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China Blinks on Pork and Soybean Tariffs

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Some news from the trade war front. China has decided to exempt pork and soybeans from future tariffs, giving a much needed reprieve to the agricultural sector in the United States. There was joking last week when China lifted tariffs on a few inconsquential items that it was an “olive twig,” but this move signals something bigger.

Via Reuters.

SHANGHAI (Reuters) – China will exempt some agricultural products from additional tariffs on U.S. goods, including pork and soybeans, China’s official Xinhua News Agency said Friday, in the latest sign of easing Sino-U.S. tensions before a new round of talks aimed at curbing a bruising trade war.

The United States and China have both made conciliatory gestures, with China renewing purchases of U.S. farm goods and U.S. President Donald Trump delaying a tariff increase on certain Chinese goods.

This is likely happening for reasons related to China’s condition, not as a gesture of good will. China would like nothing more than to stick it to us but they rely on our agricultural products to keep their people from starving.

An outbreak of deadly African swine fever, which has cut China’s pig herd by a third since mid-2018, has propelled Chinese pork prices to record levels and left the country in need of replacement supplies from overseas. U.S. pork exports to China so far this year have largely fallen short of expectations.

That issue of diseases didn’t just come out of nowhere. It is a result of China sourcing unsafe Russian pork to try to replace what we were selling them. In other words, China needs us and they are starting to feel the pinch. Hence, they lifted these tariffs because they need the imports, not just to be nice.

It’s disappointing that just last week I saw some conservatives on Twitter snarking that Trump should retreat and declare victory. That’s short sighted and stupid. It’s exactly the kind of attitude that got Trump elected, i.e. the idea that Republicans aren’t willing to fight the tough battles. Trump is winning this trade war. For now, the U.S. has been largely left unscathed, with the markets already rebounding big after a scare a few weeks ago. The question is whether Trump can finish this before 2020. This isn’t something he’s going to want hanging over his head. That’s the only wildcard in this.

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The post China Blinks on Pork and Soybean Tariffs appeared first on RedState.

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More blinking? China to add pork, soybeans to tariff exemption list ahead of talks

Westlake Legal Group trump-xi-handshake More blinking? China to add pork, soybeans to tariff exemption list ahead of talks Xi Jinping Trade War The Blog Tariffs Soybeans pork donald trump China

As Democrats on stage at the presidential debate took their shots at Donald Trump’s trade strategy with China, it looks as though it has begun producing some results. In a surprise move, Beijing announced that it would roll back tariffs on key agricultural products ahead of next week’s initial trade talks. China had targeted pork and soybeans in order to put pressure on Trump through his rural voter base, but appear to have reversed course:

China will exempt some agricultural products from additional tariffs on U.S. goods, China’s official Xinhua News Agency said Friday, in the latest sign of easing Sino-U.S. tensions before a new rounds of talks aimed at curbing a bruising trade war. …

“China supports relevant enterprises buying certain amounts of soybeans, pork and other agricultural products from today in accordance with market principles and WTO rules,” Xinhua said, adding that the Customs Tariff Commission of China’s State Council would exclude additional tariffs on those items.

China has “broad prospects” for importing high-quality U.S. agricultural goods, Xinhua reported, citing unnamed authorities.

Part of this is motivated not so much by trade pressures but domestic problems at home. As Reuters notes, a swine-flu epidemic has forced domestic pork prices to skyrocket. China can’t produce enough to meet demand, and the last thing they need right now is more unrest at home to go along with the uprising in Hong Kong.

However, extending that to soybeans might be more of a trade-war blink:

China is also expected to step up purchases of soybeans, historically the most valuable U.S. farm export which China has largely avoided buying since the trade war began last year.

Before the announcement of additional tariff exemptions, Chinese firms bought at least 10 boatloads of U.S. soybeans on Thursday, the country’s most significant purchases since at least June.

One has to wonder whether that reflects production problems at home, too. Either way, it will make American farmers happy, while at the same time taking the pressure off American negotiators. China’s concessions now go deep into the heart of their leverage in those talks.

This follows a grudging concession by Trump yesterday that he might consider an interim trade agreement to ease tensions, but he’d prefer to wait for a full settlement:

The president told reporters he would like to ink a full agreement with the world’s second largest economy. However, he left the door open to striking a limited deal with Beijing.

“If we’re going to do the deal, let’s get it done,” he told reporters as he left for a congressional Republican retreat in Baltimore. “A lot of people are talking about it, I see a lot of analysts are saying an interim deal — meaning we’ll do pieces of it, the easy ones first. But there’s no easy or hard. There’s a deal or there’s not a deal. But it’s something we would consider, I guess.”

Trump’s statements add to confusion sparked earlier in the day about what the White House would accept in its ongoing negotiations with China. U.S. stock indexes initially climbed on a report that the Trump administration talked about crafting an interim agreement. A White House official then said the U.S. is “absolutely not” considering such a deal, causing markets to give up some of those gains.

Asked to clarify if Trump’s position had changed from earlier in the day, White House spokesman Judd Deere emphasized the president’s comment that he would prefer a complete agreement.

On Wednesday, Trump delayed the next round of tariffs from October 1 to October 15, calling it a “gesture of goodwill.” The move allows Xi Jinping to celebrate the communist government’s 70th anniversary without the hike as context, but more practically allows a little more time for negotiations. That also puts a damper on the “interim” idea, as it would still likely lead to significant tariff increases on goods outside whatever partial pact is made.

The concessions on pork and soybeans are significant, much more so than a two-week delay in tariffs. It signals that China can’t afford to deal with a lengthy trade war, especially not this year. They may not like it, but they still need to trade in order to feed their massive population, and China might have to get used to fully opening their markets and complying with agreements to do so.

