“U.S. President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said on Tuesday,” David Lawder and Michael Martina report for Reuters. “A third source who had direct knowledge of the administration’s thinking said the tariffs, associated with a ‘Section 301’ intellectual property investigation, under the 1974 U.S. Trade Act begun in August last year, could come ‘in the very near future.'”
“While the tariffs would be chiefly targeted at information technology, consumer electronics and telecoms, they could be much broader and the list could eventually run to 100 products, this person said,” Lawder and Martina report. “Trump is targeting Chinese high technology companies to punish China for its investment policies that effectively force U.S. companies to give up their technology secrets in exchange for being allowed to operate in the country, as well as for other IP practices Washington considers unfair.”
“China runs a $375 billion trade surplus with the United States and when President Xi Jinping’s top economic adviser visited Washington recently, the administration pressed him to come up with a way of reducing that number,” Lawder and Martina report. “U.S. business groups, while uneasy about triggering Chinese retaliation, have increasingly pressed Washington to take action on Beijing’s industrial policies, such as market access restrictions and the ‘Made in China 2025’ plan, which aims to supplant foreign technologies with domestic ones.”
“Shortly after Trump took office,” Lawder and Martina report, “the Information Technology & Innovation Foundation (ITIF), a U.S. technology think tank whose board includes representatives from top companies such as Apple, Amazon, Cisco, Google, and Intel, called for coordinated international pressure on Beijing.”
Read more in the full article here.
MacDailyNews Note: In the fifth edition its “Worst Innovation Mercantilists” report, ITIF documents the world’s most egregious examples of innovation mercantilist policies that were proposed, drafted, or implemented in 2017. The report finds China among the year’s worst offenders. This is the fifth consecutive year China has earned a place on the list, a dubious distinction that it alone has achieved.
When countries impose protectionist policies in high-value, high-tech sectors, they damage the entire global innovation system. The United States must lead by taking action against them. The Trump administration has taken steps in the right direction by increasing pressure against China. But in the absence of a concerted effort by an international coalition, innovation mercantilism will put the broader global trading system at systemic risk. — ITIF Trade Policy Analyst Nigel Cory
Read ITIF’s “The Worst Innovation Mercantilist Policies of 2017” report in full here.
SEE ALSO:
With President Trump’s tariffs, tech investors in Apple, other stocks are now in the crosshairs of trade war – March 12, 2018
Analyst: President Trump’s tariff impact on Apple would be just a ’rounding error’ – March 7, 2018
Apple and other tech firms caught in crossfire as U.S.-China trade war looms – March 7, 2018
Apple Macs caught up in President Trump’s aluminum tariff plan – March 2, 2018
China hasn’t so far reacted to the introduction of tariffs, but when they do, it will be painful and humiliating for America.
The reality is that China doesn’t need America anything like as much as America needs China.
One reason why China is hesitant to retaliate is because retaliation will further weaken the US dollar, which in turn will affect the Chinese Yuan Renminbi. China would prefer that the CNY remains stable because if it increased in value too much, it would hinder Chinese exports. On the other hand, if those exports are being hindered by political actions, then they don’t have much to lose.
You significantly underestimate The United States of America.
On the contrary, you significantly overestimate the USA.
America is declining rapidly on the world stage, is massively in debt, can no longer be trusted to honour agreements, and has squandered it’s position of being the leader of the free world.
You are wrong.
No one, no dictator, no regime, and no nation should ever underestimate American resolve. Every once in a while in the past they underestimated us. It was not pleasant for them. We will never yield. — President Donald Trump, November 5, 2017
Although much has been written about the decline of American competitiveness, in many ways this new global market plays to our strengths. The constant in the global marketplace is change, and change is what we Americans deal with best. We have always been innovators. Who else would choose as a national motto on our great seal “novus ordo seclorum” – the new order of the ages. This native adaptability is in itself a type of “infrastructural” advantage, an infrastructure of culture that will serve us well as long as we refuse to panic in the face of statisticians and pundits wielding yesterday’s numbers and telling us we’re washed up if we remain ourselves. ― Walter Wriston
Those are very nice quotes, but neither of them actually addresses the issue (other than offering comforting words and a good motivational speech).
There is no indication that American leadership is recognising the economic threat of China and taking action that will actually address such threat.
