President Donald Trump is succeeding in making China pay most of the cost of his trade war.
That’s the conclusion of a new paper from EconPol Europe, a network of researchers in the European Union. U.S. companies and consumers will only pay 4.5 percent more after the nation imposed 25 percent tariffs on $250 billion of Chinese goods, and the other 20.5 percent toll will fall on Chinese producers, according to authors Benedikt Zoller-Rydzek and Gabriel Felbermayr.
The trade dispute between the U.S. and China is showing slim hope of abating as the leaders of the two nations prepare to meet in Argentina this month. According to Zoller-Rydzek and Felbermayr, the tariffs will do what Trump has longed for: They will cut American imports of affected Chinese goods by more than a third, and lower the bilateral trade deficit by 17 percent.
The Trump administration selected products with the highest “price elasticity,” or high availability of substitutes, according to Zoller-Rydzek and Felbermayr. The Chinese products hit by Trump’s tariffs can mostly be replaced by other goods, forcing exporters to cut selling prices to keep buyers.
“Through its strategic choice of Chinese products, the U.S. government was not only able to minimize the negative effects on U.S. consumers and firms, but also to create substantial net welfare gains in the U.S.,” the researchers wrote.
The U.S. is due to raise duties on the largest $200 billion tranche of goods to 25 percent from 10 percent on Jan. 1. In retaliation, China has slapped tariffs on $110 billion in imports from the U.S. and effectively shut off its purchase of key American agricultural exports including soybeans.
With the economic costs shifted to China, the U.S. levies will lead to a $18.4 billion net gain for the American government, the researchers wrote.
“As the trade conflict escalates, however, the U.S. administration may not be able to restrict its selection to products with high import elasticities,” they wrote. “And U.S. welfare might decrease as more of the tariff incidence falls on U.S. consumers.”
The Hondurans who banded together last month to travel northward to the United States, fleeing gangs, corruption and poverty, were joined by other Central Americans hoping to find safety in numbers on this perilous journey.
But group travel couldn’t save everyone.
Earlier this month, two trucks from the caravan disappeared in the state of Veracruz, Mexico. One person who escaped told officials that about “65 children and seven women were sold” by the driver to a group of armed men.
Mexican authorities are searching for the migrants, but history shows that people missing for more than 24 hours are rarely found in Mexico – alive or at all.
Mexico’s ambiguous welcome
Nearly 22,000 people were murdered in Mexico in the first eight months of this year, a dismal record in one of the world’s deadliest places.
Central Americans fleeing similarly rampant violence back home confront those risks and others on their journey to the United States. Doctors Without Borders found that over two-thirds of migrants surveyed in Mexico in 2014 experienced violence en route. One-third of women had been sexually abused.
Mexico’s security crisis may explain why so few caravan members want to stay there.
In response to President Donald Trump’s demands that Mexico “stop this onslaught,” Mexican President Enrique Peña Nieto announced that migrants who applied for asylum at Mexico’s southern border would be given shelter, medical attention, schooling and jobs.
About 1,700 of the estimated 5,000 caravan members took him up on the offer.
A recent poll shows that 51 percent of Mexicans support the caravan. Thirty-three percent of respondents, many of them affluent members of Mexico’s urban middle class, want the migrants to go back to Central America.
But reality in Mexico often falls short of the law.
The Mexican Refugee Assistance Commission is supposed to process asylum applications in 45 days. But its offices in Mexico City were damaged by last year’s earthquake, forcing the already overstretched and underfunded agency to suspend processing of open asylum claims for months.
During that period of legal limbo, asylum seekers cannot work, attend school or fully access Mexico’s public health system. President-elect Andrés Manuel López Obrador, who takes office on Dec. 1, says he will offer Central American migrants temporary working visas while their claims are processed.
Mexico City, which in 2017 declared itself to be a sanctuary city, nonetheless put thousands of caravan members up in a stadium staffed by medical teams and humanitarian groups.
Militarizing the US-Mexico border
The first Central Americans from the caravan are now arriving at the U.S.-Mexico border, where they face a far less warm reception.
