The article ‘Trump Expected to List China Tariffs, Potentially Reigniting Trade War’ talks about the move by the Trump organization to list Chinese goods that would be subjected to the tariffs and this might lead to a trade war. The administration has always thought about withholding trade war and threatening tariffs on China as it is trying to strike a deal with Beijing that is expected to make sure that the American companies have increased access to the Chinese market. The negation, however, has produced little commitment with China claiming that it would purchase almost $ 70 billion in agriculture, energy and manufactured goods from the US, only after the Trump administration suspends the prosed tariffs.
The White House is not ready to bow down from his tariffs, which trump administration think that it gives it leverage in negotiating with Beijing. On 15th June 2018, the Trump regime announced $ 50 billion in China tariffs amid warning of retaliation from China.
The trade war with China is associated with many risks, considering the fact that the US is imposing similar trade fights with Canada, Europe, and Mexico over the imposition of tariffs on foreign aluminium and steel. Such comes with retaliation tariffs: The EU is ready to impose 2 billion euros tariff on American products; Canada is prepared to impose retaliatory tariffs on different American products from July 1 if the US fails to stop its tariffs on its metals; Mexico is in the process of hitting $ 3 billion worth of tariffs on American tariffs.
I agree with the C.D Howe Institute published note by Jiangliang Xiao and Dan Ciuriak on impacts of Trump tariff on Canada, Us, China and the other parts of the world: If Trump’s objective is hurting foreigners based on allegations that they are reaping off the United States, the policy is ineffective. The economic warfare shits to China, Japan, and EU. It would be an increase of almost $ 6 billion for the 3 nations combined. The aluminium and steel that is no longer used by the United States will keep on lowering its price helping the foreign companies using them intensively.
Undeniably, there will be trade deficit which the US tariffs assist the foreigners who sell goods to the US which includes lots of steel and aluminium. The tariffs arm strings the exporters in the United States by compelling them to overprice their products 10-25 per cent. The result from reduced exports and increased imports is more than $ 12 billion. Also, there is $ 4 billion loss since the United States consumers will be forced to move away from these goods to avoid high prices.
I think that a regime that is hell-bent to United States trade balance will not be pleased to find it that its tariffs are going to reduce exports of aluminium and steel by $ 6 billion. Why should the United States sell the foreigner’s products at lower prices when the fellow Americans would be forced to pay more, as some US producers are going to conclude. Such is the case even before the foreign markets start imposing retaliatory tariffs.
In other words, Trump does not understand that economic policy should not be derived from the reality TV. It is highly possible that his model is hopelessly wrong since economies are complex and without proper planning, they would defy your best-intentioned policies for guidiance, planning, and regulation.