The deepening U.S.-China trade war
The trade war between the United States and China escalated dramatically this week, with both nations preparing to impose new tariffs on hundreds of billions of dollars’ worth of goods after a breakdown in negotiations. The Trump administration raised tariffs from 10 percent to 25 percent on $200 billion in Chinese goods, including seafood, luggage, furniture, and bicycles. In retaliation, Beijing announced that higher tariffs on $60 billion worth of American products, including beef, vegetables, batteries, and electric saws, will go into effect starting June 1. The salvo came after months of trade talks abruptly deteriorated last week. American officials have accused China of backtracking on key commitments, including changing its laws to eliminate what the U.S. calls “market-distorting subsidies” for Chinese companies.
The Trump administration is threatening to tax an additional $300 billion in Chinese products, putting tariffs on virtually every product China sends to the U.S., including electronics and toys. The trade turmoil unsettled global markets, with the Dow Jones industrial average and S&P 500 suffering their worst one-day losses since January. Trump promised $15 billion in aid to farmers who have been hit hard by retaliatory measures from China, the nation’s second-largest agricultural market, praising the sacrifices of “our Great Patriot Farmers” on Twitter. But Roger Johnson, president of the National Farmers Union, said that the new tariffs “could not come at a worse time” and that temporary aid won’t undo “the permanent damage” to agricultural export markets.
What the editorials said
Let’s call Trump’s tariffs what they are: “a new tax on Americans,” said The New York Times. The president continues to publicly insist that China pays the tariffs imposed on products it sends to the U.S. In reality, those costs are imposed on importers, who pass them on to consumers. The price of washing machines, for example, has increased 12 percent, or $86, since Trump slapped a tariff on imported washers last year. China’s retaliatory tariffs, meanwhile, are badly hurting Midwestern farmers, “who have lost a major market” for soybeans, pork, and other products.
Trump’s tariffs “may well take a toll on the U.S. economy, but the price of not confronting Beijing would be higher,” said the New York Post. China has been a serial trade cheater for decades, using its ill-gotten gains to build itself up as America’s chief geopolitical rival. Sure, the stock market doesn’t like tariffs. But “the Dow isn’t the U.S. economy.” America is enjoying robust growth and record-low unemployment. “If the country can’t afford to stand up to China now, it never will.”
What the columnists said
Rural America was desperate for a trade deal, said Michael Hiltzik in the Los Angeles Times. Besides soybeans, prices for corn and other commodities have also fallen to their lowest levels in decades. Last year, farm bankruptcies in Wisconsin, Minnesota, Montana, and the Dakotas hit their highest level since 2010, and they’re expected to keep rising. “Trump’s trade war is wrecking America’s farm economy.” How ironic, said Paul Krugman in The New York Times. Rural areas are the only parts of the country where the president enjoys positive approval ratings. “Trump’s biggest supporters are his biggest victims.”
“Trump didn’t start this trade war,” said Marc Thiessen in The Washington Post. China did, through its years of unfair trade practices, such as forcing American companies to turn over their proprietary technology to do business there. Trump, however, now has the leverage in this struggle. The Chinese economy just reported its slowest economic growth since 1990—a fact that must be panicking President Xi Jinping. China relies much more heavily on selling things to the U.S. than America does on exporting to China. “In this game of chicken, Trump is not going to blink.”
Trump is, in fact, making a high-stakes gamble that China will buckle, said Doug Palmer in Politico.com. But Xi will be reluctant to accept a lopsided pact that makes him look as if he caved too easily to U.S. demands, which could “jeopardize his standing as the country’s paramount political leader.” If Trump can’t reach a deal, he’ll have raised prices for consumers and damaged the economy. By slowing growth, he may “lose his best ticket to re-election.”
Cover illustration by Howard McWilliam.
Cover photos from AP, Newscom (2)