Chinese President Xi Jinping and US President Donald Trump in Beijing in November 2017. The two men’s countries are locked in a bitter trade war. Getty Images / Thomas Peter-Pool
On May 14, 2019, Alexandra Ma writes on Business Insider:
- The US-China trade war has dramatically escalated over the past few days, with both sides announcing tariff increases on billions of dollars’ worth of each other’s goods.
- Chinese state media — which functions as a Communist Party mouthpiece — issued a series of rabble-rousing statements on Monday accusing the US of “greed and arrogance” and calling for a “people’s war” against it.
- President Donald Trump’s administration on Monday night threatened to impose tariffs of up to 25% on another $300 billion worth of Chinese goods.
- If such tariffs were to be imposed, almost all Chinese imports to the US would be subject to tariffs.
- Trump tweeted on Tuesday that his “respect and friendship” with Chinese President Xi Jinping was “unlimited” but that “this must be a great deal for the United States or it just doesn’t make any sense.”
The US-China trade war continues to heat up, with Beijing calling for a “people’s war” against Washington and President Donald Trump threatening to impose tariffs on another $300 billion worth of Chinese goods.
In a series of editorials and op-ed articles published Monday, Chinese state media slammed what it labeled the Trump administration’s “greed and arrogance” and called for a “people’s war” against it. Beijing’s state-run media effectively serves as a mouthpiece for the Communist Party.
“The most important thing is that in the China-US trade war, the US side fights for greed and arrogance … and morale will break at any point. The Chinese side is fighting back to protect its legitimate interests,” the nationalistic Global Times tabloid wrote in a Chinese-language editorial carried by Xinhua News Agency.
“The trade war in the US is the creation of one person and one administration, but it affects that country’s entire population. In China, the entire country and all its people are being threatened. For us, this is a real ‘people’s war.'”
Xi at the Great Hall of the People in Beijing in December 2017. REUTERS/Fred Dufour/Pool
The rabble-rousing statements come amid an intense escalation of the trade war over the past week. Here’s what happened:
- On Friday, Trump increased tariffs on $200 billion worth of imports from China, to 25% from 10%. Here are all the affected Chinese products.
- On Monday, China retaliated by saying it would raise duties on $60 billion worth of American goods starting June 1, resulting in duties of 5% to 25%. Here are the affected American goods.
- Later Monday, the US Trade Representative’s Office published a list of about $300 billion worth of Chinese imports, noting that it proposed slapping tariffs of up to 25% on those products. Those goods include live purebred breeding horses, meat, condensed milk, tobacco, canoe paddles, and articles of clothing.
If the Trump administration were to impose the new tariffs on $300 billion of additional goods, it would mean that $500 billion worth of Chinese goods coming into the US would be subject to tariffs.
That figure represents nearly all Chinese imports to the US. The US imported $540 billion worth of goods from China in 2018, according to Census Bureau data.
The Global Times’ Monday editorial also effectively accused the Trump administration of misleading Americans about the victims of US tariffs.
It singled out an interview that Larry Kudlow, Trump’s top economics adviser, gave to “Fox News Sunday” in which he said that US consumers would also suffer from the trade war, contradicting Trump’s claim that China would single-handedly foot the bill.
Trump and Xi are expected to meet in Japan in late June. Andrew Harnik/AP Images
During prime time on Monday night, the state broadcaster CCTV also aired a statement saying that China would “fight for a new world.”
“As President Xi Jinping pointed out, the Chinese economy is a sea, not a small pond,” the anchor Kang Hui said on his 7 p.m. news show, as cited by CNN. “A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is still there.” That clip went viral on Chinese social media, CNN reported.
In an English-language version of its Monday editorial, the tabloid also said: “The US tariff moves are very much like spraying bullets. They will cause a lot of self-inflicted harm and are hard to sustain in the long term.”
“China, on the other hand, is going to aim with precision, trying to avoid hurting itself,” it said.
Trump tweeted on Tuesday that his “respect and friendship” with Chinese President Xi Jinping was “unlimited” but that “this must be a great deal for the United States or it just doesn’t make any sense.”
He added on Monday that he would meet Xi next month at the G20 summit. “That’ll be, I think, probably a very fruitful meeting,” he said.
Gary Reber Comments:
We must defeat Communist China in its mission to dominate world manufacturing.
It is not in our long-term interest to end implementing a policy of strict tariffs on those trading partners and foreign countries who do not practice fairness or who steal our technologies.
Our best position is to pull back where there is not fair trading practiced, and focus on developing and building our own domestic capabilities for manufacturing employing the most advanced technological innovations and inventions to produce, while simultaneously empowering EVERY child, woman, and man to acquire an ownership portfolio of new productive capital asset formation using insured, pure interest-free capital credit, repayable out of the earnings of the investments, without the requirement of past savings.
