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In U.S.-China Trade Dispute, Continuing to Impose Tariffs Hurts U.S. Innovation

Masha Abarinova

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Photo of event by Masha Abarinova.

WASHINGTON, July 22,2019 – As friction continues in the trade war between U.S. and China, policy experts believe that continuing to impose import tariffs will hurt U.S. innovation and provide China more economic leverage in the long run.

The U.S. has an estimated billion-dollar welfare loss due to its heavy reliance on tariffs, said Joshua Meltzer, senior fellow of global economy and development at the Brookings Institute on Thursday. Tariffs are “unlikely” to put U.S-China relations on a stable footing, he said.

The tension within these foreign relations is one of the most consequential and multilateral issues facing the global economy, said Cheng Li, director of the John L. Thornton China Center. Last year, U.S. and China have had zero percent of mutual investment between their tech sectors.

Derek Scissors, resident scholar at the American Enterprise Institute, said that the World Trade Organization is not equipped to resolve these technological issues. The U.S. currently does not have implementing regulations of export controls, he said, and that is why we need unilateral action on this matter.

Panelists also recognized that the Chinese state-led economic model makes future negotiations difficult, said Neena Shenai, visiting scholar at AEI.

China doesn’t believe in comparative advantage but in “absolute” advantage, said Rob Atkinson, president of the Information Technology and Innovation Foundation. That, he said, is the “core” problem.

Atkinson added that the Chinese president made a “strategic blunder” with pushing indigenous domestic innovation, which alienated imports.

For the U.S. to work with China on a “sustained” basis, said Scissors, China needs to have “some level” of pro-competition, pro-property reform. In an anti-competitive market, China will not do well unless it can harness a single, “transformational” technology, he said.

Despite the differences in China’s economic model, continued collaboration may be in the U.S.’ best interests.

If we use dictatorship as a reason not to trade with China, said Atkinson, then we would not be trading with forty percent of the world’s economy.

China has a “long way to go” before it can think of replacing the U.S. as a superpower, said Li. Huawei CEO Ren Zhengfei had acknowledged that within the next couple years, Huawei could lose around 30 billion U.S. dollars due to the import ban.

The goal should not be to stop China from rising, said Atkinson, but rather to stop China from hurting our economy while they do so.

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Reporter Masha Abarinova is a recent graduate of Bryn Mawr College, with a bachelor’s in political science. Her concentration also included political philosophy and international relations. She previously worked at the digital media startup Bold TV.

Arsonist or Firefighter?

Trump Says He Won’t Impose Tariffs He Threatened Mexico With

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WASHINGTON, June 7, 2019 — President Trump on Friday announced that Americans will not have to pay the five percent tax he recently threatened to impose on Mexican imports, citing an agreement reached with the Mexican government following negotiations led by Vice President Pence.

“I am pleased to inform you that The United States of America has reached a signed agreement with Mexico,” Trump said in a tweet Friday night, adding that the tariffs he’d proposed last week were “hereby indefinitely suspended.”

The Mexican government, Trump said, “has agreed to take strong measures” to curb the flow of migrants passing through their country from South and Central America en route to the United States.

A “US-Mexico Joint Declaration” posted to the State Department website elaborated on the President’s announcement by stating that the two governments “will work together to immediately implement a durable solution” to the influx of migrants seeking asylum in the United States, which the declaration called a “shared challenge.”

According to the declaration, Mexico will deploy its national guard forces throughout the country, with a particular focus on the Mexico-Guatemala border.

For the Trump administration’s part, the declaration references an expansion of “existing Migrant Protection Protocols” across the entire US-Mexico border. But that policy has already been ruled unlawful by a three judge panel of the Ninth Circuit Court of Appeals after a coalition of immigration advocacy groups filed suit, alleging that it violates the asylum provisions of the Immigration and Nationality Act.

The policy remains in effect, however, because the panel stayed its ruling pending an appeal to the full Ninth Circuit or the Supreme Court.

