China retaliates with 25% tariff on $34B worth of goods including agriculture(cnbc.com)
cnbc.com
China retaliates with 25% tariff on $34B worth of goods including agriculture
https://www.cnbc.com/2018/06/15/china-announces-retaliatory-tariffs-on-34-billion-worth-of-us-goods-including-agriculture-products.html
12 comments
As I understood the last set of tariffs the EU enacted specifically targeted industries operating within the districts of Mitch McConnell, Paul Ryan, and Nancy Pelosi. I’d be interested in figuring out which politicians Xi is targeting with his tariffs.
> The list includes soybeans, electric vehicles, a range of hybrid electric vehicles, a variety of seafood and pork, according to the Ministry of Commerce.
Tariff on electric vehicles also serves China’s strategic interest in becoming the world leader in the industry. It allows their domestic manufacturers and ecosystem to achieve even stronger economy of scale and to move up the learning curve faster. (Domestic competition is already intense so complacency is unlikely.)
I suspect they had wanted to do this and the event provides a perfect excuse for it.
It is possible we will see Shenzhen-style hub for electronic components where it is the cheapest and fastest place globally to manufacture many electronics but now for electric vehicles, again in China.
Tariff on electric vehicles also serves China’s strategic interest in becoming the world leader in the industry. It allows their domestic manufacturers and ecosystem to achieve even stronger economy of scale and to move up the learning curve faster. (Domestic competition is already intense so complacency is unlikely.)
I suspect they had wanted to do this and the event provides a perfect excuse for it.
It is possible we will see Shenzhen-style hub for electronic components where it is the cheapest and fastest place globally to manufacture many electronics but now for electric vehicles, again in China.
This is where everyone starts cheating in the prisoners'dilemma. On trying to win, we're all going to lose. Trade war is the surest path to global economic depression of 1930s magnitude. Let's hope it ends better than that...
I hate to say it but tariffing their own food supply is not a tenable position. Granted they likely have some pretty fucking large stockpiles of foodstuffs and grains, but they are still very dependent on US agriculture, especially in concerns for their beef production which is super expensive there. They don't have the land to grow alfalfa and grass for their cows, but they do have large empty cargo ships regularly sitting in US ports that we normally pack to the brim with grass for a few extra pennies.
But there are lots of other places in the world to buy foodstuffs like the US sells them. Is there a reason they can't just buy from Europe or Australia or whatever?
Only if they can up their production to match what the US was selling them. The US is a very large food exporter although the EU looks like it does more in aggregate[1]. There big problem will be if the prices rise, does it cause unrest in their populace. People will grumble if their IPhone gets more expensive or jobs are lost. Riots start when food starts getting scarce
[1]https://www.worldatlas.com/articles/the-american-food-giant-...
[1]https://www.worldatlas.com/articles/the-american-food-giant-...
I don’t think the USA is a crucial food exporter to any market except maybe Mexico. Yes, we export lots of fruits, nuts, and animal feed, but none of this is going to be missed very much. It’s not like Thailand cutting off rice exports.
The USA is a food exporting powerhouse. We are not #1 in every market but we are in the top 5 of every major grain I can think of.
some examples
Wheat-http://www.worldstopexports.com/wheat-exports-country/
Corn-http://www.worldstopexports.com/corn-exports-country/
Rice-http://www.worldstopexports.com/rice-exports-country/
some examples
Wheat-http://www.worldstopexports.com/wheat-exports-country/
Corn-http://www.worldstopexports.com/corn-exports-country/
Rice-http://www.worldstopexports.com/rice-exports-country/
But no one really depends on us. A lot of what we export is used as animal feed.
animal feed is used to make more animals which humans eat. Im not saying I know that this would affect China for sure, but you cant take a major producer out of a market or increase their price substantially and expect no effect
Mexico and Canada would be hurt much more, prices would go up, meat would be more expensive in China, but...global starvation wouldn’t occur. There are plenty of net surplus exporters out there, and what they add are mostly luxuries.
This is great news for India if this really does blow into a trade war between the US and China I imagine.