[jdoliner]

Something I've been wondering about this. China is retaliating with tariffs against, for example: Sinograin [1]. What exactly is the point of this tariff when the company being taxed is, like many big companies in China, state owned? Aren't they essentially just taxing themselves?

[1] https://www.reuters.com/article/us-usa-trade-china-soybeans/...

[TangoTrotFox]

I'd expect that was just an amusing incident of the left hand not knowing what the right is doing.

Throwing out tariffs on the US farm industry is probably a smart move from a political point of view. Our farm industry is heavily subsidized and controlled by government programs. For instance we literally pay some farmers not to farm lands and in cases where harvests are unexpectedly high farmers can end up being prohibited from marketing some of their harvest. In extreme cases, this means the product -perfectly edible foods- just ends up getting destroyed. It's all about extreme control of supply to try to stabilize prices for the consumer and ensure farmers are a bit more insulated from the swings of the market, and to keep them farming (or potentially farming) year after year.

Anyhow, the point of this is that by imposing tariffs on American agriculture (thus reducing Chinese demand) you stand to force this system to respond very visible ways, such as for instance by increasing the number of farmers being paid not to farm or increasing the amount of harvest that can't be marketed. Imagine a photo of some US farmer surrounded by produce thrown to rot and a headline suggesting this was the product of the tariffs. Great propaganda that makes good headlines against the purpose of the tariffs. That a Chinese state company ended up paying the tariffs, rather than just achieving the end of reducing demand and thus hitting with some bad PR in the states, is something I'd expect is just a hilarious short-term miscalculation.

[jdoliner]

> Anyhow, the point of this is that by imposing tariffs on American agriculture (thus reducing Chinese demand) you stand to force this system to respond very visible ways, such as for instance by increasing the number of farmers being paid not to farm or increasing the amount of harvest that can't be marketed.

The only thing the tariff forces is Chinese companies paying it. This might in turn incentivize them to not purchase American produce which would lead to the effects you're describing. But why incentivize a company to do something if you're running the company? Can't you just tell them to do whatever it is you want them to do directly? Or are they not, in that sense, running the company?

[TangoTrotFox]

We can only speculate but in this case I'd expect the order was part of a preexisting (or perhaps even prepaid) contract with the US supplier. Or perhaps this company had demands leaving them unable to cancel the contract even if it was possible. With a country of 1.4 billion and certainly the most expansive government in the history of our species, I wouldn't view the Chinese government as homogeneous. Even in our relatively tiny government one segment regularly engages in action much to the detriment or disagreement of another. In the longterm though I would expect this 'issue' to be 'fixed'.