Is President Trump's Tariff Package Against China Feasible?
- Author: Tracy Klein Mar 22, 2018,
Mar 22, 2018, 1:14
Senior aides said the tariff amount was US$30 billion earlier, but Trump asked to double the amount.
The risk of an escalation in which there were a broad-based tariff across a range of Chinese goods followed by a response from Beijing that was commensurate with this would cause a hit to USA and Chinese growth, a rise in US inflation and possibly prompt China to take domestic action to boost growth. Harbor Intelligence said on March 1 that Trump's aluminum tariffs would boost production jobs by about 1,900, but 23,000 to 90,000 US manufacturing job will be lost. Only countries with a US security relationship are eligible, and they must propose alternative ways of addressing administration concerns over rising import figures.
Trump recently imposed steel tariffs, a 25 percent on imported steel and 10 percent tariff on imported aluminum, which analysts say could hurt close allies in Europe more than Beijing. That and other trade actions from the Trump administration, have triggered talk of a global trade war. On a call with reporters to explain the move, a senior administration official provided conflicting statements about whether all countries or just those with USA security ties could seek waivers.
In 2017, the United States imported 34.6 million metric tons of steel from 85 countries. Trump's tariff orders affect semifinished steel, such as ingots and slabs, and many kinds of finished steel products, including pipe and tubes, cold and flat rolls, bars and rods. Generally speaking, if industry A in the US economy might feel some momentary relief from foreign competition through one set of tariffs, then industry B in the USA economy may face higher priced imported inputs that it must use to make exported goods to sell into a highly competitive world market and thus be adversely affected, either because those higher input costs due to the higher USA tariffs hobble their price positions, because other national governments place pressures upon purchasing decisions to steer away from USA -made products in retaliation, or both.
The letter points out that the USA levies the highest tariffs on basic consumer goods, which force families shopping in American stores pay higher prices because America already levies import taxes as much as 32 and 67% on basic clothes and shoes.
China has vowed to take retaliatory measures in response.
In issuing the tariffs, Trump moved to fulfill a campaign promise to aid domestic steelworkers and get tough on trade rivals, whom the president blames for America's industrial and economic troubles.