To do nothing and continue the past “free trade” debacle is to further gut our manufacturing capabilities, eliminate jobs and ownership opportunities, and make us further dependent on the productive capabilities of foreigners, depriving the American masses of an affluent future.
We are at a pivotal point that will largely dictate our future economic status and for the possibility of an economically secure and affluent future for our children.
Our governments during the past several decades have taken us down a path in which we have become very dependent on the outsourcing and off-shoring of the production of the goods and products needed and wanted by American industry and consumers. Now that the current government, alone and without support from others seeking to replace this government, is finally imposing federal tariffs to boost the cost to American corporations of unfairly low cost imported products manufactured in Communist China, certain American corporate interests and their lobbyists, as well as the Chinese, are having a fit. Why? Because tariffs seek to adjust unfair trade that is supported by Communist Party State subsidies to key industries, and who impose technological-sharing stipulations for American corporations to operate in Communist China.
We should be asking ourselves why have we been effectively incentivizing American corporations to outsource their supply chain and finished products production to Communist China and to other low-wage, non-environmentally- and non-worker-safety-regulated countries without penalty of a federal tax on foreign-made products exported back to the United States? Such products are produced with the aim of competitively producing at the lowest cost, while decimating home-based production. They have effectively been entering the United States duty or tax-free.
As a result of our past governments doing nothing about American corporations abandoning the American heartland, we have undermined our once powerful industrial capabilities with the out-sourcing of production to Communist China and other developing countries. This means American corporations have been investing in the development of Communist China’s capabilities to produce cheaper than us due to the willingness of their masses to become low-wage slaves working in far less than ideal conditions. American corporations have left our country and have continued to leave in droves to outsource their production, or to source parts used in the assembly of products in the United States.
The greater impact derived from fair trade and tariff policy should be to stimulate the return of American corporations, who, over decades, have invested and outsourced production to foreign countries instead of investing in productive development at home, and to stimulate exports of American-made goods to other countries at competitively fair prices.
Of course, we should expect that as a result of a trade policy that readjusts the cost of imported products, prices in the short term will increase for both home-based American manufacturers and assemblers, who have come to rely on foreign-made materials and parts, and consumers, during the time American corporations readjust and return or expand to manufacture goods in the United States and embrace fair trade supply chains, in cases where we are unable to produce all the material necessary for production. No doubt, tariffs, in the short term, will force some U.S. importers and retailers to raise prices and in turn, the tariffs imposed by foreign countries on United States exports will make those American goods less competitive. But looking ahead, this is a cost we need to absorb if we are to be as self-reliant as possible and produce by our own people for consumption by our own people. Of course, in the short term, companies may not generally be able to fully offset tariff costs through raising prices or through cost efficiencies elsewhere, meaning tariffs will press on margins. Of course, these American companies may choose to pass the tariff tax onto American consumers, but the aim should be to re-establish our manufacturing capabilities by financing the most advanced technologies, which can be employed to produce at the upmost efficiency.
But should we reason, as is sadly prevalent, that, because prices will increase for certain materials and parts, as well as for certain consumer goods exported back to the United States, we should abandon policies that deter outsourcing and off-shoring and provide new opportunities for Americans to produce at home American-made replacements? The short-term thinking to stop taxing goods imported into the United States is, in reality, a rally for continued outsourcing and off-shoring of American manufacturing and investment in Communist China and other low-wage, non-environmentally- and non-worker-safety-regulated countries, depriving Americans of opportunities to become productive at home. Those engaged in “Stop Imposing Tariffs” thinking are obviously no-restriction free-trade advocates, not fair-trade advocates and are OK with the continued outsourcing of the production of goods and services, as long as wholesale and end user prices can be kept lower than if those goods and services were produced in the United States.
The point of assessing tariffs is to make the cost of production in Communist China and other low-wage foreign countries more expensive for American corporation to outsource and off-shore, and instead bring back manufacturing to the United States so that American workers have better opportunities of employment at higher wages and more opportunities for workers and citizens to broadly own the corporations growing our economy and creating consumers for their own economy. Tariffs can effectively de-incentivize American corporations from gutting our manufacturing capabilities at home. With tariffs, Communist China pays because the demand for their manufacturing capabilities, built by Western advanced corporations, will collapse or suffer severely. It is shocking just how much we have allowed to be produced in Communist China that otherwise used to be produced in our homeland.
Yet it appears to be all right with free trade advocates if Communist China is supported in its aim to be the dominant economy on Earth as long as in the short term prices we pay on outsourced and off-shored manufactured goods and products are cheap. Forget about empowering our own citizens to be productive and own advanced technological manufacturing to produce even less costly.
