You Don't Understand Tariffs, Man - By The NYT Editorial Board

[DonViejo]

Trump blinked on trade with China — and it was the right thing to do. Just ask the markets.

By The Editorial Board

The editorial board represents the opinions of the board, its editor and the publisher. It is separate from the newsroom and the Op-Ed section.

Dec. 4, 2018

Not long after claiming victory in the midterm elections in which his party lost at least 39 House seats, President Trump kept up his winning streak this past weekend, this time on the world stage.

At the Group of 20 summit in Buenos Aires, he called a temporary truce with President Xi Jinping of China in the nearly yearlong trade dispute between the two countries. The United States will continue to impose a 10 percent tariff on up to $250 billion of Chinese goods but will hold fire on threats to boost that duty to 25 percent in January. China, which has countered with $110 billion in tariffs on American goods, will reportedly lower some tariffs on American-made autos and resume buying soybeans and other agricultural commodities that had been priced out of the market by the countervailing duties.

“It’s an incredible deal,” the president claimed, and yet it is not, in fact, even a deal. The two countries have given themselves 90 days to find a framework from which to construct a new trade agreement — something they haven’t been able to do over the past two years. Nor has China given an indication that it will make any big concessions in 2019.

In imposing tariffs, the United States has accused China of walling off markets, requiring American companies to share their advanced technology, stealing intellectual property through joint ventures, counterfeiting goods and outright theft in the form of cyberespionage. Mr. Trump has been right to press all the issues, though his methods so far have yielded more disruption than progress.

Link to tweet

Mr. Trump has famously boasted that trade wars are “easy to win,” but he is currently 0-for-2 on that count. Yes, the so-called U.S.M.C.A. treaty has been signed by the United States, Mexico and Canada, but after all the bombast about tearing up Nafta and the insults delivered to America’s allies, Naft2, as it should be called, is a conventional, incremental result that isn’t markedly different from the original. “The economic implications are little to none,” noted UBS Wealth Management’s chief economist, Paul Donovan. And there’s no guarantee that Congress will approve Naft2 or that Mexico’s new president will abide by it.

Trade wars tend to be easier to prolong than they are to win or even end. And the current one is hurting both the United States and China, as well as rattling around like a loose part in the global economic machine. Both nations are heading for economic slowdowns. Growth in the United States will fall to 2.1 percent in 2019 from 2.9 percent this year, according to the bank BNP Paribas. The United States is slowing because the stimulus from last year’s tax cuts won’t be around this January to juice the stock market or consumer spending. China’s economy is cycling down just as its export machine is facing lower aggregate demand, a combination that could trim growth to 6.2 percent from 6.6 percent, Paribas says. That’s still fairly muscular compared with the rest of the world, but Mr. Xi doesn’t want China’s economic miracle to sputter under his watch.

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https://www.nytimes.com/2018/12/04/opinion/tariffs-trump-china-trade-xi.html

[Hassler]

1. Idiot Boy's MO: create a disaster, tell us how wonderful it is, then go back

To the exact, original situation and tell us how wonderful the new and improved deal is.

[murielm99]

2. My husband just said that about an hour ago.

He used almost your exact words. LOL