The impact of Chinese tariffs on US consumers is being thwarted by what is known as the de minimis rule under the US Customs law. I have written about this previously, describing the movement of a package valued at less than $800.00 which is processed under this rule and thus, no duty is paid. This is particularly problematic if it avoids the 25% tariff on Chinese goods. Contrast it with a product purchased by a US merchant from China who pays the duty and obviously must either swallow the duty as part of the purchase price or tack it on to the purchase price, thus increasing it over the amount that the Chinese merchant is selling it in the US for. A convenient loophole the Trump Administration missed.
The Trump administration was rebuffed recently by its own advisory panel to the EPA which has indicated in strong language that the proposed roll back of various environmental rules imposed by the Obama administration lacks any scientific rigor. In other words, the basis that the Trump administration is using to roll these back has been deemed by a group of scientists appointed by the Trump administration as lacking scientific support. This is extremely important because it shows that at least these scientists are not being intimidated by the Trump Administration.
The Phase One deal with the Chinese is largely a phantom agreement. The big issues (currency manipulation forced technology transfers, etc.) are not addressed that were initially put forward as the basis for engaging in the trade war and imposing tariffs and more importantly, an unspoken issue has not been addressed and that is the substantial subsidies which the Chinese government grants to Chinese merchants. This is extremely important in determining whether or not this Phase One deal has any teeth whatsoever. It would appear that most commentators are saying that this deal has no teeth and is simply checking a box for 2020.
More on trade, the cost of noncompliance with US Trade Regulations is proposed to change according to a release from the Commerce Department on January 3, 2020 with an average of about 2% over last year for violations of the Export Central Reform Act, Fastner Quality Act, the Chemical Weapons Convention Implementation Act and numerous others.
North Korea, after promising a Christmas surprise, announced at the New Year that they are no longer bound by the stand down in nuclear testing. Mr. Trump’s foreign policy is again thwarted.
We assassinated a top Iranian general with a drone rocket attack. Was it the right move; these are tough choices. I am concerned that there doesn’t appear to be a plan in place to deal with the response which virtually all pundits are predicting, other than bluster. We are now sending more troops back into Iraq. I thought Mr. Trump said no more troops in the Middle East. I wonder what the Israeli’s are thinking since they are the closest target.
Let’s reflect a bit upon Mr. trump’s vitriolic attacks of Mr. Obama over actions in 2011 and 2012 with regard to Iraq and Afghanistan, now POTUS thinks he should be supported and not criticized, as to do so is unpatriotic. So Bizarre.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford Owens in Plattsburgh, NY and a Senior Advisor to Dentons to Washington, DC.
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