THAT DIDN'T take long. But then again, nobody thought it would. The red Chinese--the big China, the one on the mainland--did indeed retaliate for President Trump's tariffs. Just 24 hours after the United States imposed tariffs on goods from the Middle Kingdom, Beijing announced $34 billion of its own tariffs against this country.
Then, in his turn again, President Trump ordered up another $200 billion in more tariffs. That's not doubling down. That's quadrupling down. And the press calls this a "potential" trade war.
If this isn't a trade war, what would one look like?
It's getting more and more difficult for economists--even those supporting the president--to explain why all this is happening. Here we are in the middle of an economic expansion, with unemployment rates not seen in decades, with a stock market still hovering around 25,000, and this president seems to be trying to reverse it all. The markets tumbled a couple hundred points Monday and Tuesday. And why? Because the president's "gut" tells him that he can win a trade war?
That's good enough for him. But will America lose while he follows his gut?
Better he should follow advice. Global trade ain't a real estate deal. And the red Chinese aren't going to be intimidated or impressed by somebody showing up late, putting his feet on the table, and talking loud.
Beginning next month, China will put an additional 25 percent tariff on 545 products from this country. So say officials with the People's Republic of China, which isn't a republic, doesn't seem to care much for its people, and only represents mainland China. (Taiwan is where the free Chinese dwell.) And that's only the beginning. For tariffs on another $16 billion of U.S. goods will be announced later, so the Beijing media says.
And the first item on all the lists we've seen? Soybeans.
Arkansas grows a lot of soybeans.
According to the Arkansas Farm Bureau, soybeans and the products thereof are this state's largest agricultural product. Arkansas farmers grow 150 million bushels each year--valued at $1.5 billion. The number of rows of soybeans in this state is more than the number of rows of rice, corn and wheat combined. China, it should be noted, imports two-thirds of the world's soybean total.
The papers say that the Chinese have hit back at the U.S. by imposing more fees on (deep breath) cars, orange juice, whiskey, lobsters, salmon and cigars. But on most lists we've seen, soybeans is first.
Then there's poultry and pork and beef. The Chinese plan to hit them too. And we hear that Arkansas produces a lot of poultry and pork and beef. Combine all the households in this state that rely on the selling and exporting of soybeans, poultry and pork and beef, and you're talking about a lot of Arkansans who can be hurt in this dispute-for-nothing.
The red Chinese hold several advantages in any trade war a-brewing: First, theirs is a heavily regulated economy, with officials in Beijing calling all the shots. It can also retaliate over the coming years by withholding approval for other American business interests. And it doesn't have to answer to the media or economists or a Congress.
Speaking of politics, the communist government in China doesn't have to answer to its own people, either. If its economy goes into the dumpster because of this trade dispute, Comrade, President and General Secretary Xi Jinping isn't going to be voted out of office. He's boss for life.
On the other hand, if the United States is tossed into even a mild decline, this president will pay for it politically.
The question is easy: Why?
We've heard no good answer. Just something about a gut.
GLOBAL FREE TRADE isn't only good for American farmers, auto workers, steel factories and the world economy in general, it's also a matter of national security. As 19th-century economist Frederic Bastiat once put it, "when goods don't cross borders, soldiers will."
We're reminded of a populist politician back in 2016, campaigning for president by defending tariffs, pooh-poohing free trade agreements and promising to turn back time to an era when the nation's economy was based on blue-collar workers in highly paid union jobs of the industrial past. His name was Bernie Sanders. We the People rejected his arguments in 2016 (with the help of the Democratic National Committee) and we certainly don't need protectionism and closed markets now.
It's said this president doesn't read books or briefing papers. But surely he Googles on occasion, like the rest of us. We'd suggest looking up "Smoot Hawley." Or even better, "results of Smoot Hawley."
And then till under these tariff ideas. Like any other weed in the soybean field.
Editorial on 06/20/2018