China Tariffs: A New Price For Patriotism

President Trump yesterday followed through on his threat to impose tariffs on another $200 billion worth of Chinese exports to the United States. A 10 percent levy will go into effect immediately, rising to 25 percent on 1 January 2019. China, undeterred by Trump’s willingness to up the ante, has already pledged to retaliate. A negotiated compromise to end the US-China trade war looks as far off as ever.

This round of tariffs puts a new group of people on the front lines of that war: a broad swathe of American consumers. Trump’s earlier rounds of China tariffs – which are meant to force China to stop unfairly subsidizing its own companies while extracting technology from foreign ones – focused largely on industrial equipment purchased by American firms.

But the new measures include things like Chinese-made computers, furniture, home appliances, and food products that ordinary Americans purchase in large quantities. Industry organizations and consumer advocates have warned that these tariffs could cost jobsreduce economic growth, and erode living standards, particularly for middle class and lower-income people, who tend to spend more of their income on imported goods.  By one official estimate, cheaper imported goods account for more than a quarter of the American middle class’s purchasing power.

In practice, the new tariffs may not show up fully in the price of your (or your American friends’) next vacuum or laptop – in part because many suppliers will be able to source things from countries other than China (and also partly why Trump’s focus on China may not affect the overall US trade deficit.)

But it does raise an important question for an American society that has gotten very used to cheap consumer goods from China over the past several decades. What price are people willing to pay in the name of economic nationalism and solidarity with domestic industries?

Brazil's governors take on Bolsonaro: We've previously written about the tensions between local and national governments over coronavirus response, but few places have had it as bad as Brazil. As COVID-19 infections surged in Brazil, the country's governors quickly mobilized – often with scarce resources – to enforce citywide lockdowns. Brazil's gangs have even risen to the occasion, enforcing strict curfews to limit the virus' spread in Rio de Janeiro. But Brazil's president, Jair Bolsonaro, has mocked the seriousness of the disease and urged states to loosen quarantines in order to get the economy up and running again. "Put the people to work," he said this week, "Preserve the elderly; preserve those who have health problems. But nothing more than that." In response, governors around the country – including some of his allies – issued a joint letter to the president, begging him to listen to health experts and help states contain the virus. The governor of Sao Paulo, Brazil's economic powerhouse, has even threatened to sue the federal government if Bolsonaro continues to undermine his efforts to combat the virus' spread.

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The major outbreaks of coronavirus in China, Europe, and the United States have garnered the most Western media attention in recent weeks. Yesterday, we went behind the headlines to see how Mexico and Russia are faring. Today, we'll look at three other potential hotspots where authorities and citizens are now contending with the worst global pandemic in a century.

Start with India. For weeks, coronavirus questions hovered above that other country with a billion-plus people, a famously chaotic democracy where the central government can't simply order a Chinese-scale public lockdown with confidence that it will be respected. It's a country where 90 percent of people work off the books— without a minimum wage, a pension, a strong national healthcare system, or a way to work from home.

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In the end, it took the coronavirus to break the year-long deadlock in Israeli politics. Prime Minister Benjamin "Bibi" Netanyahu will still face corruption charges, but he has yet another new lease on political life, as he and political rival Benny Gantz cut a deal yesterday: Bibi will continue as prime minister, with Gantz serving as Speaker of the Knesset, Israel's parliament. After 18 months, Gantz will take over as prime minister, but many doubt that will ever happen.

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With large parts of the American economy shuttered because of coronavirus-related lockdowns, the number of people filing jobless claims in the US last week exceeded 3.2 million, by far the highest number on record. Here's a look at the historical context. The surge in jobless claims, which may be an undercount, is sure to cause a spike in the unemployment rate (which tells you the percent of work-ready people who are looking for a job). At last reading in February, unemployment was at a 50-year low of 3.5 percent. Economists warn that it could reach 5.5 percent in the near term. Even that would be far lower than the jobless rates recorded during previous economic crises such as the Great Depression or the Great Recession. Have a look.