US report says trade war would destroy jobs
WASHINGTON — The proposed United States tariffs on imports from China, and the retaliation promised by China, would cost up to hundreds of thousands of US jobs and greatly harm the economy, according to a new study.
The study shows that the proposed tariffs on $50 billion of Chinese imports announced by the administration of US President Donald Trump on April 3 and the proportional retaliation China announced the following day would reduce annual US GDP by nearly $3 billion and destroy 134,000 US jobs. US GDP in the first quarter of 2018 was $19.97 trillion, according to the US Commerce Department.
Four jobs would be lost for every one gained from the tariff actions, according to the study, conducted by Washington-based consulting firm Trade Partnership Worldwide LLC on behalf of the National Retail Federation and the Consumer Technology Association. It was released on Tuesday.
“As administration officials prepare to head to China for trade talks, the livelihoods of American workers hang in the balance. … We must resolve this trade dispute without resorting to job-killing tariffs and retaliation,” NRF President and CEO Matthew Shay said in a statement.
The study warns that slapping tariffs on an additional $100 billion of Chinese imports would come at an even bigger cost to the US economy, decimating 455,000 jobs and shrinking annual GDP by $49 billion.
Trump threatened new tariffs on an additional $100 billion in Chinese imports a day after China announced its retaliation proposals on products ranging from soybeans to cars and planes. China responded by pledging it will “fight back resolutely”.
“Rising costs on farmers, manufacturers and service providers isn’t the answer; it shows protectionism will weaken America,” CTA President and CEO Gary Shapiro said. He added that the tariffs could wipe away the benefits of the recent tax reform and bring uncertainty to US businesses.
The study shows that the tariffs’ effect would be felt across various sectors of the US economy, but agriculture would be hit especially hard. The net income of farmers would decline by 6.7 percent, and 67,000 agriculture jobs would be lost.
The hit to farmers would more than double if the tariffs expanded to an additional $100 billion of products. Farmer income would drop by 15 percent, and jobs in the sector would decline by 181,000.
The report says that the tariffs plus retaliation would hurt every US state, including those in the Rust Belt, many of which voted for Trump in the 2016 presidential election.
The Trump administration has not released any research that quantifies the impact of the tariffs on the US economy and jobs.