The post More blinking? China to add pork, soybeans to tariff exemption list ahead of talks appeared first on Hot Air.

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“Modest olive branch”: China lifts 16 tariffs on the eve of trade negotiations

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Blink, part II? Not only has China decided to send a team of negotiators to Washington to break a vicious cycle on retaliatory tariffs, they have also made the first gesture to reverse the cycle. Through its official ministry, China announced tariff exemptions on sixteen US imports, with more to come soon, the New York Times reports today:

China extended a modest olive branch to President Trump on Wednesday, publishing a short list of products that it will exempt from its retaliatory tariffs on American-made goods.

But the list does not include big-ticket items, like soybeans and other agricultural goods, that the Trump administration would likely consider key to getting a trade deal done with China.

Cancer drugs, lubricants, pesticides, shrimp meal and a number of other products will be excluded from a list of American goods subject to tariffs, China’s Ministry of Finance said in a statement on its website. China first threatened to place tariffs on many of those goods last year, as the trade war began to heat up.

Tariffs that have already been imposed will also be refunded, the ministry said. It added that further exemptions will be announced in the upcoming weeks.

The Washington Post sniffed, calling the gesture a “twig” rather than a full olive branch. One analyst told them that it was about shaping the public-relations battlefield ahead of the negotiations:

China extended an olive twig, rather than a branch, to the United States in their trade war Wednesday, announcing it would exempt 16 American-made products from tariffs as a sign of goodwill ahead of talks scheduled for next month. …

“China wants to claim the moral high ground before the October talks and to send a message of goodwill,” said Yao Xinchao, professor of international trade at the University of International Business and Economics in Beijing. “It’s all about molding public opinion” to portray the United States as the aggressor, Yao added.

Sure, but that and five bucks will get them a café latté at Starbucks in October. No one doubts that Trump is the aggressor in this trade war; he’s the one who slapped tariffs on in the first place. China’s keeping tariffs on ag products in an attempt to force Trump into backing down to protect his political support in rural America, but PR on that point won’t help the PRC until fourteen months or so from now — if it does at all. American farmers also have lots of frustration with China’s sharp limits on US agricultural products, which means farmers have some good reasons to stick with Trump for a while in this fight.

The issue for China is getting tariffs lifted before supply chains for US businesses get relocated permanently. Right now, American companies are riding out the first waves of tariffs with price increases passed along to consumers, but at some point it will just be cheaper to relocate their supply chains to other countries. Most of them won’t end up in the good ol’ USA as Trump would like, but they’ll go to other countries that don’t use trade to conduct espionage and steal intellectual property.

The bottom line from this concession is obvious: China sees the need to resolve this quickly. The exemptions are meant to highlight the risk to the ag sector here too, but they’re first aimed at scaling back the risk to their own priorities when the rest of the US tariffs come into effect. Once the supply chain exodus begins, it won’t be easy to reverse the damage — and both Trump and China know it.

The post “Modest olive branch”: China lifts 16 tariffs on the eve of trade negotiations appeared first on Hot Air.

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India Reminds: What DC Has Long Pretended Is ‘Free Trade’ – Is Not Free Trade

Westlake Legal Group world-fair-trade-day-logo India Reminds: What DC Has Long Pretended Is ‘Free Trade’ – Is Not Free Trade trade import limits trade Taxes Tariffs sugar subsidies Politics Policy News Judicial India Front Page Stories Front Page Free trade fair trade Business & Economy Brazil

Washington, D.C.’s very swampy denizens have spent the last half-century-plus perpetrating a panoply of frauds against We the People.

Perhaps the most Gaslight-y of them all – has been DCs fake free trade.

We the People have watched DCs fake free trade – dispatch millions of our jobs and trillions of our dollars to everywhere else on the planet.  And our nation – has been hollowed out and caved in.

And when We the People complained about the self-destruction – we were yelled at as nationalist Luddites who are anti-commerce.

Yes.  Our opposition to the guys with guns and masks taking our wallets and watches – is “anti-commerce.”

What they do not understand is – commerce occurs between peoples.  Trade Policy – occurs between governments.  And every government – seeks to advantage its people over all others.

Well, except our government, of course.  Because “Free Markets!!!” – or something.

So our half-century-plus of allowing every country on the planet to favor their peoples over ours – has gutted our people and our nation.

The planet tariffs and limits the import of our stuff – which hurts our stuff.  And the planet subsidizes their stuff – thereby giving their stuff an anti-market advantage over our stuff.

We do very little of any of this.  We do absolutely nothing about their doing it.

Fifty-plus years later – we are in the heinous mess we’re in.

In writing about trade with utterly corrupt Communist China, Nicholas Phillips wisely notes:

“(Fake) free trade with China means allowing its distortions into our market.

“Refusing to allow our government to ‘pick winners’ by rejecting industrial-policy support to key sectors means that Beijing will pick winners for us.”

If we don’t prioritize things for ourselves – the planet will prioritize things for themselves.  And much more often than not – it will be to our great disadvantage.

“Key sectors” you say?  I would say food growth and production is a key sector.

Before you can put on your cheap Bangladeshi PJs and watch your cheap Chinese TV – you gotta eat.

And fake free trade has been devastating our farmers, ranchers and food producers.

By not choosing to defend our producers – we have subjected them to the rest of the planet defending theirs.

To wit:

Sugar: Concern Increases Over Subsidies in India:

“Édgar Herrera, executive director of the (Costa Rica) Industrial Agricultural League of Sugarcane (Laica), explained…:

“‘These (sugar) subsidies are greater than those allowed by the World Trade Organization, in the order of $10 billion annually.  At the same time, it causes an artificial increase in sugar production, which surpasses India’s internal consumption.’…

“‘There is an oversupply, which has caused sugar prices to collapse below production costs. And this causes severe damage to countries that do not have these subsidies, as in the case of Costa Rica.’”

