Trump Escalates Trade War With China; China Retaliates
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I also cover the White House. I'm Mara Liasson national political correspondent. So this is just the latest round of tariffs in what seems to be a ping pong game. Wilson ping pong game where you keep hitting the ball harder and harder. It's an escalation in President Trump's trade war. He adjusts late yesterday, announced tariffs on another two hundred billion dollars worth of Chinese imports to the US and while up until now they have sort of tried to avoid consumer products. Now, these are going to be things that consumers are going to see in the stores. And Donald Trump says that if CHAI. China retaliates with tariffs of their own, which trying to has already done to the first round of this trade work. He'll put even more tariffs on. We don't want to do, but we probably will have no choice. So eventually tariffs have the kind of affect that. Every single economist will tell you, which is they will raise prices for consumers, and we're very much near that point. Now where near that point now, the big question is, is the US economy big enough as Trump cabinet officials will say that it can absorb this. Even President Trump says, there's going to be some short term pain for farmers for other people. But in the end we're going to win. Yeah, we'll so Wilbur Ross. The commerce secretary was on TV this morning and said, you know, it'll be spread out. It'll be on so many different things. People won't even really notice. Wilbur Ross has been minimizing the effects of Trump tariffs from the beginning. You might remember his his TV appearance with the Campbell's soup can where he talked about the fractional sense it will put on on extra cost. A steel can. But if you're talking about two hundred billion dollars in Chinese goods and hitting them with a ten percent tariff to start with ratcheting up to a twenty five percent tariff in the new year, you're talking about billions of dollars in additional cost. It is spread out it is, you know, not a huge chunk of our overall economy, but these are going to start to show up. Absolutely. And on top of the increase prices for US consumers, you are also seeing the effects of the retaliatory tariffs that China and other countries have have hit back with. Initially, you remember the, the Trump administration said, oh, we don't think China's gonna hit back when they hit back immediately. Why wouldn't? Why wouldn't they and surprise prize. They've already hit back again to this next round. Just just this morning, China announced tariffs on another sixty billion dollars in US exports to China. So folks who are in the export business are already certainly feeling the effects. And that includes a lot of. Farmers. We are now in a trade war. This is war looks like, and this is what Donald Trump famously tweeted. Trade wars are good and easy to win. We're now going to find out if he's right or not. Okay. Let's start from the beginning. What is President Trump trying to achieve with these sort of escalating trade fights? Well, that is an excellent question. You know, this is can be confusing because what many economists think should be done about China is that China is a trade cheat. China steals intellectual property. China makes force technology transfer. China doesn't play by the rules. Those are problems that there is a bipartisan consensus around that. Those problems need to be fixed. Donald Trump on the other hand, seems fixated on the trade deficit number. He wants that number to come down. He talks about when you take out five hundred billion dollars from us as if as if you if you have. Trade deficit with a country, they're stealing money from you. What Donald Trump seems to want is that we have a trade surplus with everyone. Wait, this is maybe a dense question. What is the trade deficit? So the trade balance is how much you buy from me, measured against how much I buy from you. The United States today buys a lot more goods from China than China buys from the US. Therefore, we have a trade deficit with China, but that doesn't mean China is stealing money from the United States. That means at the end of the year, we have a lot of Chinese goods. They have fewer American goods, but they have more American dollars. Sometimes when we have a lot of times when an economy is very strong, one of the signs of that is the trade deficit goes up because American consumers have money and they want to buy a lot of stuff. Donald Trump was asked, hey, since you started talking about tariffs the deficit trade deficit has gone up. He, you know, he's talks about, we're being ripped off by China. We're being ripped off by the EU. He sees the trade deficit as some. Kind of a metric of an economy success or failure. And so here when you ask, what is the president trying to achieve with these tariffs? Are these tariffs a means to an end as he trying to get China to change its behavior and stop stealing intellectual property and stop forcing American companies to transfer their technology to China, or does he see these tariffs as an end in themselves that will discourage Americans from buying Chinese goods? And I think it's probably the latter because he according to Bob Woodward's scribbled in the margin of speech, trade is bad. Donald Trump doesn't like trade with other countries somehow or other. He