International Trade Administration: Fill & Download for Free

With the help of the United States government and media which accused China of:Committing genocide against Tibetans and Uyghurs;Harvesting the organs of Falungong followers and others who don’t like the party;Stealing US and western IP without making payment;Accused China of using “debt diplomacy” to make other countries dependent on ChinaTrying to undermine western influence in the worldStarting a trade war with ChinaBlocking leading Chinese tech companies like Huawei from using US IP without showing evidence to support its chargesSupporting Hong Kong rioters and arsonists in destroying Hong Kong as a center for international tradeWithout this kind of opposition from the west, Party Central would not have been nearly as successful in making Chinese so nationalistic.It is the US and Trump administration which have made Chinese so nationalistic now.

Judging by his statements and actions, President Trump sees every interaction as a zero-sum game where one side wins and the other loses. He doesn’t seem to believe that it can be possible for a deal to be struck that is mutually beneficial.That’s not how international trade works. A trade deficit just means that we buy more than we sell to a particular country. We still have the value of the goods or services we bought, it’s not as if we just hand over the money and get nothing in return.The President doesn’t seem to understand that, which is why he keeps making statements about how much money other countries keep stealing from us. He just doesn’t seem to grasp macroeconomics.

What better way to look at it than his track record.Below is a pie chart of the US ‘s steel imports. Donald Trump stamped a tariff on steel with the argument that China was threatening the American steel industry.If it was wouldn’t it be high on this import list?Here’s the thing. You can’t place a general import tariff on goods from a specific country. That’s not how they are designed. Tariffs are duties or levies issued on certain types of goods, a duty on certain goods by origin are a little more difficult to put in place. What this means is when the US places an import tariff on steel, the tariff applies to every imported bit of steel. When tariffs are applied with the intent of shrinking imports from a specific country, the best thing to do is choose a product for which they are a leading importer. Tariffs also don’t work beyond your own borders which means a tariff on steel from China does not actually make Chinese steel in itself more expensive. An American tariff does nothing for how much China can sell steel to Germany because America is nowhere in that equation (though America can influence the price).Notice however that China isn’t even in the top ten. Which means less than 2% of steel brought into the country (2% comes from India) comes from China.“But it could still hurt China!” Well… not quite. Because while China produces a whole lot of steel for export (14.6 million tonnes to be precise), none of its own top 10 partners are the United States.https://www.trade.gov/steel/countries/pdfs/exports-china.pdfSure, China’s top 10 makes up about 53% of its imports compared to the US, and since China produces half the world’s steel output that means China might be hurt more? Of its top 10 partners, China’s 10th biggest exporter is Saudia Arabia accounting for 3% of all Chinese steel exports. According to the above report by the international Trade Administration the US is the 21st largest export destination, buying only 187,000 tonnes a year from the PRC.As of now China exports 14.6 million tonnes of steel every year. 187,000 is barely more than 1% of the amount of steel China exports. Donald Trump aimed to bring down the Chinese domination of steel, all he did was make steel from NAFTA, Brazil, South Korea and his own country more expensive because it’s going to be slightly harder to get steel and factories take several years to set up. This in turn hits retailers because it hits their production costs. This can also have global consequences as a tariff makes selling steel to the United States more difficult, which could reverberate though the whole global supply chain as demand is stifled as against ease of supply to a major importer. The opposite of this is in part why Chinese steel is so cheap. So now retailers have a choice: Do they take their profit margins from higher import costs on the chin or do they ‘compensate’ for the increased cost by raising their prices?A lot of leading companies like GAP, Walmart, Costco, Polaris and General Motors are considering the second option.These popular brands say Trump's tariffs are forcing them to raise pricesThe current popular trend is to ship raw materials to China then buy the finished products. this is specialisation, which has been a key element in international trade for about 300–400 years if not longer. A better solution for boosting the American steel market (and I consider myself a layman) is to incentivise returning manufacturing to the States or otherwise bring the cost of domestic manufacturing down.Also Canada and South Korea are being labelled a threat to national security since they happen to be two of America’s largest sources of steel. Even if there is a plan a plan to sell Chinese products though imports from a third nation to which they re part of, it is generally considered not a good idea to tackle international relations with the discursive equivalent of a shotgun.Here’s an example of a smart use of tariffs. Which also happens to be Donald Trump’s target: Canada’s dairy tariffs, on the surface, seem like some draconian plan to hurt the US. But the thing is if there were no tariffs there’d be no Canadian dairy industry which is responsible for over 200,000 jobs.Canada likes its dairy industry, it has a mandate dating from 1942 to be entirely self-sufficient when it comes to milk production and 4 in 5 Canadians like that situation. Tariffs largely apply when an official import quota is exceeded. About 8–10% of dairy products in Canada are tariff-free imports.Canadans by and large like this arrangement. So it is unlikely to be revoked because of complaints that American business is being ripped off, especially not when US corporations and farming groups earn roughly $600 million profit from this deal.The US on the other hand has a mandate to produce as much milk as humanly possible. 73 percent of the cost of dairy production is subsidised by the US government. They’re producing so much milk that farmers are creating rivers of the stuff they can’t find a buyer for. Canada is an anomaly as it doesn’t subsidise its dairy farmers unlike the US and EU. This massive tariff is designed largely to ensure Canada doesn’t over-buy while the whole system insulates them from being flooded with super-cheap American milk, the vast bulk of which doesn’t pass Canadian food standards. The only ones who are that interested in more American dairy products are Americans who want to sell.Canada can handle slapping a painful tariff on dairy while the USA can’t for steel because Canada produces almost all its own milk. The USA has to import roughly four or five times as much steel as it produces.So in brief summary. Donald Trump called imported steel from China and Canada’s self-sufficient dairy market a threat to national security. He puts in place a levy for a product it gets less than a fiftieth of from China who are shipping globally one hundred times what it sends to America. He did however hit the export markets of several close allies and pissed off their northern neighbor because they sell a lot the US and that neighbor feels offended their self-sufficient dairy economy is somehow a threat to American national security.There are few presidents I can think of that would make such monumental cock-ups in matters of international trade as calling one of every fifty imported tonnes of steel a threat to national security, thinking the country responsible will be hurt when they get a penalty on one of every hundred tonnes they sell, then slapping a penalty that affects producers of the other forty-nine-out-of-fifty tonnes.Edit: Thank you to all the responses pointing out that more specific duties can be put in place. Preferential duties, anti-dumping duties and the like. The furor from Canada, Mexico and Europe about the duties is a strong indicator at least a few of these tariffs are open ones on product not origin.https://www.investors.com/politics/editorials/dairy-subsidies-government-farm-programs-surplus-cheese/Myths & Realities - supply managementWhy America Cannot Just Make Everything It NeedsWhere Does the U.S. Import Steel From?United States Steel Production | 1969-2018 | Data | Chart | Calendarhttps://www.trade.gov/steel/countries/pdfs/imports-us.pdfhttps://www.trade.gov/steel/countries/pdfs/exports-china.pdf