By JCreative @Adobe Stock
Closing Ridiculous Loopholes
As trade wars seem to be unfolding across the world, the media is having a field day with the Trump administration’s placing tariffs on remote, penguin-inhabited islands. If nothing else, it illustrates the old saw, don’t believe everything you read. At least dig deeper to understand what’s going on before you descend into that rabbit hole.
In the WSJ, Kyle Peterson discusses letters from listeners who are puzzled about what the Trump administration is up to here with the WSJ’s Barton Swaim and Kate Bachelder Odell. Peterson and his cohorts consider China and the media’s pushback about the Trump administration placing tariffs on islands occupied by penguins. According to trade data, Vietnam has become a pass-through country to get Chinese exports to the United States. Is this the theory for the global reach?
If the US doesn’t place tariffs on Guatemala or some far-flung islands, it is likely that within six months those countries and territories would begin exporting billions of dollars’ worth of Chinese goods to the United States. Doing end runs around trade policy concerns the Trump administration for sure. It also concerned other administrations before Trump’s.
In a recent podcast explaining what Trump is doing, Guatemala, which provides the US with coffee, bananas, and such, was mentioned. If the concern is that Chinese steel and Chinese manufactured goods are going to be routed soon through Guatemala, couldn’t this be easily fixed? Wouldn’t it be easy for the Trump administration to leave tariff-free bananas, the coffee, and the things that we cannot grow very easily in the United States?
Along with tariff-free goods, the US would also need to flag nascent Guatemalan steel and manufacturing industries that did not previously exist but are now sending stuff en masse to the United States.
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