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1.Market Observations, 8.Was Sticky

6 Aug 2019 (TheAge) – Trump is escalating a trade war he isn’t winning

(6 Aug 2019, The Age, Business, p22, Stephen Bartholomeusz)

‘Overshadowed by Donald Trump’s escalation of his trade conflict with China last week was the release of US trade data that shows, again, that his trade wars aren’t working. For the first six months of this year the US goods trade deficit with the rest of the world increased from $US427.1 billion ($631 billion) in the same half of 2018 to $US439.3 billion.’


‘In reality, China’s exporters haven’t been paying the tariffs anyway. It is the US importer who pays the “tens of billions” of dollars that Trump often refers to, with the extra costs then passed onto US companies and consumers. So far the Trump administration has paid out more in subsidies to farmers hurt by China’s retaliatory tariffs and reduced purchases of US agricultural products than it has raised in extra tariff revenues. Last week Trump announced, via tweet of course, that the US would impose 10 per cent tariffs on the remaining $US300 billion or so of China’s exports to the US that haven’t yet been included in the trade conflict. If implemented from September 1 the new tariffs will raise the cost of a raft of consumer goods – including toys, clothing, footwear and smartphones – which is causing US retailers to warn of increased bankruptcies and job losses.’


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