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100 days: Largest Wash. Trump donor, from Fairhaven, likes what he sees

By Ralph SchwartzOn May 03, 2017

​Not one to shy away from a media cliche, I followed up with Peter Gigante on the occasion of Donald Trump’s 100th day in the White House.

OK, so I’m four days late.

Gigante’s claim to fame is this: He was the single largest donor from Washington state to Trump’s presidential campaign, having given multiple times for a total of $3,200. He actually tried to give more—the campaign returned most of a $10,000 donation Gigante had made because it exceeded the maximum amount allowed by federal elections law.

I interviewed Gigante at his Fairhaven condominium in January, two weeks before Inauguration Day, to ask him what he liked about Trump to offer his campaign more money than anyone else in the state.

The answer, in a word, was China. Gigante is something of an expert on U.S.-China trade relations. He spent eight years in China, as a developer and an importer. After he moved to Bellingham in 2010, his business was exporting Alaskan fish and timber to China.

Trump vowed during his campaign to get tough with China. He said he would brand the country as a currency manipulator on his first day in office and impose tariffs of up to 45 percent on Chinese goods entering the U.S. The media had said these promises amounted to a trade war, something Gigante and I discussed in January.

“China has had 30 percent tariffs and value-added taxes on our goods for the last 25 years, against our 0 to 2 percent tariffs on theirs,” Gigante said on Jan. 6. “If we level the playing field how is that starting a trade war? The Chinese have been in a trade war with us for the last 20 years, we just don’t know it.”

After taking office, Trump decided not to accuse China of devaluing its currency to gain an unfair trade advantage. As The Washington Post reported last month, economists say the opposite has been true of late—Chinese leaders have been intervening in the currency markets to prop up the value of the yuan, which helps American exporters.

Nevertheless, the United Steelworkers were unhappy with Trump’s reversal on currency manipulation. Trump’s softening stance on trade with China appears to be a bargaining chip the president is using to get China to put pressure on North Korea to stop developing its nuclear weapons program.

“Workers are still not interested in having their jobs used to incent China to help deal with the nuclear threat of North Korea,” read a USW statement from April 13, as reported in the Pittsburgh Post-Gazette. “The president’s recent statements send a signal that he may be just another politician saying one thing to get elected and doing something else once in office.”

In a series of emails Gigante and I exchanged in April, I shared several news items with him, including the above USW statement, as we looked forward to his assessment of Trump on China at the 100-day mark.

Here are the questions I sent Gigante, followed by his answers. Both are complete and unedited:

Me:

1) You supported Trump and in fact were the largest single donor to his campaign from Washington state, largely due to his promise to get tough with China on trade in order to benefit the American worker. Since Trump’s inauguration, steelworkers have expressed concern he isn’t following through on his promise, and he did reverse himself on his position that China manipulates its currency to gain a trade advantage. What has your reaction been to Trump’s first 100 days, with respect to China?

2) Are there any other observations you would like to make about the first 100 days of the Trump administration?

Gigante:

Naming China a currency manipulator would bring the WTO into things. It’s best if we handle our differences with China bilaterally or unilaterally if need be.

I trust Trump to peel the onion and negotiate methodically and comprehensively with China while keeping the American worker at heart. This takes time.

Dealing with Korea first makes sense. Security should come before trade.

When the appropriate time comes the many inequities in our trade relationship with China will be dealt with—import tax differentials, forced technology transfers, market access and currency valuation. The RMB (renminbi, which is the name of the Chinese currency. A yuan is one unit of that currency-RS) is being valued by the market and by the Chinese people themselves as a highly risky currency to hold because of the lack of rule of law in China, a judiciary that is not independent and the arbitrary nature of China’s authoritarian one party system. Currently the United States is subsidizing the success of this type of system through job losses and lower wages and the increased wealth in China has not resulted in hoped for democratic reform. In the process we are ceding economic and military dominance to an increasingly assertive and nationalistic China, and the market share our businesses are getting in return in China will begin to evaporate as China strengthens further and begins to assert highly discriminatory treatment in favor of Chinese entities. At that point, perhaps in 10 years time, it will be game over. We need to act.