What is being done (punitive tariffs) is significantly more detrimental to the US economy (and political stabilityh) than to China’s, and is likely only to exacerbate the problem (according to most experts).
I’m nowhere near smart enough to know what action would be better, but there are plenty of people who are, and who are already suggesting better options. Too bad the administration doesn’t care for their opinions…
According to most experts? You mean the experts who have run things the last however ,app many years while things have progressed to where they currently are?
Yeah, let’s listen to them.
\sarcasm
“Those are very nice quotes, but neither of them actually addresses the issue”
Addresses the issue in what way Mr. Purposely Vague? The quotes are a reflection of how Americans have dealt with adversity in the past and prevailed. Sound principles that are timeless and work when tried. Not surprised at all you don’t get it.
“There is no indication that American leadership is recognising the economic threat of China and taking action that will actually address such threat.”
Says the socialist Democrat that gives zero credit to the president on a daily basis working on solutions to the mess created by two Democrat presidents and did NOTHING to stop it. Now all the have left is full throttle DENIAL.
“What is being done (punitive tariffs) is significantly more detrimental to the US economy (and political stabilityh) than to China’s, and is likely to only exacerbate the problem”
What, did you cut and paste from the Democrat playbook or was it from CNN reporter notes?
“(according to most experts)”
The same experts that advocated adding China to the WTO and cutting unfair trade deals then sat back and watched trade deficits spiral out of control? Those so called experts are clueless theoretical socialists you favor, theories that obviously do not work in the real world.
“I’m nowhere near smart enough”
Agreed …
First Then:
China population: 1413402000, about 18.5% of the world
USA population: 326767000, about 4.3% of the world
Get it?
did all of this principally happen?
Make America Backwards Again…
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
I had a good friend (northeast liberal jew) who back in the 80s decided his kids needed to learn Japanese because by the 21st century Japan would rule the world economically.
What you and he both underestimate is the underlying culture that drives the American economy. For China to overcome this, they would have to decentralize power even more than the last 20 years which in return would lead to less productivity unless a totally free market is introduced, which would also raise living standards via wages which raises the cost of everything associated which then leads to higher production prices and fewer advantages over the West in trade.
No, just like Sears, Affiliated Foods, Western Auto, and now WaL-Mart the same things happen to economies. a few decades from now the low-wage advantage can will be kicked down the road to other less developed areas with even lower wages to offer than China, with China actually being in the lead to open their factories there just as we did in the 70s.
Trumpov is quite the idiot.
We need to deal with the imbalance of trade with China, but this is not the way to do it.
you sound like a middle-aged juvenile. Bernie, your man is closer to the Soviets than Trump will ever be to Russia.
Hardly. A Democratic Socialist or Social Democrat is a common party in much of the world- including our capitalist allies.
You do not know what you are talking about. I have partners and family in many if these countries you speak of. They are very corrupt and in recent elections the people are pushing back against this. These countries pale in comparison to even a few of our states. Please read a little more and actually see for your own eyes the BS called Democratic Socialism before you make a final judgment.
I lived in Germany, so I guess I do know what I am talking about.
Labor in Great Britain and the SPD in Germany are two examples of Social Democratic Parties.
Call your parterres and families and ask them if Jeremy Corbin is much different than Bernie Sanders.
Almost every single Apple device (except for the trashcan Mac Pro) is made in China. If Trump slaps tariffs, they will apply to every iPhone, MacBook, HomePod, Apple Watch. Whatever the tariff, Apple can possibly eat it and survive, but we can then forget the $1T market cap for quite some time.
Democrats are clearly loving these protectionist moves, but it is a big question exactly what are they protecting, and at whose expense. America isn’t a manufacturing nation anymore. With the exception of very few industries (and even there, the work is mostly automated), low-skilled labour costs in a rich nation are far too high when compared to poorer nations. With a massive amount of international commerce, no one nation can survive alone, not even America.
You also significantly underestimate The United States of America.
You are living in the 80s and the age of American exceptionalism and moral righteousness (against the “evil empire” of USSR). Those days are long gone. There is a new bully in town, and he is rapidly growing bigger and stronger.
People born in the 50s and earlier are still under the illusion that there is no power in the world like America and there never will be. They are wrong, and what makes it worse is, they don’t really know or care to know what happens outside of America’s borders, because America is the biggest, greatest, strongest in the world.
