Absolutely Epic Escalation Of The Trade War Has Us On The Precipice Of A Cataclysmic Global Economic Crisis
Absolutely Epic Escalation Of The Trade War Has Us On The Precipice Of A Cataclysmic Global Economic Crisis by Michael Snyder – The Economic Collapse Blog
If Americans really understood how much their standard of living was about to change, the streets of our major cities would be packed with protesters by tomorrow morning. For the past several decades, China and other low cost exporters have been flooding our shores with hundreds of billions of dollars worth of cheap goods. This is the only reason why you can go to Wal-Mart and buy a shirt for three bucks. But since we buy far more stuff from the rest of the world than they buy from us, we ultimately have to go back to those other nations and beg them to lend our money back to us so that we can pay our bills. This sick, twisted co-dependent relationship has enabled Americans to live a debt-fueled standard of living that is far beyond what we deserve, and now our rapidly escalating trade war with China is going to bring the party to a crashing halt. On Tuesday, the Trump administration released a list of $200,000,000,000 worth of Chinese exports that will be hit with 10 percent tariffs. Those tariffs are in addition to the 25 percent tariffs that had previously been announced on 50 billion dollars worth of Chinese exports. These new tariffs are scheduled to go into effect on August 30th, and the Chinese have already pledged to retaliate.
In essence, our trade war with China has now “gone nuclear”, and this is going to have extremely serious implications for the U.S. economy. The following is a short excerpt from the statement that U.S. Trade Representative Robert Lighthizer released about these new tariffs…
On Friday, in response to unfair Chinese practices, the United States began imposing tariffs of 25 percent on approximately $34 billion worth of Chinese imports. These tariffs will eventually cover up to $50 billion in Chinese imports as legal processes conclude. The products targeted by the tariffs are those that benefit from China’s industrial policy and forced technology transfer practices.
China has since retaliated against the United States by imposing tariffs on $34 billion in U.S. exports to China, and threatening tariffs on another $16 billion. It did this without any international legal basis or justification.
As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports. This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies.
Without a doubt, something needed to be done about China’s unfair trade practices. The Chinese manipulate currency rates, they impose very high tariffs on U.S. goods, and they have been stealing our intellectual property for decades.
But it is very unlikely that anyone is going to “win” this trade war, and in the short-term all it is going to mean is a whole lot of economic and financial pain.