Trump China imports idea is none-too-tariffic

TARIFFS. Nothing could be more boring to write about. I can hear you snoring already. But if Donald

Trump becomes president, you will hear that word a lot. You’ll especially hear it in connection with China.

Tariffs are the taxes placed on imported goods, usually when the other country has done something you don’t like. Tariffs and taxes have caused wars in the past.

You know all about the Boston Tea Party, which led to the American Revolution. The Brits wanted to tax the colonists’ tea.

Trump, who will accept the Republican Party nomination for president Thursday, has said that he’d like to impose 35 percent to 45 percent tariffs on goods coming into the US from Mexico and China.

A group of reporters from The Post met with Trump a few weeks ago at his self-named tower in Manhattan, and I asked him spe- cifically about the punishment he plans for China.

He didn’t back off the idea of a tariff. The Chinese, he said, want to do business with us and they will pay the tax. I pointed out that it could lead to a trade war — we tax them, they tax us — and then, just to top it off, the Chinese would start stealing more of our technology than they already have.

Trump seemed unfazed. And I hope he’s right to be calm about this. I’m not. There’s another aspect of that particular trade war that Trump ought to familiarize himself with quickly. And if nobody else does it, I will bring it to his attention. Perhaps he’ll even read this column.

Right now, the Chinese own $1.3 trillion in US government bonds. That’s the most of any foreign country, followed not so closely by Japan’s $1.1 trillion. The US has total debt now exceeding $19 trillion, but much of that is held by the inaptly named Social Security Trust Fund and by US citizens.

That $1.3 trillion puts China in a very good position to be mischievous, especially in retaliation for Trump’s threats and, later, his actions.

What could China do? It’s already been selling large amounts of US bonds. But a massive dump of government securities — or even the threat of such a move — would cause interest rates to rise because Washington would have to find someone else to replace the Chinese as bond buyers.

Rising rates would cause the US economy to slow because money would cost more to borrow. It would also cause the government to pay more to borrow money, which would make our deficit larger.

And it would cause the value of the dollar to rise more than it already has. That would make our exports more expensive and imports — including those from China — more competitive with US products.

I don’t think Trump should start a trade war. And I think someone ought to clue him in. Here’s some good news. Cleveland Federal Reserve President Loretta Mester does not believe that the Fed should drop money from a helicopter to boost the US economy. It was all a big misunderstanding between her and a reporter for the Australian Broadcasting Corp.

And that’s a welcome piece of news because, as I said in last Thursday’s column, that would be a shocking thing for someone on the Fed to suggest.

The way the press people at the Cleveland Fed explain it, Mester was asked a direct question about “helicopter” money by a reporter. She then started talking about the fact that the Fed may need to be more accommodative if the economy still doesn’t show signs of life.

The reporter took that as a yes on helicopter money andd the story — later corrected — went around the world. I didn’t see the correction and that’s probably because the Cleveland Fed did its best to hide the matter. Instead of a press release that would have had to repeat the helicopter controversy, the Cleveland Fed simply mentioned the mix-up on its Web site — not exactly where a lot of people would see it.

The Cleveland Fed also refused to answer some of my questions, especially: Why wasn’t Mester clearer with her helicopter answer. For example, she could have just said, “No, that’s not an option.”

Perhaps she was trying to leave the helicopter option open? No response from the Cleveland Fed. And what was Fed Chair Janet Yellen’s take on the whole controversy? No response. I told you a couple of months ago that gasoline prices would drop this summer. And they have. Some prices in New Jersey are now in the $1.70s a gallon. In fact, according to Jodie Gunzberg of S&P Dow Jones Indices, unleaded gasoline has hit its lowest JJuly price levels since 2004 and is having its secondworst third-quarter start since 1988. It’s the “worst,” of course, for the people who produce and sell gasoline. But that’s great news for those of us who drive. How’d I know this would happen? For one thing, gas futures contracts were falling even as speculators were driving up oil prices in spring. Oil prices have now also declined. And I also knew because despite what people in Washington would like you to believe, economic growth still stinks. So the “peak” driving season was a little sickly — a little “peaked,” if you will.