Trump Threatens "Reciprocal Tax" On Imported Goods; White House Denies

Update: Citing an unnamed administration official, Bloomberg reports that the White House has "no formal proposal on the table for a so-called reciprocal tax on imports" - presenting yet another case of an administration official contradicting their boss in the press.

Trump is set to meet with lawmakers Tuesday to discuss trade issues.

As BBG reminds us, a House Republican proposal to tax imports, known as the border-adjusted tax, was removed from the Republican tax plan after being heavily criticized by retailer lobbyists vociferously objected.

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US President Trump, who has already raised taxes on the US consumer once this year, is vowing to do so again. On Monday, the president suggested a reciprocal tax on imported goods (details were not forthcoming). Generally, such taxes tend to hit lower income consumers more than higher income consumers.

The Wall Street Journal reported that Trump's blueprint surprised his top aides, who were quick to note that no formal plans have been drawn up yet. The comments about the reciprocal tax were made during a meeting at the White House with mayors and governors to discuss his infrastructure plan, which was officially unveiled yesterday.

However, Trump seemed pretty adamant that such a plan would, in fact, be put into place.

“We are going to charge countries outside of our country - countries that take advantage of the United States,” Mr. Trump said. “Some of them are so-called allies, but they’re not allies on trade.”

As a result, he said, “we’re going to be doing very much a reciprocal tax, and you’ll be hearing about that during the week and the coming months.”

Trump famously campaigned on raising trade barriers, including threatening to slap a 30% import tax on Chinese goods, as a central tenant of his nationalist agenda. But he has been slow to implement measures that typically pro-free trade Republicans oppose, though his administration has made some notably protectionist moves, like slapping Canadian aerospace company Bombardier's C-Series jet with a 300% import tariff for purportedly anticompetitive subsidies. he also withdrew the US from the TPP - a complex, multilateral trade deal that was one of the hallmark accomplishments of the Obama administration.

Trump

While some anonymous aides were reportedly chagrined by the plan, others expressed a more sanguine view:

After the meeting, one senior administration official said Mr. Trump was considering responding in-kind to countries that put tariffs on American-made products. “The reciprocal tax is, simply, what you do to us, we’ll do to you,” the official said. “It’s nothing formal right now.”

WSJ says Trump repeatedly mentioned the reciprocal tax during his infrastructure meeting, even bashing his predecessors for being too “lazy” to rework trade policies after World War II and the Korean War.

“After World War II, we helped Germany, and we helped all countries. You had the Korean War, we helped South Korea. We helped everybody, and nobody changed,” Mr. Trump said, adding that these countries are now “very wealthy” and “could pay us back.”

“The reason nothing happened is that, No. 1, no imagination. No. 2, the people that were in my office, and in other offices, were lazy. But we’re not going to be letting it go, because it’s truly affected our country.”

Since last April, the administration has also been exploring the possibility of new tariffs on steel and aluminum imports, and recently imposed tariffs on imported solar panels, a move that was interpreted as a swipe at China.

Trump also famously ordered a review of Chinese trade practices pertaining to transferring intellectual property rights for Chinese firms under an obscure trade-related statute that was last widely used during the Reagan administration. This investigation deadline is August, and could result in wide-ranging tariffs against America's largest trading partner.

 

 

 

 

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Comments

Bes Falconsixone Tue, 02/13/2018 - 10:43 Permalink

 

Only a fool thinks that China or Mexico is winning.

The vast amount of money in the trade deficits to other countries are going to:

American Oligarchs

American Companies

and American Shareholders

with a few crumbs to local overlords for hush money and providing the slave labor.

-------------

American oligarchs sold out the American worker for Chinese and Mexican slave labor with the help of the Republicrats.  Both parties. 

The manufacturing jobs will only come back when

1.  Americans become the slave labor

or

2.  There is enough pork lining the pockets of big business

And not a fucking moment sooner.

 

In reply to by Falconsixone

JimmyJones Bes Tue, 02/13/2018 - 10:45 Permalink

Keep up the good work Mr. President!

we have dealt with the so called "free traders" long enough, all they did was sell us out and off shore to the Communist in China to make a bigger profit at the peoples expense, siphoning off our wealth that the previous generations had built up.  They let in hordes of illegals to put downward wage pressure on the poorest of us.  F' them, bunch of Traitors to the people!  Keep up the Pressure Mr. President.

In reply to by Bes

Ghost of PartysOver JimmyJones Tue, 02/13/2018 - 10:52 Permalink

What is so controversial bout "Fair Trade"?   What is so controversial about treating other countries the way they treat us?  I don't get all the up roar bout Trump's position.  Personally I think all trader agreements can be boiled to to one paragraph.  You export more to a country than you import you get a tax/tariff/whatever.  Give some developing countries a 5 billion dollar grace.

In reply to by JimmyJones

east of eden Ghost of PartysOver Tue, 02/13/2018 - 11:17 Permalink

Well, 'ghost', of course the problem is NOT with 'fair trade', although since the whole arrangement was made 30 years ago, you are the first American that I have ever witnessed writing 'fair' as opposed to 'free' trade.

