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Will America Lose In The Trade War With China?

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This is only my opinion, and not the representation of Saintel Daily, LLC.

Donald Trump keeps proving, time and again, that he can’t make sound decisions for the United States.  Most recently, Trump is pulling out all the stops and engaging in a trade war.  Yes, he’s taking aim at Canada, but the big fish is China.  On Friday, the tariffs take effect, which will impose duty on $34 billion worth of goods.  What might be worse is that Trump may ultimately target over $500 billion worth of Chinese goods.  Which is roughly the amount that the U.S. imported from China last year. That said, China is fighting back – and this is where it’s going to get worse for the United States.  China has implemented a tariff on cars, soybeans, and other agricultural products. If China isn’t importing its soybeans from the United States, they will have to start bringing it in from Brazil, which means China is going to pay more.  Thus the price of food in China will increase.  To me, that’s not the worst part.  What I think is awful is how Trump is putting tariffs on trade, but he doesn’t understand that the impact is going to hit America and the American economy the hardest.  What do I mean by that?  What are all the soybean farmers going to do if they’re no longer exporting their products to China?  They’re literally going to rot because they don’t have anywhere to send them.

made in china

American farmers produce their crops based on what the market calls for.  Meaning, if there are so many hundreds of thousands of bushels that are wanted in China, they will produce enough to cover off that market, as well as whatever other exports or domestic sales that they have.  We are well into the soybean season, which means, thousands of farmers are going to lose money this season just because Trump decided to dig in his heels on trade. Further to all of this China is imposing its own tariffs on the United States.  Which means any goods being imported from China are now going to cost more.  This also means that China will lose its competitive advantage, and while I assume that’s Trump’s goal, I think that it’s also going to have unintended consequences for the United States, and we could find ourselves in a 2008 type situation all over again. Analysts say tariffs are not the most effective way of putting pressure on China, which the US accuses of unfair trade practices and stealing intellectual property from US companies. In fact, it’s estimated that reciprocal tariffs on the $50 billion worth of U.S. goods in both directions will have minimal impact on China because the Chinese economy no longer depends on exports alone.donald trump

What you might not have been expecting to hear is that Russia is in on the trade war as well.  Maxim Oreshkin, the economic development minister said that Russia is applying additional tariffs to some road construction equipment, oil, and gas equipment, metal processing equipment, drilling equipment and optical fiber.  Why? Because of the U.S. decision to impose tariffs on foreign steel and aluminum. The EU, India, China, and Russia all have applied to the World Trade Organisation (WTO) to challenge the US tariffs of 25 percent on steel and 10 percent on aluminum, which mostly took effect back in March. Washington argues they have been put in place for national security reasons. National security?  Come on Trump.  That’s low, even for you. I don’t see an end to this any time soon, I do think that this is hopefully going to turn the tides for the mid-term elections.  Many of the areas that will be hit the hardest are those who voted for Trump in the first place.  I in no way want to see anyone suffer as a result of this trade war.  But there’s a part of me that thinks its ok if its what is going to make some changes in Washington this November.  I’m not usually one to gloat, but this is your president.  Meaning, you voted him into office.  Now is your opportunity to make changes because this trade war is an us vs. them type situation, and unfortunately, it might be us who loses.

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