{"id":1116259,"date":"2019-05-13T19:12:57","date_gmt":"2019-05-13T19:12:57","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=107376"},"modified":"2019-05-13T19:12:57","modified_gmt":"2019-05-13T19:12:57","slug":"retaliation","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1116259","title":{"rendered":"Retaliation!"},"content":{"rendered":"

This post Retaliation!<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

“The next few weeks could be rocky.”<\/p>\n

Bank of America\u2019s fortune cookie writers may have undersold their case\u2026<\/p>\n

The trade war famously reopened Friday. The United States imposed 25% tariffs on $200 billion of Chinese products.<\/p>\n

Come this morning, China announced retaliatory tariffs on $60 billion of United States products.<\/p>\n

They enter effect June 1 \u2014 unless a negotiated truce first washes them out.<\/p>\n

CNBC lists the butcher\u2019s bill:<\/p>\n

\n

Beijing will increase tariffs on more than 5,000 products to as high as 25%. Duties on some other goods will increase to 20%. Those rates will rise from either 10% or 5% previously.\u00a0<\/em><\/p>\n<\/blockquote>\n

American agricultural products were not excepted. Soybean and cotton prices went plummeting today\u2026 in consequence.<\/p>\n

Additional retaliation, suggest some Chinese sources, may await.<\/p>\n

Trade war, like any other war, is harder to stop than to start.<\/p>\n

China Maximizes the Market Impact<\/strong><\/h2>\n

Was it coincidence that this morning\u2019s blast arrived in time for opening whistle on Wall Street?<\/p>\n

Samantha Azzarello, global market strategist at JPMorgan:<\/p>\n

\n

China retaliating as fast as they did was a clear signal they\u2019re not going to be pushed around\u2026 It was interesting it wasn\u2019t done on the weekend. It was done just in time Monday morning for markets to open.<\/em><\/p>\n<\/blockquote>\n

On cue the floodgates swung open at 9:30\u2026 and a red deluge came washing down the canyons.<\/p>\n

The Dow Jones was instantly 400 points under\u2026 then 500\u2026 600\u2026 and 700 by early afternoon.<\/p>\n

By midafternoon the worst of the hemorrhaging was plugged.<\/p>\n

The Dow Jones ended the day down 617 points.<\/p>\n

But for the first occasion since February, it has slipped beneath its 200-day moving average \u2014 which has the chart watchers shaken and rattled.<\/p>\n

The S&P lost another 70 points today.<\/p>\n

But percentage wise, the trade-sensitive Nasdaq withstood the worst slating of the three \u2014 down 270 points on the day \u2014 or 3.41%.<\/p>\n

\u201cVery bad for China, very good for USA!\u201d<\/strong><\/h2>\n

President Trump laughed off all concerns this morning\u2026 and insisted China is brunting the true impact.<\/p>\n

Their [sic…] is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today\u2026 Also, the Tariffs can be completely avoided if you by from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That\u2019s Zero Tariffs.\u00a0<\/em><\/p>\n

Here he digs his thumbs into China\u2019s eyes, and gives them a good hard twist:<\/p>\n

\n

Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That\u2019s why China wants to make a deal so badly! There will be nobody left in China to do business with. Very bad for China, very good for USA!<\/em><\/p>\n<\/blockquote>\n

The American Consumer: Hidden Casualty<\/strong><\/h2>\n

But the president\u2019s top economics man \u2014 Larry Kudlow \u2014 conceded this weekend that American consumers will in fact pay much of the freight.<\/p>\n

Companies that accept imports actually pay the tariffs at water\u2019s edge.<\/p>\n

These costs they pass along to the consumer further down the line.<\/p>\n

Thus tariffs represent a tax increase upon Joseph and Jane Average American\u2026 who must stretch deeper into their pockets to purchase the same goods.<\/p>\n

And now that China has responded in kind, Chinese demand for American products will slacken.<\/p>\n

Oxford Economics has issued a new report. It reveals\u2026<\/p>\n

That a 25% tariff on $200 billion of Chinese goods imports would cost the United States economy $62 billion once all scales are balanced, once all accounting is settled.<\/p>\n

That figure amounts to $490 per household\u2026 incidentally.<\/p>\n

What if the president levies additional tariffs on all Chinese wares, as he has threatened?<\/p>\n

Oxford estimates total economic losses would cost the United States some $100 billion by next year \u2014 or $800 per household.<\/p>\n

The Seen vs. the Unseen<\/strong><\/h2>\n

The president must have misplaced his copy of Economics in One Lesson <\/em>by legendary economics journalist Henry Hazlitt.<\/p>\n

From which:<\/p>\n

\n

This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups\u2026<\/em><\/p>\n

The bad economist sees only what immediately strikes the eye; the good economist also looks beyond\u2026 The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.<\/em><\/p>\n<\/blockquote>\n

Hazlitt\u2019s is a faint and feeble voice coming from the tomb.<\/p>\n

There is the seen, he reminds us\u2026 as he struggles to rise above the din of the living.<\/p>\n

But there is also the unseen.<\/p>\n

You must consider the unseen effects of any given policy.<\/p>\n

But it requires a special effort of the imagination. And few can conjure the image\u2026<\/p>\n

The Unseen<\/strong><\/h2>\n

They cannot observe the lost jobs, the money unspent on other goods, the cost of retaliatory tariffs.<\/p>\n

Here is what the president does not appreciate\u2026<\/p>\n

The businesses that will not open or will not expand because the inputs of industry are costlier\u2026<\/p>\n

The money Americans will not spend on other goods and services because they are expending more for these goods\u2026<\/p>\n

The American products that will go unsold abroad because of the tariffs China throws up in retaliation.<\/p>\n

Or as another president, Woodrow Wilson, once said in reference to the sugar tariff:<\/p>\n

\u201cVery few of us taste the tariff in our sugar.\u201d<\/p>\n

Few ask the right questions\u2026 connect the proper dots\u2026 draw the right conclusions.<\/p>\n

Heave 100 bricks off a rooftop in any American city.<\/p>\n

One \u2014 perhaps two \u2014 will find a man who tastes the tariff in his sugar.<\/p>\n

That is precisely how the political men prefer it.<\/p>\n

But the costs are nonetheless real.<\/p>\n

In the Unseen\u2026 We Will See the Light<\/strong><\/h2>\n

Yes, it is true\u2026 tariffs may open one door for one American.<\/p>\n

But they slam one door shut on the nose of another.<\/p>\n

For every extra dollar that jingles in the one fellow\u2019s pocket\u2026 one less dollar jingles in the other fellow\u2019s pocket.<\/p>\n

This fellow will see his pay envelope shrink \u2014 in effect, his taxes raised.<\/p>\n

In conclusion, tariffs benefit few. And damage many.<\/p>\n

Let us instead direct our focus to the unseen, as a wise voice whispers from beyond the grave.<\/p>\n

It is here \u2014 in the unseen \u2014 that we will see the light\u2026<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/em><\/p>\n

The post Retaliation!<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Retaliation!<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

China picks the perfect time to retaliate in trade war… New U.S. tariffs on Chinese goods could take $490 from American households…  The lesson of the seen vs. the unseen…<\/p>\n

The post Retaliation!<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[484,366,463,466],"tags":[30,377],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1116259"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1116259"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1116259\/revisions"}],"predecessor-version":[{"id":1116260,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1116259\/revisions\/1116260"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1116259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1116259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1116259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}