You let the German Nazi's into your country in the early 20's. You doubled down on them post world war 2, importing useless rocket scientists like Von Braun and of course, welcoming all the Nazi scientists who specialized in making potent poisons.

Then, you let the Zionists in. And they are still there, fucking you, fucking anyone they can.

On top of all that, YOU, YOUR COUNTRY, has been responsible for the invasion/overthrow/murder of over 100 nations and 150 Million souls, and apparently your aren't done yet, if that fucking alien vice-president is any indication.

So, you have come to the wall. Your choice. Run headlong into it, or come to your fucking senses

In reply to by Ghost of PartysOver

overbet Bes Tue, 02/13/2018 - 10:51 Permalink

Only a fool thinks that China or Mexico is winning.

This looks like winning to me. When is the last time you seen middle class growth like that in the USA? The US is going in the opposite direction with the middle class being destroyed. 

 

http://www.businessinsider.com/chinas-middle-class-is-exploding-2016-8

China managed to reduce the proportion of the population in sever poverty from 250 million to 26 million between 1978 and 2004. This, coupled with the aforementioned boost in middle class citizens, reflects the fact that Chinese people are experiencing a kind of financial stabilization that to many was otherwise unthinkable in the past.

These households reflect a dramatic change from the five million households that represented the demographic just 17 years ago. The current criterion for those within the middle class involves earning between $11,500 and $43,000 a year in current U.S. dollars, a metric that should be kept in context with China’s lower cost of living.

https://www.zacks.com/stock/news/264298/the-meteoric-rise-of-chinas-mid…

In reply to by Bes

GARDENZ overbet Tue, 02/13/2018 - 11:39 Permalink

While the change from the hard line Communist model to the more effective Fascist/Communist dictatorship has had a tremendously positive effect on economic development in China since the end of the Maoist period, without the lax and sacrificial trade policies of the U.S. this record of success would have been diminished in great measure.  Nevertheless, once again it is shown that even a small amount of capitalism injected into an economy lifts millions out of poverty.

In reply to by overbet

Miner overbet Tue, 02/13/2018 - 12:56 Permalink

To export a US manufactured car to Germany costs 10% import tax and 19% Vat.  There is no reciprocal tariff.

The current arrangement strongly discourages sales of US-made vehicles in Germany, with no corresponding deterrent in the opposite direction.  This encourages imports of goods and discourages exports of goods.  It exports dollars to support German workers.

Trump isn't wrong about this.  Globalization is great for a lot of people, but it's gutted a big section of America's economy.  They said they were only going to take the low paying factory jobs, but with no factory jobs you didn't need the technicians, the toolmakers, the maintenance workers, R&D, or the office staff.  Then the suppliers moved too, and the supplier's suppliers, all the way up the chain.  There is a limit to how many dollars you can export and still have a functioning economy.

... and no, you NAFTA cunts, "US" does not mean "including Mexico and Canada".  It means fucking United Goddamn Bomb your shit States of FICA paying America.

In reply to by overbet

neilhorn overbet Tue, 02/13/2018 - 13:18 Permalink

During that time, when China, India, and Mexico were winning, the blue collar middle class worker has been disappearing from the American scene. Politicians say that tariffs will hurt the American consumer, but they don't talk about how much joblessness, part time labor, and minimum wage labor hurts the American consumer. 

That is what Trump is talking about, and that is why he is winning. He'll have those union bosses voting R for the next 100 years.

In reply to by overbet

east of eden Bes Tue, 02/13/2018 - 11:11 Permalink

I have a really, really, big shock for you. You HAVE BEEN SLAVES TO ENGLAND ever since you 'thought' you won the war of independence.

You lionize 'Adam Smith' who was nothing more than a tool for Britain. His treatise on 'the wealth of nations' is a sham that was foisted on you, and you bought in 200%.

The fact that you are only NOW waking up to your dilemma, basically proves that not one of you has any fucking brains at all.

In reply to by Bes

GARDENZ Bes Tue, 02/13/2018 - 11:23 Permalink

We can presume then that you are all in on Trump's initiatives to level the trade barrier playing field since according to you only American interests are being served by these countries' unfair trade practices, and above all we can't have that.

 

In reply to by Bes

Endgame Napoleon Bes Tue, 02/13/2018 - 11:37 Permalink

The American Uniparty aristocracy gave itself and its campaign donors’ often foreign-staffed businesses a huge tax cut, greasing the legislative wheels with another huge increase — a doubling — of the non-refundable & the refundable child tax credit for citizens, legal and illegal immigrants.

This includes millions of part-time employees, adding keeping-up-with-the-Jones’ money to a spousal income and millions of single moms and male breadwinners in illegal alien households who stay below the [earned-income limit] in traceable earnings, thereby qualifying for a multitude of welfare programs that cover their rent, groceries, etc., in addition to refundable [EITC] child-tax-credit welfare that used to max out at $6,444. 

