Trade war between the US and China heats up

Michelle Jones, a fourth-generation farmer, and Mary Lovely of the Peterson Institute at Syracuse University discuss the on-going and escalating trade war between the United States and China.
6:59 | 05/10/19

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Transcript for Trade war between the US and China heats up
Also today overnight at 1201. Last night. Big new tariffs winced in place the US ramping up tariffs on 200 billion dollars an incoming Chinese goods. A pretty dramatically from 10% to 25%. We have a graphic I think that'll show all of this incredibly long list of items impacted things like seafood and luggage electronics. Just. I'm number of of in the coming products to the United States. Now was the fact that this new rate hike went into effect at 1201 but it only impacts products that leave China today not those that are RD in transit. So we know the Chinese delegation is still here in the nation's capital negotiating with. Our own diplomats of ballot a possible trade deal and now there's this. The rats essentially making its way across the ocean and at this closer that those newly taxed goods get the United States the more real that credit increase terrorists will be. I bring in two guests we have Mary lovely a professor at Syracuse University. As well as Michelle Jones a fourth generation farmer from Montana. And a shot lesser review because you pretty outspoken. Saying that your against the idea of increased tariffs against these incoming Chinese guides tell us why. You know armor and tariffs that never delete your. We aren't seeing out our experience on our her own products expert overseas. And China. Particularly in terms of the sordid means as loans are now our own arms. We've seen in disappear or are we or did. Is why they haven't here and coming when he and actually it's not importing them once the lots here. I'm and also increase as you're on input costs steel are there they're dead they. Is negatively impacting our the sheer larger army. And rest a lovely Adenauer TO you know. Candid deals still be reached with the Chinese delegation that's here seem that the president has really upping the ante putting a lot of pressure on them. Just water stunned how. Yes the president is determined to negotiate with the guns and the Chinese. But I do you think a deal. And will likely be done. And Aaron the reason I believe that is because a Chinese delegation is still here. With this threat hanging over their head and they wouldn't be here they didn't think that a deal could be done so recall any deal is still going to be sealed. Hopefully by the ended its week I think Michelle is very articulate in explaining some of that change that farmers are feeling. Army's urban and very patriotic insane if they're willing to sacrifice for some gains here but. I think that if president Tran goes through. And raises these parents and then China retaliate they'll be a lot more pain and no game so I really don't see anything in for the trump administration. Either not to strike a deal this week. A professor while it does seem like the markets are making a similar calculation you're not seeing a major meltdown in in in line with what you might expect. I'm curious how that affects the negotiations. From your perspective does that weaken the president's hand if everyone may be including the Chinese thinks that he's bluffing. Well you know it's endangers aimed to try to get it is in the mind of Donald Trump. But I would say that the markets had seen this administration make threat. And make initiatives that haven't come through. And they are not overreacting. I think that the president is more sophisticated. And merely thinking well this is not going to move markets I think he doesn't know that is a market. And if he doesn't know there's a lot of people in the business community that are telling him and it Wilmer market so I think he know his hands ash. I think he does think that this type of strategy is a winning one. There is enough on the table here to keep the Chinese here and again nights and Ingrid likely is he deal by the end of the week I could be Iran I hope not because it beat a lot of farmers like Michelle really suffer and we do not get a deal this week. Michelle I want to ask you about our line from from those that are in favor of some of these terrorists in favor of the tough tactics. You know they say that this pressure on China. Could mean event that people turn elsewhere they turn to other countries for manufactured dad's seat backs the ad states for manufactured goods. Is there any of our plus side the UC GB convince an argument like that. Why it's important that it is certainly there Laurie. These are much trade distorting practices. And industry and read your support case is that. Written Eric. They're trade is hurting oh. It oh on without parents that are running a substantial impact on. The amount of goods that we can shipped to China and look arts and in terms of the commodity market this week. Soybean and wheat I believe I was corner sitting on contract well so. Diet. And a breakdown toxins in. Do you need but we also raised here as how did its impact on. Commodities markets and negative manner. And so oh. Hopefully we can deal that week in. Our role in acts on her and allow you normalize street. And prescilla they'll let you have the last word here I was struck by. The big vote of confidence that the president got from Democrats on Capitol Hill in a tweet from. Minority leader Chuck Schumer there in the senate who basically said stays strong. When you're talking to China don't back down is this are rare moment where both sides seem to agree the president is at least moving in the right direction but. Senator Schumer has never minute free trader. But it's also not his sister it's offering now so badly his state. And I I think that the people who aimed at you know this stuff just move someplace else to get it from someplace else through reach shore. To realize that that is going to be costly. Demand how he looked at it is going to raise costs war American business. And it will be retaliation so there's really no way around this. So again I think investing for the US economy you as farmers. Will be an end to the conflict in ho Lee that the Chinese make good enough deal we see significant progress. And changing the practices to which we. Jacked. Well that's a very lovely they're from Syracuse thank you for joining us and a Michelle Jones all the way from Montana we really appreciate you being with us here on the briefing room.

This transcript has been automatically generated and may not be 100% accurate.

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