Again: $10 billion per year.  JUST in sugar subsidies.  JUST from India.

Yet again, a country is cheating to help its people – and screwing everyone else.  Not just US.  Not just Costa Rica.  Everyone else.

India’s New Sugar Export Subsidy a Bitter Pill for Australia:

“India has announced a fresh round of subsidies to prop up its ailing sugar industry and Australian growers and millers argue the export incentives are an illegal market distortion….

“Previous Indian subsidies have flooded the global market with Indian sugar, and the latest package will extend the glut….

“Brazil and Guatemala joined Australia in an appeal to the the World Trade Organisation (WTO), claiming India’s export subsidies are an illegal market distortion and formal dispute resolution has begun….

“‘We are stunned by this development, just days after the WTO formally established a Dispute Panel to investigate the legality of India’s sugar subsidies,’ said Australian Sugar Milling Council chief executive David Pietsch.

“’India’s government has approved a massive market distortion. The amount of sugar involved dwarfs Australia’s total annual raw sugar exports….’”

So we wait for the WTO to get its act together and do something about this.  If they ever do.

In the meantime, India strip mines the global sugar market – and every non-Indian in it.

Oh: And a huge reason why India’s sugar production was struggling so mightily?  Which led to their sweetening their pot with $10 billion a year in subsidies?

Brazil has LONG been subsidizing their sugar production – to the tune of $4 billion per year.  Which artificially got them – to controlling almost half of the 100+ country global sugar market.

Again: Commerce is between peoples.  Trade Policy – is between governments.

We’re now in a subsidy arms race.  With governments heading in the wrong direction – ratcheting upward, rather than down.

Which results in:

Brazil Ethanol Boom Pushes Sugar Outlook to 14-Year Low

Our farmers and producers – getting omni-directional screwed.  Yet again.

Brazil Says India’s Subsidy Will Extend Cycle of Low Sugar Prices

If our farmers and food producers can’t get a decent price for their stuff – they’ll stop growing and producing their stuff.

And then where will we be?

In the name of fake free trade – DC has gutted our industrial manufacturing.

Which is inconceivably terrible.

In the name of fake free trade – DC is on the verge of gutting our food manufacturing.

Which is cataclysmic.

Let’s stop pretending fake free trade is free trade – shall we?

The post India Reminds: What DC Has Long Pretended Is ‘Free Trade’ – Is Not Free Trade appeared first on RedState.

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Trump: Pay no attention to that garbage ABC/WaPo polling outfit

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Alternate headline: “Presidential tweet focuses country’s attention on ABC/WaPo poll showing Trump’s job approval sliding.”

It made me laugh to think of lawyers threatening a pollster. With what? Bad Sampling in the First Degree?

There’s one true thing in those two tweets: ABC did briefly have Trump falling 12 points behind Hillary in October 2016 — from October 20 to 23, to be exact. Other pollsters saw Clinton’s lead balloon around the same time, though. The AP had her up 13, Suffolk had her up 10, and so on. That’s not because of data-rigging or FAKE NEWS!, it’s because Trump was getting battered at the time by fallout from the “Access Hollywood” tape and the women coming forward to accuse him of various forms of sexual misconduct. Not long after, though, Comey released his letter to Congress announcing that he was reopening the Emailgate probe. And late deciders began weighing whether to sign up for another four years of Clintonism or to try to something different in a big way. The very next ABC poll taken, from October 21-24, found Hillary’s lead slipping to eight points. The ABC/WaPo poll conducted from October 23-26 found it shrinking to five points. The next tracker, from October 27-30, after the Comey letter was issued, had it down to one.

The final poll they published before Election Day put the race at 49/46 for Hillary. That turned out to be the closest match of any major pollster with the national popular vote, which went 48/46. Which was no surprise: Contra Trump, ABC/WaPo actually has a sterling record of polling in presidential contests.

But we needn’t dwell on this. Anyone who doesn’t understand yet that Trump cries “fake!” at any news that’s bad for him to try to convince people not to believe it isn’t going to be swayed at this point. Besides, I can understand why today’s ABC/WaPo poll is especially irritating to him. It’s not the job approval number in it, which is bad at 38 percent (down six points from June) but nothing he hasn’t seen before. The ominous numbers are the ones associated with the economy, particularly the trade war with China.

While a 56 percent majority of Americans rate the economy as “excellent” or “good,” that figure is down from 65 percent in November. A separate question finds 6 in 10 say that a recession is either “very likely” or “somewhat likely” in the next year. That fear compares with 69 percent who said a recession was likely in fall 2007, shortly before the recession began later that year…

The Post-ABC poll finds 43 percent of Americans say Trump’s trade and economic policies have increased the chance of a recession in the next year, more than double the 16 percent who say his policies have decreased the likelihood of a recession. Another 34 percent say Trump’s policies have not made a difference…

But sizable shares of Trump’s core supporters say they are worried about price increases because of tariffs, including 55 percent of whites without college degrees, 54 percent of people living in rural areas and 45 percent of white evangelical Protestants. Concern rises to about 6 in 10 political independents and people living in the suburbs, two key swing voting groups.

His approval rating on the economy was in majority territory in June at 51 percent. Now it’s at 46/47.