The world has changed since the 80s. The Berlin wall has come down long ago, and with it massive changes in the world economy.
Look at the last fifteen years of China. The difference is simply astounding. A good example is their space programme. SInce 2002, they:
Put a man in orbit
Launched a space station (of their own, not related to ISS)
Launched a second space station
Put a probe on the moon
This is the stuff that USA and USSR had done in the 60s and 70s, but China is the only other country that has independently done it on its own, without any outside help. They now have the engineering, the manufacturing, and the money to do this (and their plans are no less ambitious than the US, with bases on moon and a trip to Mars).
This ain’t Mao Zedong’s China anymore…
Making false accusations, AGAIN.
No one here is living in the past (impossibility), but you can certainly LEARN from history. We may not call it the “evil empire” these days, but if you’re saying it no longer exists, absolutely great. Then it makes sense to end all Russian collusion talk and investigations — TODAY.
“There is a new bully in town, and he is rapidly growing bigger and stronger.”
Some detractors call President Trump that name, fine. Results are all that matters.
“People born in the 50s and earlier are still under the illusion that there is no power in the world like America and there never will be.” They are wrong, and what makes it worse is, they don’t really know or care to know what happens outside of America’s borders, because America is the biggest, greatest, strongest in the world.”
You are WRONG. Our military and economy is second to NONE. The computers and iPhones you are using, motor vehicles, telephone, planes and thousands more products are American FIRST inventions. Now you have to denigrate all people born in the 50s including Democrats. Nothing wrong with being patriotic and loyal to your country, unless of course you are a global socialist from the EU, right PD?
Not caring about what happens outside our borders. Wrong again. You mean like the Democrats you are worried about favoring protectionist trade deals and then voting for the president? Americans care about losing good jobs to foreign companies and cheap labor since they worked in the textile mills.
“The world has changed since the 80s. The Berlin wall has come down long ago”
“Long ago” is Democrat code word for it doesn’t matter anymore. Just ask James Carville about using this technique best.
“and with it massive changes in the world economy.
Look at the last fifteen years of China. The difference is simply astounding.”
I see you are gushing over world socialist globalism, again. How nice.
What is simply “astounding” is the unfair trade deals that have led to Democrat administrations working with connected lobbyist corporations for their own benefit such as Clinton NAFTA, Gore Carbon credits, Obama TTP. Ross Perot was right about the “giant sucking sound” of jobs and manufacturing out of the U.S. which directly led to China’s rise and Trump’s victory. Pat Buchanan’s excellent article explains the process with historical facts posted by First 2014, Then 2016 below. Certainly, not the socialism happy talk you peddle.
Besides China’s space program already 50 years behind the U.S. — are the following bullet point realities in day to day China life — also “astounding”:
* Hardline Communist rule
* Censorship of the internet
* Censorship of company practices, Apple got byte
* One child rule
* Wearing pollution masks when you leave your home
* Child labor
* Low wages to lure away American jobs
* Environmental regulation almost non-existent
* Surveillance of citizens unabated
* Government limits on protest, free speech, religion, personal freedoms and what about human rights?
I thought these conditions were the heart and soul of of what the Democratic Party fights to eliminate. But not in China, right.
Time to remove the rose colored glasses, and get real PreDrag …
“You also significantly underestimate The United States of America.”
For someone who supports a party that claims to understand and value the free market, you seem to have a problem with facts and economics.
There is simply no way that a high wage, high tax, western economy with proper environmental rules can produce at a cost or margin with a low wage, low tax, developing economy with lax environmental rules. As wages rise, tax burden rises and environmental rules tighten in China, we are seeing production move on to other countries.
China is transitioning rapidly (and has been) from low value added assembly to high value added manufacture- the only way a high wage/cost economy can sustain such activity. This is the model that has served Germany so well or so long and China no longer wants to make stuffed toys for your kids- they want to build high technology high margin equipment and products.
The US cannot roll the clock back to 1880 when we had massive undeveloped natural resources, and endless supply of cheap labor, minimal taxes and few rules to protect the environment.
Walls and Tariffs do not work. What we could do is a value added tax to level the playing field, allowing higher cost countries to protect themselves against low wage exporters. Not the same as a tariff.