thinks if you buy a foreign product, that country has ripped you off, they've taken your money, but you know, because he's the president of the United States. He gets to prosecute this. And what's so interesting is there is a bipartisan consensus that China is a trade cheap, but there is no. Bipartisan consensus, that tariffs are the way to correct that problem. And not only is there a bipartisan consensus within the United States, but there's an international consensus that China is is been a bad, a bad actor on the trading scene, but instead of marshalling an international coalition to go after China and put pressure on China from all sides, President Trump and his trade policies of managed to alienate lots of other countries who should be allied with the United States in pressing that case against China. So folks who might be working with us against China are instead matters because he's slap tariffs on the EU or slap tariffs on Canada. Once upon a time, there was an actual official coalition of countries had tried to do something about it, and it was called the TPP and it was every country that had you know a border on on the Pacific that was going to basically gang up against China. They were gonna make a free trade pact. It was specifically excluding China, what Donald Trump do. One of the very first things he did when he came into office was pulling out of that, okay. We are going to take a quick break and when we get back, we're going. To look at how the trade war is affecting the midterm elections support for this podcast, and the following message come from discover- discover believes that getting cash back on your credit card makes great financial sense and getting twice the cash back is even smarter. That's why at the end of your first year, as a new cardmember discover will match all the cash back. You've earned dollar for dollar, no caps, no catch. So not only do you get your cash back bonus. You get it matched learn more at discover dot com. Slash match cash back match, offer only for new card members limitations apply. Hi on the neon undergone host of NPR. Spanish-language putt cuts slam will into this week a year after the earthquakes devastated the country. Mexico is still dealing with the aftermath. Schools were especially damaged and the government promised to rebuild them fast, but to journalists discover that the truth about that reconstruction is much more complicated and we're back and President Trump in his campaign. One of his big items, something that he. Really talked up, especially in the upper midwest, those states that he ended up winning like Michigan and Wisconsin. He said the Trans-Pacific Partnership is terrible, and we're gonna tear it up. And he said, NAFTA is no good and and voters in the upper midwest, those states that he won Michigan and Wisconsin voters responded to that. The question now is he's taking action. He's he is doing the things that he said he was going to do in the campaign. Is he being rewarded for it or not? You mean politically? Yeah, right now, I mean, we're headed into the mid Wales right now. You know the question. Donald Trump famously said I could stand on Fifth Avenue and shoot someone and I wouldn't lose any voters. Now he's testing a corollary of that. Could I stand in a soybean field or on the floor of small manufacturing company and shoot someone and not lose any voters? I think voters in the mid west who liked Donald Trump or willing to give him a lot of leeway, see if this tack works, but. We do see in polls is there's been a thirteen point swing shift against Republicans and the generic ballot in the mid west. When you ask voters all over the country, do you approve or disapprove of Trump's performance in trade negotiations, thirty nine percent approve sixty. One percent disapprove trade itself is getting more and more popular, tariffs getting less popular polls show. So we have to assume that even Trump voters in the midwest, which was his target audience are concerned about the results of his trade war. But when you're talking about the mid-term, elections, tennis is an interesting issue that doesn't break neatly along partisan lines. It's not as if a vote for a democratic congressional candidate is necessary. A repudiation of Donald Trump's trade policy or a vote for Republican candidate is an enthusiastic thumbs up for Donald Trump's trade policy. Because when you look at the folks who are in congress. Right now, some of the Democrats like Ohio Senator Sherrod Brown are more or less cheering the president on they. They tend to support his trade policies and some of the fiercest opponents of the president's trade policies have been farm state Republicans whose constituents have been paying a price for the retaliatory trade tariffs and other countries slapped on the US. And you talk about Ohio and shared Brown. He is benefiting from all of the talk about trade and being able to connect himself to President Trump and a state that President Trump won by a significant margin in two thousand sixteen. Then you go to North Dakota where President Trump is also quite popular one by ton in two thousand sixteen and you have democratic Senator there, Heidi Heitkamp fighting for her life, and she has a new ad out where she is going after her Republican opponent on trade China, his canceling their contracts to buy soybeans. This is a farmer standing in