Tariff - The Official Tariff Thread

[harrybarracuda]

And of course the orange turd is claiming he's the one responsible.

Oil buckled on concerns of a global glut after OPEC+ agreed to another bumper output increase, adding to supply at a time when demand is challenged by the drag from the trade war.

Global benchmark Brent tumbled as much as 4.6% toward $58 a barrel as the week’s trading kicked off, while West Texas Intermediate was near $56.

The decision by OPEC and its allies was taken at a meeting on Saturday, with the group’s leaders seeking to punish overproducing members including Kazakhstan in a strategy shift that had already sent prices plunging.

The latest hike of more than 400,000 barrels a day from June matched a similar increase announced last month, when the group made the shock decision to bring back triple the planned volume for May.

The alliance — led by Saudi Arabia and Russia — has been reversing prolonged output curbs that were meant to support prices, but which cost it market share to rival drillers.

After the meeting, Saudi Arabia signaled further similar-sized increases could follow, according to delegates.

Oil sinks as OPEC+ supply surge threatens to swamp global market

[Looper]

US-China Tariff Deal

The US and China have agreed a truce to lower import taxes on goods being traded between the two countries.

The agreement marks a major de-escalation of the trade war between the world's two biggest economies, which has sent shockwaves impacting countless other countries, including the UK.

Here's what it all means.
What has been announced?

Both the US and China have confirmed a reduction in the tariffs they imposed on each other following the initial escalation by President Donald Trump earlier this year.

The deal involves both nations cancelling some tariffs altogether and suspending others for 90 days, by 14 May.

The result is that US tariffs on Chinese imports will fall to from 145% to 30%, while Chinese tariffs on some US imports will fall from 125% to 10%.

China has also halted and scrapped other non-tariff countermeasures, such as the export of critical minerals to the US, which it put in place in response to the initial escalation.

US-China tariff deal: What does it mean?


Almost all of the tariffs are now wound back to inauguration levels for now. Stock market surges higher than before Tarrif-gate blackened the horizon.

Fiendishly cunning economic ninja move by Trump? .....or hard landing with gear up after flying by the seat of his pants with his ass on fire...?

You decide

[baldrick]

30% ..pffffttt , tis but a scratch ,, us credit cards will barely notice

This is just 5g chess to combat the seppo obesity epidemic

[harrybarracuda]

Another good day of insider trading for the Trump junta.

[harrybarracuda]

And another good day of insider trading for the orange cabal.

President Donald Trump on Friday said he is “recommending a straight 50% Tariff on the European Union” after complaining that trade negotiations have stalled.

The steep new import duties would start June 1, Trump wrote on Truth Social.

The EU “has been very difficult to deal with,” Trump wrote of the 27-nation bloc. “Our discussions with them are going nowhere!”

Asked later Friday if he was looking to cut a deal with the EU in the next nine days, Trump said he was not.

“I just said, it’s time that we play the game the way I know how to play the game,” he said during an executive order signing event at the White House.

“I’m not looking for a deal,” added Trump, who frequently praises tariffs as a clutch negotiating tool and a way to bring in federal revenue.

“I mean, we’ve set the deal. It’s at 50%.”

[S Landreth]

Court says Trump/TACO does not have the authority to set tariffs.

A federal court on Wednesday ruled President Trump does not have the authority under economic emergency legislation to impose sweeping global tariffs.

Why it matters: The U.S. Court of International Trade's ruling could bring the administration's trade war to a screeching halt.

• By blocking entirely most categories of tariffs, the court effectively wiped out most of the regime Trump put in place since taking office.

Driving the news: The court, ruling in two separate cases, issued a summary judgment throwing out all the tariffs Trump imposed under the International Emergency Economic Powers Act, or IEEPA.

• Trump used the 1977 law, which had never before been invoked in a tariff situation, to unilaterally impose sweeping trade levies worldwide.
• The two groups of plaintiffs — businesses and states — sued on the grounds that the president's orders violated the Constitution's grant of authority over import duties to Congress.
• The administration filed a notice of appeal soon after the ruling.

Zoom in: "The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 ("IEEPA") delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world," the three-judge panel wrote.

• "The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder."
• Tariffs imposed under a different legal authority called Section 232 — including on imports of autos, steel and aluminum — are unaffected by the ruling.