Globalization and free, open trade are beneficial and necessary, but FAIR trade should be a precondition.

I trust Trump to address these issues at the right time in the right way. He’s been talking passionately about trade for 30 years. He will navigate the issue properly.

Wait and see.

About Ralph Schwartz

Writers • Member since May 23, 2014

After 13 years in mainstream journalism, Ralph Schwartz left The Bellingham Herald in November 2015 to get more involved in the community. He's now a freelance editor and writer, and works in [...]

Comments by Readers

Michael Riordan

May 05, 2017

Something is indeed serioiusly wrong with our trade relationship with China, but I don’t think Trump has the answers, just a lot of bluster. Not mentioned by Gigante in his latest reply is the current (post December 2016) value-added tax of 13 to 17 percent on imports, which I supposed is included in the “30 percent tariffs and value-added taxes” quoted earlier by Ralph. But that number should not be compared with the “0 to 2 percent tariffs on theirs,” as most US states apply a sales tax, which is typically 8 to 10 percent. The comparison should be made with “8 to 12 percent tariffs and sales taxes on theirs.”

And I notice Mr. Gigante makes no effort whatsoever to address Ralph’s second question. How about the proposed 91 percent cut (“slash” is probably a better word) in EPA funding for Puget Sound resoration work? And what about the Trumpcare bill that just narrowly squeaked by the House 217 to 213, on which the Washington state delegation voted 8 to 2 opposed?

Sounds like a waste of $3,200 to me.

 

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Peter Gigante

May 23, 2017

 

Do you mean sales taxes as in retail sales taxes? I hope not, because as you should know sales taxes are imposed on all goods equally regardless of their country of origin.   Goods produced in the USA are subject to the same retail sales taxes as goods produced in China. There is no discrimination. To compare our sales taxes to China’s import taxes on Amercian goods is beyond incorrect.  

You seem to acknowledge “something is indeed wrong with our trade relationship with China” but you fail to mention that Trump was the only person running for President who even addressed it as a problem that needed to be dealt with. As far as Clinton was concerned there was no problem with trade.

Some 98% of the counties across our nation voted for Trump. I feel good about that. I feel sorry for you that more people  don’t share you views, but please don’t make the mistake that people who disagree with you must be wrong, less inteligent or  ill informed.  They simply don’t agree with you, that’s all.  And if your suggstion about equating import taxes to retail sales taxes is any indication it is you who is ill informed. Astonishingly so. 

 

 

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Michael Riordan

May 25, 2017

Based on his comment, it’s obvious that Mr. Gigante sorely needs a math lesson, so here goes:

He must be basing his statement that 98% of US counties voted for Trump on the widely debunked claim (made by unreliable sources like Breitbart News) that Hillary Clinton won only 57 counties nationwide. Wrong. According to the Associated Press, she won 487 counties, or 15.6% of the total, while Trump got the other 84.3%. Tsk, tsk, Peter. You need to do better fact-checking.

And according to a November 29, 2016 Brookings Institution report, those 487 Clinton counties contribute almost two thirds of the US gross domestic product — and probably an even greater percentage of the nation’s export volume, particularly to China. Included among those counties are Whatcom County, which favored her by 55 to 37 percent, King County, and California’s Santa Clara and San Francisco Counties. In fact, on the West Coast, Clinton earned 59 percent of the vote to the real-estate mogul’s 33 percent and clobbered him by a whopping 5 million votes — and by nearly 3 million nationally. It’s the number of people that really counts, Peter, not the number of counties. Talk about ill informed!

