China figured out carrots work as well as sticks

Click to enlarge

Since the start of President Trump’s trade war, China has retaliated against US tariffs by raising tariffs on US goods. Less well known is that China has also been lowering rates for everyone else, putting US companies at an even greater disadvantage when trying to sell to China’s 1.4 billion consumers. Companies in the United States and elsewhere used to be on a level playing field, facing an average Chinese tariff of 8.0 percent. Now, there is a 14 percentage point difference between the average Chinese tariff US exporters face versus all other exporters. Some US goods are facing even wider differences in duties, like soybeans, farm and fish products, and certain manufacturing products.

3 thoughts on “China figured out carrots work as well as sticks

  1. Gwailo Joe says:

    China has to take necessary counter-measures to the latest U.S. tariffs on $300 billion of Chinese goods, the finance ministry said on Thursday. The ministry also said the U.S. tariffs violate a consensus reached by leaders of two countries and get off the right track of resolving disputes via negotiation.

    As financial markets tumbled again Wednesday over concerns about a trade war with China and unrest in Hong Kong, President Donald Trump took to Twitter to request a one-on-one meeting with Chinese President Xi Jinping. “I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it,” Trump said of escalating unrest in Hong Kong over Beijing’s threat of a crackdown on protests there. “Personal meeting?”

    Despite few signs of progress in negotiating a new trade agreement with China Trump also claimed [@ 12:21 PM – 14 Aug 2019] “We are winning, big time, against China. Companies & jobs are fleeing. Prices to us have not gone up, and in some cases, have come down. China is not our problem, though Hong Kong is not helping. Our problem is with the Fed. Raised too much & too fast. Now too slow to cut….” [continues] “..Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve. Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!”

    ‘Why I translate all of Trump’s tweets into Chinese” (BBC News, China service 9/9/19)

  2. Mahjong says:

    “China exempts US soybeans and pork from tariffs”
    Chinese state news agency Xinhua announced the policy change on Friday, citing government sources as saying China would support “relevant enterprises” purchasing US pork, soybeans and other commodities. “There are broad prospects for importing high-quality agricultural products from the United States,” it added. “We hope that the United States is as good as its words and will fulfill its promises, in order to create favorable conditions for cooperation in the agricultural field,” Xinhua said on Friday.

    “When you surround an army, leave an outlet free. Do not press a desperate foe too hard.”
    Sun Tzu, “The Art of War” (5th century BC).

  3. Haijin (海禁) says:

    “An agreement between the United States and China to roll back existing tariffs as part of a ‘phase one’ trade deal faces fierce internal opposition at the White House and from outside advisers, multiple sources familiar with the talks said.
    The idea of a tariff rollback was not part of the original October “handshake” deal between Chinese Vice Premier Liu He and U.S. President Donald Trump, these sources said.
    Chinese officials said earlier Thursday that tariff reductions had been agreed, and a U.S. official confirmed that that was the case.
    There is a divide within the administration over whether rolling back tariffs will give away U.S. leverage in the negotiations, the sources said.”
    See also: “The Effect of Tariffs on U.S. Manufacturing” (Sept 10, 2019)

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.