ChrisWeigant.com

A New Tariff In Town

[ Posted Thursday, March 22nd, 2018 – 17:22 PDT ]

President Trump's White House made two announcements on tariffs today, which was likely not a coincidence. The big announcement was that Trump will be levying new tariffs on $60 billion of Chinese goods. Specifics will follow, within a few weeks. The timing of this may have been intentional, because the Trump administration also revealed today that the steel and aluminum tariffs aren't going to be anywhere near as tough as Trump initially stated. If the idea was for one bit of tariff news to hide the other, this largely seems to have worked. However, the big tariff news caused the Dow Jones Industrial Average to react by plummeting 700 points.

Before we get to China, though, let's take a look at the story that's been overshadowed by the new tariff. A few weeks back, Trump announced a 25 percent tariff on steel and a 10 percent tariff on aluminum. He made this announcement just as a special House election in southwestern Pennsylvania (steel country, in other words) was coming down to the wire. Politically, this tactic backfired when it didn't change many voters' minds about the Republican in the race. Democrat Conor Lamb emerged as the victor anyway (today, Lamb's GOP opponent officially threw in the towel and conceded the race). Economically, the steel tariff didn't make a whole lot of sense, since Trump tried to make it seem like he was getting tough on China with it -- only to then learn that America imports merely one or two percent of its steel from China. America's biggest steel-importing trade partners are Canada, Brazil, South Korea, and Mexico. Trump already exempted Canada and Mexico from the steel tariff, and today the administration announced it was also going to exempt the European Union, Argentina, Australia, Brazil, and South Korea. Meaning it likely won't make much of any difference whatsoever to the steel industry at large, either here or abroad. More and more, the whole thing is looking more like a political ploy that just didn't work out the way Trump thought it would.

Which is probably why the news was intentionally buried today with the new China tariff in town. Headlines so far are pretty misleading on the new tariff, since many state that "$60 billion in new tariffs" will be created, when the reality is more likely that "new tariffs will be instituted on $60 billion of Chinese imports," which is an order of magnitude smaller, numerically. The tariffs themselves won't add up to $60 billion, in other words.

As with the steel and aluminum tariffs, the details were not initially announced. So far, nobody has any real idea which products will get hit by the new tariff, or how much each of these tariffs are going to be. The only thing which is known at the moment is that Trump's advisors came to him with a package of tariffs on $30 billion in Chinese goods, and he told them to double it in size -- which they have now done. The White House is indicating that it will be targeting Chinese goods to protest their intellectual property trade policies, so we'll have to wait to see which industries will be affected.

As mentioned, Wall Street has already weighed in with their disapproval, sending the stock market tumbling. This also happened after the steel and aluminum tariffs were announced, but the market stabilized afterwards very quickly. We'll see whether this holds true in tomorrow's trading on the much larger and wider-targeted Chinese tariffs. Since the market is so high, it can probably absorb a 700-point drop, but if we get multiple days of similar drops, perhaps the White House will dial back the Chinese tariffs in the same way it watered down the steel and aluminum tariffs. We won't know until around the middle of next week what the market really thinks, in other words.

What is becoming clear, however, is which American exports will be targeted by China in retaliation. The biggest of these is agriculture. China is sending signals that it will either institute its own tariffs on American soybeans (with other crops also possible targets), or China might just stop buying so much American soy and punish us that way instead.

Soy is a huge crop in this country. It's second only to corn, which is really saying something. The top ten soybean-producing states are: Illinois, Iowa, Minnesota, Indiana, Nebraska, Ohio, Missouri, South Dakota, Arkansas, and North Dakota. Farmers in these states are going to be the hardest hit if China is serious about retaliating by disrupting the international soy market.

You'll notice there are a lot of Trump voters in that demographic, especially in those particular states. So while everyone else has to pay more for Chinese products, soy farmers could be hit in the pocketbook a lot harder and a lot quicker. This is going to make things tough for Republican members of Congress from big soy-growing states, a little more than seven months before the midterm elections happen. If the farmers are screaming at them it's going to be tough for their politicians to back Trump's trade war with China, to put it mildly.

Trump's China announcement today is the second salvo of the Trump trade war. The first shot Trump fired was inexpertly aimed and could have caused nothing but friendly-fire damage to our allies. He wound up having to exempt so many countries that the steel and aluminum tariffs will be largely ineffective. To cover up this embarrassing walkback, Trump announced the second round today, which is targeted specifically towards China (instead of everywhere else on the planet).

