China Again Hits Rural America in Retaliation for Trump’s Trade War

Update 2 (July 5, 2018): China says it hopes Trump will rethink his trade war before it kicks off at 12:01 a.m. July 6, but with his $34 billion in tariffs likely to take effect Beijing is ready to strike back dollar-for-dollar.

Rural America will feel nearly the full force of China’s retaliatory action. “Beijing is targeting soybeans, corn, wheat, rice, sorghum, beef, pork, poultry, fish, diary products, nuts and vegetables, and autos in its first round of counter measures,” Bloomberg News reported.

China is signaling it’s preparing to go tit-for-tat with Trump for the long haul. As a result of the trade war, Chinese importers are already buying soy from growers in other countries like Brazil. China is canceling orders for 1.14 million tons of soy produced in the U.S. that had been scheduled to be shipped by the end-August

UPDATE 1 (June 19, 2018): The White House escalated its trade war with China by threatening late Monday to put tariffs on another $200 billion on Chinese goods, deepening concerns from Rural Main Street to Wall Street that Trump’s policy will cripple American businesses. China immediately said it would not cave to “extreme pressure and blackmailing” and would retaliate with equal tariffs on $200 billion in U.S. goods.

China has strategically hit back at Trump by targeting products made in The Heartland, where Trump has his strongest base of support. farmers, growers and ranchers are among the hardest hit in Trump’s trade war.

There was a quiet sigh of relief Friday in U.S. tech communities on the East and West Coasts when China spared them painful retaliation for Trump’s tariffs on Chinese technology. Instead of a direct eye-for-an-eye poke, Beijing hit back at the latest salvo in the Trump trade war with a body blow to the breadbasket, striking at products primarily harvested and made in the American Heartland.

Welcome to Trump’s trade war – a high stakes economic war game in which China finds the best way to retaliate is by attacking the Rural Economy in the epicenter of Trump Country. Farmers, growers, ranchers, fishermen, coal miners, automakers, and oilfield workers all made China’s latest hit list.

In his latest move, Trump hit Chinese aerospace, automobiles, machinery and robotics industries with tariffs. China is answering with $34 billion in tariffs on U.S. agriculture and aquaculture, including beef, corn, cotton, lobster, orange juice, pork, poultry, and soybeans, along with automobiles and whiskey. Another round of Chinese tariffs on U.S. products will target coal, crude oil, gasoline and medical equipment.

The hit lists from the two respective countries are an escalation of global economic warfare. This latest round of trade shenanigans follows Trump announcing tariffs in April on steel and aluminum. China struck back at that time with tariffs on fruit, nuts, pork, and wine.

Unruly trade agreements have become a problem for U.S. communities and workers, but trade imbalances are really just the result of American companies and consumers getting the most bang for their buck. That’s how the game is played in the marketplace and that’s how it’s taught in the finest American business schools. Perhaps Trump was not in class the day they taught capitalism at Wharton, his famous but embarrassed alma mater?

The hard truth is the Trump administration, Wall Street and most corporate boardrooms have no “Buy American” policies. Alas, the locally grown family farmers movement and labor organizations are pretty much going it alone with the Buy American campaign.

After all the bluster and grandstanding are over, negotiations and deal-making are the only real solutions to fixing lousy trade deals. Trump needs to patch up the holes, not blow up the whole system with a trade war that hurts American consumers, families, and businesses. Unfortunately, scorched earth policy is the Trump model. We know that from experience. Here are three stark examples of the Trump implosion strategy:

Trump is the man without a plan. We can’t lose sight of how it was Trump who picked the fights with China, Europe and Canada, and yet there is no reason to believe he has a plan to protect the Rural Economy from being ravaged in his trade wars. Instead, all he has for us is another slogan: “Trade wars are easy to win.” Well if trade wars are easy to win, as Trump has boasted, then why don’t countries do it all the time? And why are Republicans lining up to tell Trump to back off?

(updated)

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