For the record: The court, which gets relatively little attention compared to most other federal courts, has jurisdiction over civil cases arising from trade disputes.

• The three judges who heard the case were Reagan, Obama and Trump appointees.

What they're saying: "It is not for unelected judges to decide how to properly address a national emergency," White House spokesperson Kush Desai said in a statement in response to the ruling.

• "President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness."
• White House deputy chief of staff Stephen Miller said to X, "The judicial coup is out of control."

_________

Just for fun: https://edition.cnn.com/markets/premarkets

[Looper]

White House is reviewing other avenues to continue tariffs

Leavitt says the Trump administration will consider other avenues to carry out trade policy despite decision yesterday.

She says the president has other legal authorities that he could use. She is asked if the White House is already reviewing those other avenues or waiting to see the current case play out, Leavitt says they are doing both.

"We can walk and chew gum," she says.

Trump administration to go to Supreme Court on Friday if unable to block tariff ruling - BBC News


I did not see this one coming. I did not realise that there was a question mark over the legality of the tariff shenanigans. I thought it was all well within executive remit.

Seems strangely late in the day for the judicial intervention, given all the water that is under the bridge on this one already.

It seems curious, in general, that these lower circuit state level judges can block the entire executive branch nationally. I would have thought that they would only be able to block action in their state. You would think the system would be designed so that some level federal judgement would have to take place before the executive branch could be blocked nationally.

[Looper]

I did not realise that there was a question mark over the legality of the tariff shenanigans. I thought it was all well within executive remit.

Good analysis of the separation of powers here at the BBC:


Tariff ruling completely changes the global trade war

"Watch the courts" was the whispered message a well-connected diplomat used in Washington DC last month, amid the previous episode of US tariff chaos.

Most eyes were on the high-profile case in California from the Democratic Governor Gavin Newsom - that President Donald Trump's trade tariffs were illegal.

In the event, it was a separate case at the International Trade Court filed by a dozen other states and some small businesses that have pulled the rug from underneath Trump's signature policy.

It raises the real question about whether the wider so-called reciprocal tariffs due in July will ever come in to effect, whether the 10% universal tariff can stick, whether nations will bother to negotiate, whether Congress will come to the president's rescue, and of course, the eventual reaction of the Supreme Court.

Much of this can be traced back to the highly unusual dynamic underpinning the Trump's tariff actions.

The very sight of the president proclaiming sweeping tariff rates on a variety of countries, culminating in his now infamous Rose Garden moment with the blue board, is the foundational legal problem here.

Typically, indeed constitutionally, trade policy is the domain of the US Congress. The chairs of the trade committees of the House and Senate (branches of the Ways and Means Committee) are very powerful positions.

President Trump bypassed all of that by proclaiming a variety of national emergencies. While he has some scope to act in actual emergencies, these cases contend that the sweeping use of these powers to announce permanent tariff changes was illegal and unconstitutional.

There is a fascinating assessment of the separation of powers in the US that includes reference to both former President Richard Nixon's limited use of the same powers and the Federalist Papers of Hamilton and Madison.

In essence, the powers he has asserted to "regulate importation" are narrow in scope and do not stretch to unlimited imposition of tariffs, in particular, to remedy trade deficits.

Of course, the Trump administration rather undermined their own logic by also levying "reciprocal" tariffs on countries with which it ran a trade surplus, such as the UK.

Separately the court also found that the president's basis for the fentanyl tariffs against Mexico, Canada, and China did not "deal with" their stated objective.

Trump's claim that they "create leverage" to do deals is not a permissible rationale for use of the powers. This dismantles the entire notion of the "art of the deal" 4D chess manoeuvres designed to extract trade advantages.

This will now be dealt with by the Supreme Court. The case appears rather robust, and also emboldens California's similar case.

It also totally undermines any attempt by the US Treasury Secretary Scott Bessent to negotiate deals with other countries.

The likes of Japan and the European Union were already holding back, after seeing the White House retreat in the face of tariff-related turbulence in US government borrowing rates.

US retailers were warning not just of tariff-related inflation, but of potential empty shelves. The rowback on the China tariffs, purportedly fentanyl-trafficking enemy, means that actual G7 allies expect better treatment from the US.