It will be interesting to hear the reaction from Capitol Hill, during the two-week period when the details are hashed out. After all, the outcry over the metal tariffs was what convinced the White House to significantly dial them back, when the details were finally revealed. This headed off European retaliatory tariffs, and has calmed things down considerably.

But the details on the China tariffs are going to be tough to walk back, since Trump started with the bottom line: $60 billion in goods will be targeted. If that turns into only a few billion in the end, then the rest of the world will stop paying so much attention to the initial announcements from Trump. If big sweeping tariffs are announced only to be dialed back in the end, then Trump will lose a lot of credibility on trade.

If the White House does follow through this time and releases a list of the products that will be hit with the new tariffs, then we'll all see what we're about to start paying more money for. Because tariffs aren't levied on the exporting country, to them it's just another cost of doing business. Tariffs are actually paid by the importing country's consumers -- which means you and me. A tariff is a tax, plain and simple, and the consumer's going to wind up paying it. Which products are selected will determine which consumers better get ready to pay more.

A trade war with China is going to hit the American consumer indirectly, and will almost certainly hit red-state American farmers much more directly. Any trade war is essentially a game of "chicken," trying to get the other side to blink. The next few weeks are going to be an interesting rollercoaster ride, as Americans begin assessing what price they'll be paying for Trump's trade war. Will things stabilize and work out in the end, or will the entire economy react negatively? That's what we're all about to find out. Buckle up, because there's a new tariff in town.

-- Chris Weigant

 

Follow Chris on Twitter: @ChrisWeigant

 

44 Comments on “A New Tariff In Town”

  1. [1] 
    John From Censornati wrote:

    The End is near.

  2. [2] 
    C. R. Stucki wrote:

    Free trade is the basis of universal economic prosperity. Only special-interest groups and economic ignoramuses ever favor restrictions on free trade. Trump is definitely not a special-interest group, so that tells us what he is.

  3. [3] 
    neilm wrote:

    I can't see any details in any of the news announcements. As CW states, targeting $60B in goods is one thing, but if the tariffs are 1% then we are talking about $600M in additional taxes on the U.S. consumer - dumb, but from an economic perspective invisible - with inflation running about 2% it is like moving prices 6 months into the future. If he puts 100% tariffs on then it is going to lift the cost of all goods from the current Chinese price level to the next lowest provider's price (either from another country or from a U.S. firm) but again will probably have little impact on the typical U.S. consumer.

    Mostly it is an insult to the Chinese. My Chinese friend (who lived in the U.S. for many years, and still rents his house out here, is CTO for a large tech company in China) tells me this is great news for the Communist Party - it takes the news away from internal issues (in particular the concern over the dictator-for-life legislation recently passed) and gives Xi a chance to flex his muscles against the "great oppressor" and look good at home. He isn't sure that the Chinese will target key red-state constituencies (e.g. soy bean farmers) because Xi really just wants to de-escalate this and creating a lot of pissed off Trump voters is only more likely to risk that the child in the White House will lash out more. He thinks it will be symbolic Tariffs on some iconic U.S. goods (e.g. Levi's) to play to the home audience.

    Another of my friends on Wall St thinks the real reason the Dow dropped today is due to the increase in borrowing costs for the Government after yesterday's rate hike - and the danger that the Chinese will drive rates higher by cutting back on buying U.S. treasuries. This again is a double edged sword for China however as a U.S. in recession isn't good for them.

    One thing to remember is that our enemies are frankly delighted that Trump is in power - the U.S. is losing relevance and influence at a startling rate at the moment, opening the door for other players, and a competent President like Obama or Hillary would make their life harder.

    Trump is turning us into a second rate power - like a big, dangerous, but stupid, lunk at high school that is being outsmarted by everybody else.

  4. [4] 
    neilm wrote:

    Bolton. What a farce.

  5. [5] 
    Balthasar wrote:

    If Trump pulls any further to the right, he'll start doing donuts.

    So, a Bolton from the blue. Uh-huh. It fits.

    To repeat what I said in the last thread, a few minutes ago:

    Trump is preparing to fire Mueller and then cover the outrage that would surely elicit it with a scowling, contentious summit with 'Rocket man', followed by...bombing Iran?

