Policymakers seeking to reduce US-China economic dependence must exercise extreme caution. Any move that uncouples them could have serious repercussions for companies, consumers and the overall economy.
The Biden administration has upheld most tariffs imposed upon China, excepting steel, aluminum and washing machine tariffs which increase consumer costs as well as make manufacturing inputs more costly for American factories.
Trump says he’s weighing options for a major new economic attack on China
With tensions between China and the world’s two largest economies continuing, former President Donald Trump suggested imposing tariffs of up to 60% on all Chinese goods should he win reelection, prompting strong criticism from Nikki Haley – his Republican challenger for president who highlighted consumer costs and stock markets when responding to his proposal.
Starting in 2018, the US implemented tariffs on Chinese goods worth hundreds of billions of dollars, sparking a trade war that disrupted global supply chains and is estimated to cost Americans up to an estimated cost of $195 billion, according to conservative think tanks.
Economic damage was done both ways and has significantly harmed Chinese economy, where recent data show industrial output and consumer spending is continuing to decrease. China may resist giving in to US bullying given their long-term strategy of becoming an economic powerhouse and regional leader; Trump may present the biggest obstacle.
Trump says he’s “doing great” with China
Trump’s trade war has upended global commerce, increased consumer prices and altered stock markets – costing Americans an estimated total of around $195 billion since 2018 alone according to one conservative think tank.
Business groups — merchants, manufacturers and growers alike – have voiced concerns that tariffs have harming them by increasing costs and diminishing competitiveness, contrary to what President Donald Trump claims when he claims the U.S. benefits from China’s turmoil.
Trump has long overstated his trade deficit with China, yet 2016’s deficit stood at $308.9 billion — its lowest annual total since 1999 under Obama. On Friday, however, instead of discussing this fact directly he instead focused on saying we were doing great with China while simultaneously noting tariffs will lead to higher costs for clothing, footwear and groceries for American consumers.
Trump says he’s preparing for a trade war
Trump raised the stakes significantly with his announcement to place tariffs on another $300 billion of Chinese imports, raising the risks of any trade agreement between two major economies and imperiling any hope for reaching an accord between them. Although he may believe “trade wars are good and easy to win”, most economists expect a long, costly economic cold war between America and China that will ultimately harm American companies, workers, consumers and workers.
On the campaign trail, Trump has asserted that tariffs bolster domestic industries and raise money for the federal government while dismissing economists of both parties who state they raise prices for American shoppers and producers. Furthermore, he has claimed any pain his tariffs cause Chinese manufacturers and consumers is offset by profits his trade strategy generates for America – further asserting he won’t back off until Beijing amends its unfair practices and offers fair deals.
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