Republican proponents of unlimited free trade don’t like President Trump’s tariffs on China. And Democrats who have long supported tariffs seem to dislike them now because . . . they’re Trump’s tariffs.
Also disliking the China tariffs? China.
For years in Washington I have heard politicians and administration officials talk about the rampant cheating by China, its near-slave labor costs, its theft of American technology, and its manipulation of its exchange rate. All of it cost American workers their jobs while keeping iPhones from being too expensive for America’s elite.
But we were informed that this was the “global system” working with efficiency and we don’t want to upset China because we’re busy ushering it into the global trading system and modernizing it and creating democracy, etc., etc.
Meantime, we need to expand the service sector – you know, more attorneys, and more cashiers to ring up all those cheap Chinese imports that you are going to buy.
Trump finally took some action. And it’s working. China’s economy is suffering, in part because of Trump’s tariffs, and it seems to me they’re going to have to change their behavior.
According to the Wall Street Journal, which is stocked with free traders:
Another blow has come courtesy of Mr. Trump. However much criticized at home, his tariff war is hitting China’s economy hard. Its stock market is around a four-year low, while Beijing’s bluster is offset by repeated overtures to resolve the confrontation. Thanks to China’s $350 billion trade surplus with the U.S., Washington can target a broad range of Chinese goods with tariffs. The damage to American firms from the current trade war may be significant, but China can’t weather a prolonged battle nearly as well.
Politico today reports that the post-tariff economic news is bad:
Business sentiment in both the manufacturing and non-manufacturing sectors was weaker than expected in October, led by sharp declines in export demand, according to the official purchasing managers’ index published on Wednesday by the National Bureau of Statistics and the China Federation of Logistics and Purchasing.
The figures were the first gauges of the trade war’s impact since the U.S. levied 10 percent tariffs on $200 billion worth of Chinese goods in late September.
The manufacturing sentiment index dropped to 50.2 in October, from 50.8 a month earlier. The reading, which was its lowest in more than two years and barely above the 50 point line that separates expansion from contraction in the sector, suggests the possibility of contraction in November as the U.S. tariffs take effect.
That situation could worsen in January, when the tariff on the $200 billion of Chinese imports is set to rise to 25 percent.
Trump is a man of action. And certain principles. One of his principles is that manufacturing is good for America, and its disappearance isn’t inevitable. There are at least in part some specific causes for the decline, and those reside overseas, where there is unfair competition.
That is now, finally, being addressed.