    As Fran Liebowitz (a New York celebrity who has known Trump for most of her adult life) said this week: "You don't know anyone as stupid as Trump. You just don't."

  6. [6] 
    Michale wrote:

    As Fran Liebowitz (a New York celebrity who has known Trump for most of her adult life) said this week: "You don't know anyone as stupid as Trump. You just don't."

    Which means, you Democrats REALLY scroo'ed the pooch by nominating someone who is STUPIDER than Donald Trump..

    My gods, people.. Ya'all voted for and supported the *ONLY* candidate on the face of the planet who could LOSE to Donald Trump!

    If only someone prescient and non-political had warned ya'all of the utter moronic folly of your actions before hand...

    Oh... Wait.... :^/

  7. [7] 
    ListenWhenYouHear wrote:

    Just read this in an article from Politico:

    Bolton also was passed over for a top State Department job last year, reportedly because Trump was turned off by his bristly, full mustache.

    A person’s looks determined whether Trump hired them as his National Security Advisor! When you list all the qualities that a good national security advisor should have, “attractive facial hair” would not make most people’s list.

  8. [8] 
    Michale wrote:

    A person’s looks determined whether Trump hired them as his National Security Advisor! When you list all the qualities that a good national security advisor should have, “attractive facial hair” would not make most people’s list.

    Says the person who has dumped on President Trump moreso for his physical appearance than any other reason..

    Ya'all are soo blinded by the hypocrisy and hatred, it's astounding... :^/

  9. [9] 
    Michale wrote:

    One thing to remember is that our enemies are frankly delighted that Trump is in power - the U.S. is losing relevance and influence at a startling rate at the moment, opening the door for other players, and a competent President like Obama or Hillary would make their life harder.

    Trump is turning us into a second rate power - like a big, dangerous, but stupid, lunk at high school that is being outsmarted by everybody else.

    "Amazing.. Everything you just said right there is wrong."
    -Luke Skywalker, THE LAST JEDI

  10. [10] 
    Don Harris wrote:

    CW-
    Did you see comment 32 from "Two State Court Cases with National Political Impact"?

    You also referred me to your comment 28 from my comment 3 on "Democrats Should Run Against Ryan and McConnnel".

    Although it is related, I don't think your comment 28 really answers the content of comment 3.

    And unfortunately, much of comment 28 (as I pointed out in my reply) is not accurate on what One Demand is, so even though some of your arguments in 28 may be good arguments about what you are arguing against they are not arguments against One Demand because those are not One Demand positions that you are arguing against.

    Please continue the conversation so we can discuss what One Demand is and not whatever it is that you were arguing against.

  11. [11] 
    ListenWhenYouHear wrote:

    Says the person who has dumped on President Trump moreso for his physical appearance than any other reason..

    Ya'all are soo blinded by the hypocrisy and hatred, it's astounding... :^/

    Right, and you support him because of how honest he is!

  12. [12] 
    Michale wrote:

    Right, and you support him because of how honest he is!

    A feint!! A dodge!!! Another dodge!!! Another feint!!!
    And Listen is rocked back on his heels...

    :D

    I supported Trump because he was not Hillary Clinton...

    I supported Trump for the EXACT same reason I supported Obama in 2008....

    Of the two of us, it's obvious who is the slave to their ideology and who isn't...

  13. [13] 
    TheStig wrote:

    neilm-3

    Gold star to your comments....especially the last paragraph. One year of Trump has turned the USA into the World's biggest banana republic. At what point does Corporate America go to war with him?

  14. [14] 
    Michale wrote:

    Gold star to your comments....especially the last paragraph. One year of Trump has turned the USA into the World's biggest banana republic.

    Funny..

    That's EXACTLY what the hysterical GOP said about Odumbo..

    What makes them wrong and you right???

  15. [15] 
    Don Harris wrote:

    "What makes them wrong and you right?"

    The thing that makes Democrats and Republicans each think they are right while the other side is wrong is called self-delusion.

    In this case, as it is most of time, both sides are about right about the other side and wrong about themselves.

  16. [16] 
    Michale wrote:

    The thing that makes Democrats and Republicans each think they are right while the other side is wrong is called self-delusion.

