A comprehensive analysis integrating China's customs export data, the share of Chinese exports in key industries in the U.S. market, and a recent quantitative study by the Peterson Institute for International Economics suggests that if the new Trump administration imposes a 60 percent tariff on imports from China, the U.S. economy will suffer a heavy blow. A tariff hike of this magnitude would trap both parties in a tariff-driven trade war, halting bilateral trade between China and the U.S. Suspended China-U.S. bilateral trade will exert three major negative impacts on the industrial production and overall economy of the U.S., with repercussions lasting for years.
First of all, the study by the Peterson Institute for International Economics indicates that the U.S. agriculture, forestry, and fisheries sectors would suffer the most severe and prolonged setbacks. These industries rely heavily on exports to China, and the loss of this significant market could lead to plummeting prices, overproduction, and financial strain on American farmers and fishermen.
Secondly, U.S. manufacturing sectors that depend on Chinese raw materials and intermediate goods would face increased production costs. The tariff hike would make imports from China more expensive, forcing companies to either absorb the costs, reduce their workforce, or pass the costs onto consumers, leading to higher prices for everyday goods.
Lastly, consumers across the U.S. would feel the pinch as prices for a wide range of products rise. From electronics to clothing, the increased tariffs would lead to higher retail prices, reducing purchasing power, and potentially slowing down the overall economy due to decreased consumer spending.
The ripple effects of such a trade war could extend beyond immediate economic implications. Long-term partnerships and supply chains have been built over decades between the two nations. A sudden halt in bilateral trade could disrupt these networks, leading to uncertainty and instability in global markets.
While the intention behind the tariffs might be to protect domestic industries, the unintended consequences could result in more harm than good. Economists warn that a trade war benefits no one and that collaborative solutions should be sought to address trade imbalances and disputes.
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The US will remain biggest victim of Trump's new tariff policies
cgtn.com
