The US is already in a trade war with China


President Obama has a habit of undercutting Republicans by stealing their issues.  He is doing that to Donald Trump on trade.

Trump has threatened a trade war with China, but the Obama administration has already launched a trade war.

Trump proposes to hit China with protective tariffs of up to 45 percent on goods shipped to the United States.   But the Obama administration has authorized U.S. Steel Corp. to ask the International Trade Commission for permission for total ban on Chinese steel exports to the United States.

U.S. Steel executives ask for the ban in retaliation for theft of their trade and manufacturing secrets by Chinese hackers.

Earlier this year the Obama administration has imposed a tariff of 522 percent on cold-rolled flat steel from China and 72 percent of this type of steel from Japan.  Cold-rolled flat steel is used in auto manufacturing, shipping containers and construction.

The justification for the tariff is that Chinese companies are dumping steel on the world market below their cost of production.  They produced more steel than they can profitably sell, and so are trying to cut their losses by selling their product for whatever they can get.

Based on a quick reading of on-line news articles, I think there is a basis for the charges against the Chinese.  European countries also charge China with dumping.

The new steel tariff on China, and the proposed import ban, would mean a big windfall from to U.S. Steel and other American steel producers.  It also would mean increased costs for American manufacturers who use imported steel, and higher prices for American consumers.

This could be of net benefit to the United States if U.S. Steel executives decide to use their windfall prices to modernize and upgrade so as to be able to produce a better product at a lower price.  If they divert the increased profit into executive bonuses, stockholder dividends and stock buybacks, then the American public does not benefit.

It is true, as Donald Trump says, that other governments take advantage of Americans.  But it is not true that we Americans can solve our problems by threatening  foreign governments.  We need to build up our home industries as other countries have done theirs.


The trade war with China is already here by Jon Connars for Asia Times.

Will the US ban Chinese steel imports? by MacroBusiness.

U.S. Steel Seeking China Import Ban After Alleged Hacking by Sonia Elmquist for Bloomberg News.

US slaps China steel imports with fivefold tax increases by Karishma Vaswani for BBC News.


 Photo via Sina English

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One Response to “The US is already in a trade war with China”

  1. 61chrissterry Says:

    Reblogged this on 61chrissterry.


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