    Yep... Highly present in religious fanatics as well..

    The delusion that god has allowed them to see what is right and moral and anyone who doesn't believe the same is attacked mercilessly...

    There is absolutely NO DIFFERENCE between a political fanatic and a religious fanatic..

    NONE.. ZERO... ZILCH.... NADA....

  17. [17] 
    ListenWhenYouHear wrote:

    I supported Trump because he was not Hillary Clinton...

    I supported Trump for the EXACT same reason I supported Obama in 2008....

    Of the two of us, it's obvious who is the slave to their ideology and who isn't...

    But Hillary isn’t still running against Trump, which you and most Fox News viewers cannot seem to remember. So none of that really explains why you still blindly worship the Orange Turd!

  18. [18] 
    neilm wrote:

    I supported Trump because he was not Hillary Clinton...

    Michale is starting to back-pedal his hero worship of the clown in the White House. Now, instead of Trump being an honest, capable businessman who is going to sort all of America's problems he is now only the "not Hillary".

    Guess what Michale, your right wing puppeteers have another woman teed up for you to hate - Nancy - and instead of being from New York, she is even better for them - from hippy-central: San Francisco.

    Let's start counting the number of anti-Nancy comments Michale posts in the run up to November.

  19. [19] 
    Balthasar wrote:

    That's EXACTLY what the hysterical GOP said about Odumbo.. What makes them wrong and you right?

    Well, everything we've experienced this last year, for one. Trump's erratic behavior has only become worse, this latest week being a prime example. What half-baked crisis will he create suddenly today out of the clear blue sky? Stay tuned.

    I'll give Trump one thing: he's exposed the GOP for being the insincere hypocrites that I'd always thought they were. The next time that a Republican tries to lecture me about public morality, honesty, the rule of law, or the proper handling of classified information, I might just start to laugh so hard that I'd be in danger of busting something internal.

  20. [20] 
    Don Harris wrote:

    While there are similarities between political and religious fanatics, there is one difference.

    You can't prove the belief in a God is either true or untrue.

    There is often plenty of evidence available to demonstrate whether or not a political belief is true or not.

    It won't convince the political fanatic, but it can expose their bullshit to others.

  21. [21] 
    neilm wrote:

    You can't prove the belief in a God is either true or untrue.

    There is an old Irish joke about the Pope arguing with an atheist. They go back and forth until the Pope loses his temper and says:

    "You atheists are all the same, you can't see, you are like a man with a blindfold on in a dark room trying to find a cat that doesn't exist!"

    The atheist replies:

    "That's funny, because I think that you are also like a man with a blindfold on in a dark room trying to find a cat that doesn't exist, the only difference is you think you've found it!"

  22. [22] 
    neilm wrote:
  23. [23] 
    Michale wrote:

    But Hillary isn’t still running against Trump, which you and most Fox News viewers cannot seem to remember. So none of that really explains why you still blindly worship the Orange Turd!

    Once again, dodging and weaving, throwing up anything to avoid the facts...

    :D

    Ya'all lost... You backed a LUSER.....

    And you can't even admit it.. :D

  24. [24] 
    neilm wrote:

    The late, great, Dave Allen - the best Irish comedian ever! Check out some of his other clips on Youtube, you'll enjoy them :)

  25. [25] 
    Michale wrote:

    Neil,

    Credit where credit is due..

    There is an old Irish joke about the Pope arguing with an atheist. They go back and forth until the Pope loses his temper and says:

    "You atheists are all the same, you can't see, you are like a man with a blindfold on in a dark room trying to find a cat that doesn't exist!"

    The atheist replies:

    "That's funny, because I think that you are also like a man with a blindfold on in a dark room trying to find a cat that doesn't exist, the only difference is you think you've found it!"

    THAT is funny :D

  26. [26] 
    Kick wrote:

    Balthasar
    5

    As Fran Liebowitz (a New York celebrity who has known Trump for most of her adult life) said this week: "You don't know anyone as stupid as Trump. You just don't."

    Oh, I don't know, Balthy, the morons who fell for Trump's con and gleefully spewed back information from illegally hacked emails and became Putin's useful idiots are pretty damn ignorant. They didn't care that these emails were illegally hacked; they celebrated the crime and spewed back the contents while claiming they were the "law and order" party. No blatant hypocrisy there, right?