We need to put a full stop to American corporations outsourcing supply chain parts and finished products and off-shoring manufacturing products, and begin the process of re-industrializing our productive capabilities using the most technically advanced and sophisticated smart technologies of production, all financed by creating new acquired with the earnings of the reinvestments in our own economy.
What Americans do not see is how, with the earnings boost provided by American corporations outsourcing and off-shoring productive capital asset investments, Communist China is spending billions to automate Chinese factories. Also, Communist China is exempting foreign investors and American outsourcers from being taxed on profits from investments in Communist China provided the proceeds are reinvested in industries high on the Chinese government’s priority list. In other words, Communist China is using tax breaks to discourage foreign earnings from flowing out of the country. These measure are aimed at gaining an edge in global competitiveness.
Why are we not spending billions to fully developed our at-home productive capabilities? Highly automated production could just as feasibly be employed in the United States as in Communist China or other countries. Tariffs are a means to incentivize the development of such production and other production in the United States and penalize investment in Communist China and other non-fair trade practicing countries.
Instead, duty-free imports over decades have resulted in propelling American corporations to outsource production to Communist China and other third-world countries, enabling new investment in those countries and building their economies through exporting tariff-free back to the United States. This is at the expense of Americans, who have been losing jobs to outsourcing and off-shoring. Of course, the wealthy capital asset ownership class, who monopolize the ownership of the large American corporations doing most of the producing and who outsource and off-shore investment to produce at the lowest possible cost, continue to enrich themselves by investing in productive capital asset formation in other countries, which then they own or share ownership with, for example, the Chinese State-supported and controlled manufacturing elite. We need a pro-active policy to stop allowing goods produced as a result of outsourcing and off-shoring from entering the United States without a stiff tariff applied so that the imported pricing is commensurate with the pricing for the same or similar goods produced here. This will help to deter American corporations from further outsourcing and bring back production to the United States.
The Chinese authoritarian government has attracted our corporations to invest in Communist China and decrease investment in the United States, significantly decreasing the availability of good-paying manufacturing jobs, and Communist China has pilfered our intellectual property, as more and more American corporations move their production to there. The Chinese Communists have also hacked into politicians files and our government offices.
And according to international trade experts, Communist China has been “stealing” more than $5 TRILLION from Americans––each year. China and its American out-sourcing accomplices have devastated our heartland, our businesses, and the livelihoods of millions of Americans.
The American people should share a large part of the blame for American corporations outsourcing as we have widely embraced buying lower-cost Chinese goods and products instead of higher-priced American-made equivalents. And this has further propelled more and more American corporations to outsource their production to stay competitive with those American corporations in the same industries who have preceded them.
This snowballing effect has been supported as the result of steadily increasing exports from Communist China and other low-wage countries over the past few decades, which have been allowed to enter the United States without tariff adjustment, with the result that “American Made” production can no longer compete, resulting in factory closings and underproducing.
But after years of sitting back and letting hardworking Americans take the brunt of Communist China’s attacks and unfair trade policies, imposing tariffs is a way to de-incentivize American corporations from further outsourcing and off-shoring, and instead invest in the expansion of American-made production, while simultaneously creating new productive capital asset owners and jobs.
What is frustrating is that there is not a broader discussion on the national level in political circles over the threat to our economic well-being from Communist-ruled China. Over the last two decades, Communist China has gotten away with robbing us of American jobs and the productive foundation that enables us to be self-sufficient in producing the goods, products and services that Americans need and want, and create and keep jobs at home.
If we continue on this outsourcing and off-shoring path it will do significant harm to our economy and our ability to strengthen our capability to produce at home. We need to uphold an economic policy that strengthens manufacturing in the United States, while ceasing production in Communist China and other countries. This will strengthen our economy and galvanize “Made In The USA.”
In the current political climate, the question is why would any American support outsourcing or off-shoring? De-incentivizing outsourcing and off-shoring and creating a fair trade system should be an issue that receives bi-partisan policy support.
We need to call out those who advocate for continuing to allow cheap-labor-produced Chinese goods and goods from other cheap-labor-production countries to enter duty-free or near duty-free when exported to the United States. They are supporting the owners of American corporations who are enriching themselves using essentially slave labor and no regulations to protect workers and the environment, as well as gutting our manufacturing capabilities in our homeland, leaving Americans with far fewer good paying jobs or jobless and without financial security.
We need to face up to Communist China’s mercantilist economic policy and plan for pushing its “Made In China 2025” campaign, an ambitious plan not only to upgrade Chinese industry––most notably in advanced sectors like information technology, robotics and pharmaceuticals, where IP is key––but to compete with and ultimately displace foreign companies domestically and globally. To that end, Communist China has continued to aggressively push foreign companies to hand over technology and IP rights in exchange for market access––a possible violation of World Trade Organization (WTO) rules.