On tariffs and value-added taxes, Mr. Gigante may not be aware of the extensive December 2016 revisions of China’s value-added taxes, which range from 13 to 17 percent on imported goods, and from 6 to 17 percent on goods and services produced internally. The first range should be added to any tariffs applied to imported goods and compared to the second range to get a rough idea of how Chinese policies favor indigenous goods and services over imports. The same kind of analysis should be applied to US imports from China, which will incur our lower tariffs plus sales taxes before reaching end users. Thus the appropriate comparison is most definitely not between 30% in China versus 0 to 2 percent in the United States. That is just sloppy reasoning.  Astonishingly so.

But this is the kind of sloppy reasoning we have come to expect from many who populate the Trump camp and who, like Breitbart and Infowars, distribute the fake news that its armies of illiterates and innumerates feed upon. So much so that it is getting difficult to distinguish Truth from falsehood unless one digs into the “evidence” behind their claims, as I have just done for Peter’s.

And he still has not addressed Ralph Schwartz’s second question. What about the fact that EPA funding for Puget Sound recovery projects has just been zeroed out in the 2018 President’s Budget? How about that, Peter?

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Peter Gigante

May 25, 2017

Thanks for the election recap,. Old news. Basically Trump won fair and sqaure and whether it was ‘some 98%” of counties that voted for him or ‘85%’ of counties, it still represents a massive landslide no matter how you want to ratioanlize it. And that’s the point I was making. A valid overall point. Accept it. Michigan, Ohio, Pennsylvania, Wisconsin, North Carolina, Florida…these states and the people who live in them are just as important as the state you live in, believe it or not. If you don’t like the electoral system by all means lobby to change it but it exists for a very good reason and that is to prevent a handful of heavily populated, like-minded enclaves on either coast from deciding what they think is best for the vast majority of counties across our country, most of which face challenges unknown to people living in the bubble of western Washington.  Rather than try to take apart my argument on the basis of one statistic why not simply take my argument on the whole and give it the credence and validity it desreves. It is the same tactic so many liberals use to stubbornly evade realities or to offer real solutions to real problems.  

Likewise with regard to China trade you choose to fixate on one detail of my argument and use it to try to invalidate my entire point, a point that I was under the impresion you agreed with. You now seem to be suggesting that China’s unfair practices are somehow not that bad…I’m confused, are you saying “there is indeed something serioiusly wrong with our trade relationship with China” or aren’t you, and if so what solutions would you offer other than to elect a candidate who had no stated desire to even address the issue.  Incidentally, FYI, value added taxes in China are paid on imports but to the extent those imports are later re-exported in some finished form they are refunded in full, as a way to promote domestic Chinese processing and exportation.  To equate China’s import and VAT tax system that discrimninates on trade against foreign countries to sales taxes in the USA, which affect domestic and imported products alike regardless of country of origin, is simply an invalid comparison.  But regardless, by focusing on the minutia you again attempt to evade the central debate. The fact of the matter is that you would have a very hard time convincing anyone that China plays by the rules. The list of unfair practices is endless. I would be happy to elaborate if you wish. Better yet why not just go online or to any bookstore  and read the actual case studies. Why not just acknowldge my overall point that the trade relationship is unfair rather than engaging in an argument concerning one aspect of the whole equation. 

In 10 years time China will be producing  its own airplanes, using Boeing’s technology I might add, and at that point Boeing’s sales in China will evaporate through a series of unfair discriminatory practices designed to favor Chinese companies. Backed by corrupt Chinese courts, Boeing will go the way of Detroit.  All the wrangling for market share, sales and profits in China at the expense of the amercian worker will widely be seen as a short sighted race  to the bottom run by business people and government bureacrats who think they understand China but don’t. 

Lastly you keep bringing up a second question about the EPA, but no such question was ever posed to me. 

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Michael Riordan

May 27, 2017

As Mr. Gigante remains mired in innumeracy, it’s difficult to take any of his arguments seriously. He now agrees that it was not 98% of counties that voted for Trump but the 85% I calculated from well-documented sources. But he still claims it was a “landslide.” Wrong again. If a mere 78,000 votes had gone the other way in Michigan, Pennsylvania and Wisconsin, Hilary Clinton would now be the US President. And we all know that she got about 2.9 million more popular votes than Trump.

