Economy

Romney Sides with Trump on Tariffs

U.S. Senate candidate Mitt Romney (R) sees President Trump’s proposed $100 billion in new tariffs on China as a shot across the bow but doesn’t think it would lead to trade war, the Deseret News reports.

Said Romney: “I think the president is leading with some policies that will wake up our friends in China and they’ll recognize that business as usual is going to have to change. China over the years has taken advantage of the attitude in America, which is we haven’t watched very closely and they’ve been cheating.”

Trump Mulls Extra $100 Billion in Tariffs on China

President Trump said that he “will consider hitting China with an additional $100 billion in tariffs, on top of the $50 billion the White House has already authorized, escalating threats of a trade war with the Chinese that his top advisers had tried to minimize a day earlier,” the New York Times reports.

“Mr. Trump’s threat of additional tariffs is a marked escalation of a trade dispute that could have global economic ramifications and derail the economic expansion underway.”

Jonathan Swan: “This is exactly what the free traders who formerly worked in the White House feared, Trump in a macho pissing match against Chinese President Xi. Trump has a blunt understanding of leverage and believes the worst thing he can show is weakness.”

Kudlow Talks Down Tariffs

“White House economic adviser Larry Kudlow stressed U.S. tariffs announced on Chinese goods are still only proposals that might never take effect as the Trump administration sought to tamp down fears of a trade war,” Bloomberg reports.

Said Kudlow: “None of the tariffs have been put in place yet, these are all proposals. We’re putting it out for comment. There’s at least two months before any actions are taken.”

Extra Bonus Quote of the Day

“Ask the working people in Ohio, Pennsylvania and Michigan about Wall Street. Wall Street supported and cheered on the export of their jobs. To hell with Wall Street if they don’t like it. It’s time somebody stood up to them and Donald Trump is the perfect guy.”

— Stephen Bannon, in an interview with Reuters, on the negative stock market reaction to Trump’s trade policy.

China Hits Back on Tariffs

“China said it would levy an additional 25 percent tariff on imports of 106 U.S. products including soybeans, automobiles, chemicals and aircraft, in response to proposed American duties on its high-tech goods,” Bloomberg reports.

“Matching the scale of proposed U.S. tariffs announced the previous day, the Ministry of Commerce in Beijing said the charges will apply to around $50 billion of U.S. imports. Officials signaled that the implementation of the proposed measures will depend on when the U.S. applies its own after a period of public consultation.”

Playbook: “This could completely dwarf the good news Republicans have celebrated from tax reform and screw up their strategy to use it as the GOP’s main selling point in the midterms.”

CNBC: Stock futures plunged “as concerns over a potential trade war between the U.S. and China intensified.”

Quote of the Day

“I’m not a fan of tariffs, and I am nervous about what appears to be a growing trend in the administration to levy tariffs. This is a slippery slope, so my hope is that this will stop before it gets into a broader tit-for-tat that can’t be good for our country.”

— Sen. Mitch McConnell, quoted by the Louisville Courier-Journal.

China Retaliates on Tariffs

“China is moving forward with its plan to counter President Trump’s new tariffs on steel and aluminum, levying duties that will take effect Monday on more than $3 billion in U.S. exports to the country. In a statement Sunday, the Chinese government said it would impose the retaliatory tariffs on 128 products, according to an informal translation,” Politico reports.

“China will impose a 15 percent tariff increase on goods including American fruit and nuts and add a 25 percent tariff on pork, recycled aluminum and other goods, the government said. The move to impose the duties comes just over a week after the Chinese Commerce ministry had announced it was considering tariffs on the goods. Just over a week later, those tariffs are taking effect.”

Financial Times: Who will fare worse in a China-US trade war?

Trump Reaches Trade Deal with South Korea

“President Trump scored his first significant trade deal this week, securing a pact with South Korea that represents the type of one-on-one agreement that Mr. Trump says makes the best sense for American companies and workers,” the New York Times reports.

“Mr. Trump used his threat of stiff steel and aluminum tariffs as a cudgel to extract the concessions he wanted, helping produce an agreement that had stalled amid disagreements this year.”

“But winning the deal may have had more to do with the geopolitical realities confronting the United States and South Korea as America embarks on tricky nuclear discussions with North Korea. The United States cannot afford a protracted trade standoff at a moment when it needs the South as an ally.”

Trump Approval Rises with the Economy

A new AP-NORC poll finds a growing American economy and passage of a Republican tax overhaul appear to be helping President Trump lift his approval ratings from historic lows.

“Trump remains unpopular with the majority of Americans, 58%. But 42% say they now approve of the job he’s doing as president, up seven points from a month ago. That’s a welcome change in trajectory for a White House that has been battered by chaos, controversies and internal upheaval.”

Not a Single Economist Polled Backed Trump’s Tariffs

A new University of Chicago survey of 43 top economists found not a single one said President Trump’s new tariffs on steel and aluminum will end up being a net positive for Americans.

Overall, 65% of respondents said they “strongly disagreed” when asked if Trump’s move “imposing new US tariffs on steel and aluminum will improve Americans’ welfare,” while 28% simply disagreed. Three economists, or the remaining 7%, did not respond to the survey.

Democrats Don’t Realize They’re the Free Trade Party

Ron Brownstein: “This silence speaks volumes about the Democrats’ inability, or unwillingness, to recognize the evolving nature of the party’s demographic and geographic base. While many Democrats still think of the party as the home of blue-collar industrial regions hostile to trade, in fact, the party is now centered in the major metropolitan areas that are integrated into global markets and at the forefront of the transition into the information-age, digital economy. The most telling measure of that shift: while Hillary Clinton won fewer than one-sixth of America’s counties in 2016, her counties accounted for nearly 60 percent of all US exports, according to calculations by the Metropolitan Policy Program at the center-left Brookings Institution.”

“Yet few Democrats are articulating the interest of those areas in the tariff debate — either because they share the President’s long-standing suspicion of free trade, or because they fear antagonizing the labor unions who promote protectionist policies as well.”

Senate Republicans May Try to Block Tariffs

“A bloc of Senate Republicans is readying legislation to halt Donald Trump’s steel and aluminum tariffs, in the most provocative step yet taken to thwart the president on trade,” Politico reports.

“Senate Republicans discussed the matter in depth on Thursday, just hours before Trump announced he would go through with his crackdown on imported metals. And they are gearing up for an open clash with Trump over economic policy, with Sen. Jeff Flake (R-AZ) telling reporters that he will introduce legislation to block the tariffs.”

Trump Imposes Tariffs on Steel and Aluminum

“President Trump will sign a pair of proclamations Thursday that impose tariffs on imported steel and aluminum but offer relief to some U.S. allies,” the Washington Post reports.

“The tariffs, which take effect in 15 days, initially will not apply to imports from Canada and Mexico so that U.S. officials can assess progress toward a new North American Free Trade deal.”

“Other countries with a ‘security relationship’ to the United States may seek exemptions by opening talks with the administration on ‘alternative ways’ to address the threats the administration alleges their products pose to national security.”