Posted by 19 September 2018
The dispute over tariffs between the U.S. and China heated up this week – and there is no indication that it may cool down any time soon.
On Monday, President Trump announced that the U.S. would be imposing new tariffs on numerous Chinese products. China then said that they would levy tariffs against some U.S. goods in retaliation. President Trump then announced that if China did that, he would put in place even more tariffs on Chinese imports.
Unless the two countries come to an agreement, this back-and-forth levying of tariffs could lead to a major trade breakdown.
President Trump has been a consistent critic of foreign trade, especially trade with China. The tariffs he announced this week would impose a 10% duty on $200 billion in Chinese imports, ranging from auto parts to refrigerators to toys. The Chinese tariffs announced in response would have a similar tariff on $60 billion in U.S. imports to that country. President Trump also imposed tariffs on some Chinese goods in July.
Over the past two decades, trade between China and the U.S. has increased dramatically, nearly doubling since 2006. The interdependence of the two nations’ economies would be severely disrupted by high tariffs, which would not only affect consumer goods but also components used for manufacturing in the U.S. Auto makers in Detroit, for instance, are very concerned that these tariffs will raise their cost of manufacturing cars, leading to higher prices and lower sales.
President Trump and those who support higher tariffs say they are necessary to protect U.S. companies from unfair competition. They contend that U.S. companies could make many of the products being produced by China, and that tariffs will help stimulate American manufacturing. Critics of tariffs point out that it is ultimately U.S. consumers, not foreign businesses, who will pay these tariffs. They note that the evidence is overwhelming that tariffs hurt economic growth.
Officials from China and the U.S. are planning to meet to see if the differences between the two nations can be worked out.
Do you support President Trump’s decision to impose higher tariffs on Chinese goods? Or do you think that these tariffs will raise costs for consumers and hurt U.S. businesses?