And now its own courts deem the actions illegal. The White House is currently hemmed in by its own bond markets, retailers, big business, many individual states and now its courts on this policy.

While it hit back with an immediate appeal, some in the wider administration might well be privately toasting the judges.

Could the White House get Congress onside to pass these tariffs? There has to be a very big doubt about this. In any event, other countries can now return to traditional trade tactics designed to pressurise the self interest of key senators and congressmen and women, with impacts on their local industries, whether that is motorcycles, jeans, or bourbon.

Another option might be to switch to another legal basis, such as the section 232 powers underpinning the steel and automotive tariffs. This approach would alter the dynamics of the trade war away from sweeping country-specific ones, towards industry-specific tariffs instead.

In any event, the court has surfaced rather unarguable evidence of the economic harm caused to the US by its own tariffs.

For example, Virginia-based educational manufacturer MicroKits says it will "be unable to pay its employees, will lose money and as a result may go out of business". New York-based wine company VOS says it is paying the tariffs "upon arrival at the Port of NY" putting immediate strain on its cash flow. Terry Cycling has already paid $25,000 and projects a total of $250,000 this year.

The court concluded: "The government does not meaningfully contest the 'economic logic' tracing the retaliatory tariffs to the plaintiffs showing of downstream harm."

Does the White House want a messy Congressional fight to pass these tariffs, with numerous examples of their real life impact?

For now, expect other negotiators around the world to put their feet up and wait, while the White House tries to disprove the illegality of the very basis of its global trade conflict.

Trump tariff ruling completely changes the global trade war

[Norton]

She says the president has other legal authorities that he could use. She is asked if the White House is already reviewing those other avenues or waiting to see the current case play out, Leavitt says they are doing both.

The current cases will go to the Supreme court who should rule to support lower court rulings.
Imposition of tariffs and other trade related items are the perview of Congress so the fool on the hill will have to rally his congressional lackies.

[S Landreth]

The current cases

Second federal court blocks the Trump/TACO tariffs

A second federal court blocked the bulk of President TrumpÂ’s tariffs on Thursday, ruling he cannot claim unilateral authority to impose them by declaring emergencies over trade deficits and fentanyl.

The ruling from U.S District Judge Rudolph Contreras, an appointee of former President Obama who serves in the nationÂ’s capital, comes hours after the U.S. Court of International Trade similarly blocked a series of TrumpÂ’s tariff announcements.

The administration quickly appealed both rulings.

Since February, Trump has attempted to impose tariffs by invoking the International Emergency Economic Powers Act of 1977 (IEEPA). The law authorizes the president to impose necessary economic sanctions during an emergency to combat an “unusual and extraordinary threat,” but a series of businesses and plaintiffs have argued the law doesn’t authorize tariffs.

This case is not about tariffs qua tariffs, Contreras wrote in his 33-page opinion.

It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy,” he continued. “The Court agrees with Plaintiffs that it does not.

The order blocks both Trump’s April 2 “Liberation Day” announcement that imposed a baseline 10 percent tariff and steeper rates on dozens of U.S. trading partners as well as Trump’s various tariffs on China.

[harrybarracuda]

"Goldman Sachs has mentioned in its note on Thursday that the Trump Administration could have four other ways by which it could offset this court verdict, even before it heads to the Supreme Court for the next leg of the courtroom battle.

Here are some avenues highlighted by the global investment bank:

One such option is the use of "Section 122" of the Trade Act, 1974, which permits the President to impose tariffs of up to 15% to address a balance of payments deficit or to prevent an imminent and significant depreciation of the US dollar. Unlike other trade laws, Section 122 does not require a formal investigation, making it one of the swiftest tools at the administration’s disposal.

However, any tariffs enacted under this section can only last up to 150 days without further Congressional approval, the Goldman Sachs note said. Additionally, there is also no clarity on what happens next after the 150-day period ends.

Secondly, Goldman Sachs said that the Trump Administration could initiate fresh investigations against major trading partners using Section 301 of the US Trade Act, 1974.

Section 301 allows for retaliatory tariffs in response to unfair trade practices, and while it involves more procedural steps than Section 122, it provides broader and more enduring authority. There is no cap on the size or duration of tariffs under Section 301, although the investigations typically take weeks or months to conclude.

