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trade war
December 4, 2018

President Trump's awkwardly-phrased "BIG leap forward" with China on trade got a little smaller on Monday, as his economic team said that contrary to a Trump tweet on Sunday night, China did not agree to "reduce and remove tariffs on cars coming into China from the U.S." China raised tariffs on U.S. auto imports to 40 percent, from 15 percent, in retaliation for Trump's tariffs on Chinese goods. Trump and Chinese President Xi Jinping agreed to a temporary truce on Saturday night. Getting auto tariffs down to zero is aspirational, Trump's advisers said.

"We don't yet have a specific agreement on that, but I will just tell you ... we expect those tariffs to go to zero," Larry Kudlow, Trump's top economic adviser, told reporters Monday. Treasury Secretary Steven Mnuchin said "there is an immediate focus on reducing auto tariffs," but "there's a lot of work to be done over the next 90 days." Trump's top trade adviser, Peter Navarro, said auto tariffs "certainly came up in discussions" with China, but "that's just one of the many tariffs that have to be reduced."

Trump's trade talks with China, with more tariff hikes paused for 90 days, and his push for a skeptical Congress to ratify his revised NAFTA agreement with Canada and Mexico, "are at the center of the White House's agenda and could have profound implications for the global economy if negotiations collapse," The Washington Post notes. "At the same time, they are also fraught with confusion and ambiguity, complicating urgent timelines set by Trump." You can read Jeff Spross' anaysis of Trump's China truce at The Week. Peter Weber

December 2, 2018

President Trump and Chinese President Xi Jinping agreed at a dinner meeting Saturday to a 90-day break from further escalating the U.S.-China trade war.

"It's an incredible deal," Trump said of the arrangement on Air Force One on his way home from the G-20 summit in Argentina. "What I'll be doing is holding back on tariffs. China will be opening up. China will be getting rid of tariffs. China will be buying massive amounts of products from us."

"President Trump has agreed that on January 1, 2019, he will leave the tariffs on $200 billion worth of product at the 10 percent rate, and not raise it to 25 percent at this time," a White House statement said. "Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent."

While negotiations proceed on topics including intellectual property, technology access, and agriculture products, the statement added, "China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other product from the United States to reduce the trade imbalance between our two countries." Bonnie Kristian

September 16, 2018

President Trump is expected to levy a new round of tariffs on Chinese imports as soon as Monday, this time targeting $200 billion in goods with a tax around 10 percent.

That rate is lower than the 25 percent proposed last month, and sources told The Wall Street Journal it is intended to have a less onerous impact on Americans' holiday shopping. However, the rate reportedly could increase if Trump is unsatisfied with Beijing's response — and as Beijing has already pledged retaliation to Trump's next trade war volley, a rate hike is plausible.

This set of tariffs would take effect in November. Beyond that, Trump has also threatened an additional set of taxes on $267 billion in Chinese goods, including mobile phones. If he moves forward with both new rounds of tariffs, Trump will have levied new taxes ranging from 5 to 25 percent on everything America imports from China. Nevertheless, U.S. imports from China increased over the summer. Bonnie Kristian

August 28, 2018

On Monday, the U.S. Department of Agriculture announced that it will start passing out $4.7 billion in direct aid to farmers on Sept. 4 to help them stay afloat while President Trump wages his trade war with China and other countries. The bulk of the direct aid, $3.6 billion, will go to soybean growers. Separately, the administration will spend $1.2 billion to buy certain "commodities unfairly targeted by unjustified retaliation," the USDA said, and spend another $200 million helping farmers develop alternative foreign markets. In July, the Trump administration said the subsidy program will provide up to $12 billion in aid to farmers.

Agriculture producers have been pretty clear that they want to trade their products, not take government handouts. They are also worried that when the trade war is over, the foreign markets they have spent years cultivating — China large among them — will have found other countries to purchase from. Peter Weber

June 22, 2018

The escalating economic conflict with the European Union is proving dangerous for American car companies.

After President Trump announced Friday that he would impose a 20 percent tariff on all cars imported from the EU, shares for both European and American car companies plummeted, reports Bloomberg.

Trump sought to punish the EU for its retaliatory tariffs, which included tariffs on about $3.3 billion worth of American goods, including bourbon, orange juice, peanut butter, and motorcycles. The tariffs, mostly at 25 percent, are designed in part to "make noise" by targeting politically important states like Kentucky, Florida, and Wisconsin, EU trade commissioner Cecilia Malmstrom said.

Trump punched back by commanding that U.S. car companies "build them here," but investors were wary of his move. The president wants the EU to walk back its import barriers to U.S. goods "soon," but it seems market-watchers aren't holding their breath. Shares of Ford, Tesla, Chrysler, and General Motors fell rapidly after Trump announced the forthcoming tariffs, and Bloomberg reports that Volkswagen, Daimler, and BMW each fell in Frankfurt. Lawmakers have criticized Trump's decision to target the auto industry, arguing that his claims that auto imports threaten the country's defense capabilities are baseless. Read more at Bloomberg. Summer Meza

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