los Angeles area in the last five years, spending more than $5 billion to buy property in the region during that time, according to brokerage Cushman and Wakefield. That includes the sites of billion-dollar condominium, hotel and retail complexes being built downtown and large airport-area hotels that have been upgraded by their Chinese owners.
But they are withdrawing from some high-profile ventures as leaders in Beijing constrict the flow of money out of the country. In August, China's State Council laid down new regulations on outbound investments to reduce the risk of runaway debt and to blunt capital flight.
Also dramatically on the wane is Chinese investment through the federal EB-5 program, which allows foreigners to apply to become legal U.S. residents in exchange for investing $500,000 or more in a business that creates or preserves at least 10 jobs.
Millions of dollars raised by individual Chinese investors angling for green cards in past years have paid for such major projects as the trendy Dream Hotel complex in Hollywood and the Courtyard Los Angeles L.A. Live in downtown Los Angeles.
"There has been a huge fall-off in EB-5 funding," said Los Angeles attorney Jim Butler, who helps arrange investments from overseas through the program.
China can definitely make our lives far more miserable than we can theirs right now. We import over $100 billion from China a year and Trump wants that to essentially end.
When it does, it's going to take a lot of jobs with it, particularly retail, agriculture, and manufacturing. I've been saying for a while now that Trump's tax cuts in addition to a Chinese trade war and the housing bubble means a guaranteed recession on the horizon, and soon. Should that include a shooting war too in Iran or North Korea, very much a possibility now, and you have the recipe for an American economic disaster that will make the last one look like a walk in the park.
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