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    Here’s How Trump Could Lose the Coming Trade War

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    The good news: I don’t think Donald Trump will cause a global trade war.The bad news: The reason I say that is I believe that a trade war would be coming even if Trump had lost the election, largely because China is refusing to act like a responsible economic superpower. Unfortunately, Trump may be the worst possible person to guide U.S. policy through the turmoil that’s probably ahead.He won’t be the reason we have a trade war, but he may well be the reason we lose it.China is the greatest economic success story in history. It used to be very poor; there are still many people alive who remember the great famine of 1959-61. But after the reforms that began in 1978 its economy soared. Even now, China is only a middle-income country, with G.D.P. per capita substantially lower than ours or in Western Europe. But China has a huge population, so by some measures it is now the world’s largest economy.However, all indications are that China’s era of torrid economic growth is behind it. For decades, Chinese growth was fueled mainly by two things: a rising working-age population and rapid productivity growth driven by borrowed technology. But the working-age population peaked around a decade ago and is now falling. And despite some impressive achievements, the overall rate of technological progress in China, which economists measure by looking at “total factor productivity,” appears to have slowed to a crawl.But a growth slowdown doesn’t have to be a catastrophe. Japan went through a similar demographic and technological downshift in the 1990s and has, on the whole, handled it fairly gracefully, avoiding mass unemployment and social unrest.China, however, has built an economic system designed for the high-growth era — a system that suppresses consumer spending and encourages very high rates of investment.This system was workable as long as supercharged economic growth created the need for ever more factories, office buildings and so on, so that high investment could find productive uses. But while an economy growing at, say, 9 percent a year can productively invest 40 percent of G.D.P., an economy growing at 3 percent can’t.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Fashion World Fears High Tariffs in Trump Administration

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      President-elect Donald J. Trump has threatened a tax of at least 60 percent on goods from China — a move with the potential to decimate small American brands.In the days after Donald J. Trump won the presidency, several small American fashion designers placed anxious calls to overseas manufacturing partners. Spurred by fears that the president-elect will make good on promises to raise tariffs, thereby upending their operations, they scrambled to find alternatives.The tariffs “would be devastating,” according to Chris Gentile, owner of the Brooklyn-based Pilgrim Surf + Supply, which produces items like padded work coats and fleece zip-ups in China. “I don’t know how we could function.”Throughout his campaign, Mr. Trump threatened to levy a 10 to 20 percent tax on most foreign products and, most significantly, at least a 60 percent tariff on goods from China. The thinking is that sharp taxes would compel companies to begin producing in America again. In conversations with clothing designers over the past week, that logic was met with extreme skepticism.Some designers are not convinced that talk of dizzying tariffs will survive past the campaign trail. But for smaller, independent apparel businesses that rely on the comparative affordability and high quality of Chinese clothing manufacturers, the mere threat of increased taxes on foreign goods was enough to plan for the worst.“We’ve established relationships with these factories,” Mr. Gentile said. “They’ve become almost like family.”A still-scrappy entrepreneur 12 years in, Mr. Gentile doesn’t have an army of supply-chain wonks to ferret out new factories. The task of corresponding with his manufacturers falls largely on him. He’s spent untold hours working with his Chinese production partners on how to set in the sleeves of his shirts just so or how poofy a down jacket should be.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      U.S. Farmers Brace for New Trump Trade Wars Amid Tariff Threats

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      Despite their concerns, some farm operators still support the former president and prefer his overall economic plan.To former President Donald J. Trump, “tariff” is the most beautiful word in the dictionary.But to farmers in rural America, the blanket import duties that Mr. Trump wants to enact if elected are a nightmare that they would rather not live through again.As president, Mr. Trump imposed tariffs in 2018 and 2019 on $300 billion of Chinese imports, a punishment he wielded in order to get China to negotiate a trade deal with the United States. His action triggered a trade war between Washington and Beijing, with China slapping retaliatory tariffs on American products. It also shifted more of its soybean purchases to Brazil and Argentina, hurting U.S. soybean farmers who had long relied on the Chinese market.When Mr. Trump finally announced a limited trade deal in 2019, American farmers were frazzled and subsisting on subsidies that the Trump administration had handed out to keep them afloat.Now it could happen all over again.“The prospect of additional tariffs doesn’t sound good,” said Leslie Bowman, a corn and soybean farmer from Chambersburg, Pa. “The idea of tariffs is to protect U.S. industries, but for the agricultural industry, it’s going to hurt.”The support of farmers in swing states such as Pennsylvania could be pivotal in determining the outcome of Tuesday’s election. Mr. Trump remains popular in rural America, and voters such as Mr. Bowman say they are weighing a variety of factors as they consider whom to vote for.Mr. Trump has said that if he wins the election he will put tariffs as high as 50 percent on imports from around the world. Tariffs on Chinese imports could be even higher, and some foreign products would face levies upward of 200 percent. Economists have warned that such tariffs could reignite inflation, slow economic growth and harm the industries that Mr. Trump says he wants to help.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Airbus, With Eye on U.S. Race, Says It Will Be Ready for Higher Tariffs

