PRELIMINARY ESSAY NOTES #002--
(Starbucks Cantina)--Curiously, the items that are being tossed about for tariff consideration have some similarities and some major differences. Note that there is a major discrepancy first of all in the overall number of products under consideration; for China the list stands just over 100 items, for the United States, the trade cops have pegged 1300 plus items for import tax.
Posted on CNBC last Wednesday, the China boycott consists of products that range from foodstuffs, automobiles and chemicals:
https://www.cnbc.com/2018/04/04/the-full-list-of-us-products-that-china-is-planning-to-hit-with-tariffs.html
Some of the items listed the general population probably has no interest in at all with the exception of tobacco. There appears to be some question as to why there is great emphasis on what looks like a luxury item, expensive automobiles. As if the average Chinese person needs some high-profile SUV for the upcoming ski sojourn in the Himalayas. Is this just a political statement or will it actually impact the US auto industry? In fact, many of these types of vehicles can be obtained from other sources, as can numerous items on the list. What's not on the list? Educational materials, electronic gadgets, and household items that would make life easier and more convenient for the the working class. There is also no mention of clothing items.
As for the reciprocal barriers being imposed by the United States, the list is far more extensive, but doesn't necessarily include familiar items that may be found in the large shopping markets like WalMart. The media has made a big deal out of exporting soy products and steel-aluminum exports but little has been said, once again, of what's not on the list:
https://ustr.gov/sites/default/files/files/Press/Releases/301FRN.pdf
Again, it appears the average working stiff consumer may escape the escalating standoff as many products, are just not relevant to his or her needs. Some or most of the electronic gadgets the American can do without or can find from another market. Much of the stuff, from chemicals to aircraft to machine motor parts have no place in the lower echelon consumer market, where demand is based on need, not on component assembly for a complete product for consumption.
Given also that there are tens of thousands of items categorized on the HTSUS, it would be difficult to hammer down just where deprivation exists for the Jenny Average in the middle and lower classes. Once again, the absence of clothing items, shoes, and personal commodities seem to have taken backstage to the tariff pegging performance currently running at the administration playhouse.
It also appears the trade bureau had to look long and hard to come up with the comprehensive list of 1300 plus items to make the effort pay off, since there may not be as many big ticket items coming out of China to make the tariff endeavor profitable. It may be no surprise as a result that both the Hang Seng and the Dow show positive gains today as the traders, the other traders, don't see much future in threats over trade taxing, boycotts and embargoes, not now, or historically.