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The Truth About Tariffs And Red China

Trump on Trade
Our friend Christopher C. Hull has posted a great article on the Epoch Times featuring Brian Kennedy, chairman of the Committee for the Present Danger: China, Newt Gingrich, Senator Ted Cruz, Rep. Chris Stewart and Steve Bannon explaining the threat from Red China and the pressing necessity to defeat it.

Hull reports Gingrich said, the United States is “watching a revolution in strategic economic capabilities and a revolution in geographic location of power and all of it is being done while we sleepwalk.”

“This is going to be a long-term struggle between a civilization that believes in liberty and a civilization that believes in authoritarianism with Chinese characteristics,” a clear reference to “socialism with Chinese characteristics,” the slogan used by CCP dictators from Deng Xiaoping to Xi Jinping.

From our perspective the current trade negotiations and the tariffs President Trump is using to pressure the Red Chinese are the key element in the battle.

Thanks to the fecklessness of Barack Obama, China has established naval bases far out in the South China Sea and will never be ejected by any means short of war and began operating its One Belt One Road economic imperialism program unhindered, which means ramping up economic competition is our cheapest most effective weapon against Chinese expansionism.

The United States is Red China’s largest external market – they need us to keep buying Chinese goods to keep their 1 billion people employed and content with an improving quality of life so they do not get restless and have any reason to question the oppressive social credit system that runs the lives of the hundreds of millions of Chinese who are not part of the Communist Party elite.

As Brett Arends explained in a recent MarketWatch column, most of what the public is being told about these tariffs is either misleading or a downright lie.

Yes, tariffs are “costs.” But they do not somehow destroy our money. They do not take our hard-earned dollars and burn them in a big pile. Tariffs are simply federal taxes. That’s it. The extra costs paid by importers, and consumers, goes to Uncle Sam, to distribute as he sees fit, including, for example, on Obamacare subsidies, or we might add, building a wall on our southern border or keeping a carrier battle group or two operating in the Pacific.

And, says Arends, the amounts involved are trivial. Chicken feed.

President Trump just hiked tariffs from 10% to 25% on about $200 billion in Chinese imports. In other words, he just raised taxes by … $30 billion a year.

The total amount we all paid in taxes last year — federal, state and local — was $5.51 trillion. This tax increase that has everyone’s panties in a twist is a rounding error, says Mr. Arends.

Even if Trump slapped 25% taxes on all Chinese imports, it would come to a tax hike of … $135 billion a year. U.S. gross domestic product (GDP) last year: $20.5 trillion, noted Arends.

So even this supposedly scary “escalation” of this “tariff war” would raise our total tax bill from 26.9% of GDP all the way to 27.5% of GDP.

And’ observes Arends, isn’t it interesting to see some people’s priorities? Apparently the most shocking part of this trivial tax hike is that it might raise the price of new Apple iPhones.

Meanwhile, the trade spat seems to be bringing down food prices. China is going to take less of our farm products. So, wheat prices are down 20% since the start of the year. Soybeans are at 10-year lows.

Good for consumers, right? Though you’d never know it given the wall to wall negative media coverage soft farm prices are getting.

And all this ignores the much bigger picture, anyway says Arends.

The tariffs are simply a means to an end. The president is trying to get China to start buying more of our stuff. He knows the so-called Middle Kingdom, which now has the second-biggest economy in the world, responds to incentives more than to nice words. These tariffs give China an incentive to open up.

Naturally, China’s first reaction is to retaliate. Big deal. That’s just posturing says Arends.

Right now we export less to China than we do to Japan, South Korea and Singapore put together. That’s the point. So, the effect of China’s new tariffs on the U.S. are yet another rounding error. Even if China banned all imports from the U.S., that would amount to only 0.6% of our gross domestic product. And we’d sell the stuff somewhere else.

Don’t buy the hysteria. President Trump is simply trying to pressure our biggest competitor to buy more American goods. That should be a good thing, even if you don’t like him concludes Mr. Arends.

We agree with Brett Arends that pressuring China to buy more American products is a good thing, but there is also another angle to this: China has been at war with us for at least 20 years, but successive Presidents, Republicans and especially Democrats, have pretended the war wasn’t going on, and you are sure to lose any war you don’t fight.

Donald Trump is the first President to recognize we are in a war with the Red Chinese, and the battlefield he has chosen is one that is favorable to us. We believe conservatives should support the President’s tariffs because they are among the cheapest and most effective weapons we have to win the war Red China has declared on us.

George Rasley is editor of Richard Viguerie's ConservativeHQ.com and is a veteran of over 300 political campaigns. A member of American MENSA, he served on the staff of Vice President Dan Quayle, as Director of Policy and Communication for former Congressman Adam Putnam (FL-12) then Vice Chairman of the Oversight and Government Reform Committee's Subcommittee on National Security and Foreign Affairs, and as spokesman for Rep. Mac Thornberry former Chairman of the House Armed Services Committee.

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