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      The giant European airplane maker’s chief executive said it would pass along any higher charges to its customers.Airbus, the world’s largest commercial airplane manufacturer, said on Wednesday that it was preparing for the possibility that the United States would impose new tariffs on all imports, and that the company would deal with the higher charges by passing them along to its airline customers.In a call with reporters, Airbus’s chief executive, Guillaume Faury, said the European company was monitoring the U.S. presidential election next week and would be prepared for the possibility of a new 10 percent tariff. Former President Donald J. Trump, the Republican candidate, has made sweeping tariffs a critical plank of his economic platform if he wins.Mr. Faury said any new tariff would be passed along to Airbus’s airline customers, in much the same way that Airbus dealt with a tariff that Mr. Trump put on European aircraft in 2020 as part of a long-running airplane subsidy dispute.“So that’s something we will be discussing with our customers” if necessary, Mr. Faury said. “But it puts them in a difficult place of adding an additional cost on what they have ordered and what they’re procuring,” he said. “That’s basically mainly a decision of the state that has to be borne by the companies.”He added: “So we are prepared. We know what it feels like. We don’t believe that’s helping aviation and the competitiveness of the airlines and the aviation industry, but it’s something we would be able to manage.”Airbus on Wednesday announced a 22 percent jump in its net profit for the first nine months of the year despite major problems in its supply chain. Mr. Faury said that Airbus’s net profit rose to 983 million euros, or $1.1 billion, through September, and that its third-quarter adjusted earnings before interest and taxes were €1.4 billion.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

    • 138 Shares108 Views

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      Trump Flirts With the Ultimate Tax Cut: No Taxes at All

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      The former president has repeatedly praised a period in American history when there was no income tax, and the country relied on tariffs to fund the government.Former President Donald J. Trump has spent much of the presidential campaign brainstorming new, and sometimes untested, ways to cut taxes. In the election’s final stretch, he raised the possibility of going even further: eliminating income taxes entirely.During a Fox News segment on Monday, Mr. Trump took questions at a barbershop in the Bronx. When asked if the United States could potentially end all federal taxation, Mr. Trump said the country could return to the economic policies in the late 19th century, when there was no federal income tax.“It had all tariffs — it didn’t have an income tax,” Mr. Trump said. “Now we have income taxes, and we have people that are dying. They’re paying tax, and they don’t have the money to pay the tax.”In June, Mr. Trump floated the idea of replacing federal revenue from income taxes with money received from tariffs. Mr. Trump has not provided specific details of how that would work, and it is unclear if he wants to eliminate all federal taxes, including corporate income taxes and payroll taxes, or only end the individual income tax.Either way, both liberal and conservative experts have dismissed his idea as mathematically impossible and economically destructive. Even if Republicans control Congress, lawmakers are unlikely to dismantle the income tax system. Yet Mr. Trump’s combination of tax cuts and tariff increases has been central to his political pitch.“There is a way, if what I’m planning comes out,” Mr. Trump said of ending income taxes.Replacing income taxes with tariffs would reverse the progressivity of the tax system in the United States. In general, income taxes are progressive, meaning that Americans with more income pay a higher tax rate. Tariffs, which impose a tax on products imported into the United States, are regressive. They raise the prices on imported items like clothing and groceries, placing a larger burden on lower-income Americans who spend a bigger percentage of their income on those goods.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Chinese Automakers Show Force at Paris Auto Show

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      Weeks after Europe imposed additional tariffs on electric vehicles made in China, the country’s car companies were defiant at France’s leading auto event.China’s ambitions to become a force in the European car market were on full display this week at the Paris Auto Show, where a record number of the country’s automakers unveiled cutting-edge electric models despite a recent European Union decision to impose anti-subsidy tariffs on their vehicles.At the event, designed to showcase Europe’s top automakers, the displays that drew some of the biggest crowds were those from the likes of BYD, Leapmotor and Xpeng, which boasted how the speed of their technological advances — including the use of artificial intelligence — would help them compete with, or even surpass, their European rivals in the electric vehicle revolution.Europe has an ambitious goal of fully transitioning to electric vehicles by 2035, and the continent’s biggest carmakers — among them Renault, Stellantis, BMW and Volkswagen — all put forward new models aimed at appealing to European consumers. But Beijing is also eager to get in on that game, with the nine Chinese automakers at the Paris show appearing undeterred by what they view as protectionist efforts to slow their advance.BYD, which made its European debut at the show two years ago, displayed seven models, which its officials said used electric and hybrid technology that surpassed that of its European rivals.At the BYD stand, a large-screen video displayed landmarks from around the world, from the Christ the Redeemer statue in Rio de Janeiro to the Arc de Triomphe in Paris. It was a visual reminder of the company’s ambition to make a Chinese car appealing to Western buyers.The BYD Yangwang U8 at the Paris Auto Show. BYD displayed seven models, which its officials said used electric and hybrid technology that surpassed that of its European rivals.Dmitry Kostyukov for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      None of Trump’s Economic ‘Solutions’ Hold Any Water