If we do end up in a recession, POTUS will use every rhetorical weapon available to him to shift the blame. It’s Jerome Powell’s fault for not lowering interest rates; it’s manufacturers’ fault for not moving their businesses out of China quickly enough; it’s Democrats’ fault for not agreeing to a payroll tax cut to stimulate the economy; it’s China’s fault for stubbornly resisting American pressure to end its intellectual-property banditry and play fair economically. Those arguments will work for fans but I don’t know if they’ll work for swing voters. A separate poll taken late last month showed most Americans will blame Trump if the economy goes south:

The Harvard CAPS/Harris poll of 2,531 registered voters at the end of August found that 57 percent would blame Trump more than the Federal Reserve or anyone else should America enter recession by the end of the year.

Moreover, 62 percent said they were somewhat or very concerned that there will be a recession in the next six months amid the China trade war, a global economic slowdown, and the waning impact of federal stimulus from early on in the Trump administration…

The Harvard CAPS/Harris poll found that 63 percent believe the tariffs are hurting the U.S. more than China. Moreover, 74 percent said U.S. consumers, not China, pay the cost of the tariffs.

The good news for him is that Americans do see the point of this war. Fifty percent approved of his tariffs on China despite the economic pain and fully 80 percent thought it was better to reckon with China’s chicanery now than to keep postponing it. That’d be an interesting electoral pitch if Trump tried it — “I know it’s tough right now but it’ll be tougher if we let China keep stealing. And unless you elect me to a second term, the next president will let them off the hook.” I don’t think he’d try that message, though; it’s too close to accepting responsibility for a negative development, something to which his ego is deathly allergic. He’ll try a combo of insisting that things really aren’t so bad and, to the extent that they are, it’s someone else’s fault.

One other ABC/WaPo detail via Charlie Sykes: Trump’s approval is at 30/64 among women, abysmal numbers that are way off his pace of 41 percent of the female vote in 2016. Obviously he’ll do better than 30 percent next November as some right-leaning women decide he’s the lesser of two evils, but you can see why I thought yesterday that a third-party run by a woman candidate could be dangerous to him. If a Carly Fiorina type pulled more women voters from him than from the Democrat, it could cost him a second term. Fiorina says it won’t be her, though, luckily for POTUS.

The post Trump: Pay no attention to that garbage ABC/WaPo polling outfit appeared first on Hot Air.

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Trump: I hereby order American businesses to immediately start looking for alternatives to China

Westlake Legal Group t-9 Trump: I hereby order American businesses to immediately start looking for alternatives to China Xi Jinping Trump The Blog Tariffs powell China

Just a reminder in case you missed the Greenland episode this week that the president is losing his mind, in full public view, day by day.

Like a Twitter pal said, imagine throwing a fit because Denmark refused to sell Greenland to you and touting the fact that an ally said Israelis love you like you’re the second coming and having those things *not* be your most alarming statements of the week.

He started off the day with a bang:

He’s never going to accept that the Fed is independent from partisan politics by design, but he could at least restrain his scapegoating of Powell by not comparing him unfavorably to communist China’s supremo, a guy who operates actual concentration camps. Trump’s willingness to speak warmly about the world’s worst bad guys while excoriating domestic politicians in the most acidic ways has lost most of its power to shock after his bromances with Putin and Kim Jong Un, but not all of it.

But wait. He was saving the Big Crazy for his response to China’s new retaliatory tariffs on American imports:

“Our great American companies are hereby ordered.” Every day brings new material for a game of “What if Obama said it?” but purporting to order U.S. companies not to do business with China is championship-round stuff. I wonder which White House advisor got stuck explaining to him that he doesn’t actually have the power to do that. Just like I wonder when we’re going to start hearing about sanctions on China, which would be like dropping an atomic bomb on the economy.

Over at WaPo, Megan McArdle points to the Greenland episode and pleads with Trumpers to finally, finally admit that this isn’t normal:

This is not normal. And I don’t mean that as in, “Trump is violating the shibboleths of the Washington establishment.” I mean that as in, “This is not normal for a functioning adult.”…

If your company’s owner abruptly pulled out of a conference with an important joint-venture partner just because the other CEO said something mildly unflattering, would you try to defend it as some sort of cunning N-dimensional chess move? Or would you start looking for another job? If your mother canceled a family visit because your cousin wouldn’t sell her the bedroom, would you get mad at your cousin for slighting your mother’s honor? Or would you try to arrange a neurological consult?

Hopefully, you wouldn’t just smile and say, “No, really, everything’s fine,” when it’s very obviously not. The longer you humor people who have clearly gone off the rails, the more time they have to damage themselves and those around them. Moreover, the damage is usually fiercest to the people closest by — which in Trump’s case means the folks who have been standing loyally behind him for the past three years.

This past week is going to get its own chapter in all of the self-serving post-Trump “I never really liked him” memoirs written by his cronies eager to rehabilitate their image once he’s gone. What’s interesting, though, is that as I write this the Dow is “only” down 500 points, and most of that loss is surely attributable to China’s announcement of new tariffs, not Trump’s reaction. That shows you the extent to which even people with skin in the game on Wall Street largely tune out his ranting and raving now. “The president tried to order American industry to pull out of China via a tweet? That crazy rascal. What’s for lunch?”

As it is, if Biden wins the nomination, we’re going to spend an entire presidential campaign debating which side’s candidate is more addled.

The smart move now by China would be to offer Trump a return to the pre-tariff status quo and propose calling it the “Trump Total Victory Accord” or whatever to let him save face. That’s basically what happened with NAFTA and the USMCA; as you long as you let him have a political “win,” you don’t have to make meaningful concessions. I’m sure he’d leap at the chance at this point to extricate himself from a situation that’s risking an economic tailspin and his own destruction at the polls next year. All it would take from China is a cosmetic concession of some sort — although the fact that they’re throwing another round of tariffs at him today suggests that they’re now invested in making him live with the consequences of this trade war, even if (especially if?) it tanks his reelection chances. This is an increasingly big moment for a rising power, being strong-armed by the world’s most powerful country and its blowhardish president on trade. If China stares him down and Trump capitulates to save his own electoral skin, it’ll be a massive victory for Chinese prestige. Even if he doesn’t capitulate, the economic pain they inflict might run him out of office.

