Corporate agriculture has been ringing alarm bells about President Trump's latest tariff increases against Chinese products, because retaliatory tariffs threaten their exports to that country. Karl Denninger - no fan of the President - brings the smackdown against such scare tactics.
So over the first seven months [of tariffs] we've collected $41 billion and change in duties over the $22 billion and change last year. That's $19 billion smackers in additional tariff revenue.
Total ag exports to China are approximately $24 billion a year.
All of them.
Well, so will be the tariffs over a 12 month period.
So with that tariff revenue, should the Chinese decide they would like to try to boycott American agricultural products, we can buy the same amount of said agricultural products and essentially erase a huge amount of starvation in third-world nations by giving the products to them.
It will cost US Treasury zero to do that.
BTW $24 billion is about 0.12% of the US economy. That is, the cost to you as a consumer of these tariffs is going to be a grand price increase of about 0.12%. You won't even be able to see that in the price of what you buy -- even more than doubled it will be less than one quarter of one percent in price increase, unless US firms try to gouge you -- and if they do then your correct response is to destroy the firms and executives who do that and ship their body parts over to China to be recycled by swine-flu infected hogs.
There's more at the link.
It's worth noting that Denninger's figures refer to present (i.e. pre-increase) tariff rates. The new, higher tariff rates will bring in even more. Therefore, his arguments make an awful lot of sense to me. If China retaliates against the $10 billion or so of US trade upon which it hasn't yet imposed tariffs, the US has a lot more wiggle room. Right now, the side exporting the most to the other side has the most to lose from increased tariffs - and the USA is exporting far less to China than the other way around. For the foreseeable future, tariffs are a weapon the Chinese economy can't match. If they want to resolve the situation, they can . . . by negotiating in good faith, and proving it with actions, rather than words, instead of trying to renege on previously-agreed points.
The "good faith" aspect is critical. Any future agreements must be confirmed in operation by mutual inspections, audits, or whatever. As the late President Reagan said in another context, "Trust . . . but verify."