trade

India is the Latest Country to Impose Tariffs on U.S. Goods

Written by adminJune 18, 2018

When people talk about World War 3 happening, they didn’t realize it would be in the form of a global trade war that threatened to impact the world’s economies.

So far, we’ve extensively covered President Trump and his attempts to gain fairer trade and the retaliation of China and Europe, but now India is jumping into the fight as well.

This week, India has announced retaliatory tariffs of their own on 30 U.S. products ranging anywhere from apples and almonds to metals and chemicals. These tariffs total around $241 million, which is on par with what India is expected to lose once Trump’s tariff on steel and aluminum goes into effect.

India also plans to increase its already large tariff on U.S. motorcycles like Harley Davidson, an issue Trump has complained about in the past. It seems unfair that countries can have tariffs on U.S. products, but if the U.S. sets a tariff, it’s met with retaliation, so the move speaks volumes.

These new rounds of tariffs are due to take effect on June 21^st and India says they’re open to adding more if necessary.

“India reserves the right to adjust the specific products for which [tariffs would apply], and its right to adjust the additional rate of duty imposed on such products,” they said in a filing to the World Trade Organization.

Currently, the deficit of trade between the U.S. and India sits at $30.8 billion with India getting the advantage. These tariffs are an attempt by the Trump administration for the U.S. to cut the trade deficits that happen worldwide, but our allies won’t have it, which means that the storm clouds are gathering over further economic prosperity worldwide.

Last week, we reported China’s move since a 25% tariff was slapped on Chinese products and Canada’s frustration with the U.S. as well.

The U.S. implementing tariffs to recoup money lost in trade deals seems like a fair deal, but with countries worldwide promising to retaliate (and refusing to back down), industry all across the board will suffer.

If the cost of these products goes up, then that means jobs will be cut and economic production within these industries will slow to a crawl. Losing jobs, especially in recently-hit sectors like the auto industry, would stop the unprecedented growth we’ve seen in recent months.

One can only hope that this situation gets taken care of before a global trade war goes too far and hurts everyone in the process.

Written by adminJune 15, 2018

Politics

Another chapter of this story has been written, as President Donald Trump announced on Friday that the U.S. will indeed impose more tariffs on China. Specifically, a 25% tariff on a variety of Chinese exports number over 1,100 products totaling around $50 billion.

China immediately said they would retaliate with tariffs of their own before accusing the U.S. of starting a trade war.

The justification from the Trump administration? They had it coming. These tariffs are designed to work as a punishment on China for their espionage against us, stealing trade secrets and technology.

“(Trade) has been very unfair, for a very long time. This situation is no longer sustainable,” Trump said later in a statement.

This decision has been in the works for several weeks now, as we previously reported that Trump was looking into different tariffs against China. This came after both sides seemed to come to a deal that had China buying billions in U.S. agriculture. Neither side is looking to back down.

China already has a list of products they claimed to impose tariff’s on if Trump went through with his threat, including transportation and agriculture. They also said they would immediately cancel any recent trade deals made.

“In this day and age, launching a trade war is not in the interest of the world. We call on all countries to act together to firmly stop such an outdated and backward move, and to firmly safeguard the common interest of all mankind,” said China’s Commerce Ministry.

All of this comes not even a week removed from the G7 Summit held in Canada. After fighting with our closest allies over trade, Trump seemed to have angered everyone, including the entirety of the European Union.

Every country has vowed retaliation.

These particular tariffs are set to hit in two waves. The first will come in July and will cover about $34 billion worth of products. The second will come later, so it would seem to be undecided just yet.

Perhaps the time given before these tariffs take hold is a good sign that Trump is holding out hope that a new trade deal will be signed for the betterment of both countries.

Trump has touted unfair trade practices against China and the rest of the world during his campaign. He promised he would put America back on top of trade dominance, hoping it would give a boost to U.S. industries.

“We have a tremendous intellectual property theft problem. It’s going to make us a much stronger, much richer nation,” Trump said in March when he first brought up imposing tariffs this year.

As a citizen, it can be difficult to see how taxing foreign goods will make us a stronger country. This tit-for-tat retaliation will end up forcing the world’s top economic powers to engage in a trade war that threatens to not only hurt jobs, but the extra costs will translate down to the consumer, making products we use every day much more expensive.

Update: As I wrote up this article, China announced their own 25% tariff on about 695 U.S. goods worth near $50, which will hit on July 6^th.

Written by adminJune 12, 2018

Politics

America First. It’s a bold idea that helped win the White House.

During his campaign, President Trump promised Americans that he would fix the trade deficit between countries. It was vastly unfair, in the minds of Trump and the millions who voted for him, that other countries got billions more in goods than we received.