“‘Trade wars are not won, only lost,’ warns Sen. Jeff Flake. This is ahistorical nonsense,” Pat Buchanan writes for The Tribune-Review. “Since Bush I, we have run $12 trillion in trade deficits, and in this century’s first decade, we lost 55,000 factories and 6,000,000 manufacturing jobss. Does Flake see no correlation among America’s decline, China’s rise and the $4 trillion in trade surpluses Beijing has run up at the expense of his own country?”
“The hysteria that greeted Trump’s idea of a 25-percent tariff on steel and a 10-percent tariff on aluminum suggests that restoring this nation’s economic independence is going to be a rocky road,” Buchanan writes. “In 2017, the U.S. trade deficit in goods was almost $800 billion, $375 billion of that with China. If we are to turn that into an $800 billion surplus, sacrifices will have to be made. If we are not up to it, we will lose our independence, as the EU countries have lost theirs.”
“We need to shift taxes off goods produced here and impose taxes on imported goods. A tariff on the nearly $2.5 trillion in goods we import, rising gradually to 20 percent, would initially produce $500 billion in revenue, which could eliminate and replace all taxes on domestic production. As prices of foreign goods rise, U.S. products would replace them. There’s nothing we cannot produce here. And if it can be made in America, it should be made in America.”
“Assume a Lexus costs $50,000 in the U.S. and a 20-percent tariff raises the price to $60,000. What would Japan’s Lexus do? It could accept the loss in U.S. sales, cut prices to hold U.S. market share, or shift production to build cars here and keep its market,” Buchanan writes. “The idea of a policy of economic nationalism to turn our trade deficits (which subtract from GDP) into trade surpluses (which add to GDP) is not to keep foreign goods out, but to induce foreign companies to move production here. We have a strategic asset no one else can match: the U.S. market.”
Full article: http://buchanan.org/blog/gop-terrified-tariffs-128840
Pat Buchanan, seriously? What do InfoWars and Breitbart have to say? The Loon in Chief has unleashed a rash of stupidity, cruelty and bigotry that I thought America had overcome. Look how wrong you can be.
might be a good time to consider selling off a nice chunk of your apple stock in anticipation of the hit it may well take when china decides to respond to any american imposed tariffs.
then be positioned to buy back in at a later date at a reduced price and ride it back up, once somebody comes back to their senses.
Why buy poor quality goods made in the USA when you can buy quality goods made elsewhere even with a tarif? It will be worth the premium. Buy cheap, buy twice……
I know this is a sensitive subject overall, and one difficult avoid turning into a mass flaming session, but Trump is a fool to think that trade wars are “good” or “easy to win.” Trump is used to dealing with vendors much less powerful than him—vendors whom he can bully and cheat, something he has a long history of doing. Trump does not “bargain” or “make deals.” Trump, to repeat, bullies and cheats.
China is not some small company or some third-world nation; China is one of the most powerful nations on the planet, and one with a vast economy that is looking toward the future. Trump is stymying innovation whether it be pandering to the coal and oil industry at the expense of green, renewable technologies (which are growing faster than fossil fuels). Whereas coal and oil are “resources,” that leave behind a trail of pollution, wind and solar are technologies that are clean, and will never be depleted. China is investing hundreds of billions of dollars in green technology while Trump is squandering leadership in these areas.
While Trump refuses to appoint diplomatic positions, and is pulling out of treaties, China is stepping in and forging diplomatic and trade alliances, strengthening its position on the political, diplomatic, and economic stage. Despite his fatuous, bumper-sticker claims of “America First,” and “Make America Great Again,” he is doing everything possible to weaken our standing on the global stage.
Through his ignorance and foolhardiness we have become the world’s laughingstock, and a trade war with China only furthers this claim. In standing idly by, endorsing Xi Jingping’s dictatorial practices, claiming a lifelong term as leader is a good idea, he disavows everything America stands for. George Washington, who lead our troops to victory, making America what it is today, stepped down as President because he understood the dangers of one person having power for too long. He saw the “madness of King George” and realized how too much power could lead to a certain type of madness—the type of madness Trump already embodies, and will only worsen as he cedes more power to China. Oh, and where are Trump’s ties and other articles of clothing made? Ummmm, not in America. They’re made in China.
To reiterate, as Trump weakens America, China only grows stronger both because of its own initiatives, and because of Trump’s idiotic, self-destructive world view.