US think tank deducts trade war: Trump's hardcore ticket warehouse will be hit hard

Feng Difan

The calculations of the top economic research institutions in the United States show that if the Sino-US trade war breaks out, the most serious injury will be the deep red ticket of US President Trump.

The Brookings Institution of the United States has refined the influence of the two tariff lists of the Chinese counter-United States to the "county" level of the United States, and reached the above conclusion; and the data from the US Department of Agriculture can also clearly see that only pork The increase in taxes on soybeans and soybeans has had a huge impact on the deep red states of the Midwest: during the 2016 US elections, Trump won eight of them in the top ten soybean and pork exporting states.

In the trade war, in addition to the damage to local employment in the United States, US traders and consumers will also be deeply affected. As a result, the size of the US business alliance, which currently opposes the White House’s tax increase plan for China, has doubled in just one week, reaching 107 trade organizations, including heavyweight trades such as the National Retail Federation and the US Security Industry Association. Organizations, they are now again sending an open letter urging the Trump administration to abandon the $150 billion tax increase plan for Chinese exports to the United States.

China’s Ministry of Commerce spokesperson’s spokesperson said at a regular press conference on April 12 that we would like to persuade the US to recognize the general trend of the world and not to “go black on one road” and not to attempt to use unilateralism and trade protectionism. The big stick is bullying China. China’s determination and confidence to resolutely defend the interests of the country and the people will not be shaken. We are fully prepared. If the US has any action that leads to an escalation of the situation, China will not hesitate and resolutely counterattack.

Zhou Shizhen, a senior researcher at the China-US Relations Research Center of Tsinghua University, told the First Financial Reporter that the American society is not as strong as China. Playing agricultural products 000061, stocks, American businessmen have been a good business, and will react violently.

The heaviest injury will be the dark red ticket warehouse.

Up to now, China has made two tariff responses to the provocation of the US.

On April 1, the State Council Tariff Commission of the State Council issued a notice stating that in order to safeguard China’s interests and balance the losses caused by the United States’ tariffs on imported steel and aluminum products (ie “232 measures”), it is decided to Some imported goods in the United States have suspended tariff reduction obligations.

Among them, 120 import commodities originating in the United States, such as fruits and products, are subject to tariff reduction obligations, and tariffs are imposed on the basis of the current tax rate, and the tariff rate is 15%; for pork and products originating in the United States, etc. 8 The import goods shall be suspended from the tariff reduction obligation, and the tariff shall be imposed on the basis of the current applicable tariff rate, and the tariff rate shall be 25%.

On April 4, in response to the "301 Investigation", the Chinese side will take the equivalent of the foreign trade laws, such as the Foreign Trade Law and the basic principles of international law, on the importation of agricultural products such as soybeans originating in the United States, automobiles, chemicals, and aircraft. Tariff measures, the tax rate is 25%. In 2017, China imported about 50 billion US dollars of these goods from the United States.

The Brookings Institution said in the above report that if the Chinese side counters the US according to the two tariff lists in the “232 Measures” and “301 Surveys” responses, there will be 40 industries, 234 products and 2.1 million in the United States. Jobs were affected, with the top three most injured in terms of employment: plastics manufacturing (294,000), aircraft manufacturing (229,000) and pharmaceutical manufacturing (201,000). A number of jobs in the agricultural sector will also be affected, including the corn industry (18,000 people), the soybean industry (5,000 people), pork production and slaughter (147,000 people) and the wine industry (60,000 people).

According to the report, the list shows that China has a very good understanding of the diversity of key factors in the US production industry and the importance of cultural traditions, even deeper than the understanding of the US authorities: whether it is high technology or low technology, Industry or agriculture is covered by the above list. "It is clear that China has a good understanding of the geographical distribution of US production systems."

The Brookings Institution report also pointed out that geographically, on the one hand, the number of jobs affected by the tariff list is almost evenly distributed among the affected 2,742 counties. This means that both the Red (Republican) and Blue (Democratic) members of Congress will be affected and act in Congress.

Zhou Shizhen told the First Financial Reporter that agriculture is the soft underbelly of the United States. Which state of the United States does not have agriculture, and which member of the agricultural state can be indifferent to such a situation? How will they face their political future?

The report also said that, on the other hand, as measured by the political position of each county, the tariff list has the greatest impact on Trump's deep red ticket warehouse: 2,472 (82%) of the 2,742 counties are In 2016, the vote was voted for Trump.

Key varieties of soybeans and pork

According to the US Department of Agriculture, in 2017, US agricultural exports to China totaled US$19.6 billion, accounting for 14% of US agricultural exports. The other major export destination for US agricultural products is Canada. Last year, exports to Canada were about US$20.5 billion. , accounting for nearly 15%.

