China Boosting Tariffs on U.S. GoodsBen Miller
With tensions rising among some of the global superpowers in the last few months, China has not made anything better by now announcing they have boosted tariffs on U.S. goods. Some of these goods are apart of huge industries within the US, such as soybeans, aircraft and vehicles. Experts have estimated that the tariffs are worth a combined $50 billion, and are at this point praying that they won’t see a full-scale trade war. Tariffs are the tax paid on a particular import or export, and a $50 billion increase to these US goods is a significant and statement move by China.
This action did not come out of the blue, as it was provoked by recent economic moves performed by the Trump Administration. Recently the Trump Administration has published a list of nearly 1,300 Chineses products that they plan to impose with a 25% tariff. Of course, the Chinese Embassy was the first to condemn the action by saying: “Such unilateralism and protectionist action has gravely violated fundamental principles and values of the WTO (World Trade Organization). It serves neither China’s interest nor U.S. interest, even less the interest of the global economy,” they go on to state, “As the Chinese saying goes, it is only polite to reciprocate.” China got creative with it and even listed several agricultural products with the goal being to harm the economy of Iowa, whose ex-governor Terry Branstad, is the current U.S. Ambassador in China.
As seen in figure one, Trump responded on Twitter by saying: “We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a Trade Deficit of $500 billion a year, with Intellectual Property theft of another $300 billion. We cannot let this continue!” This situation is interesting considering Trump has reached out to China as an ally to counter North Korea, but from an economic point of view, these two powerhouses are nothing short of enemies at the moment.
I understand the justification behind the decision to increase tariffs on China as unfair trade practices in the past (with the current tariffs), has caused the economy to see an increase in unemployment by 6 million people and also has caused 60,000 factories to close, according to the Time.com. A decrease in factories within the US would cause a decrease in capital stock, thus leading to a decrease in investment spending which would lead to an overall decrease in GDP. With a decrease in the GDP, to me, it justifies the Trump Administration’s decision to increase the tariffs on China. On the other hand, though, I believe that the situation must have been handled in the wrong way considering China came back and raised the tariffs on the US even more. Especially in this current time period, I believe that government actions, especially relating to the economy, must be done with great attention to detail and to a certain level of precaution. If the US simply sprung this increase in the tariffs on China with no warning or explanation, that would justify the response that China had. Trump also claimed according to Time.com that the trade deficit of $375.2 billion between both the US and China is costing the US a significant amount of American jobs. This again justifies and proves to me that increasing the tariffs on China was initially a good idea with the proper intentions in mind, but was simplied carried out in the wrong fashion.
Works CitedChandran, Nyshka, and Everett Rosenfeld. “China Announces It's Imposing New Tariffs on 128 US Products.” CNBC, CNBC, 2 Apr. 2018, www.cnbc.com/2018/04/01/china-announces-new-tariffs-on-us-meat-and-fruit-amid-trade-war-fears.html.
“China Hits Back at Trump by Targeting U.S. Goods Worth $3 Billion.” NBCNews.com, NBCUniversal News Group, www.nbcnews.com/news/us-news/china-imposes-additional-tariffs-response-u-s-duties-steel-aluminum-n861916.
“Twitter.” Twitter, Twitter, twitter.com/.
“China Increasing Tariffs - Search Results.” Time, Time, time.com/search/?q=china+increasing+tariffs.