a soybean field. You. Kevin Kramer why he supports the trade war. He criticizes farmers. You're all kinds of hysteria. There's potential short term pain. We don't have a very high pain threshold, the United States of America. Mr Cramer, that trade war is costing my family lot of money and you don't seem to care. That's a pretty powerful ad. One of the things as Scott said, the trade wars, a political issue is really complex cuts across partisan lines. But one thing it clearly does is it is a wedge issue inside the Republican party. I mean, the vast majority of Republicans in congress are against this trade war. It's one of the very few issues where Republicans are even willing to speak up against Trump and the president, not Kevin Kramer, but but many others and the president and his administration have tried to tamp down some of that opposition, especially in farm states red states. That's why you saw the agricultural department take us multibillion dollar rescue package for farmers had heavily weighted towards soybean and pork producers, because since those are a couple of commodities have been hard hit by retaliatory, Tara. That cushions the blow, but you'll hear the farmers say, I don't want a government bailout. I want the government opening up these markets. It's kind of humiliating for them. Why do they need welfare? I call it that strategic soybean reserve. Why do we have to do that? These farmers say, I can sell my product. I don't need a welfare check. And one reason farmers are being targeted is a farm states went for Donald Trump. So the other countries figure, this is a way to put some pressure on the White House, but also American farmers are very productive. We have a trade surplus in agriculture is it's an area where the United States is extremely competitive. We produce commodities at a at a low cost, high quality. Other countries want to buy those products. And the trade war is definitely hurting agriculture. And so if you are dividing Republicans, if this is a wedge issue for Republicans, does that become a problem for Republicans running for office if you, if there are some voters who are suddenly not that enthused, we'll sure and also makes it hard. Order for Republicans to sell the to great success stories that they feel they've had a good economy and tax cuts and the trade war not only muddies the message. It also threatens to undermine the positive economic effects of what they think they're rain has has produced the trade war can take some of the bloom off the rows of a great economy, and you can see concern about that in this latest round of tariffs directed at China. Again, these are going to hit some consumer products when the White House initially talked about this, it was going to be a twenty five percent tariff as they've rolled it out. They said, no, it's going to be ten percent for the rest of this year and it'll go to twenty-five after the New Year's. So they wanna get past the the Christmas shopping season when there's going to be a lot of Chinese goods in the stores. And most importantly, they wanna get past that midterm election in November. And what you hear heard Kevin Kramer say in that Heidi Heitkamp add is what Donald Trump says. There's going to be a little short term pain. We just gotta get through this. But the goal was to make a deal with China. The goal was to have the tariffs be an ago, sheeting tool, but so far we haven't had any results with talking to the Chinese at all, and it's not exactly clear that that was the president's goal in a tweet that he sent out a couple of weeks ago. He, he said, and, hey, we could get money from those tariffs and yes, as if tariffs were an end in in another himselves, he's also said, we're making a lot of headway. It's kind of hard to see wherever they're making that headway in terms of actually bringing China the table, changing China's behavior, striking new trade deals at the president's talking about there hasn't really been any new trade deals since he's taken this aggressive approach. So in voters, go to the polls in states all over the country in November, will they be paying more for their iphones or will they will they be seeing or their ten cans there, Campbell Soup? Will they see the effects of this fight? Will they? Will they be. Feeling the pain and the gain part hasn't happened yet. The game port definitely hasn't happened yet. The pain is there. It may be a mild headache because opposed to a migraine. But for some folks in certain select industries that have been hardest, it's it's a migraine. You certainly know if you're in a small manufacturing plant and all of a sudden the cost of your steel and aluminum has gone through the roof or you're the nail manufacturer who had to lay off everyone in clothes. Then you really know if you're just a consumer. It's hard to tell there's no sign on the grocery store shelf that says your Campbell Soup. Now cost five cents more because of Donald Trump's tariffs, you know, there's not information like that out there. Okay. We are gonna leave it here for today, but we will certainly be back in your feet soon. Just as soon as there is news that forces us to run back into the studio. I'm tamra, Keith. I cover the White House for NPR. I'm Scott Horsely now cover the White House. I'm Mara Liasson national political correspondent, and thank you for listening to the NPR politics podcast.