The Morning: U.S. vs. China, trade edition
Good morning. Today, we explain the arguments for and against a trade war with China. We’re also covering El Salvador, Mark Zuckerberg and Rory McIlroy.
Power struggleThe United States and China are waging a trade war. Relative to the indiscriminate trade battles President Trump has pitched against the rest of the world, a conflict with China might seem small or even justified. China, after all, is an adversary. It has taken American jobs and threatened to topple democracy in Taiwan. But open conflict with one of America’s three largest trade partners is still a big departure from decades of U.S. policy. It will bring higher prices and lower economic growth, experts say. Is it worth it? Today’s newsletter will look at the arguments on both sides. The case forThere are two main arguments for Trump’s 145 percent tariffs on China. The first is about the trade imbalance. America has bought a lot from China over the years, and China has not returned the favor. To sell stuff there, American companies bend over backward to comply with Communist Party rules. Chinese companies don’t face the same barriers. Consider video games: U.S. companies have to censor their games to get into Chinese markets, if they can get in at all. Chinese developers ship their games to the United States replete with pro-China censorship. Trump and his allies say tariffs will force China to negotiate friendlier trade rules with the United States. China can’t afford to lose America, its biggest customer, if it wants to keep its economy growing quickly. It will have to capitulate and allow more U.S. products into its markets. The second argument is about national security. America relies on China for electronic chips, pharmaceutical ingredients and rare earth metals. (Beijing has suspended critical rare earth exports, and U.S. companies don’t have an alternative supplier.) At the same time, China is working to weaken the United States on the global stage, and America could go to war with China if Beijing invades Taiwan. The tariffs on China force the countries to decouple; companies will have to find other places, including within the United States, to source and make their products.
Notably, these arguments — on trade imbalances and national security — are at odds with each other. If the trade balancers get their way, the United States could actually trade more with China. If the national security side gets its way, America will shut China out. Still, the administration has made both points at different times. The case againstTrump’s critics make two main arguments against his tariffs — one on the merits and one on the tactics. On the merits, they argue that a trade war with China will leave the United States worse off. China has built expertise and resources for manufacturing that no other country has — with advanced machine tooling, for instance. So it’s not possible to shift production to, say, Mexico or Vietnam and expect the same affordable goods. The cost of living will go up and the quality of life will go down. Maybe the economic pain is worth it if the United States wins the trade war, but victory is not guaranteed, experts argue. And if the United States loses, it could suffer all the pain of tariffs only to end up with less-favorable trade conditions with China. On tactics, even supporters of a trade war with China question Trump’s methods. The president increased tariffs on China to 145 percent from 20 percent in a little more than a week. But companies are not able to shift manufacturing to the United States or other countries so quickly, which means Americans will have no choice but to pay higher prices while that process plays out. If Trump had phased in the tariffs over time, companies could have left China without interrupting production.
Narrower tariffs could also achieve the same goals, critics say. Tolls on computer chips or other parts used in military equipment could help protect national security. Levies on clothes and smartphones don’t. (Trump plans to impose additional tariffs on computer chips, he said yesterday.) What’s nextSo far, Washington and Beijing have responded to each other’s tariffs with more tariffs. But the impact of even higher levies is small, because the difference between a toll of 105 percent and 145 percent is less than meets the eye. If you’re looking for a $20 toaster, the distinction between a $40 and $50 price tag is irrelevant — both are far more than you’re willing to pay. The consequential next phase of the trade war, then, will not play out in tariff announcements but in shops and at kitchen tables across both countries. People in America will pay more for the same stuff, if they can get it at all, and people in China will have fewer customers and make less money. Their respective economies will grow slower, if not shrink. Eventually, America’s or China’s leaders will decide they’ve had enough and try a negotiated peace. For more
Deportations
More on the Trump Administration
More on Politics
International
Tech
Other Big Stories
Opinions Israel is the new hegemon of the Middle East. Which means it has no reason to negotiate with its enemies or end the violence, Aaron David Miller and Steven Simon write. Here are columns by David French on the Supreme Court’s deportation decision and M. Gessen on universities and Trump. A subscription to match the variety of your interests. News. Games. Recipes. Product reviews. Sports reporting. A New York Times All Access subscription covers all of it and more. Subscribe today.
Bentonville: Read how an Arkansas city became an epicenter of the cycling world. A snow paradise? In a wealthy Colorado ski town, people experiencing homelessness can sleep in their cars — but only if they have a job. How to evade taxes in ancient Rome: This 1,900-year-old papyrus offers a guide. Metropolitan Diary: Rescued by shoelaces in Queens. Ask Vanessa: “Are my pants really supposed to drag on the ground?” Most clicked yesterday: Have we been thinking about A.D.H.D. all wrong? Lives Lived: Mario Vargas Llosa was a Peruvian novelist who combined gritty realism with playful erotica and depictions of the struggle for individual liberty in Latin America. He also ran for Peru’s presidency in 1990 and won the Nobel Prize in Literature in 2010. Vargas Llosa died at 89.
Golf: Rory McIlroy ended an 11-year majors drought by winning the Masters. McIlroy became just the sixth player to win the career grand slam. See video of his victory. Women’s basketball: The former UConn star Paige Bueckers signed a three-year deal with the start-up league Unrivaled, which will pay Bueckers more in her first year than her first W.N.B.A. contract would pay over four. College football: Kyren Lacy, the former L.S.U. wide receiver who was once considered a top N.F.L. Draft prospect, died at 24 of an apparent self-inflicted gunshot wound.
There was a time when the wealthy would dress themselves in rich colors like indigo and purple. No longer: Today, beige is color of money. Set against the backdrop of anti-elitist sentiment, neutral hues have taken over moneyed enclaves like St. Moritz in Switzerland. “The ultrawealthy don’t want to show off,” one luxury designer said. “This class of people is super discreet and doesn’t want to be seen.” More on culture
Cook gnocchi with miso butter and asparagus. It’s a super fast weeknight meal. Save on these skin-care essentials. Browse spring sales that actually have good deals. Spend 36 hours in the Hudson Valley. See our best recommendations. Find your next favorite workout. Take our news quiz.
Here is today’s Spelling Bee. Yesterday’s pangram was promontory. And here are today’s Mini Crossword, Wordle, Connections, Sports Connectionsand Strands. Thanks for spending part of your morning with The Times. See you tomorrow. Sign up here to get this newsletter in your inbox. Reach our team at themorning@nytimes.com.
|