U.S. law prohibits the use of the armed forces to enforce domestic laws without specific congressional authorization. That means the troops can only support border agents in deterring migrants.
But Trump’s decision still has symbolic power. This is the first time in over a century that military troops have been summoned to defend the U.S.-Mexico border.
The last deployment occurred during the Mexican Revolution.
On March 9, 1916, a small band of revolutionaries led by Francisco “Pancho” Villa invaded Columbus, New Mexico.
Officially, the group assaulted the border city in retaliation for then-President Woodrow Wilson’s support of Venustiano Carranza, Villa’s political rival. Villa also had a personal vendetta against Sam Ravel, a local man who had swindled money from him.
President Wilson responded by summoning General John J. Pershing, who assembled a force of 6,000 U.S. troops to chase Villa deep inside Mexico’s northern territory. Pershing’s “punitive expedition” returned in early 1917 after failing to capture the revolutionary leader.
No relief at the border
Central Americans who reach the militarized United States border can still apply for asylum there, despite President Trump’s recent executive order limiting where they may do so. But they face stiff odds.
After an evaluation process that can take months or years, the majority of Central American asylum claims filed in the United States – 75 percent – are denied. Caravan members rejected will be sent back to the same perilous place they fled last month.
With 60 percent of its population living in poverty, Honduras is the poorest country in Latin America. It also has the world’s second-highest homicide rate – 43.6 murders per 100,000 people – trailing only El Salvador.
The U.S. contributed to the instability that created these hardships.
Honduras has been in turmoil since 2009, when the military overthrew leftist President Manuel Zelaya. Rather than join the United Nations and European Union in demanding Zelaya’s reinstatement, then-Secretary of State Hillary Clinton called for new elections, effectively endorsing a coup.
The country entered a prolonged political crisis. Honduras’s November 2017 presidential election was contested, with the U.S.-backed President Juan Orlando Hernández accused of rigging the vote. Seventeen opposition protesters were killed in the unrest that followed.
The Central American caravan that started in Honduras seeks in the U.S. a life free of such violence. Its steady progress toward the border shows that even kidnappings, Trump’s threats and soldiers cannot deter them.
US President Donald Trump said he and North Korea’s Kim Jong Un have fallen “in love” –- their bromance fuelled by “beautiful letters” he received from the leader of the nuclear-armed state.
Trump on Saturday elevated his recent praise of Kim to new heights, at a West Virginia rally in support of local candidates for his Republican Party.
“And then we fell in love — OK? No really. He wrote me beautiful letters and they’re great letters. We fell in love,” Trump told the crowd.
On Monday at the United Nations General Assembly Trump lauded the North Korean strongman — who is accused by the UN and others of widespread human rights abuses — as “terrific”, one year after Trump eviscerated Kim from the same platform.
Trump followed those comments by saying Wednesday he had received an “extraordinary letter” from Kim, and sounded optimistic about prospects for a second summit between the two leaders “fairly quickly.”
Trump used his debut address at the UN General Assembly 12 months ago to threaten to “totally destroy” North Korea and belittle its leader as “rocket man,” prompting Kim to respond by calling the president a “mentally deranged US dotard.”
Those were among a series of playground-type slurs the leaders of the two nuclear-armed states hurled at each other, setting the world on edge.
Last August, after US media reported Pyongyang had successfully miniaturized a nuclear warhead to fit into a missile, Trump warned Pyongyang not to threaten the United States or it would face “fire and fury like the world has never seen.”
Kim had earlier compared comments by Trump to the bark of a “rabid dog,” and Trump derided Kim as a “sick puppy” — before the apparent outbreak of puppy love.
Trump met Kim in Singapore in June for the first-ever summit between the two countries that have never signed a peace treaty.
The summit led to a warming of ties and a halt in Pyongyang’s missile launches, but there has been little concrete progress since.
North Korea’s foreign minister Ri Yong Ho on Saturday told the UN there was “no way” that his country would disarm first as long as the US continued to push for tough enforcement of sanctions against Pyongyang.