The risk is that, if they play hardball with him and he wins next fall anyway, there’s no telling how crazy he might be in a second term. Right now he’s panicked at the thought of how voters will react to all this. What happens after November 2020 when he’s no longer accountable to voters?

Ah well. If only Congress had some constitutional power over trade and tariffs which it could use to rein Trump in!

The post Trump: I hereby order American businesses to immediately start looking for alternatives to China appeared first on Hot Air.

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Escalation: China to hit US with tariffs on $75 billion in exports

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“The heat is rising” ahead of the upcoming G7 summit between China and the US. Answering Donald Trump’s last round of tariffs. Beijing’s Finance Ministry announced that they would impose new tariffs on $75 billion of US imports. Some of those will hit almost immediately, and then some will escalate on December 15th, the same day that the other half of Trump’s announced tariffs will hit consumer goods:

The US-China trade war ratcheted up yet again on Friday, with Beijing unveiling a new round of retaliatory tariffs on about $75 billion worth of US goods.

China will place tariffs of 5% or 10% on US imports starting on September 1st, according to a statement posted by China’s Finance Ministry on Friday.

The Ministry also announced plans to resume tariffs on US imports of automobiles and automobile parts. The tariffs would be 25% or 5%, and would take effect on December 15th.

It’s the kind of tit-for-tat action that takes place in trade wars. Bloomberg’s Shawn Donovan calls it a “measured response” to Trump’s tariffs, but that might be all China has left — at least in tariffs:

China has a disadvantage in a trade war with the US, as it exports far more than it imports. Furthermore, they need to be able to conduct industrial espionage on US companies operating in China and exporting their manufactured goods to the US in order to glean trade secrets and gain a competitive edge for their own companies. Both issues are driving Trump’s strategy on the trade war, but they give him an advantage in that China’s losses are much more significant in both economic and strategic terms.

That doesn’t make it cost-free for Trump, however. Bond yields are already signaling a potential recession on the horizon driven largely by the economic damage from the trade war. Freight shipping has declined for eight straight months in the latest indication of a coming contraction:

Economists and executives alike are trying to assess the impact of tariffs and the overall health of the economy, amid mixed signals such as steady consumer spendingweak manufacturing data and volatile stock and bond markets. J.P. Morgan wrote in a note this week that the average American household will lose $1,000 a year because of new tariffs. …

In July, the Cass Freight Index, which measures North American rail and truck volumes, fell 0.8% from June, marking its eighth month of declines, and a drop of nearly 6% from a year ago.

“With the -5.9% drop in July, following the -5.3% drop in June, and the -6.0% drop in May, we repeat our message from last two months: the shipments index has gone from “warning of a potential slowdown” to “signaling an economic contraction,” strategist Donald Broughton wrote in the report for Cass Information Systems, a freight payments processor.

As the trade dispute continues, it’s “forcing companies to run down inventory, curbing new orders,” Jefferies wrote in a note Wednesday. “This is corroborated by weak export growth from Asia during the peak shipping season. The good news is that the run down in the backlog of orders and import intentions appears to be close to a nadir.”

Trump has good reasons for playing hardball with China, but he’s going to have to make a decision soon whether he can afford it for much longer. A recession will kill his main argument for re-election, and it would likely produce a stronger Joe Biden in the Democratic primaries, as I wrote last week:

A recession in 2020 would be a body blow to Trump’s campaign. A recession in 2019, or perhaps just the perception of its inevitability, might influence the Democratic primaries more than even Warren could predict. For insight, we can look back to 1992’s Democratic primary and how Carville’s axiom played out.

The Democratic field in 1991-2 was nowhere near as large as in this cycle, but it had a surprisingly similar progressive bent. Early in 1991, fresh off his Gulf War victory and with approval ratings of 89 percent at one point, Bush seemed unbeatable, which discouraged more well-known potential candidates such as Mario Cuomo and Jesse Jackson from throwing their hats into the ring. Instead, Clinton and his successful Southern centrism squared off against only one other governor, California’s Jerry Brown, at the time a favorite of left-leaning progressives. The three other major candidates in the race all came out of the U.S. Senate: Massachusetts’ Paul Tsongas, Nebraska’s Bob Kerrey, and Iowa’s Tom Harkin, all of whom came from the party’s more liberal and/or populist wing.

And yet, in the midst of a recession, the race took a surprisingly centrist tone. After recovering from the exposure of an extramarital affair, Clinton kept his focus on economic growth through traditional methods. This strategy turned out to be so successful that Brown tried changing tactics late in the primaries, swinging right to back a flat tax and abolishing the Department of Education, long a goal of Ronald Reagan conservatives. In the end, however, Democrats went with Clinton and his laser focus on the economy, a centrist who promised less of an economic revolution in the midst of uncertainty in the short recession.

If that same dynamic holds in 2020, it won’t benefit Warren even if she wins the recession-prediction sweepstakes. Voters will want stability and caution rather than radical shifts in policy, perhaps especially after the drama and unpredictability of Trump’s White House tenure. Almost the entire Democratic field has run hard to the left in order to out-Bernie Bernie Sanders; of the viable candidates remaining, only Joe Biden fits the mold. Biden also represents a restoration of the Barack Obama order, which is already attractive enough that Biden’s opponents have been forced into the role of attacking Obama to fight Biden for the nomination.

