Market Economics and Political Change: Comparing China and Mexico

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The tariffs would cover goods such as coal, paper, walnuts and almonds, tobacco, whiskey, automobiles, cosmetics, machinery equipment, and petrochemical products. The burden of the tariffs will be commensurate to the U. Turkey has also announced plans to double tariffs on 22 U. Russia announced its decision to begin implementing tariffs on U. The 0. If additional tariffs and in-kind retaliatory actions continue to be taken, the harm caused to U. The Trump administration would do well to not follow a path of imposing tariffs that could dampen the U.

This tariff would take effect in two stages, with some products impacted on September 1, , and others impacted on December 15, This tariff will be effective October 1, , after a comment period.

A Tale of Two Economies: China and Mexico

The tariffs will be imposed in two stages, beginning on September 1 and ending December These tariffs are in retaliation for the U. The USTR stated that it is in the process of removing certain products from a list of potential Chinese imports established in May that would be subject to tariffs, based on national security, health, and other concerns. The USTR also noted that it determined certain products should be delayed until December 15, including cell phones, certain toys, and certain items of clothing.

We will wait to update the tariff tracker until more details are provided on the products that will be excluded from the tariff.

PDF Market Economics and Political Change Comparing China and Mexico Ebook

These threatened tariffs come amid trade talks between the nations. Our estimate of the impact of threatened tariffs now reflects this reduced, but more specific, threat. The tariffs would begin on June 10, rising to 10 percent on July 1, 15 percent on August 1, 20 percent on September 1, and 25 percent on October 1.

In response, Canada and Mexico have announced that they will lift their retaliatory tariffs on the U. Lifting these tariffs will reduce the negative economic impact of tariffs on the U.

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We also made slight adjustments to our estimates to correct for rounding. Turkey responded by doubling its tariffs on 22 U. The U.

Current highlights

Our estimate of total imposed and announced tariffs already includes this latest announcement. This reduction in real income reduces wages, which results in less individual income and payroll tax revenue. This reduction in real income also reduces profits for businesses both corporate and pass-through businesses. This reduces corporate income tax revenues, as well as revenues from pass-through businesses under the individual income tax. Note we did not model the effects of tariffs on solar panels or washer parts. We use these numbers in our estimate.

Tariffs that have been re-imposed on automobiles and auto parts are already accounted for from previous estimates. Our estimate of the effect of retaliatory tariffs does not currently include this exemption. This is partly because of uncertainty in calculating this value and in what will happen with future trade negotiations.

Market Economics And Political Change Comparing China And Mexico by Juan David Lindau

This would be a small reduction in the overall base of U. During Premier Li Keqiang's visit to Ottawa in September , he and Canadian Prime Minister Justin Trudeau vowed to double trade by and accelerate negotiations on a free-trade agreement. Last year, another meeting between the two resulted in agreement to collaborate further on agriculture, tourism, and student exchanges. While bringing down tariff barriers means major new opportunities for Chinese exports, Beijing also views such agreements as an effective way to deal with the multilateral trading systems of which it is not a part, such as NAFTA.

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This spring, Canada blocked a billion-dollar takeover of a construction firm by a Chinese state-owned company, citing national security concerns. Trade issues have become especially political. The Chinese government has promised significant financial benefits and development support for participating nations. While the Belt and Road plan does not include North America, there are links, and they may be increasing in the current climate. Despite opposition from Washington, Canada applied to join the Bank in , and it was approved this March. This is not a situation where China can easily replace the United States, even if it does make significant gains.

That same card could also be flipped, with China assuming the role of a shared concern; as the Chinese article on NAFTA strategy notes, there are many Chinese products and manufacturing parts, such as auto parts and intermediate textile goods, that are exported to Canada and Mexico before reaching their final destination in the U.

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