The third option, according to Goldman Sachs, includes an expansion of Section 232, under which tariffs on steel and aluminium are already in place under the rationale of national security.

While sector-specific tariffs have not been a recent focal point of the administration, officials may revisit them due to legal uncertainties surrounding broader, country-focused tariffs. Potential sectors under consideration for new tariffs include pharmaceuticals, semiconductors and electronics, for which, investigations are already ongoing.

Lastly, the Administration could also examine using Section 338 of the Trade Act of 1930. This rarely used provision permits the President to impose tariffs of up to 50% on imports from countries that engage in discriminatory practices against the US.

Unlike Section 301, Section 338 does not require a formal investigation, although it limits the magnitude of tariffs that can be imposed, Goldman Sachs said."

Four ways the Trump administration can offset the Trade Court ruling on tariffs - CNBC TV18

[S Landreth]

Here are the Trump tariffs that were struck down, then reinstated

A federal court allowed the president's import taxes to continue while the appeal plays out.

The trade court also held that the U.S. must refund the tariffs it has collected under the emergency powers statute, according to analysts with Nomura Holdings financial group, who added in a note to clients that even if Trump ultimately replicates those tariffs using other authorizations, the refund obligation would remain in place.

[S Landreth]

New lawsuit seeks to force return of collected tariffs following court ruling

A new lawsuit filed in the U.S. Court of International Trade seeks to force the Trump administration to return tariffs it collected under the president’s “Liberation Day” announcement now that the court has ruled them unlawful.

Chapter1 LLC, a Las Vegas-based skincare start-up, said it paid nearly $23,000 under the challenged tariffs when it imported a custom machine to mix its serum and toner products from China.

The suit says the company’s owner, 25-year-old Ali Shaubzada, ordered the machine in the fall, using most of his savings and business lines of credit. It arrived in the U.S. earlier this month, with the duties outpacing the roughly $16,000 cost of the machine itself.

“To pay for this unexpectedly large bill, Ali had to take out a personal loan,” the complaint reads.

The class-action suit seeks to recover Chapter1’s tariff payment and the billions in payments made by businesses across the country following Trump’s announcements.

“Hundreds of thousands of other American businesses have exactly the same claim, based on exactly the same legal theory, against the United States: Each importer has a claim against the United States for repayment of the tariffs it paid,” the lawsuit states.

Chapter1 is represented by Gerstein Harrow.

[harrybarracuda]

Donald Trump said he plans to double tariffs on steel imports from next week, deepening his trade war which has hit global markets.

The US president told a rally of steel workers in West Mifflin, Pennsylvania, on Friday that tariffs would be raised from 25% to 50%, "which will even further secure the steel industry in the United States".

Mr Trump later said on Truth Social that the new levy - also affecting aluminium imports - would be in effect from Wednesday and that American "industries are coming back like never before".

"This will be yet another BIG jolt of great news for our wonderful steel and aluminum (sic) workers," he added. "MAKE AMERICA GREAT AGAIN!"

He then said: "We don't want America's future to be built with shoddy steel from Shanghai - we want it built with the strength and the pride of Pittsburgh!"

A UK government source has told Sky News that the UK is exempt from this new tariff rate following the signing of a US-UK trade agreement earlier this month.

Trump to double tariffs on steel imports - as he threatens China | US News | Sky News

[S Landreth]

TACO

U.S. and China Agree to Resume Trade Truce After Tensions Escalated

The United States and China agreed to roll back some of the punitive measures they had taken against each other’s economies and return to a trade truce reached in May, officials from both countries said on Tuesday.

After two days of marathon negotiations in London, top economic officials from the United States and China are now expected to present the new “framework agreement” to their leaders, President Trump and China’s top leader, Xi Jinping, for final approval.

The agreement, the full details of which were not immediately released, is intended to return the relationship to the terms that the United States and China reached in Switzerland last month. That deal had unraveled in recent weeks, after China continued to restrict shipments of valuable rare earth minerals and magnets needed by U.S. manufacturers.