Trump has far more economic leverage on China, but Beijing might have more political leverage on Trump. At some point, they might be able to offer him just enough to declare victory and depart the field. If Trump is as self-serving as his critics claim, he might have already done so. If he does cut a deal, Trump had better make sure he gets enough concessions to make the pain worth it.

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WSJ Op-Ed Gets Social Conservatives (and Trump Supporters) Way Wrong – Yet Again

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I begin with a disclosure.

The Wall Street Journal piece we will examine was penned by the Competitive Enterprise Institute (CEI)’s Iain Murray.  CEI is a fine organization.  And I consider a great many of their people to be friends – including Murray.

But Murray really misses the mark with Tuesday’s “Free-Marketeers Have Taken Social Conservatives for Granted.”

And let us please take a moment to note:

In this piece, the Venn diagram of Social Conservatives and Donald Trump supporters – is a nigh perfect overlay.

Murray fundamentally misunderstands Social Conservatives – in almost exactly the same way the Never Trump Right misunderstands Trump supporters.

It’s why the Never Trump Right (and many others) has spent the Era of Trump wondering how Social Conservatives can possibly support the serially-marrying-and-philandering Trump.

As you read on, when you read “Social Conservatives” – you can mentally add “and Trump supporters.”

Actually, Murray’s title is semi-accurate.  The Free-Market-Uber-Alles Contingent has indeed taken Social Conservatives for granted.

But the title’s unspoken, incorrect assumption is Social Conservatives – aren’t also free-marketeers.  Many if not most…are.

The subtitle really begins to reveal the inaccuracies:

“Capitalists need to make the case that prosperity is crucial for protecting tradition and security.”

Again, most social conservatives already understand and agree with this.

What Social Conservatives have witnessed for the last half century-plus – is the Free-Market-Uber-Alles Contingent fail to protect the free market – AND tradition and security.

DC is a two-party collusive cabal.  Democrats and Republicans put on Partisan Theater – squawking at each other on TV and in print.  But it is all for show.

All the while, Ds and Rs have been working together to empower and enrich themselves and their cronies – at the expense of the nation.

DC gets bigger and bigger.  And regulates more and more.  And spends more and more.  Because the bigger DC is – the more power and money the DC cabal has.

All the while, America has grown poorer and poorer.

The Free-Market-Uber-Alles Contingent – failed miserably in their many attempts to stop any of this.

Meanwhile, DC has left our nation’s borders wide open to a mass Third World invasion.  Because Democrats want Third World votes – and Republicans want Third World cheap labor for their donors.

And the Free-Market-Uber-Alles Contingent – has been the right-of-center head cheerleader for this insanity.

Stop right there.

Murray acknowledges social conservatives want to protect tradition and security.  Mass Third World immigration – completely destroys both.

Social Conservatives do not oppose mass Third World immigration – because of anything having to do with race.

Social Conservatives oppose mass Third World immigration – because they have witnessed a half century-plus of it…and it has eviscerated our nation’s tradition and security.

We have idiotic sanctuary cities and states.

Which much more closely resemble the Third World they’ve imported than they do the US.

Which refuse to work with law enforcement – and release illegal alien gang member murderers and rapists back into our disintegrating society.

Mass importing Third World Worlders – has obscenely overcrowded the likes of our nation’s classrooms and emergency rooms.

Teachers spend most of their time working with students who do not speak English – at the expense of everyone else.

Americans wait endless hours to see health care providers – because there simply aren’t enough health care providers to handle the overload.

And the Free-Market-Uber-Alles Contingent – has long championed open borders.  Which would turn America – into a sanctuary nation.  And this tradition-and-security insanity – would occur EVERYWHERE.

I can’t imagine why Social Conservatives have tuned out the Free-Market-Uber-Alles Contingent.

Mass Third World immigration – is awful American economic policy too.  Because America is a nation – with an economy.  Not an economy – with a nation.

Americans elect American officials – to do what’s best for America and Americans.  Crazy, I know.

Mass importing Third Worlders – takes jobs from and drives down wages for Americans.

Mass importing Third Worlders – drives up the likes of housing and health care costs for Americans.

Mass importing Third Worlders – costs us tens of billions of dollars per annum (and probably much more) in government money.  In welfare, health care and education money spent on the invaders.

Americans are taxed more and more and more – to pay for all of this.  They are taxed more and more and more – on fewer jobs and lower wages, and while paying higher housing and health care costs.

I can’t imagine why Social Conservatives have tuned out the Free-Market-Uber-Alles Contingent.

Murray only mention’s Trump once:

“While President Trump’s antipathy to free trade was well-known, his and other conservatives’ sudden embrace of aggressive antitrust actions was more surprising. Now self-described ‘national conservative’ thinkers are pushing industrial policy—government planning that meddles with economic decision-making to promote favored industries or social outcomes.”

This is just…so much wrong.  In the interest of verbiage conservation – we’ll only address the free trade wrongness.

Trump doesn’t have “antipathy to free trade.”  He’s just about the only guy in DC actually trying to achieve it.

Trump has rightly highlighted the incredibly awful, one-sided, anti-US trade deals DC has spent decades cutting – and the Free-Market-Uber-Alles Contingent has been applauding.

The US engages in free trade.  The rest of the planet – absolutely does not.

Nigh every other nation tariffs the daylight out of our stuff.  Nigh every nation severely limits the import of our stuff.  Nigh every other nation subsidizes their stuff – thereby rendering it artificially cheaper on the global market.

This isn’t free trade.  This is FAKE tree trade.

Social Conservatives work on farms.  And on assembly lines.  And in mines.  And on oil rigs.

