As Trump elevates Putin onto the world stage again:China rejects US demands to stop buying Russian, Iranian oil
"Trump/Brazil: Delusions of Grandeur Go South "As Trump turns his back on renewables, China is building the future "The U.S. Under Trump: Alone in Its Climate Denial "The Real Reasons for High Oil and Gas Prices "Four Ways Trump Plans to Raise Energy Costs for American Consumers""""
China has taken a firm stance against U.S. demands.
By DIDI TANG Associated Press August 4, 2025, 10:11 AM
VIDEO 1:17 National headlines from ABC NewsCatch up...
WASHINGTON -- U.S. and Chinese officials may be able to settle many of their differences to reach a trade deal and avert punishing tariffs, but they remain far apart on one issue: the U.S. demand that China stop purchasing oil from Iran and Russia.
“Coercion and pressuring will not achieve anything. China will firmly defend its sovereignty, security and development interests," the ministry said.
The response is notable at a time when both Beijing and Washington are signaling optimism and goodwill about reaching a deal to keep commercial ties between the world's two largest economies stable — after climbing down from sky-high tariffs and harsh trade restrictions. It underscores China's confidence in playing hardball when dealing with the Trump administration, especially when trade is linked to its energy and foreign policies.
U.S. Treasury Secretary Scott Bessent, emerging from the talks, told reporters that when it comes to Russian oil purchases, the "Chinese take their sovereignty very seriously.”
“We don’t want to impede on their sovereignty, so they would like to pay a 100% tariff," Bessent said.
On Thursday, he called the Chinese “tough” negotiators, but said China's pushback hasn't stalled the negotiations. “I believe that we have the makings of a deal,” Bessent told CNBC.
Gabriel Wildau, managing director of the consultancy Teneo, said he doubts President Donald Trump would actually deploy the 100% tariff. “Realizing those threats would derail all the recent progress and probably kill any chance” for Trump and Chinese President Xi Jinping to announce a trade deal if they should meet this fall, Wildau said.
In seeking to restrict oil sales by Russia and Iran, a major source of revenue for both countries, the U.S. wants to reduce the funding available for their militaries, as Moscow pursues its war against Ukraine and Tehran funds militant groups across the Middle East.
“If the U.S. is bent on imposing tariffs, China will fight to the end, and this is China’s consistent official stance,” said Tu Xinquan, director of the China Institute for WTO Studies at the University of International Business and Economics in Beijing. WTO is the acronym for the World Trade Organization.
Negotiating tactics aside, China may also suspect that the U.S. won't follow through on its threat, questioning the importance Trump places on countering Russia, Tu said.
Scott Kennedy, senior adviser and trustee chair in Chinese Business and Economics at the Center for Strategic and International Studies in Washington, said Beijing is unlikely to change its posture when it sees inconsistencies in U.S. foreign policy goals toward Russia and Iran, whereas Beijing's policy support for Moscow is consistent and clear. It's also possible that Beijing may want to use it as another negotiating tool to extract more concessions from Trump, Kennedy said.
[The only ones who see Trump in control are Trump and his supporters. Like the friend at the pub today who said, "Wait until Monday", then revealed he knew about sanctions yet not about Trump's tariff war.]
Danny Russel, a distinguished fellow at the Asia Society Policy Institute, said Beijing now sees itself as “the one holding the cards in its struggle with Washington." He said Trump has made it clear he wants a “headline-grabbing deal” with Xi, “so rejecting a U.S. demand to stop buying oil from Iran or Russia is probably not seen as a deal-breaker, even if it generates friction and a delay."
Continuing to buy oil from Russia preserves Xi's “strategic solidarity” with Russian President Vladimir Putin and significantly reduces the economic costs for China, Russel said.
“Beijing simply can’t afford to walk away from the oil from Russia and Iran," he said. “It’s too important a strategic energy supply, and Beijing is buying it at fire-sale prices.”
A 2024 report by the U.S. Energy Information Administration estimates that roughly 80% to 90% of the oil exported by Iran went to China. The Chinese economy benefits from the more than 1 million barrels of Iranian oil it imports per day.