Commerce Secretary Howard Lutnick, who was part of the negotiating team, told reporters gathered in London after the talks that American concerns over China’s restrictions on exports of minerals and magnets had been resolved. He also said that the measures that the United States had taken in response to those Chinese restrictions would be reversed “in a balanced way.”

U.S. officials had tried to put pressure on China in recent weeks by clamping down on exports of American products and technology, including chemicals, airplane parts and software, as well as proposing barring Chinese students from enrolling in universities in the United States.

A person familiar with the negotiations who was not authorized to speak publicly said the Chinese side had agreed to begin sending the United States rare earths, while the United States would roll back export controls implemented on Chinese products since the meeting in Geneva, and that both efforts would happen simultaneously.

Mr. Lutnick, along with Jamieson Greer, the U.S. trade representative, and Scott Bessent, the treasury secretary, will brief Mr. Trump on the deal on Wednesday, the person said.

“We do absolutely expect the topic of rare earth minerals and magnets with respect to the United States of America will be resolved in this framework implementation,” Mr. Lutnick said.

Mr. Greer, who took part in the discussions, said the two sides would remain in regular contact as they tried to work through their economic disagreements, a point both sides had also agreed to after the Geneva talks. But he said that another meeting had not yet been scheduled.

Officials had met at Lancaster House in London, adjacent to St James’s Palace, to try to restore their truce. The talks continued late into the night, at times growing tense and seeming as if they might fall apart, the person familiar with the negotiations said.

Last week, Mr. Trump held a 90-minute phone call with Mr. Xi — the first time the two heads of state had spoken directly since Mr. Trump returned to office in January.

A 90-day pause on some tariffs, which the countries agreed to in Geneva, is scheduled to expire in August. Mr. Greer said that both sides were “motivated,” but that it would be up to Mr. Trump to decide if the pause would be extended as additional negotiations proceeded.

Mr. Greer also said that the topic of a broader trade deal had come up, but that the current meetings were focused on implementing the agreements reached in Geneva and by the two leaders in their call.

China’s official Xinhua news agency issued a cautious statement, saying the two sides had agreed “in principle” — a term used by state media and diplomats to indicate that details have not been worked out. According to Xinhua, the discussions were “professional, rational, in-depth and candid.” Chinese state media often uses the term “candid” when there have been considerable disagreements.

The countries made the announcement shortly before the Trump administration attained an early yet important win in a fight over the legality of its tariffs.

In Washington, a federal appeals court agreed on Tuesday to allow Mr. Trump to maintain many of those import duties, which a lower court declared to be illegal in late May. The stay will preserve the centerpiece of the president’s trade agenda while federal lawyers battle with states and businesses that say they were harmed by tariffs that Mr. Trump had no authority to issue.

U.S. officials said that the court rulings on tariffs had not come up in the discussions with the Chinese.

Mr. Bessent, who had led the American delegation, left the talks late Tuesday to return to Washington for congressional hearings on Wednesday. On the Chinese side, the negotiations were led by He Lifeng, the vice premier in charge of economic policy.

American dependence on China for rare earth metals and rare earth magnets has given Beijing a formidable tool for putting pressure on the American economy. After Mr. Trump ratcheted up tariffs on Chinese goods in April, Beijing clamped down on exports of critical minerals and magnets, threatening to shut down operations by American manufacturers, defense contractors and others.

The United States has a single rare earth mine in Mountain Pass, Calif., and has very little capacity to process rare earths into needed chemicals and then into magnets. The rare earth restrictions motivated the U.S. side to meet with Chinese officials in Geneva last month.

But after that meeting, Trump administration officials were dismayed when Chinese shipments of the rare earth minerals, and the magnets made with them, remained infrequent. They accused China of violating the Geneva agreement.

In an effort to pressure China to lift its curbs, U.S. officials clamped down on exports of some American products and technology to China, including software for making semiconductors, gases like ethane and butane, and nuclear and aerospace components. U.S. officials also proposed the ban on enrolling Chinese students.

It remains unclear whether the latest framework will hold, and analysts were skeptical that a broader pact was imminent.

“Two days of negotiations are better than none, but frankly, we’ve seen these extended negotiations in the past,” Henrietta Treyz, director of economic policy at Veda Partners, wrote in a research note. “There’s a lot of time spent translating, confirming meaning and reiterating framing that goes on in these negotiations that make them time consuming but ultimately keep a lot of the status quo, which appears to be what’s come out of London.”

