Assertions of a \u2018big leap forward\u2019 are based on few details and little confirmation from ChinaTariffs are a tax, not a membership fee to trade in US economy as Trump seems to claim<\/b>
\nEager for a historic trade agreement, US President Donald Trump is claiming done deals with China that are not measuring up to the hype.
He describes last week\u2019s meeting with Chinese President Xi Jinping in Buenos Aires, Argentina, as \u201cextraordinary\u201d and a \u201cbig leap forward\u201d. China, however, has provided few details and little confirmation about what it actually agreed to do in regard to buying more American products and addressing the Trump administration\u2019s assertions that Beijing steals American technology.
Trump claimed that China had agreed to reduce or eliminate its 40 percent tariffs on cars imported from the US His top economic adviser, Larry Kudlow, acknowledged no deal had been \u201csigned and sealed and delivered yet\u201d.
A look at the claims and the facts.
TRUMP: \u201cChina has agreed to reduce and remove tariffs on cars coming into China from the US Currently the tariff is 40%.\u201d \u2014 tweet on Sunday.
THE FACTS: Nearly a week later, it\u2019s still not clear if this will happen. When asked about the matter, Kudlow would only say that he hoped China would remove its tariffs on US autos.
\u201cWe don\u2019t yet have a specific agreement on that, but I will just tell you, as an involved participant, we expect those tariffs to go to zero,\u201d he told reporters on Monday. Pressed again on Tuesday, Kudlow said on \u201cFox and Friends\u201d that he expected China to move quickly on removing the tariffs \u201cif they\u2019re serious about this\u201d.
\u201cI think it\u2019s coming, OK?\u201d he said. \u201cIt hasn\u2019t been signed and sealed and delivered yet.\u201d
The White House\u2019s confusing and conflicting words have left Wall Street sceptical.
\u201cIt doesn\u2019t seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump\u2019s tweets (which seem if not completely fabricated then grossly exaggerated) with reality,\u201d JPMorgan told investors in a trading note.
On Thursday, a Chinese official said that China will \u201cimmediately implement the consensus reached by the two sides on farm products, cars and energy,\u201d but did not address the auto tariffs specifically or provide any additional details.
Trump has cast doubt on whether a firm agreement had been reached, tweeting on Tuesday that his administration will determine \u201cwhether a REAL deal with China is actually possible\u201d.
TRUMP: \u201cI am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.\u201d \u2014 tweet on Tuesday.
THE FACTS: Trump seems to be claiming that tariffs are some kind of a membership fee for foreign companies to trade-in the US economy.
They are not. Tariffs are a tax, per Article I, Section 8 of the US Constitution.
The costs of this tax are borne by US consumers and businesses, often in the form of higher prices. Foreign companies may end up selling fewer goods and services if the United States imposes high tariffs. So they pay a price, too.
In some cases, the tariffs exist to protect industries that are vital for national security. Or, the tariffs exist to retaliate against the trade practices of other countries. Or, they might protect politically connected companies.
In the past, White House aides have insisted that Trump\u2019s tariffs are a negotiating ploy. Yet the president offered no such qualifications on Tuesday.
Tariffs are not seen as some easy way of generating massive wealth for an economically developed nation. After Trump announced steel and aluminium tariffs earlier this year, the University of Chicago asked leading academic economists in March whether Americans would be better off because of import taxes. Not a single economist surveyed said the country would be wealthier.
Nor do the budget numbers suggest they can come anywhere close to covering the costs of the federal government.
Trump is correct that tariffs did generate $41.3 billion in tax revenues last budget year, according to the Treasury Department. But to put that in perspective, the federal budget exceeds $4.1 trillion.
The taxes collected on imports were equal to about 1 percent of all federal spending.
TRUMP: \u201cI am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable Arms Race. The US spent 716 Billion Dollars this year. Crazy!\u201d \u2014 tweet Monday.
THE FACTS: His criticism of US weapons spending as \u201ccrazy\u201d vastly overstates the amount spent on the arms race. It also is a sudden change of tone from his previous boasts about increased military spending.
Trump\u2019s statement appeared to confuse the total defence Department budget with America\u2019s investment in the missile defence systems and strategic nuclear weapons usually associated with the arms race. The Pentagon\u2019s budget for 2019 totals about US$716 billion, but that includes everything from health care and pay for service members to the costs of the wars in Afghanistan, Iraq and Syria.
The arms race is just a fraction of that amount, totalling about US$10 billion this year for a wide range of missile defence and nuclear weapons programmes.
Until recently, Trump has bragged about his increase in military spending, railing about what he claims is previous administrations\u2019 neglect of America\u2019s armed forces.
He said his administration is \u201crebuilding our military.\u201d He has occasionally complained about specific programmes such as Air Force One and the F-35 Joint Strike Fighter, but his criticism was levelled at the defence contractors and focused on demanding savings.
He has been far more supportive of the broader defence increases, and specifically has endorsed hikes for missile defence in line with a US defence strategy that targets China and Russia as key adversaries.
TRUMP, about his meeting with Xi at the gathering of leading rich and developing nations: \u201cWhat he will be doing to fentanyl could be a game changer for the United States \u2014 and what fentanyl is doing to our country in terms of killing people. Because he\u2019s agreed to put it at the highest level of crime in his country.\u201d \u2014 aboard Air Force One on December 1.
TRUMP: \u201cOne of the very exciting things to come out of my meeting with President Xi of China is his promise to me to criminalise the sale of deadly Fentanyl coming into the United States. It will now be considered a \u2018controlled substance.\u2019\u201d \u2014 tweet on Wednesday.
THE FACTS: That\u2019s a misreading of what China agreed to do, at least as far as Chinese authorities are concerned.
Fentanyl has been a controlled substance in China for years, according to Chinese regulators. All told, China has already put 25 variants of fentanyl, plus two precursors \u2014 chemicals used to make the drug \u2014 on its list of controlled substances, Chinese foreign ministry spokesman Geng Shuang said last week.
Now, \u201cChina has decided to list all the fentanyl-like substances as controlled substances and start working to adjust related regulations,\u201d says China\u2019s foreign ministry.
Doing so could help block China\u2019s opioid merchants from skirting the law by inventing new chemical variants of fentanyl faster than regulators can declare them illegal.
The standard approach of regulating drugs one by one has failed to control the proliferation of new and deadly synthetic opioids in the United States.
In February, the US said that for at least the next two years, all new chemical versions of fentanyl that weren\u2019t already regulated would be classified as illegal controlled substances. US officials had been urging China to do something similar.
But China has not always followed through on its promises. \u201cSimilar suggestions have failed to gain approval from Chinese regulators in the past,\u201d the US-China Economic and Security Review Commission said in a report last week that criticised China for \u201cslow and ineffective\u201d regulation of fentanyl.
In 2016, US negotiators thought they had secured an agreement with Beijing that China would target US-bound exports of substances that were illegal in the United States, even if they weren\u2019t illegal in China, but Beijing never implemented the policy, according to the commission, a group formed by the US Congress to monitor economic relations with China.
China\u2019s new approach could indeed be game changing, as Trump said. But so far there\u2019s no timeline for implementation of the policy.<\/p>\n