After the Iranian parliament floated a plan to shut down the Strait of Hormuz in June following U.S. strikes on Iran's nuclear facilities, China spoke out against closing the critical oil transit route.
China also is an important customer for Russia, but is second to India in buying Russian seaborne crude oil exports. In April, Chinese imports of Russian oil rose 20% over the previous month to more than 1.3 million barrels per day, according to the KSE Institute, an analytical center at the Kyiv School of Economics.
This past week, Trump said the U.S. will impose a 25% tariff on goods from India, plus an additional import tax because of India’s purchasing of Russian oil. India's Foreign Ministry said Friday its relationship with Russia was “steady and time-tested."
Stephen Miller, White House deputy chief of staff and a top policy adviser, said Trump has been clear that it is “not acceptable” for India to continue financing the Ukraine war by purchasing oil from Russia.
“People will be shocked to learn that India is basically tied with China in purchasing Russian oil,” Miller said on Fox News Channel’s “Sunday Morning Futures.” He said the U.S. needs “to get real about dealing with the financing of this war.”
[Stephen, please. The only ones who will be shocked are the ones not following events as closely as they could. And as far as the US having to get real, yeah, would help if you cut your bullshit enabling of Trump's bullshit charade about caring so much about stopping the killing. Again, see Nobel aspirations re that. And see Graham's posturing too.]
Sen. Lindsey Graham, a Republican from South Carolina, is pushing for sanctions and tariffs on Russia and its financial backers. In April, he introduced a bill that would authorize the president to impose tariffs as high as 500% not only on Russia but on any country that “knowingly” buys oil, uranium, natural gas, petroleum products or petrochemical products from Russia.
"The purpose of this legislation is to break the cycle of China — a communist dictatorship — buying oil below market price from Putin’s Russia, which empowers his war machine to kill innocent Ukrainian civilians,” Graham said in a June statement.
The bill has 84 co-sponsors in the 100-seat Senate. A corresponding House version has been introduced, also with bipartisan support.
Republicans say they stand ready to move on the sanctions legislation if Trump asks them to do so, but the bill is on hold for now.
___
Associated Press writers David McHugh in Frankfurt and Rajesh Roy in New Delhi and researcher Yu Bing in Beijing contributed to the report.
Att: B402 --Decades favorite, Krugman -- The Economics of Smoot-Hawley 2.0, Part I
"Trump/Brazil: Delusions of Grandeur Go South "As Trump turns his back on renewables, China is building the future"
Tariffs will be very high as far as the eye can see. What does that mean?
Paul Krugman Aug 03, 2025
The Aug. 1 deadline has come and gone, and Donald Trump hasn’t made any trade deals. What some gullible reports call “deals” are at best “frameworks” in which other countries have suggested — without signing anything — that they’ll do things that might help the U.S. economy. For the most part even these understandings are vaporware. For example, the European Union literally has no way .. https://paulkrugman.substack.com/p/fossil-fool .. to deliver the increased U.S. investment and increased imports of U.S. energy the Trump administration has trumpeted as part of the so-called deal.
What we’re left with is that the United States has, for all practical purposes, unilaterally imposed high tariffs. So you should think of Trump’s trade policy as the second coming of the 1930 Smoot-Hawley tariff, effectively reversing the results of 90 years of trade liberalization. In fact, average U.S. tariffs, which were very low just a few months ago, are roughly back to Smoot-Hawley levels.
Unless the courts rule Trump’s tariffs illegal — which they clearly are, but I fully expect the Supreme Court to uphold them anyway — Smoot-Hawley 2.0 is the new normal.
