Why additional tariffs on Chinese goods should be discarded
Source: Xinhua Editor: huaxia 2022-05-14 19:55:28
As the additional tariffs imposed by the previous U.S. administration on Chinese products soured bilateral economic ties, continuously taking its toll on American businesses and consumers, it is high time the U.S. side discarded the false move.
"Four years on, the trade war is still hurting U.S. consumers and companies, and forcing supply chain workarounds that make trade more complex and vulnerable," Christopher Tang, professor of supply chain management at the UCLA Anderson School of Management, said in a recent article published on the South China Morning Post.
Like the professor, many more U.S. trade groups and economists have been urging the Biden administration to scrap Trump-era additional tariffs on Chinese imports, regarding such tariffs as counterproductive to the U.S. economy.
At a time when world economic recovery is still strangled by the COVID-19 pandemic and the U.S. economy itself faces soaring inflation, it will be both a right and responsible choice for the country to remove all additional tariffs as soon as possible, analysts said.
Who pays the price
Four years after the U.S. tariff hikes on Chinese goods, it has been a clear fact that the acts have brought more costs to U.S. companies, consumers and farmers.
"American businesses and consumers, not Chinese exporters, are bearing the cost of Trump-era tariffs in the form of higher prices on made-in-China parts and products," David J. Bulman, assistant professor of China Studies and International Affairs at the Johns Hopkins School of Advanced International Studies, said in an article published on The Hill earlier this year.
Tariffs on Chinese goods have provoked retaliatory tariffs that have sharply reduced American exports to China, allowing other nations to move in on markets once dominated by the U.S., he noted.
Since the additional tariffs were taken into effect, they have cost American companies 1.7 trillion U.S. dollars, and American household 1,300 U.S. dollars a year, Chinese Ambassador to the United States Qin Gang said during a recent interview with Forbes magazine, noting that the tariffs have not reduced the U.S. trade deficit.
Americans for Free Trade, a broad coalition of trade organizations, recently warned that the Section 301 tariffs create an "additional economic burden" for American businesses, manufacturers, farmers, and families, make the United States less competitive globally and cause "disproportionate economic harm to an American economy grappling with ongoing inflation concerns."
Soaring inflation pressure
As the U.S. is experiencing the highest inflation in four decades, economists said eliminating additional tariffs on Chinese goods would help lower elevated inflation and stabilize inflation expectations.
"The reasons to end the trade war with China keep piling up. Inflation is the latest case in point," David J. Bulman said.
Data from the U.S. Labor Department showed Wednesday that U.S. consumer inflation in April surged by 8.3 percent from a year ago, marking the second straight month of inflation over 8 percent.
Even Treasury Secretary Janet Yellen said in a recent interview with Bloomberg Television that removing Trump-era China tariffs would have some "desirable" effects on inflation and "it's worth considering."
"Americans are unhappy about rising inflation and costs, so providing tariff relief soon is one way to lower prices and increase demand, especially for consumer goods," said the U.S.-China Business Council (USCBC), which represents 260 American companies that do business with China.
Back on track
As people from the American academic and industrial circles came to urge the government to drop additional tariffs on Chinese products, it is significant to recognize the essence of China-U.S. business ties and bring it back on track.
The economic and trade relations between the world's two largest economies are mutually beneficial in nature and have been yielding win-win results.
Taking employment for instance, U.S. exports of goods and services to China support hundreds of thousands of jobs across the country in almost every sector of the economy, according to the U.S. Export Report 2022 released by USCBC.
"More than 300 congressional districts have over 1,000 jobs supported by exports to China, and eight are home to more than 10,000," the report said, noting that China remains an important market for U.S. exporters.
In 2020 alone, the number of jobs supported by exports to China reached a total of 858,486, according to the USCBC's calculations.
In addition to creating jobs, trade with China has helped increase the income of U.S. farmers as agricultural trade has been an important part of bilateral business activities.
U.S. goods exports to China reached an all-time high in 2021, with oilseeds and grains seeing significant growth to cement their place as the top U.S. export to China, the USCBC report said.
Last year, U.S. farmers sent 4.8 billion dollars more in oilseeds and crops such as soybeans, wheat, and corn, to China than they did the year before, bringing the latest total to 21.9 billion dollars.
"As we face a complex and severe situation in agricultural development and food security worldwide, I firmly believe that China and the United States, as major agricultural producers, consumers and traders, should meet challenges together, maintain stable development of agriculture, enhance the resilience of agricultural supply chains, ensure food security domestically, and promote cooperation for international food security," Qin said.
Despite the lingering COVID-19 disruptions, trade between China and the U.S. maintained sound momentum, rising 8.7 percent year on year to 1.56 trillion U.S. dollars in the first fourth months, demonstrating the high complementarity of the two economies.
In the context of soaring prices, the removal of additional tariffs on Chinese goods meets the fundamental interests of American consumers and businesses, and is beneficial to the U.S., China and the whole world, China's commerce ministry spokesperson Shu Jueting said Thursday at a press briefing.