They’re the ones whose jobs are outsourced, whose wages are crushed, whose towns are hollowed out – by DCs fake free trade.

Because DCs fake free trade makes making anything in the US less attractive than…anywhere else on the planet.

And now the Free-Market-Uber-Alles Contingent is defending this obscenely awful DC status quo – against Trump trying to even things out.

I can’t imagine why Social Conservatives have tuned out the Free-Market-Uber-Alles Contingent.

One last thought….

We’ve noted the Free-Market-Uber-Alles Contingent’s pronounced, prolonged inability to effect any positive change.

Trump has already delivered a ton.

The best US economy in decades.  The lowest unemployment in decades – including the lowest Black and Hispanic unemployment ever.  Great Wall Street growth.

And great consumer confidence and spending.  In large part because for the first time in half a century-plus – wages are actually, substantially increasing.

How and why are wages finally increasing?

Because Trump is deporting competitors to Americans for jobs and wages.

And because Trump is – amongst other helpful things – imposing tariffs on trade cheats.  Thereby making America exponentially more attractive to job creators – who are returning to our shores in growing numbers.

Two things to which the Free-Market-Uber-Alles Contingent are vociferously opposed.

I can’t imagine why Social Conservatives have tuned out the Free-Market-Uber-Alles Contingent.

Trump just this week achieved yet another Social Conservative win – by delivering yet another economic policy win.

Trump banned federally funded clinics from giving abortion referrals.  Which caused the nation’s largest abortion mill – Planned Parenthood – to refuse the federal funding.

Boom.  Something very simple the Free-Market-Uber-Alles Contingent could have very easily delivered at any point for years and years – but never, ever did.  (Where were you on this, George W. Bush Administration?)

Trump is time and again delivering on Social Conservative priorities – on economic, traditional and security grounds.

The Free-Market-Uber-Alles Contingent – never, ever has.

And is now actively working against – the policies that are benefiting Social Conservatives.

I can’t imagine why Social Conservatives have tuned out the Free-Market-Uber-Alles Contingent.

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NBC: Support for free trade reaches new high thanks to Trump

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His most lasting conservative legacy might be turning the trade war into such an economic trainwreck that neither party goes near tariffs again for decades.

In fact, I wonder if Trump’s trade policy might end up so unpopular by next year that even some like-minded Democratic candidates will be forced to scramble to the center to try to pick up voters who feel disaffected by it. Elizabeth Warren’s trade program is plenty protectionist in its own right, demanding as a precondition to negotiations that potential trade partners meet certain standards on labor, taxes, energy, and the environment which even the United States at present doesn’t meet. If the U.S. ends up in a recession and the public concludes that Trump’s trade war with China is the prime suspect (a belief that’ll be eagerly encouraged by the media), how aggressive can Warren really be on the stump in trying to shift blame away from tariffs and onto Wall Street?

Whether or not Trump creates a long-term public consensus in favor of free trade, it’s a cinch that ardent anti-Trumpism among Dems will create a short-term Democratic consensus in favor of it.

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NBC didn’t provide a partisan breakdown but its story notes that “Democrats and independents much more supportive than they were four years ago.” That’s the best-case scenario for protectionists here, that most of the new love for free trade is pure, mindless opposition to anything Trump does. Even if we dodge a recession and the economy remains healthy into next fall, some critical mass of Dems will decide that the policy is bad because everything the orange man does is bad.

The worst-case scenario for protectionists? Well…

In the survey by the National Association for Business Economics, out Monday, 72% of economists predicted that a recession would occur by the end of 2021. That’s up from 67% in February and according to data gleaned from more than 200 respondents.

The new figure combines the 38% of economists who said they expect a recession to strike in 2020 with the 34% who said they see one befalling the US economy in 2021. In a survey conducted in February, 42% said they saw a 2020 meltdown, while just 25% forecasted one in 2021.

Trump is already incorporating some preemptive scapegoating into his rhetoric about this, insisting on the one hand that the economy has never been better while also informing the country that if he’s wrong then it certainly isn’t his fault:

Having already passed tax cuts and alienated Democrats to the point that no infrastructure stimulus is in the offing, he has few legislative tools at his disposal to try to goose growth if the economy falters. So we’re left to wonder what strange forms his panic might take if the monthly numbers begin to slow down. Would he try to fire Powell? Would he capitulate to China on trade in a desperate attempt to reverse unemployment trends? Would he start ranting on Twitter every day about a vast left-wing conspiracy to talk down the economy in hopes of defeating him next fall? Actually, he’s already started doing that, notes the Times:

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

Mr. Trump has repeated the claims in private discussions with aides and allies, insisting that his critics are trying to take away what he sees as his calling card for re-election. Mr. Trump has been agitated in discussions of the economy, and by the news media’s reporting of warnings of a possible recession. He has said forces that do not want him to win have been overstating the damage his trade war has caused, according to people who have spoken with him. And several aides agree with him that the news media is overplaying the economic fears, adding to his feeling of being justified, people close to the president said.

WaPo says that behind closed doors he’s taken to accusing his enemies of manufacturing phony data to shape public opinion: “Trump has a somewhat conspiratorial view, telling some confidants that he distrusts statistics he sees reported in the news media and that he suspects many economists and other forecasters are presenting biased data to thwart his reelection, according to one Republican close to the administration who was briefed on some of the conversations.” Odds can’t be worse than 50/50 that if we end up in a true recession he’ll figure out a way to pin it on Soros.

