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Trump’s Tariffs are Working, Causing China Economic Pain

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.

Poll: Farmers Not Abandoning Trump Despite Trade Stance

It looks like America’s farmers may be able to take a longer, more intelligent view of Trump’s tariffs than the mainstream media thinks. Which violates one of the most prized assumptions of the MSM – that you’re dumb.

A new poll by CNBC and Morning Consult shows that support for Trump stayed about the same in rural areas of farm states between May and the end of July. Farmers understand that these trade deals treat the United States unfairly and that they may have to absorb some short-term pain to achieve long-term gain.

And I’ll bet some of them are also taking a principled stand: It’s not right, and it has to be changed, even if I’m harmed.

Principled stands do not factor into the thinking of the press and analysts in Washington, who only view things through a political lens and see voters’ behavior as entirely motivated by personal gain.

Video || Obama Official Dissing Trump Trade Policy Interrupted by News That It’s Working

Now this is hilarious.

At the very moment former Obama Treasury Secretary – and officially one of the most annoying aides to have served Obama, which is a high standard – Jack Lew is busy dismissing President Trump’s trade policies, the conversation is interrupted by a bulletin saying that Trump has gained concessions from the Europeans.

“I’m in a little bit of a bad position to respond not knowing the full details,” Lew stammers. Meantime, CNBC’s Sara Eisen takes him on: “If this is true, this would be certainly a win for the administration, and it would show the world that these tough trade tactics are working – this idea of short-term pain for long-term gain. It’s certainly not the way you guys went about it.”

Trump Gains Trade Concessions from Europeans

Well, everyone was outraged and ready to cave in except President Trump, but it looks like his tough stance with the Europeans has paid off again, like it did when he sought to get them to pay more for their defense.

From the Wall Street Journal:

The European Union delegation meeting with President Donald Trump Wednesday agreed to consider changes in its trade policies in an effort to ease relations with the U.S., according to a European official in the room.

The official said European Commission President Jean-Claude Juncker and his top trade official Cecilia Malmström agreed to work with the U.S. administration to lower industrial tariffs on both sides, increase LNG exports and soy beans to Europe, and align regulatory standards to allow for medical devices to have better market access in Europe, the official said.

Both delegations were still fine-tuning language in a common statement on car tariffs, the official said.

Trump: “Tariffs are the Greatest”

President Trump Tuesday sought to reassure supporters and others growing concerned about the effect of tariffs he is placing on millions of dollars in foreign goods, asserting that other countries are now showing up for negotiations that will make trade more fair.

Trump lauded his own tarffis, calling them “the greatest.”

The president believes that the long-term gain will outweigh the short-term pain of other countries imposing tariffs on U.S. goods. He may be right. Unfortunately, the midterms are going to occur before many of the potential benifits manifest themselves.

Still, polls suggest his supporters are hanging in there, trusting in his vision. Working class Americans voted for a tougher trade policy, which Trump specifically advocated. And they are likely more patient and better stragegic thinkers than the Washington press corps, which treats evert momentary situation – i.e. the “news” – as if it it’s permanent.

Trump: U.S. Won’t Rejoin the TPP

President Trump said the United States will not rejoin the Trans-Pacific Partnership multi-country trade deal, sparing himself the outrage of voters who elected him to keep the United States out of globalist commitments.

Trump had reportedly been reconsidering his decision, among the first of his presidency, to withdraw the United States from the agreement. I’m willing to bet that thinking was driven at least in part by his newly installed National Economic Council Director Larry Kudlow, who holds traditional Republican views on trade and multi-state deals.

Anyway, Trump heard from people, including probably himself, that kept him on track with his innate populism – and with the voter base he needs to be reelected.

Trump Considers Rejoining the Trans-Pacific Partnership

From the Washington Post:

President Trump ordered top administration officials Thursday to look at rejoining the Trans-Pacific Partnership, the sprawling trade pact he rejected three days after taking office.

The move would mark a stunning reversal for Trump, who sharply criticized the pact as a “disaster” and made opposition to global trade deals a centerpiece of his economic agenda as a candidate.

The Obama administration had inked the trade agreement, known as TPP, with 11 other countries, including Japan, Vietnam, Singapore, and Australia, to lower tariffs and counter China’s influence in the Pacific. An embrace of TPP would give Trump more leverage in his escalating trade feud with Beijing. It also would give U.S. farms, retailers and other businesses better access to foreign markets if China makes good on its recent threats of new tariffs on U.S. goods.

Damn right it would be a stunning reversal. This is exactly what Trump campaigned against: Multilateral trade deals; making U.S. law subservient to international structures; and the New World Order.

Best rethink this. Before you know it, he’ll have us back in the Paris climate change treaty.

I’m sure those within the administration who don’t share Trump’s nationalist agenda are using the China tariffs and the possible consequences for U.S. agriculture as leverage to get him back into the TPP. So now the White House is floating this to see how angry conservatives might get.

WSJ: Trump’s Tariffs Could “Really Hurt” China

Maybe President Trump knows what he’s doing.

If you listen to much of the press, Trump is recklessly getting the United States into a tit-for-tat trade war with China that hurts everyone. But from Trump’s point of view, as he tweeted this morning, the United States has already lost the trade war. Now, it’s time to play catchup.

According to the Wall Street Journal, the United States has significant leverage because of the damage Trump’s proposed tariffs could do to China:

Foreign firms in China are among the most productive of all firms there and are a critical conduit into the country for technology.

Those same companies will dial back investment if they believe routing Chinese goods into the U.S. is set to become progressively difficult. And China—struggling under a massive debt load created by its own inefficient state firms—needs their dynamism and know-how.

But companies attracting investment from outside mainland China have still been key job engines over the long run. Crucially, they have done so without the dangerous build-up of debt that’s characterized so much of China’s domestic industry . . .

So while U.S. leverage with China is weaker than a decade ago, there are still good reasons for China to offer concessions. Neither the U.S. or China has yet set a firm deadline for these tariffs to actually take effect—that means the next step is serious horse trading. The question is what the Trump administration will accept.

A few things are perhaps achievable. They include greater purchases of U.S. semiconductors by Beijing—a move reportedly under discussion; much looser joint venture or foreign ownership requirements, particularly in sectors like finance and health care where additional capital is sorely needed; and higher Chinese payments for U.S. intellectual property.

The article goes on to say we can’t “rapidly” scale down our trade deficit with China. But serious progress in combating China’s egregiously unfair trade practices seems to be on the way.

Trump Putting Together Massive China Tariff Package

The Chinese have been stealing our technology and cheating on trade for years, and we do nothing about it because businesses think it’s still worth it and past administrations don’t want to pick a fight. President Trump was elected on a nationalist platform that includes standing up for the United States. We shouldn’t be such… Continue Reading

Trump at Davos Takes Tough Line on Trade

President Trump today refused to back off his contention that trade needs to be “fair” as well as “free,” maintaining a campaign promise that he will take measures on trade designed to protect American workers from unfair overseas practices. Trump spoke at the annual World Economic Forum in Davos, where the concepts of globalism and… Continue Reading