---- [ Insert: Federal court strikes down Trump’s tariffs on countries around the world The U.S. Court of International Trade ruled unanimously that the president overstepped his powers in imposing the tariffs on dozens of trading partners, most of which he’s since paused. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=176249757 Add note on CIT - In 1956, the U.S. Customs Court was reconstituted by Congress as an Article III tribunal, giving it the status and privileges of a federal court. The Customs Courts Act of 1980 established the U.S. Court of International Trade in its current form, granting it jurisdiction over all trade matters and conferring its judges with life tenure. https://en.wikipedia.org/wiki/United_States_Court_of_International_Trade ... then ... US appeals court reinstates Donald Trump's tariffs, a day after they were deemed illegal Fri 30 May [...]What's next? The plaintiffs in the trade court case have been ordered to respond by June 5, and the US government by June 9. [...]Mr Trump's tariffs had been imposed under the International Emergency Economic Powers Act (IEEPA) on April 2. P - The 1977 Act provides the US president "broad authority to regulate a variety of economic transactions following a declaration of national emergency". P - But the trade court ruled Mr Trump's sweeping tariffs "exceeded any authority" granted to the president by IEEPA to regulate importation by means of tariffs. https://www.abc.net.au/news/2025-05-30/us-appeals-court-reinstates-trump-tariffs/105356190 ] ----
How should we think about this astonishing policy reversal? Beyond the paywall I’ll discuss the following issues:
1. Where we now stand on tariffs, with historical context
2. The likely impact of tariffs on U.S. and world trade
3. The effect of tariffs on U.S. growth. Spoiler: significantly negative, but maybe not as bad as you imagine. But big costs for families.
I’ll follow up next week with some of the larger implications of Trump’s tariffs. Crucially, what Trump is really waging is mostly a class war against middle- and lower-income Americans rather than a trade war against other countries. The hit from his tariffs to the typical family is much bigger than the hit to GDP. Also, it’s important to understand that all of Trump’s tariffs violate solemn agreements — agreements ratified by Congress — that the United States has made in the past. So the Trump tariffs have inflicted massive and possibly irreparable damage on U.S. credibility.
Most of Donald Trump’s tariffs are clearly illegal. There is a special court, the Court of International Trade, which is supposed to have jurisdiction over these issues, and it ruled the tariffs illegal on May 28. However, the ruling was stayed while the administration appealed the decision to the Federal Circuit Court. Those following the deliberations mostly believe that this court will uphold the trade court’s ruling. But then the case will go to the Supreme Court, and almost everyone expects the Supremes to rule that Trump can do whatever he wants.
So high tariffs are probably here to stay. And I mean high tariffs. Trump has reversed 90 years of tariff reductions, achieved via reciprocal trade agreements — we’ll cut our tariffs if you cut yours. Here’s a chart of average U.S. tariffs since 1929, just before the infamous 1930 Smoot-Hawley tariff:
Source: Statista and Yale Budget Lab
How should we think about the economics of this huge policy reversal? In last week’s primer I focused on the macroeconomics of Smoot-Hawley 2.0 — its effects on trade flows and real GDP. But as I suggested at the end of that post, the real economic significance of the tariffs — even though they are ostensibly aimed at foreigners — is mainly how they will affect the distribution of income among Americans.
In 2020 Matthew Klein and Michael Pettis published a very good book titled Trade Wars Are Class Wars .. https://yalebooks.yale.edu/book/9780300261448/trade-wars-are-class-wars/ . They didn’t have Trumpian trade wars in mind, and their analysis was in important ways different from mine. But their meta point — trade policy is mostly about income distribution — was absolutely right, and I am going to steal their tagline.
Not to be coy about it, what I’ll argue in today’s post is that Trump’s trade war should be seen as part of a package of policies that amounts to class warfare — class warfare against middle and lower-income Americans in favor of the affluent, especially the top 10 percent of the income distribution.
Beyond the paywall I’ll discuss the following:
1. Tariffs as regressive tax increases that help pay for regressive tax cuts
2. The false promise of a revival in manufacturing jobs
Love substacks but can't afford now to get behind paywalls on some of them.
The Economic Effects of President Trump’s Tariffs Summary: Many trade models fail to capture the full harm of tariffs. PWBM projects Trump’s tariffs (April 8, 2025) will reduce long-run GDP by about 6% and wages by 5%. A middle-income household faces a $22K lifetime loss. These losses are twice as large as a revenue-equivalent corporate tax increase from 21% to 36%, an otherwise highly distorting tax. https://budgetmodel.wharton.upenn.edu/issues/2025/4/10/economic-effects-of-president-trumps-tariffs
Where is the B402 who said he was so concerned about inequality yet is silent on Trump's tariffs which will hurt the working class. Gotta think he really is the fraud some of us here have long seen him as.
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