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Lies From London

Fact Checking President Trump’s London Adventure

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WASHINGTON, June 5, 2019 — President Trump on Wednesday finished up a two-day visit to the United Kingdom, during which he made a number of false or misleading statements. We separate the truth from the lies below.

Denying the existence of London protests

During a Tuesday press conference with British Prime Minister Theresa May, Trump was asked to respond to the highly visible protests against him during his visit to London, including thousands of demonstrators and the “Baby Trump” balloon which debuted during last year’s presidential trip to the UK.

Although Trump spent most of his trip moving from event to event via helicopter, he claimed that throngs of Londoners had taken to the streets in celebration of him and his presidency.

“As far as the protests, I have to tell you, because I commented on it yesterday: We left the Prime Minister, the Queen, the Royal Family — there were thousands of people on the streets cheering.  And even coming over today, there were thousands of people cheering.  And then I heard that there were protests.  I said, “Where are the protests?  I don’t see any protests.”

In actuality, protest organizers estimated that a crowd of 75,000 people had turned out to march against Trump’s visit to the UK.
 
 

Falsely claiming to have the highest-ever approval rating among GOP voters

During the same press conference with Prime Minister May, Trump was asked if he thought Republicans in Congress would take any action to block his plans to impose a five percent tax on all Mexican imports next week.

Trump replied that he did not think Congressional Republicans would do anything to stop him, in part because of his approval rating among Republican voters.

“I have a 90 percent — 94 percent approval rating, as of this morning, in the Republican Party.  That’s an all-time record.”

While polling by Gallup has shown Trump to have a 90 percent approval rating among Republicans in the past, his approval rating slipped by a percentage point last month to 89 percent.

That 90 percent approval rating does not even place him among the top three highest approval ratings for Republican presidents among Republican voters. At the height of his popularity, George W. Bush could boast of a 99 percent approval rating among Republicans. His father, George H.W. Bush, once had the favor of 97 percent of GOP voters, and his predecessor — Ronald Reagan — had a peak approval rating of 93 percent.

Trump’s is the 6th highest-rated Republican president among Republicans, as he is also topped by Presidents Dwight Eisenhower (95 percent) and Richard Nixon (91 percent).

Confusing the United Kingdom with China

During a Tuesday roundtable with British officials and business leaders, Trump claimed that the United Kingdom is the United States largest trading partner.

“We are your largest partner.  You’re our largest partner.  A lot of people don’t know that.”

The reason “a lot of people” don’t know that the UK is the United States’ largest trading partner is because it’s not true.

According to the Congressional Research Service, the Department of Commerce’s Bureau of Economic Analysis found that America’s largest trading partner in 2017 was China, with $711.7 billion in total goods and services passing between the two countries. Canada is next, with $679.9 billion of goods and services exchanged, followed by Mexico ($622.1 billion), Japan ($286.1 billion), and Germany ($239.8 billion).

Claiming that Winston Churchill never worried about nuclear weapons

During a televised interview with British journalist Piers Morgan, Trump invoked the threat of nuclear weapons when Morgan asked him to compare himself with Winston Churchill.

“Churchill didn’t have to worry so much about the nuclear.”

During World War II, nuclear weapons were a significant enough concern for both Churchill and then-President Franklin Roosevelt that Roosevelt gave the Manhattan Project — the top-secret effort to construct the world’s first nuclear weapons — top priority throughout the war. The project began after Albert Einstein wrote a letter Roosevelt, warning him that German scientists could potentially build a weapon to unleash the terrible destruction that would result from splitting uranium atoms.

According to the Atomic Heritage Foundation, both leaders had ample reason to worry, as Nazi scientists began work towards the construction of atomic weapons in 1939. Though their project was not successful, they nevertheless held a considerable lead when America began the Manhattan Project.

