US President Donald Trump’s recently announced Chinese import tariffs on goods are almost sure to raise prices to US consumers. Among the goods affected are electrical appliances, flat screen TVs, and many other consumer products, particularly in the electronics field.
Are Chinese Import Tariffs Protectionism?
Generally, taxes on imports achieve little other than retaliation and increased consumer prices. It is a form of protectionism, designed to persuade US consumers to buy American. However, the initial result has seen China responding likewise, giving rise to a potential trade war. Such economic conflict between two global superpowers will benefit neither country, particularly their own citizens.
1,300 goods were included in Trump’s latest list. The price of such goods to US consumers would increase were the threatened tariffs to be applied. China’s response was the release of its own list on Wednesday. This includes aircraft, automobiles, soybeans and orange juice among a total of 106 imports from the US.
American Economy and US Soybean Industry at Risk
This would likely have an effect on the American economy and US jobs. It is also fairly sure to raise American consumer prices. It could have a serious effect on the US soybean industry since China is its main market. Loss of aircraft and car exports might also have a negative effect on the US economy.
However, we must assume that Donald Trump knows what he is doing, and is doing so under knowledgeable professional advisement. The stakes are high on this issue, and it is not one to be settled by presidential knee-jerk reactions.
US – China Trade Deficit an Issue
For now, the threats have been more a case of saber rattling than firm action. Final decisions have yet to be made, and there is still time to negotiate an agreement suitable to both countries. President Trump is known to feel very strongly about the trade deficit with China. He believes that such tariffs would go some way towards reducing that. On the other hand, the Chinese are highly unlikely to accept them without responding in kind.
Are American Consumer Prices Sure to Increase?
What will happen? Who knows? However, it seems fairly certain that American consumer prices will increase should the announced import taxes be applied. Not only that, but jobs may be at risk if the Chinese cancel orders, or reduce their frequency of goods such as US planes, cars and particularly soybeans. China is the main market for US soybean growers. Should this market be compromised, then the US industry might well collapse.
In conclusion, Chinese import taxes are sure to affect US industry, just as US import taxes would affect Chinese industry. However, China may be better prepared to absorb such trade losses than the US. That said will it really happen, or will sane minds prevail!