At home, there is virtually no political discussion of how the non-human factor of production––productive land, structures, infrastructure, tools, machines, robotics, computer processing and apps, artificial intelligence (AI), which are owned by people individually or in association with others––is continually eliminating the need for masses of human workers. Yet, as tectonic shifts in the technologies of production continue, resulting in more and more AI-assisted automation, the result is eroding opportunities for less-educated workers, who have in the past performed the physical work needed by our industries, now must increasingly compete against labor-saving, efficient machinery. With plenty of want-to-be workers, willing to work for less pay, wage levels are dropping or stagnant, especially for less-educated workers.
Unfortunately, in light of these decaying developments and opportunities, no politician has come forth to offer solutions to empower Americans to earn income by owning the productive capital assets that are continually eliminating the necessity for their labor.
Isn’t enough, enough? Or will we continue to not penalize American corporations who out-source to Communist China and other countries, without tariffs? The plan should be to make “Made In The USA” the gold standard for quality.
Solutions to energizing our at-home economic growth have been developed since the 1960s but political leaders and academia have ignored the policy recommendations.
We do not have to depend on the Chinese or the wealthy, wherever they are, to create investment monies to re-build and build new productive capabilities in the United States and create a technologically advanced new industrial economy that can produce general affluence for EVERY child, woman, and man. We should and can manufacture the materials and parts necessary to supply industries at home and produce products for consumers in the United States, and adopt and expand the application of highly automated processes to create efficient production, and not rely on foreign producers.
The key to our success as we rev up to develop new responsible and “green” production capabilities and factories is to finance their formation using financial mechanisms that will empower workers and other citizens to own the new productive capability. By simultaneously creating new productive capital owners with the development and growth of our future economy, there will be more financially sound “customers with money” who earn from the productive capital assets they own, as well as from their earnings from jobs that will be created as a result of the huge demand for workers to build a future affluent economy.
What we need to do is enact legislation that will empower EVERY citizen to acquire productive capital assets to be formed in the future, without the requirement of past savings (the exclusiveness of the wealthy), and whose investments pay for themselves out of the earnings generated (future savings).
There are solutions for establishing a trade system that is fair and for incentivizing American corporations who have outsourced their supply chain parts and finished products manufacturing to Communist China, as well as off-shored their manufacturing, to return to the United States to manufacture using the most advance technological tools possible, and at the same time finance the formation of new productive capital assets in ways that empower American workers and other citizens to become owners.
One part of the solutions, proposed as the Bring Jobs Home Act (S.247 introduced by Senator Debbie Stabenow [D-MI] on January 30, 2017), amends the Internal Revenue Code to: (1) grant business taxpayers a tax credit for up to 20 percent of insourcing expenses incurred for eliminating a business located outside the United States and relocating it within the United States, and (2) deny a tax deduction for outsourcing expenses incurred in relocating a United State-based business outside the United States. The bill requires an increase in the business taxpayer’s employment of full-time employees in the United States in order to claim the tax credit for insourcing expenses. Senator Stabenow first introduced this legislation in 2012, and in every Congress since, but Senate Republicans have repeatedly blocked it.
Another Act introduced on April 7, 2017 by Senator Stabenow is the Make It In America Act (S.908), which closes loopholes in the current Buy American law so the federal government spends American tax dollars to buy products made in America. This Act also holds federal agencies accountable for how they spend taxpayer dollars.
The Buy American Act, which was passed in 1933, gives priority to American companies when the federal government purchases goods. The current law has numerous exemptions, which need to be eliminated. As a result of the loopholes, federal agencies issued over $92 billion in contracts to foreign companies between 2008 and 2016. For example, the Department of Defense awarded the most contracts to foreign companies—$154 billion during this time period. More than half of the Defense Department’s foreign spending was due to Buy American loopholes. These are contracts that could have gone to companies creating jobs and manufacturing, as well as capital asset ownership opportunities for EVERY citizen of the United States.
How could any American object to the logical sense that American tax dollars be used to purchase products made in America, not overseas? The Make It In America Act is aimed at creating more opportunities for American jobs and productive capital asset ownership by strengthening our current Buy American law and holding federal agencies accountable. In this age of American production outsourcing, the Act is a critical component of protecting our national security.
Still, another Act introduced by Senator Stabenow is the Made In America Act of 2018 (S.2865), which adds new Buy America requirement to 16 federal programs that provide $10 billion in federal funding or financial assistance to infrastructure projects.
We also need legislation that requires American companies applying and awarded government contracts to be employee-owned.
But the most powerful legislation to re-invigorate home-based American manufacturing and economic growth is still yet to be introduced and enacted. This would be the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/.
Complementary to this proposed legislation is the Agenda of The JUST Third WAY Movement (also known as “Economic Personalism”) at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/ and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/, as well as Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
