BEIJING — The Trump administration’s “reckless” tariffs are harmful to consumers and the economy in the United States, according to some industry groups and analysts.
US President Donald Trump on Monday threatened to slap a 10 percent tariff on $200 billion of Chinese products, in addition to the import duties previously announced on $50 billion in goods. China immediately vowed to retaliate.
Zhao Ying, a researcher at the Institute of Industrial Economics at the Chinese Academy of Social Sciences in Beijing, said modern manufacturing is far from producing a single segment, rather, it has a range of segments, from products design, raw materials procurement, production and logistics. The US’ tariff move surely will destroy the value chain built by the two sides decades ago.
“This explains why exporters from the two sides were in a hurry to purchase more products in both parts and finished goods from each other’s markets in the first five months of this year,” said Zhao.
Brad Setser, an economist at the Council on Foreign Relations, noted that the proposed tariffs on $250 billion of Chinese goods accounted for half of the US goods imports from China in 2017.
“No way you get there without putting tariffs on a lot of consumer goods imports,” whether they are computers, cellphones, apparel, toys and small household appliances, the former Treasury official in the Obama administration, said on his Twitter account.
The National Retail Federation, an advocacy group, called the latest tariff threat “reckless escalation”, saying the tit-for-tat trade fight is catching US families in the middle.
“Higher prices for everyday essentials and lost jobs threaten to sap the energy out of the strong US economy just as most Americans are starting to enjoy the benefits of historic tax reform,” NRF President and CEO Matthew Shay said on Monday night.
Imposing new tariffs on Chinese goods is only an excuse for the US government to irrationally pursue political goals, as it has placed heavy restriction on high-tech exports to China, said Ma Yu, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
He said the issue of the trade deficit will disappear automatically or drop significantly if the US can trade with China in high-tech products including aircraft engines, inertial navigation systems, lasers, optical fibers, depleted uranium, underwater video cameras and propulsion systems, advanced composite materials and communications equipment.
In a White House conference call on Tuesday, Peter Navarro, Trump’s trade advisor, dismissed fears that ratcheting up tariffs would harm the US economy.
“Our view is that these actions are necessary to defend this country, and that they are ultimately bullish for corporate America, for the working men and women of America, and for the global trading system,” Navarro said, as US stocks fell following the sharp escalation in the trade dispute between China and the US.
Economists warned that the tariffs would start to slow US growth, The Associated Press reported on Tuesday. The story cited Oxford Economics, a leader in global forecasting and quantitative analysis, which estimated that if the US imposed the $200 billion in tariffs and China responded in kind, US growth could slow by 0.3 percentage point next year.
“By threatening to impose a 10 percent tariff on an additional $200 billion of imports from China, the US President Trump has upped the ante on the trade conflict between the two,” Oxford Economics said in a research briefing.