[S Landreth]

TACO

New China Trade ‘Deal’ Takes U.S. Back to Where It Started

After two days of tense negotiations, the United States and China appear to have walked back from the brink of a devastating economic conflict — maybe.

Officials from the two countries reached a handshake agreement in the early hours of Wednesday in London to remove some of the harmful measures they had used to target each others’ economies as part of a clash that rapidly intensified in recent months.

It remains unclear whether the truce will hold — or crumble like one struck in May did. Even if the agreement does prove durable, its big accomplishment appears to be merely returning the countries to a status quo from several months ago, before Mr. Trump provoked tensions with China in early April by ramping up tariffs on goods it produces.

“It seems like we’re negotiating in circles,” said Myron Brilliant, a senior counselor at DGA-Albright Stonebridge Group and former executive vice president of the U.S. Chamber of Commerce.

“You escalate, you de-escalate,” he added. “At the end of the day we’re not really further along.”

As a result of this week’s negotiations, tariffs will stay where they are. Further details are scant, other than the likely rollback of aggressive policies the two countries adopted since May.

China is expected to loosen restrictions on exports of minerals that had threatened to cripple an array of American manufacturers. The United States will in return relax new limits that it placed on its own exports of technology and products, as well as walk back threats to cancel visas for Chinese students in the United States.

The countries did not announce progress on other trade issues. Those matters would be left for future discussions, American officials said.

For many analysts, the London meetings raised questions about what exactly had been gained by Mr. Trump’s aggressive trade tactics against China over the past few months, or whether his actions had ultimately backfired.

“What exactly are we getting that we weren’t already getting before?” said Veronique de Rugy, a senior research fellow with the Mercatus Center, a libertarian think tank. “This deal suggests there was never a real plan.”

Trump administration officials have argued that the United States came out on top from the recent escalations, saying that the punitive measures they issued in response to China’s curbs on rare earth exports show that the country has plenty of its own firepower. In recent weeks, the United States limited access to a range of software, products, chemicals and technologies, including critical elements China uses to develop advanced chips and jet engines.

The administration has also pointed to the strength of the U.S. economy and limited inflation to argue that even very high tariffs on Chinese imports have had few negative effects.

Other forecasters have not been so sanguine. In a report this week, the World Bank said that U.S. tariffs would set the stage for the weakest decade of global growth since the 1960s.

Mr. Trump proclaimed on social media Wednesday morning that “our deal with China is done” and that the “relationship is excellent,” though he acknowledged that the agreement was still subject to final approval by himself and his counterpart, Xi Jinping.

“Full magnets, and any necessary rare earths, will be supplied, up front, by China,” he wrote, in all capital letters. “Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!).”

The discussions in London played out over two long days and nights and repeatedly became heated, according to two people with knowledge of the meetings. At various moments, the talks seemed as if they might fall apart, they added — a sign of the lack of trust between the two governments.

Howard Lutnick, the secretary of commerce, who took part in the negotiations, said that the president’s fundamental goal toward China was to “reduce the trade deficit and increase trade.”

“But first we had to get, sort of, the negativity out,” he said as the talks concluded. “Now we can go forward to try to do positive trade, growing trade, and beneficial to both China and to the United States.”

Liu Pengyu, a spokesman for the Chinese embassy in Washington, said on Wednesday that the essence of relations between the two countries lies in mutual benefit and cooperation. “There are no winners in trade wars,” he added. “China does not seek conflict but will not be intimidated by one.”

Analysts and experts argued that the events of recent weeks showed that the Trump administration overplayed its hand against China. The United States has an almost immediate, economywide need for the rare earth minerals and magnets that China produces. Chinese restrictions on these exports forced carmakers and other industries to lobby the White House for relief, and eventually threatened to deplete inventories of U.S. military hardware.

The restrictions that the United States put on China in return would undoubtedly prove painful for the Chinese economy, too. But some analysts emphasized that those would also inflict pain on the United States.

Philip Luck, a director in the economics program at the Center for Strategic and International Studies, a Washington think tank, wrote in a recent analysis that U.S. restrictions on ethane exports destined for China had particularly backfired. It forced, for example, major American energy companies to halt billions of dollars in planned exports. With ethane cut off, Chinese plants could simply burn other fuels they can obtain elsewhere — which cost more but would prevent any interruptions.