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      Ask Donald Trump what he’ll do about any of the nation’s economic problems and he’ll give you one of three answers. He’ll either promise to cut taxes, raise tariffs or deport millions of people. When asked about child care, for example, Trump told the Economic Club of New York that he would raise “trillions” of dollars from new tariffs on virtually every good imported into the United States.This, of course, shows a fundamental ignorance of how tariffs work as well as the probable impact of a high-tariff regime on most American consumers. (The short story is that, if passed into law, Trump’s tariffs would amount to a large tax hike on most working Americans.) It’s also just not an answer. But that’s normal for the former president.On Friday, toward the end of a news conference where he attacked E. Jean Carroll — the former journalist who sued Trump, successfully, for damages relating to sexual abuse — Trump told his audience that he would discuss the latest jobs numbers. What followed was a brief rant about “foreigners coming in illegally” who “took the jobs of native-born Americans.”“And I’ve been telling you that’s what’s going to happen,” said Trump, “because we have millions and millions of people pouring into our country, many from prisons and jails and mental institutions and insane asylums. Traffickers, human traffickers, women traffickers, sex traffickers, which, by the way, that’s the kind of thing that people should be looking at, because it’s horrible.”Here, I’ll note that it is unclear whether Trump understands that “asylum” in immigration refers to seeking refuge or sanctuary and not, as he seems to think, to the kind of institution that you might find in a Batman movie.To the extent that Trump had a solution to this imagined problem, it was mass deportation. In fact, mass deportation is his — and his campaign’s — answer to a whole set of policy questions. What, for example, will Trump do about housing costs? Well, his running mate, Senator JD Vance of Ohio, says that they’ll deport 20 million people and that this, somehow, will bring prices down.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

    • 113 Shares109 Views

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      Europe Slashes Tariffs for Tesla Vehicles Made in China

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      The European Commission will charge the U.S. automaker an additional duty of 9 percent, much lower than tariffs levied on its Chinese peers for electric vehicles imported to Europe.The European Union is proposing to charge Tesla an additional tariff of 9 percent on its vehicles imported from China while other automakers face rates as high as 36.3 percent, as part of efforts to protect European producers from unfair competition.The updated tariffs, announced in Brussels on Tuesday, would represent a significant increase for major companies making electric vehicles in China and are meant to level the playing field with Chinese E.V. manufacturers, many of which enjoy subsidies from Beijing. Final tariffs will come on top of the existing 10 percent already charged for electric vehicles produced in China.The European Union began investigating Chinese automakers in October. Officials said they lowered the rate for Tesla, down from a proposed 21 percent, because the company did not benefit from the same level of subsidies from the Chinese government as leading Chinese automakers. Tesla did not immediately respond to a request for comment.The tariffs for Chinese automakers, which would go into effect for five years, all dropped slightly from an original proposal in June, ranging from 17 percent for China’s largest producer of electric vehicles, BYD, to 36.3 percent for SAIC Motor, the state-owned maker of MG Motor. Geely Auto, the parent company of Volvo Car, faces a rate of 19.3 percent.Companies that cooperated with the investigation, including the German automakers BMW, Mercedes and Volkswagen, face tariffs of 21.3 percent for cars they produce in China. Unlike Tesla, which has its own independent production site in Shanghai, the German car companies are all involved in joint ventures with Chinese automakers. Because Volkswagen also has an entity with SAIC, some of its cars will be subject to the highest tariffs.Compared with the 100 percent tariffs the Biden administration imposed on Chinese E.V.s in May, the European proposals reflect what experts say is a desire to maintain trade with China, while protecting domestic production. Since the initial tariffs were announced several Chinese automakers have announced plans to shift production to Europe.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      Germany Hopes to Head Off a Trade War With China

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      As the European Union moves to impose tariffs on Chinese cars, Germany, with an auto industry deeply enmeshed with China, is stuck in the middle.With billions of dollars in trade between China and the European Union at stake, Germany’s second-highest cabinet official called on Saturday for the two sides to engage in talks to try to resolve an escalating dispute over tariffs.Robert Habeck, who is Germany’s vice chancellor and minister for economic affairs and climate, said that he expected talks to begin soon between China and European officials. He expressed a hope that tariffs could be avoided.Still, he added that tariffs could be justified if the commission’s concerns about China’s subsidies for its electric car industry were not resolved.This month, the European Commission, the executive body of the European Union, proposed tariffs of up to 38 percent on electric cars from China, on top of an existing 10 percent tariff on imported cars. The commission said it found that China’s electric car sector was heavily subsidized by the government and state-controlled banking system.“These tariffs are not punitive,” Mr. Habeck said, adding that the tariffs are intended to offset subsidies that violate World Trade Organization rules.But Chinese officials strongly criticized the European tariffs after meeting with him. Wang Wentao, the commerce minister, described them as protectionist and called on Germany to help end them. “It is hoped that Germany will play an active role in the E.U. and promote the E.U. and China to move toward each other,” the ministry said in a statement.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More