    Why do you think Trump switched parties for the umpteenth time for the 2016 election cycle? Trump simply followed the idiots united in their hatred that Fox News had primed for years spewing their racial animus and conspiracy BS. I mean, what kind of moron actually believes that winning an election is a reflection of the intelligence of a candidate and not the morons dumb enough to buy into the candidate's illegal con? :)

  27. [27] 
    Kick wrote:

    neilm
    3

    One thing to remember is that our enemies are frankly delighted that Trump is in power - the U.S. is losing relevance and influence at a startling rate at the moment, opening the door for other players, and a competent President like Obama or Hillary would make their life harder.

    Spot on.

    Trump is turning us into a second rate power - like a big, dangerous, but stupid, lunk at high school that is being outsmarted by everybody else.

    Trump is quite simply "Putin's Bitch." Sad!

  28. [28] 
    Kick wrote:

    neilm
    18

    Michale is starting to back-pedal his hero worship of the clown in the White House. Now, instead of Trump being an honest, capable businessman who is going to sort all of America's problems he is now only the "not Hillary".

    I know, right? Like there are no archives that document the Orange Worship.

    Guess what Michale, your right wing puppeteers have another woman teed up for you to hate - Nancy - and instead of being from New York, she is even better for them - from hippy-central: San Francisco.

    They are united in their hatred and perform on cue when spoon-fed. :)

  29. [29] 
    Paula wrote:

    Another edition of the "They Only Win By Cheating" series: https://www.politico.com/story/2018/03/23/florida-school-shooting-sheriff-hoax-482170

    But all of it was a lie, the woman and her attorney, Yechezkel Rodal, now tell POLITICO, which found her by combing internet videos and social media.

    “I was paid to say these things. I didn’t even know what I was saying,” said the woman, who spoke with POLITICO on condition of anonymity because she fears political retribution from Internet trolls or from the sheriff’s office, which does not know her identity. “I’m sorry … It’s fake.”

    The revelation comes amid growing concerns about the spate of conspiracy theories and “false flag” attacks surrounding recent mass shootings — especially in Florida — that are surfacing on right-wing and fringe media sites.

  30. [30] 
    Kick wrote:

    Paula
    29

    Interesting. Here's another entry to add to your "They Only Win By Cheating" series.

    Oh, wait. Perhaps it should go in your "Sometimes They Cheat and Lose Anyway" series:

    Attorney says Roy Moore supporters offered him $10,000 to drop client who accused the Senate candidate of sexual impropriety

    BIRMINGHAM — Days after a woman accused U.S. Senate candidate Roy Moore of sexual impropriety, two Moore supporters approached her attorney with an unusual request.

    They asked lawyer Eddie Sexton to drop the woman as a client and say publicly that he did not believe her. The damaging statement would be given to Breitbart News, then run by former White House strategist Stephen K. Bannon.

    In exchange, Sexton said in recent interviews, the men offered to pay him $10,000 and promised to introduce him to Bannon and others in the nation’s capital. Parts of Sexton’s account are supported by recorded phone conversations, text messages and people in whom he confided at the time.

    The effort to undermine Leigh Corfman’s allegations — beginning on Nov. 13, a month before the election — shows how far some of Moore’s most fervent supporters were willing to go to salvage an Alabama campaign that many hoped would propel a nationwide populist movement and solidify Bannon’s image as a political kingmaker.

    In the phone conversations and texts, copies of which were obtained by The Washington Post, one of the men spoke of ties to Moore and Bannon while urging Sexton to help “cloud” the allegations, which included other women’s claims that Moore pursued them when they were teenagers and he was in his 30s.

    “What they’re saying, all they want to do is cloud something,” Gary Lantrip, who attended at least one private fundraising event for Moore, said during a phone call recorded by Sexton. “They said if they cloud, like, two of them, then that’s all they need.”

    Lantrip also made references to money — at one point speaking haltingly about the “the ten [pause] dollars,” a shorthand for the $10,000 offer, Sexton said.

    “We got some chance to do something, make some quick little-bitty for you … and then, on down the line, we can go to D.C.,” Lantrip said during the recorded call.