By the way, this same poll found 89 percent in favor of universal background checks for gun purchases and 62 percent in favor of banning assault weapons, which is in line with other recent surveys. Is Trump still open to expanding background checks? Twelve days ago he said, “I’m looking to do background checks. I think background checks are important.” Yesterday he sounded more cautious, saying, “We do have a lot of background checks right now” and emphasizing that mental illness is the core problem that needs to be addressed. Sounds like gun-rights supporters have been talking to him since his insta-reaction after the El Paso and Dayton shootings.

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International Trade – Is Rife with Omni-Directional Anti-Free Trade Practices

 

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One characteristic of humans – is we each view the world through our personal prism.  Perfectly understandable – how else would we?

But it can lead to difficulties.

If you are an honest and honorable person – you tend to look at everyone else as being honest and honorable.

You think “That’s how I would handle this situation – so that’s how he/she/they will handle it too.”

Unfortunately, more often than not, he/she/they will not handle the situation the way you would.

Americans are for the most part open and optimistic people.  Because we live in the most open and optimistic governmental system ever devised and enjoyed by humans.

So we enter the world – with smiling faces and arms wide open.  And far too often, the many other nations of the world – punch us in the face.

Our nigh eternal optimism – very often costs us dearly.

For my part, I am a realist – or a cynic.  Take your pick.  We realists/cynics look at optimists and pessimists both – a little askance.

So too did apparently realist-cynic writer William Arthur Ward:

“The pessimist complains about the wind. The optimist expects it to change. The realist adjusts the sails.”

Of the three – only the realist is actually looking to solve the problem.

Far too often, pessimists and optimists accept far-from-optimal situations.  Pessimists assume it could always be worse – optimists that it can’t be any better.

We realists – are always looking to improve things.

And so it is with international trade.

International trade can be a very good thing – in theory.

In practice – many, many problems rapidly arise.

Actual international free trade – is free from government interference or imposition.

That’s mostly how we in the US do it.  That’s not how nigh any other country in the world does it.

Other nations tariff the daylight out of our stuff.  Other nations severely limit the imports of our stuff.  And other nations mass-subsidize their stuff – thereby artificially lowering their prices when competing with our stuff.

None of that is free trade.  Nor is it fair trade.

We the Optimistic – have smilingly endured this one-sided, anti-US insanity…for decades.  We’ve been lost in Ridgemont High – rigidly adhering to #3 of Mike Damone’s Five-Point Plan:

“Act like wherever you are – that’s the place to be.  ‘Isn’t this great?’”

No, Trade-Uber-Alles freaks – it hasn’t been great.  At all.

We have been getting royally screwed – for half a century-plus.  By basically the entire planet.

And these nations – often get very creative in their screwing of US.

Including: Screwing us internationally – then screwing us domestically…so as to further screw us internationally.

California Olive Growers Seek More Duties on EU:

“One year after winning anti-dumping and countervailing duties averaging about 35 percent on imports of Spanish olives, California growers are hoping a long-running dispute over European support for Airbus will lead to even more taxes on the tasty Mediterranean fruit.

“Michael Silveira, chairman of the Olive Growers Council of California, testified at a Trump administration hearing on Monday in favor of USTR’s proposal to include olives on the list of EU goods that could be hit with 100 percent duties in the aircraft dispute. He also asked that three ‘bulk’ categories of olives be added to the nine olive categories already proposed.

“Silveira complained that ‘the Spanish industry is working overtime’ to find any way it can to avoid the duties imposed last year. ‘A Spanish olive company has just invested in a U.S. ripe olive processor. The combined company has now terminated nearly all its contracts with U.S. growers, enabling it to import provisionally prepared bulk olives from Spain,’ Silveira said.”

“But wait” the Trade-Uber-Alles freaks screech – “Why did we impose tariffs in the first place?

Glad you asked:

“On June 12, 2018, the Department of Commerce (Commerce) announced its affirmative final determinations in the antidumping duty (AD) and countervailing duty (CVD) investigations of imports of ripe olives from Spain….

“In the AD investigation, Commerce…established a final dumping margin of 20.04 percent for all other producers and exporters of ripe olives from Spain.”

Spain’s government is mass-subsidizing olives.  Then Spain is mass-dumping them into the US.

Which has absolutely zero to do with free or fair trade.  And is egregiously damaging to our olive farmers.

So we imposed some tariffs.

The Trade-Uber-Alles freaks will ignore all of Spain’s anti-free-trade actions up to this point – and screech “Protectionism!!!” and “Tariffs are taxes!!!” when we finally respond to getting royally screwed.

The Trade-Uber-Alles freaks – appear to be thoroughly America Last.  At least when it comes to the hundred-million-or-so Americans who grow and make things.

The Trade-Uber-Alles freaks – appear to be international trade masochists.  I have a feeling more than a few of them – are Animal House’s Kevin Bacon:

“Thank you Sir – may I have another.”

Spain responded to our tariffs – by infiltrating our domestic supply chain.  And cutting almost all ties with domestic producers – and replacing them with Spanish producers.

Which has absolutely zero to do with free or fair trade.  And is even more egregiously damaging to our olive farmers.

About which the Trade-Uber-Alles freaks will say…absolutely nothing.

But if our olive growers get their way – and the tariffs are rightly upped and broadened to further deal with Spain’s anti-free-trade behavior…the Trade-Uber-Alles freaks will again screech “Protectionism!!!” and “Tariffs are taxes!!!”

“Thank you, Sir – may I have another?”

I’ll give Spain credit for its creative ways to implement its anti-free trade agenda.  And for their putting Spain First – even cheating out the wazoo to do it.

But that doesn’t mean we have to remain the eternal optimist – and continue to take it in the shorts.

We have to be a realist – and adjust the sails.

Which in this case means – upping and broadening the Spanish olive tariffs.

We should be at least as America First – as Spain is Spain First.

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