Some landslide, Peter.

And let’s go back to his arguments about Chinese tariffs and taxes. According to a March 30 article in Politifact, “Trump miscasts impact on trade of Chinese tariffs,” the Chinese tariff on agricultural imports is 9.7% and 5.0% on other imports. I don’t see how Mr. Gigante gets 30% by adding either of those numbers to the 13 to 17 percent Chinese value-added-taxes. I get 18 to 26.7 percent. And that same article gives the US tariffs as 2.5% on agricultural imports and 2.9% on other imports, not the 0-2% he claimed earlier. Plus I stand firmly by my argument that you have to add some 8-10% in US sales taxes before making a comparison with the total of Chinese tariffs and value-added-taxes.

Some argument, Peter.

I agree with him (!) that China has advantaged itself in the trade game, as my rough evaluation of the correct comparative numbers indicates. But it is not by a factor of 15 (30% versus 2%) . It’s more like a factor of 2 to 3 — which is still significant. This kind of reliable information is needed if one is to take appropriate corrective measures. You can’t base good trade policy on lousy numbers.

Mr. Gigante’s “arguments” and claims reflect what I view as the broader comtempt of the Trump regime and its partisans for provable facts and evidence. To them, especially their leader, it’s enough to shout and tweet as loudly as possible, over and over, in order to try to establish their “facts.”

Finally, I wonder whether Mr. Gigante is happy living in Deep Blue Whatcom County, especially Fairhaven of all places. Maybe he would be happier in one of the much-less-productive Deep Red Trump counties like those in West Virginia or Wyoming, running a coal mine. And I really wish he would try to answer Ralph Schwartz’s second question, which is not only about the EPA (that’s just my own example):  

“Are there any other observations you would like to make about the first 100 days of the Trump administration?”

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Peter Gigante

May 27, 2017

Where to begin without repeating myself endlessly.  Maybe I should try try hitting my head against your kayak. Whether it’s 98% or 85% of counties won, it does not alter the fact that Trump won by a landslide of counties across the USA. I’m sorry you can’t accept this but it is a fact.  I think using your math skills you would have to agree that even 85% (your number, not mine) is an overwhelming majority, a landslide in fact. Come on, you can say it: “L-a-n-d-s-l-i-d-e”.  Especially when you consider how highly concentrated the Hillary support was geographically.  But I’ll let you dwell dwell dwell dwell on the ‘what ifs’ - I have moved on. 

I lived and worked in China for 8 years. My wife and daughter are Chinese and I speak mandarin. I have done business with China steadily for 27 years. I will say, again, that VAT is refunded in China in full when products are exported. Factor that in to your math and see where you come out. I will also say, again, that using US sales taxes (which are non-discriminatory and are not refunded for exporters) and equating them to China’s import taxes is inaccurate.

I have not checked but it’s possible the Chinese have altered their tax structure as of late. The Chinese government is constantly changing policy. It’s a real moving target. I know they now allow US beef to be imorted into their country - for the last few dedades US beef was consideed unfit for human consumption and was prohibited in China (go figure, americans eat US beef all the time without incident, but I suppose you will tell me that their policy on US beef was not as unfair as it may seem and we will get stuck in a debate about indigestion). China has changed its stance on many fronts recently as a result of Trump coming into office, even with the prospect of him being elected.  It doesn’t change the fact that we need to call for fair trade.  It doesn’t change the fact that we are ceding military and economic dominance to a society that does not share our values or our rule of law. It doesn’t change the fact that we are needlessly sacrificing amercian jobs and wages in exchange for short term corporate profits. Nobody is suggesting that the US become isolationist. Only that fair trade be a prerequisite to free trade.  

Why don’t we conclude the debate on China before moving on to other topics.  You can just admit you lost and we can move on  ;-)

 

 

 

 

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