|
REPLY TO THREAD
|
|
Subject
|
Trump caves on tariffs after Chins calls his bluff
|
|
User Name
|
|
|
|
|
|
|
| Font color:
Font:
|
|
|
|
|
|
Original Message
|
He can’t pull the trigger.
President Trump delayed the new tariffs on a large batch of Chinese imports that were supposed to go into effect Sept. 1, and exempted some other Chinese imports altogether. The move deescalates Trump’s trade war with China, and amounts to a tacit acknowledgement by Trump that his tariffs might hurt American consumers too much.
Laptops, cellphones, gaming consoles, and other products imported from China won’t face a 10% tariff on Sept. 1, as expected. The Trump administration says the 10% tariffs on those products will go into effect on Dec. 15, instead. But the delay reveals an unwillingness by Trump to raise the cost of products many Americans find essential, suggesting he’s bluffing about ever imposing such a tariff.
Trump has now partially reversed himself on the 10% tariff, without any corresponding concession from China. In fact, China has toughened its stance recently, essentially calling Trump’s bluff. China has refused to fulfill its pledge to start buying more U.S. farm products, for instance. And it has allowed its currency to fall in value more than usual, which makes Chinese exports to other countries cheaper and boosts domestic sales. It’s possible China has decided to bear the pain of Trump’s trade war for the next 15 months and hope Trump loses the 2020 election.
That has left Trump, who fancies himself a master dealmaker, negotiating with himself.
Trump has now revealed his pain point: He’s unwilling to tax American consumers beyond a nominal level, or stomach the stock-market turmoil steep tariffs cause. This is the fundamental problem with tariffs as a tool to gain leverage in trade negotiations: To inflict pain on a trade partner, you have to hurt your own economy first, through higher taxes.
But one way out of the standoff is for Trump to lose. His hand is now weaker, though that might be good for the U.S. economy. If he called off more tariffs, it would be better still.
[link to finance.yahoo.com (secure)]
|
|
Pictures (click to insert)
|
 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | | | Next Page >> |
|