Denying that anyone had told the Navy to hide the U.S.S. John S. McCain

During the same interview, Trump denied that White House staffers had told the Navy to keep the Arleigh Burke-class destroyer U.S.S. John McCain out of sight during his recent trip to Japan.

“I’m not even sure it happened.”

Trump may not be sure that it happened, but the United States Navy recently confirmed to NBC News that the White House Military Office requested that the ship, which was originally named for the late Senator’s father and grandfather, be kept from view while the President delivered a Memorial Day address aboard the U.S.S. Wasp, which was moored nearby.

Calling Ireland part of the United Kingdom

Trump was set to visit France on Wednesday for an event marking the 70th anniversary of D-Day, the beginning of the allied invasion of France that led to the Nazis’ defeat in World War II. But he first made an overnight stop in Ireland, where he owns a golf resort.

To avoid the appearance of making a stop on an international trip solely for the purpose of playing golf, Trump arranged a meeting with Irish Taoiseach (Prime Minister) Leo Varadkar at the Shannon airport. During a media availability with Varadkar, Trump was asked if he’d visited to promote his Doonbeg, Ireland golf resort.

“This trip is really about the great relationships that we have with the UK.”

Doonbeg is located in the Republic of Ireland, which has been a sovereign nation since 1921.

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Tariff Man Strikes Again

New Tax On Mexican Imports Is Necessary Because Congress Won’t Restrict Immigration, Sanders Says

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Cars wait for buyers at an auto dealership.

WASHINGTON, May 31, 2019 — White House Press Secretary Sarah Huckabee Sanders on Thursday said President Trump’s plan to levy as much as a 25 percent tax on Americans’ purchases of Mexican imports is necessary because Congress won’t do his bidding on immigration.

“Congress should actually fix the laws and we wouldn’t have this problem,” Sanders said while speaking to reporters outside the West Wing.

Sanders conceded that Americans should not have to bear the brunt of Trump’s trade policies, suggested the tariffs would be made unnecessary if Mexico were to close its’ border with Guatemala or forcibly return the “outrageous numbers” of US-bound migrants to their countries of origin.

“They have absolute authority to do a lot more than what they are doing,” she said before suggesting that Mexico has the legal authority to keep migrants from leaving the country through its northern border.

“They see this and they have the ability to stop it. They also have the legal authority to return them back home.”

“If they take that action, it will make a huge difference and we’re simply asking them to do that.”

On Thursday, Trump announced that he’d impose a five percent tariff on all imports from Mexico beginning June 10, unless Mexico took action to stop South and Central American migrants from reaching the United States.

According to the Office of the United States Trade Representative, Mexico is the United States’ third-largest trading partner and second-largest source of imported goods. In 2018, Americans imported $371.9 billion worth of goods from Mexico, including $94 billion in vehicles $64 billion in electrical machinery $63 billion of other machinery, and $15 billion in medical instruments. It is also the United States’ largest supplier of agricultural products, having sold $26 billion worth of fruits, vegetables, and other products here in 2018.

If Mexico does not satisfy the Trump administration’s demands, the President has threatened to raise tariffs on all Mexican imports as high as 25 percent, meaning Americans will pay as much as an additional 25 percent tax on anything they purchase that originated in Mexico.

Sanders dismissed concerns that the new tariffs would impact plans for Congress to ratify the US-Mexico-Canada trade agreement he has touted as a replacement for the Clinton-era North American Free Trade Agreement, and said lawmakers should vote for the USMCA when their constituents would still have to pay higher tariffs.

“They [Congress] should go through with it because it’s good for American workers and it’s good policy. It’s good for farmers, it’s good for manufacturers, it’s good for unions, it’s good for everybody,” she said. “It’s a great deal and it’s something that we should move forward with.”

When reminded that NAFTA — currently the law of the land in the United States, Mexico and Canada — prohibits tariffs on at least half of Mexican imports, Sanders ignored the question and said Trump “is concerned about national security” and “protecting Americans.”
“That’s his number one focus,” she said.

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