In a recent development that may escalate trade tensions, a spokesperson for the Chinese Embassy in the United States has cautioned that “no one will win in a trade war” following U.S. President-elect Donald Trump’s announcement of new tariffs on products from China.
Trump, set to assume office on January 20, 2025, declared on Monday his intention to impose “an additional 10 percent tariff, above any additional tariffs” on Chinese imports. This statement marks one of his most detailed revelations on implementing his economic agenda since winning the November 5 election on a platform promising to “put America first.” He also proposed a 25 percent tariff on imports from Canada and Mexico.
Liu Pengyu, the spokesperson for the Chinese Embassy, responded by emphasizing the mutual benefits of China-U.S. economic and trade cooperation. “China believes that China-U.S. economic and trade cooperation is mutually beneficial in nature. No one will win a trade war or a tariff war,” Liu stated.
The proposed tariffs have stirred concerns among economists and industry experts. In a study released in November, the National Retail Federation (NRF) warned that implementing such tariffs could reduce U.S. consumers’ annual purchasing power by up to $78 billion. The NRF highlighted that increased costs would significantly impact consumer goods such as apparel, toys, furniture, appliances, footwear, and travel items.
While tariffs are initially paid by importers or their intermediaries, the financial burden often shifts elsewhere. Despite Trump’s assertion that exporters bear the cost of tariffs, research suggests the reality is more nuanced. Importers may offset higher costs by raising consumer prices, foreign manufacturers might lower their prices to maintain importer relationships, or they could invest in relocating production to circumvent tariffs.
A Reuters analysis has noted that American consumers have become more cost-conscious, reducing non-essential spending—a trend that has already placed substantial pressure on retailers and consumer goods companies.
Jonathan Gold, NRF’s vice president of Supply Chain and Customs Policy, expressed concerns over the potential impact on consumers. “Retailers rely on imported goods and components to offer diverse and affordable products,” Gold explained. He cautioned that the proposed tariffs could disproportionately affect low-income households, as increased costs are typically passed on through higher prices.
Trump’s tariff plans aim to attract more investments and boost employment within the United States. However, experts warn that such measures could provoke retaliatory tariffs from trade partners, potentially leading to job losses in other sectors of the economy.
A study published by the National Bureau of Economic Research in January, authored by David Autor, Anne Beck, David Dorn, and Gordon Hanson, found that tariffs introduced in 2018 and 2019 did not achieve their intended goal of job creation in protected industries. Instead, they resulted in job losses, particularly in sectors affected by retaliatory tariffs, such as agriculture.
Reference(s):
cgtn.com