Not only that, the U.S. military was footing the bill for defense, aid, and a lot of other things other countries just don’t seem to want to pay for. To millions of struggling Americans, riddled with doubt, debt, and fear over their futures, the ‘America First’ campaign was a breath of fresh air that could bring our economy back to dominance.

Just ask the people of Michigan who lost thousands upon thousands of factory jobs as a result of their main employers deciding to pull up stakes and head to Mexico. Other states, like West Virginia and Pennsylvania, have a proud history of rolling up their sleeves and providing as the backbone of our country during a crucial time of unprecedented growth. Then came the cheaper steel.

Look at the blue wall that used to have a lock on democratic votes. This year, they all went red, and it was because of Candidate Trump’s message. He promised to get jobs back. He guaranteed he would revive near-dead industry. His bold proclamations demanded justice for decades of unfair trade practices that cost the U.S. billions.

How is that going too fly in an increasingly globalised world? Well, judging by this past weekend’s G7 summit, not very well. While many feel thankful that Trump stood up our country, there are plenty opponents who felt Trump embarrassed the United States.

Regardless of whatever side you’re on, these tariffs can have a real impact on us, the citizens.

Sure, by making Chinese steel more expensive, the U.S. steel industry is roaring back to life. Jobs are flooding back to places where the industry seemed nearly dead. That’s a major positive, but consider how it will negatively impact every company who uses steel. If it’s more expensive for the manufacturer, then that cost will transfer to the consumer.

President Trump has picked economic fights with China, Mexico, Canada, and 28 countries within the European Union. Each one promises retaliatory tariffs if the U.S. goes through with tariffs of his own. This will trickle down to thousands of U.S. and foreign companies, challenging economic efficiency and threaten jobs.

The Council on Foreign Relations came out with a report that stated Trump’s tariffs on steel and aluminum will create some jobs within those industries, but it risks killing 40,000 jobs within the auto industry simply due to the higher cost of making cars. If cars are more expensive to buy, then less people will buy them.

If Trump slaps a 25% levy on cars imported from China, which is his latest threat, it could end up cutting production by 1.5% and kill 295,000 jobs. If the other nations follow through with retaliatory tariffs of their own, it could slow production by as much as 4% and over 600,000 jobs would disappear. These aren’t the type of job losses that would make Trump look good.

Trump’s threats of a trade war have gotten China to back down and come to the table to reach a new trade agreement. Perhaps that’s the goal here. All he has to do is apply a bit of pressure to other countries to get what he wants. No one wants to a trade war with the largest economy in the world.

The problem is not knowing how far Trump will take this.

Written by adminJune 4, 2018

Politics

Just when we thought we had a happy ending to this story regarding China and a potential trade war, both sides seemed to have hardened their positions and waiting for the other side to move.

President Trump has continued his talk of tariffs, which is really angering a lot of our allies, who all threaten to retaliate with tariffs and taxes of their own.

To ease tensions and prevent a trade war, China agreed to purchase billions of dollars of American products, including agriculture, and lower the trade deficit between the two countries. But, as of right now, it would appear Trump is not happy with the deal. He’s still threatening the Chinese with a tax on billions of dollars of imports from China.

“Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink. Despite the potential negative repercussions for both economies, the risk of a full-blown China-U.S. trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly,” said Cornell professor Eswar Prasad.

Is President Trump really willing hurt our relationship with a prominent ally in China, who has the second largest economy in the world? The answer appears to be yes. He seems more than willing to wreck whatever relationship is necessary to keep American industry at the forefront and recover some of the billions of dollars lost in unfair deals.

Peter Navarro, who is the director of the White House National Trade Council, confirmed as much on Fox News when he stated China hasn’t been that good of a friend to us.

They’ve been aggressive in the South China Sea, threatened to steal intellectual property, went behind our backs to supply North Korea with goods after committing, in public, to join in the sanctions, and according to the president, has raked us over the coals in regard to trade for many decades.

“That’s a relationship with China that structurally has to change. We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this,” said Navarro on “Sunday Morning Futures.”

Trump is still considering more tariffs on $50 billion worth of China’s exports and another $100 billion they would consider taxing to make up for the massive deficit. If this goes through, China threatens taxes and tariffs of their own and to cancel any of the new trade deals that have been hammered out.

It appears to be a tit for tat stare down between the two world’s economic superpowers. No one knows if Trump is serious about imposing tariffs or is just using the tactic for positioning. So far, he has been able to successfully get many countries to come to the table willing to renegotiate deals just to stay in the good graces of the U.S.

President Trump has long believed that other countries have taken advantage of American industry and reap far more benefits from trade than we get in return. It was one of many economic promises he made during the campaign.

