Are Trump’s Tariffs Really that Bad?
Sinziana Stanciu, ‘20
In the past month, it has been difficult to avoid the tension between the United States and China. Influenced by the need for each country to prove itself as the best, the two largest economies in the world have already started to impose very serious tariffs on one another. This has been concerning to many, but I wanted to explore why? Is it really that bad for America to try and limit the number of imports that it receive from China to stimulate its own economy?
The influence that these countries have on each other is beyond comprehension. However, it has recently become the Trump administration’s goal to sour these relations by attempting to shift the export market toward domestic use. His plan includes placing higher tariffs on Chinese goods and essentially hoping that Americans reduce their use of Chinese products. This additional cost has been paid by the American consumer or business (Goldman Sachs). In response to the tariffs placed on its products, China has placed its own tariffs on American products as well. Thus, resulting in a trade war between two of the most powerful countries in the world.
In the past six months, trade relations had already begun to take a turn for the worse, with the number of American exports to China decreasing by 26% compared to the prior year (Washington Post). One of the top exports that have been affected has been the Soybean industry. Before tariffs were placed, the value of soybean exports was $9.1 Billion, this decreased by 80%, with only $1.8 Billion in soybeans being sold. The use of tariffs has affected the farmers of the Midwest, resulting in the Trump administration proposing a $15 Billion payment to farmers due to the number of excess soybeans. But the soybean market is particularly an extreme of the effects of the Chinese tariffs on the American economy. There have been many industries affected by the tariffs placed, and this is reflected in the stock market. After the United States announced it’s increase of tariffs, the Dow Jones Industrial Average Index lost 2.4% and the Nasdaq further reduced by 3.4%.
There is still an argument present for these tariffs: it works if we reach an agreement. Many politicians think that the tariffs could be delt with for a time period if the tactic proves worthwhile and results in an effective agreement between the two countries. Senator Pat Toomey advocated for the tariffs if they result in a good agreement despite the fact that he found them “‘absolutely painful and dislocating,’” (Politico). However, it does not look like an agreement will be reached soon, as tensions have been increasing over trade and technology.
Ultimately, I think that the ruling is still to be decided. If a trade agreement can be reached to help the American economy which repairs the effects of these tariffs then this would be amazing. However, it could also be seen as a point of no return in the context of trade wars between China and America. Did both countries push it too far? It just looks like we’ll have to wait and see.