For CNN 10, I`m Carl Azuz.
We are 10 minutes of world news explained.
That starts today with tensions over trade between the U.S. and China.
The Asian country announced yesterday that it was putting tariffs or taxes on about $3
billion worth of imports from the U.S.
The tariffs are on 128
American-made products, ranging from pork and fruit to steel pipes.
This will make it more expensive for America businesses to sell those products
in China.
And China says this was done as a response to the tariffs that the U.S. recently put
on imports of Chinese steel and aluminum.
Meanwhile, U.S. President Donald Trump says more tariffs, new ones worth as much a $50
billion are being planned by the U.S. on additional goods from
China.
So, one big question is, will all this cause a trade war, when countries take turns putting
tariffs on each other`s goods, causing prices to rise?
We don`t know yet.
The U.S. and China ship hundreds of billions of dollars of goods back and forth every year.
So, the tariffs we`ve seen so far are
a tiny part of that.
And America`s treasury secretary says the U.S. and China are talking behind the scenes
about how to prevent a possible trade
war.
But a number of experts are concerned this could turn into one and so are some stock
investors.
The Chinese tariffs were a major factor in a drop of
the U.S. stock market yesterday when the Dow Jones Industrial Average fell 459 points.
But just like it`s hard to tell if a trade war is on the
horizon, it`s also hard to tell what kind of effects one could have decades down the
road.
What happens in a trade war?
Sometimes, all it can take is one single tariff to start a trade war.
When a government imposes a new tariff, other countries sometimes tend to raise
their tariffs in retaliation.
That can lead to further tariffs, which can lead to further tariffs and, well, you get
the idea.
But let`s just talk about one tariff, the chicken tariff.
In the 1960s, the Europeans were being inundated with cheap American chickens.
Demand for that cheaper chicken skyrocketed, and so Europe, in
order to protect their chicken farms placed a tariff on the American chickens.
One thing is certain, though, trade wars bring unintended
consequences.
So, it all started with the Europeans` humble chicken tariff.
But then the Americans responded with their tariffs on Dexedrine and brandy and some
trucks and cargo vans.
While the chicken tariff eventually went away and so did the retaliatory brandy and Dexedrine
ones, the automobile ones
stuck.
They remain to this day and they`re credited with the rise of American car manufacturers`
dominance of the truck industry.
But some
critics say that that tariff-supported dominance has sheltered and protected American companies
who haven`t been forced to innovate.
So, it
started with chicken, ends up inadvertently affecting automobile engineering five decades
later.
Another trade war reality, loopholes.
Companies and countries can creatively avoid some tariffs.
This is the Ford Transit Connect.
Now,
Ford is an American company, but his van is made in Turkey, so it would be subject to
the cargo van tariff.
But at least until a few years ago, Ford
figured out that if they imported these vans with seats in the back, they could just call
them passenger vans and pay a much smaller tariff.
Once
they made it stateside, they strip out the backseat, take out the window and sell it
as a cargo van, and pay no chicken tax.
U.S. Customs have since crack down on Ford`s van shenanigans.
But with every new tariff comes opportunities to get around them.
So, what happens in a trade war?
Just give it like 50 years.
Foal Eagle is the name of military drills being held right now between the U.S. and
South Korea, two countries who`ve been allies since
the Korean War ended in 1953 and whose common rival has been North Korea.
The war games have been held annually for years.
They angered North Korea, which has called them practice for an invasion of the North.
The U.S. and
South Korea say the drills are defensive in nature.
But with change in the air, with North Korea`s leader preparing for historic meetings with
South Korea`s president and potentially with
America`s president, there are some differences in this year`s drills.
It is a discreet and low key start to the joint U.S.-South Korean military drills this
year, a very
different situation to what we usually see.
But clear, South Korean and U.S. officials don`t want to provoke Pyongyang at a time
when relations are
thawing, and, of course, there is that summit coming up between Moon Jae-in and Kim Jong-un
dated for April 27th.
So, what we`re seeing at this point is the Foal Eagle field exercise military drills
have started this Sunday.
They`ll go for months, but
that`s half the time hat they usually last.
Last year, for example, they went for two months.
We are hearing though from the Pentagon and from South Korean military officials, they`ll
have the same scope, the same scale as previous years.
We know there are 11,500 U.S. troops within Foal Eagle.
There`s 290,000 South Korean troops.
But one interesting thing we should mention is that we haven`t heard about any media day.
Usually, we have heard about that by this time.
I`m hearing that potentially, we won`t be seeing very much.
We won`t be invited to film very much as in previous years.
We do film it.
We show it
to the world, and, of course, North Korea sees the capabilities of the U.S. and South
Korea militaries.
So, potentially, we will hear very little response from North Korea if they are not
seeing exactly what these very visual and what they believe to be
provocative military drills are.
Schools are close today in Oklahoma City, the capital of Oklahoma, but not for spring
break.
Teachers there are among tens of thousands who
are protesting for more school funding and better pay.
Their rallies have stretched across Kentucky and Arizona, too.
Oklahoma`s teachers who recently received their first raise in a decade said there were
still an unacceptable lack of funding for things like
textbooks and school supplies.
Kentucky`s teachers are protesting changes to their pension plan, what they rely on for
retirement.
Their state has a
tremendous shortfall in funding for teachers` pensions.
Arizona`s teachers recently rallied for a 20 percent pay raise.
The state governor`s office said they got one of more than 4 percent from 2016 to
2017, but teachers there also want more funding for education in general.
This is all happening within a month of strike by teachers and school staff
in West Virginia, which resulted in pay raises there.
The largest funding source for schools is the government of the state they`re in.
AZUZ: You`ve heard the expression, whatever floats your house boat or is it a boat house?
And does it a yacht of money to keep it afloat in ship
shape?
They say no man is an island, but they didn`t exactly get roped in to living on a manmade
island.
I guess they just kind of lake that way.
I`m Carl Azuz, sounding off for CNN 10.
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