The de minimis system was in theory to allow developing countries to be able to take advantage of their very low labor costs and also to save the receiving country the inspection costs. Mostly countries ("third world") have time limited agreements.
Tariffs were about originally about protection of local manufacturing. But both these changed with the politics and greed. China has cheap labor costs but superb management of manufacturing. Politics are now simple. China has 3 times as many consumers as the US.
China refuses to float its currency, so the major currencies can't effectively export their inflation to them like they do with other trading partners by manipulating their interest rates.
The US dollar is the defacto world currency but that means countries must have reserves of US dollars. Those reserves are not piles of US bank notes they are stocks, bonds real estate in the US. These foreign reserves mean influence in the economy.
The current round of tariff wars are all about long term debt and attempting to reduce the long term bond rate. But countries wont wear that because their reserves are partly in bonds. So retaliation in the form of "custom fees" occur.
More than likely, the EU fees and charges are aimed at China. Already China leads the world in production in many important areas (nuclear reactors, batteries, electric vehicles, solar panels). Countries can see China becoming (if not already) the worlds biggest economy with the political power that comes with it.
Sadly, its the small manufactures & businesses that suffer the most, but thats democracy and capitalist system in action
Berniek · · focus · HN ↗
t0mpr1c3 · · focus · HN ↗