“These controls fail to clear even the lowest bar for an economic weapon,” Mr. Luck wrote. “Beyond hurting U.S. producers more than their Chinese counterparts, they undermine the administration’s own energy dominance agenda and signal to allies that the United States cannot be trusted even in supposedly apolitical commodity markets.”

Ilaria Mazzocco, a senior fellow at Center for Strategic and International Studies, said tariff threats and other policies had been guided by a theory in Washington that “China would buckle under pressure very quickly,” in part because its export-driven economy has been showing signs of weakness.

“I think what China proved is that actually it’s in a pretty strong position and it can bear a lot of pain, and perhaps actually more pain than the United States,” she added. She also said that China had also demonstrated its ability to use export controls to inflict pain on the United States in a way it had never broached before.

Jin Canrong, a professor of international studies at the Renmin University in Beijing, wrote in a commentary last week that rare earths were “a trump card in China’s hand.”

“Trump should understand that pressure and threats are definitely not the right way to deal with China,” he wrote.

Some analysts have also questioned the precedent that the Trump administration set by putting in play U.S. export controls, which are typically considered a matter of national security, rather than economic leverage.

Wendy Cutler, the vice president of the Asia Society and a former U.S. trade negotiator, said that the United States “appears to have paid a heavy price” for regaining access to Chinese critical minerals and magnets.

“These matters have been deliberately kept off the negotiating table for years given U.S. insistence that national security-related measures are not appropriate for a give-and-take,” she said. “By apparently now reversing this long-held position, the U.S. has opened the door for China that will be difficult to close.”

She added that China may now insist on two-way concessions on export controls in the future. “The London framework may signify an important turning point in U.S.-China economic relations,” she said.

[S Landreth]

Trump says he is cutting off trade talks with Canada

US President Donald Trump has said he is cutting off trade talks with Canada "immediately" as the country looks to start enforcing a tax policy targeting big tech companies.

The latest move, which he announced on social media, comes as the neighbouring nations had been working to agree a trade deal by mid-July.

Both countries have imposed tariffs on each other's goods after Trump sparked a trade war earlier this year and threatened to annex Canada using "economic force".

On Friday, the US president said he was ending talks due to what he called an "egregious tax" on tech companies and added he would announce new tariffs on goods crossing the border within the next week.

"We are hereby terminating ALL discussions on Trade with Canada, effective immediately," he wrote on social media.

"We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period."

In brief comments to reporters, Prime Minister Mark Carney suggested that talks would continue.

"We will continue to conduct these complex negotiations in the best interest of Canadians," he said.

Canada's 3% digital services tax has been a sticking point in its relationship with the US since the law was enacted last year. The first payments are due on Monday.

Business groups estimate it will cost American companies, such as Amazon, Apple and Google, more than $2bn a year.

Canadian officials had said they expected to address the issue as part of trade talks with the US.

There were hopes that the relatively warm relationship that newly-elected Carney has forged with Trump might help those negotiations.

The president's latest move casts doubt on a future deal, though Trump has often used social media threats to try to gain leverage in talks or speed up negotiations he sees as stalling.

Last month, for example, he threatened to ramp up tariffs on goods arriving to US shores from the European Union, only to climb down a few days later.

Candace Laing, chief executive of the Canadian Chamber of Commerce which has been critical of the digital services tax, said that "last-minute surprises should be expected" as the deadline for a deal approaches.

"The tone and tenor of talks has improved in recent months, and we hope to see progress continue," she added.

During Trump's first term, the White House fought hard as many countries began considering taxes on digital services.

But Inu Malak, fellow for trade policy at the Council on Foreign Relations, noted that the issue was left unresolved in the trade deal the US and the UK reached earlier this year, suggesting some flexibility.

She said Trump's threat seemed like a move to ramp up pressure out of his typical negotiating "playbook - but was also a sign the president had refocused on Canada, which could open the way for a deal.

"It does provide a bit of an opening - maybe not the one that Prime Minister Carney wanted ... but it does provide some space for them to hasten those talks," she said.