The doubling of the non-refundable child tax credit ensures that part-time-worker single moms on welfare that covers rent and food, part-time-worker married moms with a spousal income that covers their major expenses and illegal alien households with a male breadwinner have more money in their paychecks than the many full-time employees, living on one, earned-only income stream, in the wide array of states where per capita income is between $18k and $20k.

The refundable child tax credit of $6,444 was already 1/3rd of yearly take-home pay for many full-time workers who get no pay-per-birth freebies from governent before doubled by Swampians. Refundable cash infusions from the US Treasury Department to reward sex and reproduction are even more....stimulative than the non-refundable tax cuts, as those moms can spend the lump-sum cash more feeely on Chinese-made, mom-pampering items, when their rent and groceries are covered by taxpayers, with other monthly expenses financed by things like subsidized childcare, electricity assistance and monthly cash assistance. 

Citizens who are not paid by government to have sex and reproduce must spend all of their earned-only income on rent that consumes more than half of their monthly, earned-only income. We got a tax cut big enough to cover a Costco membership, but our tax cut will not cover many Chinese-made items.

Thanks to Uniparty Swampers, welfare and tax-welfare-fueled, womb-productive citizens, legal immigrants and illegal aliens, working part time to stay below the income limits for monthly welfare and the cut off for child tax credits, have plenty of extra $$$$ for buying Chinese-made products, when they do not spend that pay-per-birth money on excused vacations to copulate at the beach with their boyfriends, tattoos, car adornments, master bedroom furniture and other things for babies. 

Well, those last two mom indulgences are made in China. 

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-cr…

Get to work making those mom-pampering products, Chinese workers! 

 

 

In reply to by Bes

Consuelo Bes Tue, 02/13/2018 - 11:47 Permalink

Much of what you suggest is true, however there are many companies who would be happy to stay in the U.S. if the overburden of unnecessary regulation were removed.   It is a problem that extends very deep - not simply into business related issues, but social issues as well, where they have no business being.

In reply to by Bes

MoreFreedom Falconsixone Tue, 02/13/2018 - 12:49 Permalink

If Trump lied about starting a trade war, then I'm happy about it, though I don't support lying.  I felt Trump was blaming our problems and the economy on foreigners rather than the government which is mainly responsible (how many Americans like to blame themselves for what they voted for and got?).  As the article says, he did cancel TPP (unfortunately IMHO) and put an import duty on Bombardier.  

Seems to me, Trump has learned that tariffs on imports, hurts Americans who'd have to pay more for what they want when it's outside the country.  And that includes many US manufacturers who use imports as inputs to their products.  Thus, raising imports not only hurts US consumers, but also US producers competing against foreign firms who don't pay that import duty.  And that leads to production, jobs and income moving out of US.  So Trump just threatens and carries a small stick.  And sometimes those threats work.

In reply to by Falconsixone

Miner MoreFreedom Tue, 02/13/2018 - 13:11 Permalink

We export dollars and IP because of our high corporate tax rate.

We export dollars when we buy imports, and we buy a lot of imports.

When we export goods, we subsidize the governments of the countries we export to because of uneven tariffs.

If dollars are the key to capital investment and growth, then exporting those and subsidizing the governments that receive the dollars does not sound like a long term recipe for economic growth.

In reply to by MoreFreedom

JimmyJones Pandelis Tue, 02/13/2018 - 10:48 Permalink

Amen, we have dealt with the so called "free traders" long enough, all they did was sell us out and off shore to the Communist in China to make a bigger profit at the peoples expense, siphoning off our wealth that the previous generations had built up.  They let in hordes of illegals to put downward wage pressure on the poorest of us.  F' them, bunch of Traitors to the people!  Keep up the Pressure Mr. President.

In reply to by Pandelis

Francis Marx Tue, 02/13/2018 - 10:43 Permalink

Japan and other countries tax our products to have the market advantage for their products.. So yes...use a angle to get them to drop their tax on our products.

TeethVillage88s brushhog Tue, 02/13/2018 - 11:12 Permalink

QE and operation Twist are a Currency War.  We export our Inflation to China, Brazil, other countries.

Currency Wars are Trade Wars.  Currency War III started 2010 with QE as per Jim Rickards.  Europe had to go into QE after 2009 Financial Crisis as well... and China came into to buy their debt.  Things are all screwed up, but there is no public discussion.  Today we see President Donald Trump restarting the discussion.  Or so it seems.  I have heard Trump admin might be back into TAP/TISA/TPP... was that his Staff saying that?

In reply to by brushhog

Southern_Boy Tue, 02/13/2018 - 10:44 Permalink

Reciprocal taxes may be a tax whose time has come. This will  force the globalists at the other end of the transaction to choose, just like liberals running high-tax states and locales are now having to choose with the new tax plan.

LOWER TAXES OR STARVE? LOWER TAXES OR NO SALES?