[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

For the cash: Ex-NFL player stages hate crime, trashes his businesses

Rep Jim Jordan’s passionate speech against Red Flag laws

Trump administration repeals the Obama era ‘clean water rule’ and that is a good thing

Our Favorite Price

PETITION: Throw out the illegal prosecution of General Michael Flynn. Prosecute the perpetrators.

Concerning Government and Mainstream Media: Believe Nothing, Question Everything

Martial Law Masquerading as Law and Order: The Police StateÂ’s Language of Force

Ric Ocasek, New Wave Rock Visionary and Cars Co-Founder, Is Dead

Saturday Night Live Fires New Cast Member Shane Gillis for Using Offensive Language

New storm rises over Kavanaugh

Vapers seek relief ... by turning to cigarettes

Same Gov’t Who’s Now Banning Flavored E-Cigs, Approved Candy-Flavored Amphetamines for Kids

Remember the Vallejo Cop Who Tackled a Veteran for Filming Him?

Blood, Delusions, and Corruption in the American West

Will Justin Amash Run for President as a Libertarian in 2020?

Ken Burns Delves into the Hardscrabble History of Country Music

"Remain in Mexico" immigration hearings begin in tents at border

Black Race Huslter Deray Accuses White Race Grifter Shaun King of Fleecing Donors, Demand He Stop His "Fundraising" Scams

Are Comedians Finally Fighting Back Against the Far Left’s Cultural Clampdown?

Pete Buttigieg’s Association With the Abortionist Who Stockpiled Baby Corpses in His Home Is Hardly Surprising

Elizabeth Warren’s Social Security Proposal Doesn’t Go Far Enough: It’s Time For A Basic (Retirement) Income

The CIA’s Influence Over the Media: Use of the Conspiracy Theorist Slur

Pete Buttigieg Chides Gun Owners Who Have ‘Sense of Manhood’ Wrapped Up in Guns

Is Vaping Marijuana Safe? Deaths and Lung Disease Linked to E-Cigs Call That Into Question

DOJ Inspector General Has Completed FISA Abuse Probe

Ohio gamer sentenced to 15 months prison in 'swatting' case

Court: FBI Must Destroy Memos Calling Antiwar.com a Threat

Trump administration enters new phase for border wall, sets ambitious timetable after securing land

Eddie Money, ‘Two Tickets to Paradise’ singer, dead at 70

Eighth Illegal Alien Charged with Rape in Same Maryland Sanctuary County

Free (with ads) Movie "The Wrecking Crew"

Judicial Watch Sued To Get Footage of The ‘Plane’ Hitting The Pentagon On 9/11 (Video)

Webb Wilder & The Beatnecks - Baby Please Don't Go

95 Percent of Americans Believe the Media is Full of Shit

Orange County deputy accidentally shoots himself while training

9/11 Solidified the Destruction of Our Freedom

The Orange Car Guy

AGW is “Paid to Find Out Who’s in Town”

Witness: Girls as young as 11 visited Jeffrey EpsteinÂ’s island in 2018

Christine Blasey Ford's Father Privately Supported Brett Kavanaught's Confirmation

'Way Too Far To The Left': Obama’s Homeland Security Secretary Skewers Democrats On Immigration

Biden Tried to Buy Putin’s Support for Iraq War With Promise of Oil Money

Clown World: Canadian Cancer Society Claims Men Without Cervixes Can Get Cervical Cancer

Revealed: You Know How Rush Limbaugh Talks About "Seminar Callers"? Turns Out They're Real -- Employed by a Joint Clinton-DNC Effort

Don’t look now, but there’s more border wall news

Psychedelic Science Just Got a Big Boost

The Bill of Rights Turns 230, and What Do We Have to Show for It? Nothing Good

Trump Replaces Bolton with Fringe Neocon

When Booze Was Banned but Pot Was Not

The 911 Commission Report: A 571-Page Lie

Status: Not Logged In; Sign In

International News
See other International News Articles

Title: Here Is How China Is Really 'Paying' For Tariffs
Source: Forbes
URL Source: https://www.forbes.com/sites/kenrap ... ying-for-tariffs/#bef37ff1fae6
Published: May 17, 2019
Author: Kenneth Rapoza
Post Date: 2019-08-15 17:07:02 by Gatlin
Keywords: None
Views: 51
Comments: 3

As the trade war escalates, China will absolutely be paying a higher price.

President Trump says China tariffs have given the U.S. government billions of dollars in new revenue. He's half right. Of course, higher tariffs on Chinese imports are a new revenue stream for the government. But China is not paying for it, U.S. companies are. Everyone knows that. American consumers might be next to pay the price, as Walmart executive said recently.

But in a roundabout way, China is "paying" for tariffs. They are not paying the port duties, but they are paying the price in this trade war in more ways than one. Barclays Capital expects a one percentage point drop in China's GDP if Trump makes good on his promise to tax everything China sells to the U.S. at a rate of 25%. That takes China's GDP below 6%, its lowest GDP since opening up its economy 40 years ago.