[S Landreth]

US, China announce a trade agreement — again. Here’s what it means

The United States and China have reached an agreement — again — to deescalate trade tensions. But details are scarce, and the latest pact leaves major issues between the world’s two biggest economies unresolved.

President Donald Trump said late Thursday that a deal with China had been signed “the other day.” China’s Commerce Ministry confirmed Friday that some type of arrangement had been reached but offered few details about it.

Sudden shifts and a lack of clarity have been hallmarks of Trump’s trade policy since he returned to the White House determined to overturn a global trading system that he says is unfair to the United States and its workers.

He’s been engaged for months in a battle with China that has mostly revealed how much pain the two countries can inflict on each other. And he’s racing against a July 8 deadline to reach deals with other major U.S. trading partners.

[Looper]

Looks like El Cheeto has leveraged his tariff game to some advantage with Europe

Who are the winners and losers in US-EU trade deal?

After promising new trade deals with dozens of countries, Trump has just landed the biggest of them all.

It looks to most commentators that the EU has given up more, with instant analysis by Capital Economics suggesting a 0.5% knock to GDP.

There will also be tens of billions of dollars pouring into US coffers in import taxes.

Who are the winners and losers in US-EU trade deal?

[david44]

All are losers with friction hitting some worse than others like mercanytile chlamydia

[harrybarracuda]

There will also be tens of billions of dollars pouring into US coffers in import taxes.

i.e. There will be tens of billions of dollars pouring into US coffers from taxes on US consumers.

[Molle]

There will also be tens of billions of dollars pouring into US coffers in import taxes.

Pouring in from US consumers, tariffs are a way to punish them for buying imported goods.

It looks to most commentators that the EU has given up more, with instant analysis by Capital Economics suggesting a 0.5% knock to GDP.

There is an imbalance in trade between EU and US, an imbalance that Trump has described as "EU has been stealing from US for a too long time".
It is of course plain bollox, the main reason for the imbalance is the strong dollar which makes US goods expensive for Europe and European goods cheap for US.

EU has now promised to buy more energy (gas, petroleum) from US but that is basically also the only thing EU can import more of from US.
The tariffs will mean less export from EU to US and EU is therefore looking for other markets (Asia) for its surplus production and the end result will be:

EU will trade more with other markets than US, trade with US will decrease and US will become a less important EU trade partner.
The imbalance between EU and US will also decrease, not because of higher import from US but because of lower EU export to US.
This decrease in export to US will reduce the trade imbalance more than what the increased import from US does.

Tariffs are isolationism in a nutshell. Tarrifs are shooting yourself in the foot. Tariffs are Brexit revisited.

[Looper]

Pouring in from US consumers, tariffs are a way to punish them for buying imported goods.

Trump says it is a tax on foreign exporters. Anti-Trumpers say it is a tax on US consumers.

The truth probably lies somewhere in the middle with economic forces generating a shared burden across the various parties:

1. US Consumers pay slightly higher prices
2. Foreign exporters sacrifice some margin
3. US importers sacrifice some margin

The Federal reserve wins with a revenue stream if trade is not impacted too severely.

It is of course plain bollox, the main reason for the imbalance is...

I think economic causes and effects are often more gnarly and complex than 1 'plain-as-day black-and-white' single explanation

[david44]

The truth probably lies somewhere in the middle with economic forces generating a shared burden across the various parties:

Esteemed swordsman,extreme roof reparman and cyclist I think your grasp of the sheilas exceeds my lifetime total and I'm 30 years older uglier and feckless.

To summarize, when a tariff or quota is imposed, domestic producers are usually the winners, whilst consumers and foreign producers typically lose out. However, the overall 'net' impact on economic welfare is theoretically considered to be negative

Hwever notwithknelling as to marginal tariff analysis you may like to spend a few years as I did for my higher perches degrees on stats , ecognomic history and econometrics before assing judgement. The big immediately imminent AUGUST 1st squueeze on consumwers esp disctetionary spending, or as you might term yer picnic buddies 'impulse selections' will have as they say in NZ Rammy vacations.

[harrybarracuda]

Looper, put simply it's a tax on foreign goods.

So US consumers will pay more if they want French wine, Dutch Cheese or Italian pasta.

Do you understand?