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Utopia Talk / Politics / china paying 82% of tariffs
werewolf dictator
Member
Tue Nov 20 18:39:57
Economics

China Is Paying for Most of Trump's Trade War, Research Says

Xiaoqing Pi
November 19, 2018, 8:48 AM EST

http://www...rump-s-trade-war-research-says

President Donald Trump is succeeding in making China pay most of the cost of his trade war.

That’s the conclusion of a new paper from EconPol Europe, a network of researchers in the European Union. U.S. companies and consumers will only pay 4.5 percent more after the nation imposed 25 percent tariffs on $250 billion of Chinese goods, and the other 20.5 percent toll will fall on Chinese producers, according to authors Benedikt Zoller-Rydzek and Gabriel Felbermayr.

The trade dispute between the U.S. and China is showing slim hope of abating as the leaders of the two nations prepare to meet in Argentina this month. According to Zoller-Rydzek and Felbermayr, the tariffs will do what Trump has longed for: They will cut American imports of affected Chinese goods by more than a third, and lower the bilateral trade deficit by 17 percent.

The Trump administration selected products with the highest “price elasticity,” or high availability of substitutes, according to Zoller-Rydzek and Felbermayr. The Chinese products hit by Trump’s tariffs can mostly be replaced by other goods, forcing exporters to cut selling prices to keep buyers.

“Through its strategic choice of Chinese products, the U.S. government was not only able to minimize the negative effects on U.S. consumers and firms, but also to create substantial net welfare gains in the U.S.,” the researchers wrote.

The U.S. is due to raise duties on the largest $200 billion tranche of goods to 25 percent from 10 percent on Jan. 1. In retaliation, China has slapped tariffs on $110 billion in imports from the U.S. and effectively shut off its purchase of key American agricultural exports including soybeans.

With the economic costs shifted to China, the U.S. levies will lead to a $18.4 billion net gain for the American government, the researchers wrote.

“As the trade conflict escalates, however, the U.S. administration may not be able to restrict its selection to products with high import elasticities,” they wrote. “And U.S. welfare might decrease as more of the tariff incidence falls on U.S. consumers.”
werewolf dictator
Member
Tue Nov 20 18:44:21
it can be argued that in trade war.. china also collects tariffs on lesser amount of goods imported there

but free trade dogmatists should see problem with simplistic worldview already

sad thing is true benefits of tariffs should be expected after 2020 when trump might not be president
jergul
large member
Tue Nov 20 18:58:35
That is not the science in the research paper at all.

It is projecting what will happen if a 25% tariff is used on products with high price elasticity and assumes other producers will step up production without increasing prices.

Hot Rod
Revved Up
Tue Nov 20 19:50:46

Trump will win.

werewolf dictator
Member
Wed Nov 21 03:35:28
china being desperate to find ways to subidize shrinking exports [already being done in at least one mechanism of higher export rebates] likely moves needle even more in other direction..

than does usa have on increasing rest-of-world prices by buying ~$100b more goods and services out of rest-of-world's ~$80,000b gdp economy.. when moving away from spending that ~$100b on the types of chinese exports that americans don't mind living without..
jergul
large member
Wed Nov 21 06:26:31
What shrinking? It increased 15% year on year.

http://tradingeconomics.com/china/exports
werewolf dictator
Member
Wed Nov 21 08:11:40
"as firms increased shipments before stiffer US tariffs hit in January 2019."
jergul
large member
Wed Nov 21 08:39:42
So you are projecting that the 15% growth may be reversed to some degree perhaps as early as next year.

I doubt it. In sense that Chinese exports will grow by double digit numbers next year too.

Factually, all the trade war has done so far is increase Chinese exports to the US. As your quote indicates.
werewolf dictator
Member
Wed Nov 21 09:27:55
if the chinese are so obsessed with increasing usa exports that they decide to pay over 100% of the tariff burden then i will laugh and celebrate trump's unbelievable success
Hot Rod
Revved Up
Wed Nov 21 10:34:22

jergul - Factually, all the trade war has done so far is increase Chinese exports to the US. As your quote indicates.


That's a good thing.

jergul
large member
Wed Nov 21 12:51:26
WD
They will almost certainly spend what the Chinese tariffs generate in tax rebates so that the effect is tax neutral.

Frankly though, US-Chinese trade turnover it too small for tariffs to really impact (19% of China's total).

Say elasticity works like you OP says. Other countries pick up the slack. They export more. China exports more to those countries to replace the products being exported.

Its the globalization, stupid.
tumbleweed
the wanderer
Wed Nov 21 13:14:08
"That's a good thing"

Trump's entire goal was to lower the trade deficit
Hot Rod
Revved Up
Wed Nov 21 16:00:11

If we are collecting more tariffs we have a lower trade deficit, doesn't it?

jergul
large member
Wed Nov 21 16:37:59
HR
Tariffs are just a government tax on imported stuff.

Your imports are up and your trade deficit is up.

http://tradingeconomics.com/united-states/balance-of-trade

jergul
large member
Wed Nov 21 16:38:51
The best way to lower your trade deficit is to sink into a recession.
jergul
large member
Wed Nov 21 16:40:11
"The DOW breaks new records. Equity managers rush out to buy Fords with their bonuses"

Does that sound like a headline?
Hot Rod
Revved Up
Thu Nov 22 07:59:36

It's mostly the tech stocks and they were probably overpriced anyway.

The Children
Member
Fri Nov 23 23:20:20
aint no chinese gonna be payin 80%, duh rod. ur livin in dreamworld, did disney open a new themepark called lalaladreamssssssland?

the tariffs will be paid 4 by us consumers. only reason they havent yet coz they havent kicked in yet as article stated.

Hot Rod
Revved Up
Sat Nov 24 07:26:01

I have stopped buying Chinese.

The Children
Member
Sat Nov 24 10:25:12
thats funny coz i stopped buyin american just now 2!

Hot Rod
Revved Up
Sat Nov 24 10:33:31

I probably spend more than you do.

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