“It all comes from China.” – Donald Trump
“We’ll be taking in over a period of time hundreds of billions of dollars in tariffs and charges to China, and our farmers will be greatly helped,” Trump said at a meeting of farmers, when he announced a $16 billion second round of aid, on top of the previous $12 billion. Trump said, “farmers are great patriots, willing to sacrifice for the country.”
Taxpayers will pay for the $28 billion subsidies to farmers. Midwest farms are still flooded, and farmers are unable to plant 2020 crops. Soil quality is priceless, it’s not wise to ignore Mother Nature.
U.S. dysfunctional traders
Back in 2016, Wilbur Ross, a wealthy investor known as “The King of Bankruptcy,” while buying distressed companies said, “there’s trade, there’s sensible trade, and there’s dumb trade. We’ve been doing a lot of dumb trade, that’s going to get fixed.” He got a job as U.S. Secretary of Commerce.
Peter Navarro, a fringe economist who hates China, is the director of the National Trade Council – a new White House office on par with the National Security Council and the National Economic Council.
Navarro is the worst person to deal with China. Ignoring their requests, Navarro showed up at the G-20 Argentina and Japan trade meetings. U.S. Trade Representative Robert Lighthizer, Treasury Secretary Stephen Mnuchin, and many others without the power to make a deal have muddied the waters. How many trade officials are fluent in Mandarin, Yue, or Wu?
Trump’s tough talk plays well in campaign rallies, but not when dealing with President Xi. Trump is playing with fire. Trump’s hate speech and dishonest, unreliable behavior make him a deal breaker. Not even the new NAFTA agreement has been signed!
A level playing field
The U.S. claims China cheats. How else could they grow so fast?
The U.S. is not credible, ignoring the climate emergency, selling weapons to 9/11 criminals, environmental destruction, $650 billion per year subsidies for fossil fuels, demanding lower rates from the Fed, and discussing currency devaluation.
Pretending the U.S. economy is booming has created a national moral and ethical deficit. America’s massive trade deficit and the lack of personal savings are undeniable.
The U.S. wants to make China to protect intellectual property, improve human rights, avoid using subsidies and currency manipulation. China has made good progress over time, and they object to the allegations. China’s population is five times larger and has a different political system and culture than the U.S.
Who pays for the tariffs?
After September 1, a $1,000 Apple product, for example, will incur a $250 duty fee collected at the port of entry. The $250 will be sent to the U.S. Treasury.
Apple is not hiring 20,000 people nor opening new factories in America. The new tariffs will be paid by American consumers, creating inflation. As prices rise, your money buys less. President Reagan said, “Inflation is as violent as a mugger, as frightening as an armed robber, and as deadly as a hit man.” Senator Tom Cotton (R-AR) says, “the sacrifices Americans will pay are minimal compared to those serving overseas.” Cotton is itching for war.
Investing in science to create Intellectual Property
Intellectual property theft is an old claim. U.S. companies in the past agreed to technology transfers, and the new China patent office is now protecting IP. China’s new government investment in science and research has created local IP.
Stop blaming China and cutting budgets for science and research, developing new IP in the United States is more important and creates more value.
Why would you want to pay 25 percent more on what you buy? Inflation reduces your standard of living, recession follows.
Please call your U.S. Congressman and ask them to oppose all trade tariffs and protect our constitutional rights.
Congress gave up the power to set tariffs, but tariffs should not apply to all products and the rate of 25 percent (or more) is impulsive, unjustified, and not paid by China!
Dr. Luis Contreras