    Sexton was initially reluctant to talk publicly about the alleged offer, because the men — Lantrip and Bert Davi, business partners in a small construction firm — are his clients in an unrelated court case, a dispute over a real estate venture. Sexton decided to speak publicly after repeated requests over months from Post reporters, who contacted him after obtaining one of the recordings.

    https://tinyurl.com/y7uao664

  31. [31] 
    Paula wrote:

    [30] Kick! I was just reading that story! Oh my god.

  32. [32] 
    ListenWhenYouHear wrote:

    “I’ve signed this omnibus budget bill. There are a lot of things I’m unhappy about in this bill,” Trump said. “But I say to Congress, I will never sign another bill like this again. I’m not going to do it again.”

    Glad to see that Trump is starting to accept his fate!

  33. [33] 
    Michale wrote:

    A Virginia Beach man was charged Friday with threatening to murder his local congressman, Rep. Scott Taylor (R-Va.), the U.S. Attorney for the Eastern District of Virginia announced Friday.

    According to court documents, Wallace Grove Godwin, 69, visited Taylor's office on Thursday and threatened to shoot him and two staffers at a Saturday event. The dispute arose, according to the District Attorney's office, over a discussion about marijuana policy.
    https://www.politico.com/story/2018/03/23/man-arrested-for-threatening-to-murder-virginia-congressman-482193

    Dumbocrats...

    All about violence and hate and murder...

  34. [34] 
    Michale wrote:

    Michale is starting to back-pedal his hero worship of the clown in the White House.

    No, I am just tiring of all the hate and intolerance and bile and bigotry coming from the SUPPOSEDLY "tolerant" and "enlightened" denizens of the People's Republic Of Weigantia...

    That's why I haven't been around as much...

  35. [35] 
    Michale wrote:
  36. [36] 
    Michale wrote:

    No, I am just tiring of all the hate and intolerance and bile and bigotry coming from the SUPPOSEDLY "tolerant" and "enlightened" denizens of the People's Republic Of Weigantia...

    And yes.. I know.. It's not ALL of the denizens.. There are 2 who aren't that way...

  37. [37] 
    Don Harris wrote:

    Neilm (21,22)-

    That was funny.

    As an atheist, I've been praying for a joke like that.

  38. [38] 
    Michale wrote:

    As an atheist, I've been praying for a joke like that.

    "I see what you did there."
    -Geordi LaForge

    :D

  39. [39] 
    Kick wrote:

    Michale

    No, I am just tiring of all the hate and intolerance and bile and bigotry coming from the SUPPOSEDLY "tolerant" and "enlightened" denizens of the People's Republic Of Weigantia...

    That's why I haven't been around as much...

    I will say it was very nice of you to realize that your hysterical and repetitive hate, intolerance, bile, and bigotry were tiring.

    All better now, snowflake? Take as much time as you need to get over yourself. :)

  40. [40] 
    Michale wrote:

    Victoria,

    Thank you for proving my point so perfectly...

  41. [41] 
    Chris Weigant wrote:

    Michale -

    Sigh.

    There's nutjobs everywhere, dude. Like:

    https://www.washingtonpost.com/news/politics/wp/2018/03/20/gop-candidate-suggests-shooting-house-democrat-who-touted-his-low-nra-rating/

    who is actually running for office as a Republican. And then there's the Nazi in Illinois who won his GOP primary (since he ran unopposed).

    Don't pretend this only comes from one side of the aisle, in other words.

    -CW

  42. [42] 
    Chris Weigant wrote:

    neilm [21] -

    Heh.

    Jailer to prisoner: "Your hanging for heresy and atheism has been postponed for a day."
    Athiest prisoner: "Why?"
    Jailer: "It's a religious holiday."
    Atheist: "Thank GOD for religioius holidays!"

    :-)

    -CW

  43. [43] 
    Chris Weigant wrote:

    Don Harris [37] -

    Heh. That was pretty funny too!

    :-)

    -CW

  44. [44] 
    Kick wrote:

    Michale
    40

    Victoria,

    Thank you for proving my point so perfectly...

    Oh, please. There is no reason whatsoever for you to play whiny little victim on this blog when anyone who has read this blog for more than 3 days knows that your basic existence here consists of telling other posters individually and as a group how stupid they are and dishing out your made up bullshit about what others supposedly believe/think while spewing out disparaging terms in repetitive fashion.

    You're fooling no one with this whiny victim routine with the possible exception of yourself. :)

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