Saturday, May 11, 2019

Trump Trades Blows, Con't

With tariffs on $300 billion in Chinese imports going from 10% to 25% and new tariffs coming on another $300 billion in goods from Beijing, it's the American people who will be on the hook for billions in new taxes, and Trump is lying about every word of China picking up the tab. The NYT editorial board:

President Trump’s new tariffs on Chinese imports, which took effect at 12:01 a.m. on Friday, are taxes that will be paid by Americans. That is a simple fact, and it remains true no matter how many times Mr. Trump insists the money will come from China.

Mr. Trump’s latest escalation of his trade fight with China is a 25 percent tariff, or import tax, on products that compose about one third of China’s exports to the United States, including Chinese bicycles, circuit boards and wooden doors. The tariff rate on those goods was previously 10 percent. Mr. Trump also has threatened to impose the 25 percent rate on virtually all products imported from China — more than $500 billion in goods last year.

Mr. Trump could make an honest case for this tax increase. He could argue that Americans must endure higher prices because China will suffer too — while China does not bear the direct cost of the tariffs, it is likely to suffer a loss of sales — and the United States needs that leverage as it presses China to change its economic policies.

Instead, Mr. Trump continues to repeat the false claim that the money will come from China, even though he has been told repeatedly that this claim has no basis in fact. He is willfully peddling a falsehood for political gain.

The mechanics of tariffs are not complicated: The government sends a tax bill to the company that brings goods into the country. Most of those tax bills go to American companies, often import firms that specialize in dealing with the customs process.

It doesn’t really matter who gets the bill, however. The important question is where the money to pay it comes from. And in broad terms, there are only two options: It comes either from the firms that make, move and sell the products or from the pockets of the buyers.

Consider the case of washing machines. In January 2018, Mr. Trump imposed a tariff on washing machines, initially at a rate of 20 percent. The tariff caused a 12 percent increase in the price of washing machines, according to a study by economists at the Federal Reserve and the University of Chicago. It also resulted in a similar increase in the price of dryers. Americans responded by buying more domestic washing machines, creating about 1,800 new jobs. But the cost of the tariffs was borne entirely by American consumers. The study estimated that each of those new jobs came at a cost of more than $815,000.

And retaliatory tariffs are killing American farmers, who are already having a brutally bad year due to record Midwestern flooding. But Trump blaming China is working.  Farmers are rallying aroundthe flag just like in any other stupid, pointless GOP-caused war.

In Shelby County, Ind., Phil Ramsey said he appreciated the president’s reasons for revisiting trade deals, but said the ailing farm economy had been brutal in deeply personal ways. He said he was going without health insurance to save money. He said he has delayed some equipment purchases.

“I was very patient a year ago,” said Mr. Ramsey, who grows corn, soybeans and wheat. “I’ve gone from being very patient to being very anxious.”

But Mr. Ramsey, a Republican who voted for the president, said his primary frustrations were with China, which the United States accused of reneging on some trade promises, and with Congress, which has not approved a new trade deal with Canada and Mexico.

“He can’t do it by himself,” Mr. Ramsey said of the president. “He needs the support of all the U.S. government.”

The lack of a trade deal was especially painful in Nebraska, which saw widespread damage from flooding in March. The damage there, as well as in parts of Missouri and Iowa, has turned cropland into debris fields and forced some farmers to evaluate whether they could continue making a living off the land.

“It’s a little bit of piling on when you have so many different things that you’re struggling against,” said Steve Nelson, the president of the Nebraska Farm Bureau. “Obviously, the trade issue is one of those. The weather is one of those.”

Lance Atwater, 29, who farms corn and soybeans near Ayr, Neb., escaped the worst of the flooding but said that he has seen prices for some of his crops plunge. Mr. Atwater, a Republican who voted for Mr. Trump, said he was eager for a trade deal but taking a wait-and-see approach on the president’s policies.

“He’s claimed that he’ll get these trade deals worked out and that it will be a better deal,” Mr. Atwater said on Friday as he hauled grain. “That’s what we’re wanting to see — see those results
Jerry Mohr, 66, a fourth-generation farmer who grows corn and soybeans near Eldridge, Iowa, said he was growing frustrated.

“I admire the president for wanting to make change,” said Mr. Mohr, a Republican who voted for Mr. Trump, “but now we need to perform.”

He said the president’s success in finalizing trade deals, as well as expanding ethanol production, would help determine what happens in next year’s election.

“If the president comes through on what he says he was going to do, it would be hard for him to lose,” Mr. Mohr said. “If he doesn’t, it’s going to be hard for him to win.

US farms are going to get wrecked over the next 18 months.  But they'll blame China and Mexico and Congress and not the guy imposing a brutal trade war that will wipe out farms across the country.  Really, the only question is how many taxpayer billions farmers will get from the government to help them through this tough time, but don't you dare call it socialism.

And in November of next year, they'll vote for Trump again.

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