By comparison, the U.S. gets around 30 basis points cut from GDP; three times less than a more export-dependent China.

Some China manufacturers are lowering prices to help their American clients pay for their orders now that the cost of doing business with them has gone up. Others are moving lower-skilled, labor-intensive manufacturing to Vietnam, Bangladesh, Malaysia, and India. That's a cost of blue-collar labor for China, a country that wants to move up the value chain and make microchips and develop code for video games. Odds that the stitch-and-sew factory worker can do that are slim.

The other way China is paying for the trade war is (possibly) losing its role as the go-to nation in the global supply chain. Talk to an American company sourcing parts in China and you will hear the same thing: it's hard to get that kind of economy of scale and pricing elsewhere so quickly...but I'm looking for it! They are incredibly frustrated and looking for options. Moving out of China is one of them.

Some of the impacts of tariffs will be offset by a weaker Chinese yuan. If China's currency was to become 25% cheaper to zero out tariffs, the yuan would need to depreciate to 8. A yuan at 8 is unlikely.

Some Chinese manufacturers will pay more for the trade war than others. If Chinese toys are expensive, then U.S. importers will look into alternate sources of supply. In anticipation of substitution effects by their American partners, more Chinese manufacturers are seen eating into their margins and lower their prices.

In the overall scheme of things, it looks like Chinese exporters can absorb all of an estimated $75 billion to $100 billion in higher costs due to tariffs. China's GDP expanded by $1.3 trillion last year.

"It is the second order impact that can make trade wars significantly worse. Deteriorating business confidence and tighter financial conditions can lead to both corporates and households pulling back," says Barclays economists led by Ajay Rajadhyaksha in New York and Jian Chang in Hong Kong.

Over time, these indirect effects can dwarf the impact of higher port duties, BarCap economists wrote in a note to clients this week.

China is not expected to tighten monetary policy.

Meanwhile, China-sourced U.S. corporate revenue is estimated at $300 billion per annum or roughly 2% of total U.S. business revenue.

Besides paying the price for trade wars at the port, U.S. companies may also pay for it on the NYSE. Especially the big ones that rely on China for manufacturing and sales, like Apple.

"A tariff war could have an outsized effect on equity valuations relative to the macroeconomic effect, given that the bulk of the China exposure is with large multinationals," says Brian McCarthy, chief strategist for Macrolens, an investment research firm in Stamford, Conn. "Some stocks may have embedded expectations of Chinese consumption growth that will now be discounted. If the macroeconomy does not dislocate, there is no reason U.S. equities should," he says.

So far that has been the case with the market rising again on Thursday thanks to solid manufacturing data and corporate earnings. Markets were relatively flat here as of late afternoon Friday.

"The short-term impact on China's economy may be amplified if higher tariffs weaken confidence and reduce spending by firms and households," says Paul Gruenwald, chief global economist for S&P Global Ratings.

The Hang Seng settled 1.18% lower on Friday in Hong Kong.

Manufacturing investment growth in sectors exposed to tariffs, like computer hardware, started the year weaker. Lower investment would mean a big short-term hit to the economy, says Gruenwald.

Manufacturing accounts for about 30% of total fixed asset investment in China and an estimated 15%-20% of GDP.

If manufacturing investment growth fell to just under 3% over the next 12 months it would shave even more off China's GDP.

"It seems fair to say that the longer tariffs continue, the greater the cumulative negative effect on the Chinese economy," says Rajadhyaksha.

Post Comment   Private Reply   Ignore Thread  

TopPage UpFull ThreadPage DownBottom/Latest

#1. To: All (#0)

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

Gatlin  posted on  2019-08-15   17:14:05 ET  Reply   Trace   Private Reply  

#2. To: Gatlin (#1)

If America buys even ONE DOLLAR more of chink shit, versus how much the chinks buy American goods, and any person on this forum doesn’t wanna fight to EVEN that up, then that person is a chink loving, America hating traitor shithead. Like every socialist democrat... and the LIBERALtarian Dicktards, that fault Trump for evening the playing field.

GrandIsland  posted on  2019-08-15   20:27:56 ET  Reply   Trace   Private Reply  

#3. To: Gatlin (#0)

The answer is simple. Buy American. I realize that things will be hairy for a time, but when American business starts to proliferate, we will win this war.

I don't need Chinese made trinkets. Their quality is pathetic. American products used to last forever. I once had a coffee maker for 15 years! I sold it at a yard sale because I was sick of looking at it. Simple truth. It still worked.

I want to buy American made clothing for the same reasons. They were well made and of good quality. They were also affordable.

Now, clothing falls apart after 1 wash, and the price is not commensurate. Paying top dollar for cheaply made clothing is frustrating. Very frustrating. I'll make due until US manufacturing starts up again. Sick of paying for an absolute garbage product made in China.

WWG1WWA  posted on  2019-08-17   7:05:17 ET  Reply   Trace   Private Reply  

TopPage UpFull ThreadPage DownBottom/Latest

[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Mail]  [Sign-in]  [Setup]  [Help]  [Register] 

Please report web page problems, questions and comments to webmaster@libertysflame.com