Tariffs and a trade war would be bad for the world’s economy and for consumers, who would be required to pay more for tariffed items to cover the increased cost.

We’ll continue to cover this story as it develops.

Written by adminMay 31, 2018

Credit & Debt Settlement

We’ve been doing our best to keep track of the tariff situation, as we know it will mostly impact the consumers of products than it will any one country.

After the U.S. and China seemed to cool down talk of a trade war, Trump isn’t backing down asserting his desire to improve the balance of trade he says has been unfair for so long. While he was able to successfully negotiate with China, the same can’t be said for the EU.

Last Thursday, Trump’s team and European officials made one last attempt to negotiate a deal in Paris, but it isn’t looking promising, potentially damaging trade relationships with European countries and inflaming tensions with our allies.

According to France’s finance minister Bruno Le Maire: “Global trade is not a gunfight at the OK Corral. It’s not about who attacks whom, and then wait and see who is still standing at the end.”

You can tell Europe is frustrated with the prospect of tariffs set to take place on aluminum and steel before the end of this week. It doesn’t appear a new deal will be struck beforehand, but the determination will be whether Europe thinks Trump will actually go forward with his plans.

He wants to impose tariffs of 25% for steel and 10% on aluminum in an attempt to force companies that use cheaper, foreign steel and aluminum to buy from the U.S. instead. So far, President Trump has only focused on Asia, giving our allies a reprieve, which expires at the end of the week.

The fear of everyone else not named Donald Trump is that a retaliatory trade war with Europe is the last thing the global economy needs, especially now when things have been on the upswing for the most part.

If the tariff goes through, and a new deal can’t be made, it’s expected the Europe will impose tariffs of their own. Peanut butter, orange juice, and other U.S.-made products are on the list the EU has threatened will receive tariffs if Trump goes through with it.

“This will only lead to the victory of those who want less growth, those who don’t think we can develop our economies across the world. We think on the contrary that global trade must have rules in a context of multilateralism. We are ready to rebuild this multilateralism with our American friends,” said Le Maire

Trump hopes that tariffs will help spur American economic growth and has rallied against unfair trade deficits since he started campaigning. But French President Emmanuel Macron has a different idea.

“Unilateral responses and threats over trade war will solve nothing of the serious imbalances in world trade. Nothing. These solutions might bring symbolic satisfaction in the short term. … One can think about making voters happy by saying, ‘I have a victory, I’ll change the rules, you’ll see.’”

His belief is tariffs won’t help. It might bring a short boost in economic success, but due to the higher prices and retaliatory tariffs, eventually someone is going to lose their job, leading ultimately to higher unemployment.

Written by adminApril 30, 2018

Saving

After President Donald Trump announced he would place tariffs on steel and aluminum to spur on growth in the American markets, several countries freaked out and promised to retaliate with tariffs of their own.

Wall Street reacted accordingly as stocks dropped over 700 points in a single day to the news that the U.S. may soon be embroiled in a trade war.

The main concern has to do with the world’s two largest economies battling it out for supremacy, which would almost certainly leave other countries destabilized and fighting for air.

While the idea of a trade war is unsettling, there’s a chance that Trump isn’t too serious about keeping tariffs up for long. Instead, he might be pushing for better negotiations on a trade deal he’s touted since the campaign trail.

It’s a tactic that has proven to work so far.

All one has to do is look at the North Korea situation. Trump’s aggressive tone had many fearing that WW3 was about to break out any moment, but instead, it brought both sides to the negotiating table. For the first time in over 60 years, the Korean War has officially ended.

In an effort to avoid a trade war with China, a war the U.S. can’t afford to have as its economy recovers from a decade-long recession, Trump has sent a team of experts to Beijing with the goal of leaving with a compromise deal that helps both sides.

Trump tweeted last week that he believes a deal will get done, but some aren’t as optimistic. His team needs to be united on the tenants of the deal to make negotiations simpler, but those he did send don’t seem to be likeminded about what needs to get done. It consists of both free trade advocates as well as trade hawks…two sides who rarely agree on anything.

Chris Krueger, the managing director of the Cowen Washington Research Group, isn’t optimistic about the deal.

“This sets up a bizarre situation where the US team may spend most of the talks negotiating among themselves. It’s hard to picture more unique Trump officials.”

Trump himself believes sending a team with diverse ideas is a great thing, but one is left to wonder, with a recovering economy, if now is not the time to leave it to chance. This is the best chance we have at preventing a trade war, so sending a team that isn’t in agreement won’t be likely to solve the problem.

At the end of the day, a trade war can send the American economy back into a recession and destroy the massive positive movement we’ve seen under the Trump administration so far.

Hopefully the president’s aggressive tactics don’t lead us down that road.

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