For case studies, pork and soybeans, for example, can make the political spectrum of US agricultural products more clear. The production states of these products are in the Midwest, and Trump is strongly supported in the 2016 election.

At present, China is the largest export market for US soybeans, and about 62% of the US soybeans are sold to China. According to the National Bureau of Statistics of China, from 2010 to 2017, China's soybean imports increased from 547.98 million tons to 95.526 million tons, an increase of 40.728 million tons, an increase of 74.3%.

According to the US Department of Agriculture, Trump has won eight of the top ten exporting states in the US, including Iowa.

Zhou Shizhen said that the current US ambassador to China, Branstad, came from Iowa. In the 1980s Sino-US trade friction, US soybeans were also deeply affected. At that time, he was the governor.

US Secretary of Commerce Ross has said that soybean is a key component of China's diet and an important source of protein. "I am not sure if China can find an alternative source to replace most of our soybeans."

Zhou Shizhen did not agree with this view. He said that China's consumption habits in cauliflower oil, peanut oil and sunflower oil are also very good.

Zhou Shizhen, who was responsible for the US agricultural affairs at the Chinese Embassy in the United States, is very familiar with agricultural products. He said that China currently has a backing in soybeans. In the Far East of Russia, north of Heilongjiang, soybeans are being planted, and the soil is basically the same as that of Heilongjiang. Compared with soybeans that have crossed the ocean from North and South America, Shipping costs are low. He said that Heilongjiang's soy protein is high, suitable for making soy products, while American soybeans are not as good as northeast soybeans, and they are high in oil and suitable for oil extraction.

The US Department of Agriculture also showed that eight of the top ten pork exporting states in the United States voted for Trump.

China is a big pork consumer, the United States is a big pork exporter, and a quarter of American pigs are used for export. According to the US Department of Agriculture, the annual imports of US pork in China and Hong Kong are around $1.1 billion.

Zhou Shizhen said that pork from the EU can fill the US space, such as German pork.

A few days ago, during the visit of Austrian President Alexander Vanderbilen to China, China and Austria stated in the "Joint Statement on Establishing a Friendly Strategic Partnership": "The two sides will work together for each other's quality while respecting each other's national security and quality supervision requirements. Open markets for goods, such as Chinese imports of Austrian pork and fruit."

Business alliance urges Trump to abandon tariffs

Peterson Economic Research Institute (PIIE) researcher ChadBown measured the impact of the Chinese retaliatory force on the US export industry under the “301 Survey” from an industry perspective.

Bourne estimates that with China’s 25% tariff, there will be $49.8 billion in US-to-China products, the biggest impact of which will be the transportation industry (vehicles, aircraft and boats, worth $27.6 billion) and vegetable products. ($13.7 billion), other hit industries include plastics and rubber products ($3.5 billion), chemicals ($2.1 billion) and fossil fuels ($1.7 billion). Since Bourne did not calculate the tariff list of the Chinese side in the “232 Measures” response, industries such as pork and fruit were not included in the measurement range.

And because Trump's "301 Survey" intends to increase tariffs on Chinese products by 25%, China's exports to the United States will be most affected by machinery, machinery and electrical equipment, with a total value of $34.2 billion. Such tariff costs will eventually be shared among traders and consumers.

At the same time, according to the Tax Foundation, the Trump administration's tax on China will offset 20% of its tax reform.

Huang Yuchuan, former director of the World Bank’s former China Business Bureau and senior researcher at the Carnegie Endowment for International Peace, said in an interview with the First Financial News that there is no winner in the trade war. The key is how to avoid trade wars. Other countries export, but consider how to provide more market access conditions for enterprises.

Trade between the two countries, trade is the first stage, two-way investment access is the second stage, and the third stage is the flow of talent. Huang Yuchuan said that in the trade war, although the US economy will not collapse, American consumers will bear price fluctuations, and the income of Chinese workers may also be affected.

The prospects are bleak, and the US trade organizations, big and small, can’t sit still.

Under the auspices of the National Retail Federation, 107 trade lobby organizations publicly announced their opposition to the US tariff increase program for Chinese goods, and sent a letter to the US House of Representatives fundraising committee, warning that "all industries in the United States and workers, businessmen, consumption All will feel the impact of trade wars and tariffs."

Gao said that it is not the issue of China’s willingness to participate in the negotiations, but the actions of the United States, which did not show the sincerity of the negotiations. The US first published a list of 50 billion US dollars of tax-deferred products on the grounds of the “301 investigation”, and then unreasonably proposed to increase the taxable goods by 100 billion US dollars. This is typical unilateralism and trade protectionism. Under unilateral coercion, China cannot conduct any negotiations. "The Chinese side has fully prepared for the escalation of the situation in the way of the bottom line thinking, and has formulated specific comprehensive countermeasures." Gao said.

(Editor: He Yihua HN110)