The Trade War Begins: U.S. and China Tariffs Take Effect
*By Alisha Haridasani*
It’s happening.
A fierce trade war between two of the world’s largest economies set off early Friday, after the U.S. officially implemented tariffs on $34 billion worth of Chinese goods and Beijing immediately responded in kind.
President Donald Trump warned on Thursday, before the tariffs went into effect, that the U.S. could end up taxing every single Chinese item imported if Beijing retaliates. That would be worth $500 billion.
China, however, didn’t blink and blamed the U.S. for launching “the biggest trade war in economic history so far.”
While U.S. markets didn’t seem to react to the news at the open, the impact of the economic tit-for-tat will likely sweep across corporate supply chains in both America and China, weighing down bottom lines and consumer wallets.
“It’s becoming conventional wisdom at this point that the benefits of corporate tax cuts is being offset by the uncertainty around the trade war,” said Axios reporter Erica Pandey.
“We can see impacts as small as a small price hike for consumers, or the businesses could choose to eat the costs and we could see losses of jobs.”
The Trump administration’s tariffs specifically target high-tech products in an attempt to punish China for intellectual property theft. That could have knock-on effect on [millennial consumers](https://cheddar.com/videos/how-the-trade-war-will-affect-millennials), said Pandey.
“Some of the goods on the chopping block include e-bikes, e-scooters, e-cigs, and everything ‘e,’ and smart home devices,” said Pandey. “So it’s the tech devices that are overwhelmingly used by young people that are not often discussed but that could go up as much as $100 per unit with these new tariffs.”
China’s tariffs target America’s agricultural industry, hitting soybeans, poultry, corn, wheat, rice, and beef, with the intention of crippling farmers’ support for Trump.
One slice of the agricultural industry is already feeling the pinch: [cheese producers](https://cheddar.com/videos/u-s-cheese-producers-in-crossfire-of-trade-war). American cheese makers in recent years have relied heavily on exports to Mexico and China, both countries that have now levied retaliatory taxes on the dairy product, said Wall Street Journal reporter Heather Haddon.
Before the tariffs kicked in, dairy exports had hit a record high in April, doubling from nearly a decade ago, according to Haddon's reporting.
With the new trade barriers in place, cheese makers are struggling to find a market for their products. "They can't just take this cheese that was made for Mexico and then just and sell it to folks in North Carolina or wherever," said Haddon.
"At the same time we've got record high cheese in storage right now. There's quite a lot of supply in the U.S. so it's also not like the supply can just go domestically."
Adding to the cheese makers problems are the perishable nature of their product, which would only compound their losses.
"Some of them are starting to contemplate shifting to cheeses that can be held for longer, that can be aged, that benefit from ageing, if this tariff situation continues."
David Tafuri, Former Obama Campaign Foreign Policy Advisor & Former State Department Official, joined Cheddar News to break down the latest geopolitical stories from Beijing, amid China's human rights abuses against Uyghur Muslims and yet another Russian doping scandal.
Dr. Jennifer Haythe of Columbia University's Irving Medical Center, joined Wake Up With Cheddar to discuss the latest with the pandemic, as the debate over child safety rages amid low vaccination rates and states easing school mask mandates.
David Nelson, Chief Strategist at Belpointe, joins Cheddar News' Closing Bell, where he says that Wednesday's market movement shows a rotation back into the industries that were hit hard in January, but says his eyes are firmly fixed on the January CPI data set to be released Thursday.
Russia is preparing alongside Belarus for reportedly one of the largest joint military exercises ever held. Some analysts are concerned this could be a disguise for a real attack, while the Kremlin contends that the exercise is meant to confront potential "unprecedented security threats." Christian Whiton, a former State Department senior advisor, joined Cheddar News to break down the still tense situation. "While it could of course be a prelude to invasion, it seems like the Biden administration is signaling that if you look at Europeans, the Germans and Macron … who just met with Putin, they seem to be thinking that maybe this is a show of force by Russia intended at political intimidation, not actual invasion," said Whiton.
Truckers in Canada have blockaded the Ambassador Bridge, the busiest border crossing between Canada and the U.S. protesting a COVID-19 vaccine mandate. Cheddar News spoke with Samir Kapadia, head of trade practice at the Vogal Group, about how this impacts trade between the two countries.
New York City is not only dealing with the ongoing pandemic, it’s also facing a surge in crime. President Biden recently traveled to New York to meet with the city’s new mayor, Eric Adams, to discuss the rise in crime and gun violence.
The president praised Mayor Adams' crimefighting agenda and unveiled a new federal initiative to curb the flow of illegal weapons from the south. Josefa Velásquez, Senior Reporter for THE CITY, joined Cheddar's Fast Forward to talk about how the mayor is battling this increase in crime in his first weeks in office.
The Democratic governors of New Jersey, Connecticut, Delaware, and Oregon say they will lift mask requirements for schools in the coming weeks, reflecting a nationwide shift away from restrictions. Cheddar News speaks with internist Dr. Vivek Cherian whether it's safe to relax the regulation.
Amazon warehouse workers in Alabama are set to begin voting to unionize for a second time after workers at the facility in the town of Bessemer overwhelmingly voted against forming a union during an election early last year; but in November, the National Labor Relations Board overturned the vote, upholding a union challenge of the results which argued that Amazon undermined the conditions for a fair election. Another round of ballots will now be mailed out to works at the warehouse for a so-called re-run election. Director of Labor and Employment Studies at San Francisco State University John Logan and National Field Director for Our Revolution Mike Oles joined Cheddar News' Closing Bell to discuss.
